Bangladeshi garment exporters are set to take part in the international exhibition for textile machinery in Italy to be held in November, where global textile industry leaders will discuss the latest technology, products and services.
Bangladeshi entrepreneurs and garment exporters have a unique scope to explore new avenues to expand their client base as well as attract foreign investors. ITMA has been the world’s most established textile and garment machinery exhibition since 1951. Over the years, it has been a catalyst for change and competitiveness for the industry. The drive towards sustainability in the entire textile and garment value chain is increasingly integrated with enlightened business practices, and innovative technology holds the key to environmental sustainability.
The main purpose of the exhibition is to introduce modern and the latest machinery to potential entrepreneurs and investors. It is held every four years. Manufacturing institutions and importers are introduced to the latest machines, which they can buy from the exhibition. Bangladesh wants to use developed modern technology so as to achieve vision 2021 of exporting 50 million dollars of readymade garments.
The exhibition will play a vital role since scarcity of fuel is the main barrier facing manufacturers in Bangladesh. So they can turn to energy saving technology which will be displayed at the exhibition.
Responding to the demand made by country’s textile industry, the Cotton Corporation of India (CCI) has decided to release more cotton into the domestic market and put its plan to float a global tender for sale of cotton on the back burner. According to CCI CMD BK Mishra, the government agency has decided not to go ahead with the plans for global tender for cotton sale since the domestic market is picking up. CCI has been placing 50,000 bales on a daily basis for the past 10 days on board for e-auction and around 80-90% of this has been picked up by mills, he said.
CCI has decided to increase the quantity of cotton for sale on board to 75,000 bales a day. On Monday, of 75,000 bales placed for auction, buyers picked up around 61,000 bales. CCI has so far sold around 7 lakh bales in the domestic market.
According to Mishra, global tender is likely to result in panic in the domestic market and could send out a wrong message. He had earlier said that CCI does not intend to offload huge stocks immediately, as it could worsen an already glut-like situation in the market and hurt realisations of farmers selling cotton. The agency is holding stocks worth around Rs 16,000 crores now and has procured around 86.09 lakh bales. The agency has stopped procurement of cotton from farmers for the current season on account of prices moving up. Cotton prices have increased marginally by Rs 50-100 per bale resulting in market prices of Rs 4,100-4,150 per bale both in Gujarat and the South.
The textile industry has been urging CCI to start releasing cotton into the market, to ease supply stating that the industry is passing through a serious situation due to non-availability of cotton in abundant quantity, on account of the stop-go policy of CCI, in spite of holding a high level of stock.
Southern India Mills’ Association has also urged the Union textiles minister Santosh Gangwar to direct CCI to immediately commence selling the commodity directly to the actual users by e-auction, with liberal credit norms.
Kumar Mangalam Birla is set to tighten his grip over Century Textiles & Industries and Century Enka by taking over as chairman of the two companies owned by Basant Kumar Birla. Both companies are scheduled to hold their board meetings on May 5, where Kumar Birla is likely to be made ther chairman.
Kumar Birla has been buying shares of Pilani Investments, which owns 37 per cent of Century Textiles. Birla owns a 51 per cent stake in Pilani Investments. His formal accession will bring both companies under the Aditya Birla Group that he controls. His mother Rajashree Birla is a director on the boards of all major Aditya Birla Group companies including Grasim, Hindalco, Aditya Birla Nuvo and Ultra-Tech Cement. She is involved mainly with the group’s social and welfare driven work.
Century Textiles is among BK Birla’s top group companies, having cement, textiles and paper businesses. Century is looking for buyers to sell its paper and textiles businesses. Century Textiles would become the Aditya Birla group’s real estate arm. The company has already initiated development of around 50 lakh sq. ft. at Parel and holds 500 acres at Kalyan near Mumbai.
Once again, the Garment Manufacturers Association in Cambodia (GMAC) reposed its faith in veteran Van Sou Leng by electing him as chairman of the body at its annual general meeting. Interestingly, the GMAC has approved a new two-term limit on the two-year post.
Ken Loo, GMAC Secretary-General, said the 25-member executive committee was also voted on and saw an additional member added to make sure the association’s European-owned factories were fairly represented. All but six of them were on the committee already.
Last two years has been tumultuous for Cambodia’s $6-billion garment export industry which contributes about a third of the country’s GDP. Strikes and protests for higher wages in garment sector grew widespread and violent in late 2013 effectively shutting the industry down for a few days and came to an end only when military police shot into a crowd of demonstrators on January 3, 2014, killing at least five people.
The violence and work stoppages took their toll, helping convince some foreign brands to place more of their orders elsewhere. In 2014, Cambodia’s garment exports grew at roughly half the pace of the year before, though the World Bank also blamed stiffer competition from other countries and a rising dollar, to which the government has pegged the riel.
The industry also has to cope with a 28 per cent hike in garment workers’ minimum wage that took effect in January, and is at odds with some unions over a Union Law that the government hopes to pass this year.
With prices falling below minimum support price levels, the Cotton Corporation of India was spurred to actively enforce guarantees by purchasing the equivalent of nearly seven million 480-pound bales from domestic producers this season. The agency then stockpiled the fiber from November to March and last month began auctioning cotton at prices near MSP levels. However, the prices being offered have not been low enough to garner much offtake by Indian mills.
India, the world’s largest producer and second-largest seller of cotton, has a government support program in place that maintains and enforces a guaranteed price level for its producers (known as the minimum support price or MSP) by purchasing and stockpiling the fiber so as to help prevent domestic prices from crashing.
A major question for the local and global cotton markets is whether increasingly aggressive measures to move cotton from government hands include reductions in auction prices. The CCI has announced that a new set of auctions, which will be more open to international buyers, will be put into operation soon. The government is becoming more active in terms of its efforts to move cotton. This could be interpreted as the state’s stab at offloading inventory without having to lower prices much below the MSP rates it was purchased at, which isn’t likely to appease most domestic mills.
Compared to the previous edition of ITMA Milan, Italian textile machinery producers and exhibitors have increased their overall exhibition area by 46 per cent. The industry’s global trade fair, is making a return to Italy after 20 years. For Italy’s textile machinery sector, 2015 will primarily revolve around ITMA. From November 12-19, Milan will host the 17th edition of ITMA. For Italian textile machinery manufacturers, it has meant a year-long race to get themselves ready for the event that is held in Europe every four years.
Over 380 Italian exhibitors are slated to be present in Milan, a 19 per cent increase compared to ITMA Barcelona held four years ago, where the last edition of ITMA was held. Even greater is the area of exhibition space already booked for the show which has grown 46 per cent. According to the Association of Italian Textile Machinery Manufacturers (ACIMIT) President Raffaella Carabelli, with over 380 Italian exhibitors slated to be present in Milan it reveals the vitality of local industry.
Among the various initiatives planned are incoming missions of foreign delegations, which will bring to Italy during the course of 2015 close to 200 textile operators from around a dozen countries including Bangladesh, Iran, Egypt and Pakistan, in order to present to them the best of what Italian textile technology has to offer. Thanks to the ITMA 2015 Awards, about ten students from foreign universities (Ethiopia, India, Russia and Vietnam) will get the opportunity to visit ITMA pavilions and discover the innovations proposed by Italian textile machinery sector. All of this will be complimented by an intense press communications campaign and two media events.
In a move that may bring smile on the faces of farmers in Vidarbha, Finley Mills at Achalpur will be expanded, a textile park will come up at Nandgaon Peth MIDC, cotton processing units will be set up at taluka level and closed NTC mills in Mumbai will be shifted to Vidarbha. This was decided at a high-level meeting with Union textile minister Santosh Gangwar and Union minister of state for small and medium industries Giriraj Singh. These decisions were taken to give relief to cotton growers of Amravati division.
A meeting asked Northern India Textile Research Association (Nitra) to prepare a DPR for the expansion of Finley Mills at Achalpur. The mill presently prepares 45,000 spindles. After the expansion, spindle production will go up to 70,000. The mill has 10 hectares land available for expansion. It was decided to complete the expansion work in a year’s time.
It was also decided to expeditiously develop the textile park at Nandgaon Peth MIDC near here over a 500 hectare land. At present, three companies have started work here while 73 hectares have been given to other eight companies to start work. District guardian minister Pravin Pote assured to give 100 hectares land to NTC provided it completed its work within a year.
It was also decided to ask small and medium industries ministry and agriculture ministry to work together to evolve a comprehensive policy after studying the problems of cotton growers of the region.
The meeting also discussed at length the issue of shifting of seven NTC-run closed cotton mills in Mumbai to Vidarbha region.
India’s Synthetic and Rayon Textile Export Promotion Council of India (SRTEPC), India is planning to establish $300 million industrial park specialising in garment and textile material production near Ho Chi Minh City in Vietnam. As Vinod K Ladia, Chairman, SRTEPC, points out it is the efforts of Indian companies to take the initiative of the Trans-Pacific Partnership (TPP) trade deal which will offer a boost to local garment and textile industry.
The industrial park will focus on producing products related to textile and fabric materials. It will also accommodate manufacturers making products for large orders for Indian exports to Vietnam in the fields of healthcare, household appliances, and furniture, he said. Speaking to the media in Vietnam Ladia said that these high value-added products cannot be manufactured in Vietnam now. As a result, instead of importing from India with high taxes, now we will open our production bases in Vietnam to reduce costs.
Although Vietnam is a leading exporter of garments, it is dependent on other nations – mostly China – for its textile input. The Southeast Asian country imported more than $440 million worth of textile products from India during the financial year ending March 2014, with the main items being polyester viscose and synthetic fabric, polyester wool fabric, and polyester filament yarn. India’s exports of synthetic fiber to Vietnam went up from $36 million in 2009 to $89.09 million last year, an increase of 146 percent.
According to director SRTEPC, Srijib Roy, though India is not participating in the TPP, we have cogent reason to invest more in Vietnam to indirectly benefit from the deal because Vietnam imports fabrics from India. Last year, the Indian government approved a credit program for collaborative projects between India’s textile industry and Vietnam’s worth $300 million.
The textile ministry in India has demanded sops for yarn and fabric sectors, which it says were ignored in the five-year foreign trade policy announced early this month. It has also made a case for inclusion of garments in the interest subvention scheme being finalised by the commerce ministry to help the sector compete with Vietnam, Sri Lanka and Bangladesh, which get favourable access to developed markets.
Man-made fiber yarn as well as woven and knitted fabrics, in addition to garments, have been extended a two per cent incentive (in the form of fully transferable duty scrips) in the EU, the US, Canada and Japan.
However, sops in these markets do not help yarn and fabric producers as they export very little to these markets. The Merchandise Export Incentive Scheme (MEIS), however, ignores markets such as China, Bangladesh, Sri Lanka, Turkey, Vietnam and South Korea, which are major destinations for yarn and fabric from India.
By excluding key markets, the policy has virtually ignored fabric and yarn producers, who also need support in the shrinking world market. The textiles ministry is also trying to persuade the commerce ministry to include garments and other sectors in the new interest subvention scheme being finalised by it. Under the scheme, exporters from select sectors will get credit at a three per cent subsidy for the next three years.
APTMA has constituted a task force to deliberate on reasons for alarming 16 per cent fall in textiles and clothing exports in the month of March. The task force has a strong representation of all sub-sectors including spinning, weaving, processing, home textiles, knitwear, woven garments, towels and synthetic textile. The APTMA has given mandate to the central chairman S M Tanveer along with Gohar Ejaz as co-chairman to hold deliberations on the factors behind prevailing situation and suggest ways forward in terms of viability and sustainability of the industry.
The task force would formulate a strategy document for the restoration of viability of textile industry and undertake investment initiatives for achieving double-digit growth of textile industry. The mandate of the task force encompasses immediate reduction in cost of doing business and devise a methodology for effective zero rating regime for export-oriented industry. It would also deliberate on various incidents of taxes, cess, surcharges and inefficiencies and disadvantages of the system burdening the industry at around five to six per cent of the sales value for spinning, weaving and processing mills, making basic textiles unviable for value added exports. All these three sub-sectors are important part of the value chain, energy dependent, operate 24/7 and thus are more exposed to inefficiencies of the system, he added.
The government has only two options to save the textile industry. It would either have to reduce the cost of doing business of export-oriented textile industry or bring rupee at to its realistic value.