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Rwanda, Tanzania and Uganda have been given an ultimatum by the US to reverse their ban on used clothes imports or face trade sanctions. The three East African countries have been given a week’s ultimatum. The acting head of economic and regional affairs at the Africa Bureau of the US State Department, Harry Sullivan issued the ultimatum ahead of the East African Community (EAC) Heads of State Summit in Kampala, Uganda next week. “I believe the results of the meeting next week will determine how we proceed. While we understand the East African Community’s desire to build a domestic textile sector, we firmly believe the EAC ban on imports of used clothing will not achieve that.”
The EAC comprising Kenya, Uganda, Rwanda, Burundi, Tanzania and South Sudan had come to a decision to ban imported second-hand clothes and shoes by 2019, arguing it would help member countries enhance domestic manufacturing of clothes. As signatories to the AGOA trade programme which offers them duty-free access to the US, their decision violates the conditions including eliminating barriers to US trade and investment, among others.
The US was petitioned by the Secondary Materials and Recycled Textiles Association (SMART) which complained that the ban “imposed significant hardship” on the US used-clothing industry and violated AGOA rules. Rwandan President Paul Kagame stated his country will proceed with the ban on used clothes and will choose to grow its local textile industry at the expense of being a member of the AGOA.
Uganda and Rwanda have already raised taxes for used clothes and offered incentives to manufacturers to invest in their local textile industry. US imports from Rwanda, Tanzania, and Uganda was around $43 million in 2016, up from $33 million in 2015 while exports were $281 million in 2016, up from $257 million in 2015.
India’s textiles exports dropped by 13 per cent year-on-year (y-o-y) to Rs 9,704 crore in January following a sharp fall in cotton textile exports. Cumulative exports of textile and apparel products dropped by 4 per cent y-o-y to Rs 1.87 lakh crore in April-January 2018. Data from the Confederation of Indian Textile Industry (CITI) recorded, while cotton textile exports fell by 1 per cent y-o-y to Rs 53,818 crore during the above period, apparel exports dropped by 5 per cent y-o-y to Rs 88,709 crore.
Sanjay Jain, chairman, CITI says, “The share of textile and apparel exports (overall exports) has also declined from 14 to 12 per cent in January 2018 as compared to the corresponding period the previous year. “One of the key factors for decline in exports is embedded duties, which are more than 5 per cent and the same is not getting refunded at any stage.” The slide in exports comes at a time when there has been a rise in imports of textile products post GST. Import of textile yarn, fabric and made-ups has increased by 15 per cent y-o-y to Rs 9,914 crore during April-January 2018.
“This is posing a big threat to the Indian textile industry as post-GST the effective import duties have come down sharply, thus, making imports cheaper for the domestic industry by 15 - 20 per cent,” Jain added. He requested the government to provide export incentives for cotton yarn as it is the most vulnerable sector. Cotton yarn exports dropped over 26 per cent between 2013-14 and 2016-17 in spite of the textile industry adding over 3 million spindles and 62,000 rotors in spinning capacity during the period under review. Jain noted that the country can retain its competitiveness in the international markets by including cotton yarn under the merchandise exports from India scheme (MEIS ) and providing RoSL for fabric and cotton yarn.
South Korea’s Hyosung Corporation, the world’s largest spandex manufacturer, is looking at investing around Rs 3,000 crore in a manufacturing facility in Maharashtra. The project will be set up in Aurangabad Industrial City (AURIC), a greenfield smart industrial city that is being developed within 10,000 acres, as part of the Delhi-Mumbai Industrial Corridor (DMIC). The official further disclosed, "Hyosung Corporation is likely to invest around Rs 3,000 crore in a manufacturing facility in Maharashtra. In the first phase of the project, the company will invest Rs 1,250 crore and the state government will soon take a decision on its request to allot 100 acres land near Aurangabad. Work on the project will begin in April this year and the production is expected to start in May next year."
The cost of the land would be around Rs 120 crore and the company has paid about five per cent of the cost. Nearly 1,000 jobs are expected to be generated in the first phase of the project. During his visit to South Korea in September 2017, Maharashtra chief minister Devendra Fadnavis had met Hyosung Corporation president H S Cho. Hyosung Chairman and CEO Cho Hyun-joon will be attending the 'Magnetic Maharashtra' investor summit in Mumbai next week. Hyosung, a leading chemical and technological textile company, had shown keen interest in the deal as the company is of the view that India is a key focus market for the company, which is working with several leading Indian players in the textile segment. The market size for spandex yarn in India is forecast to be over 1,500 metric tonnes this year and the growth of Indian spandex market has been over 10 per cent between 2014 and 2015.
E-commerce is the bad boy for turning traditional retail inside out so says everybody, but the harsh reality is that the new kid on the block is only a part of the problem. XCEL Brands chairman and CEO Robert D’Loren assessed during a Sourcing at Magic panel , “Disruptive forces are impacting all sectors, the way people shop will continue to change and companies must move toward where things are going. E-commerce is only 20 per cent of the problem. At the root of the problem is consumer behaviour.”
Today consumer is king he/she decides trends, timing and what they’re willing to pay. Robert prophecises, “The only way you can win in bricks today is by bringing something new to the store every single week. And luring consumers can’t be about adding an experience just for experience’s sake. How many Zara stores have a Starbucks in them? How many salons have you seen in a TJX? The reason they’re winning is newness.” However, constant newness means much tighter supply chains, enhanced decision making and far more local for local production.
All things Sourcing Journal president Edward Hertzman says, “It’s really difficult for people to change. From a supply chain perspective [companies] know what they need to do, but they’re just not doing it.” Panelists were unanimous “It’s paralysis…”
Edward’s analyses of Zara is the store has been successful in selling fast fashion despite the fact that the retailer doesn’t trumpet a particularly special in-store experience, there’s nothing much that adds convenience and even online, there’s little by way of differentiation at zara.com, but ‘52 weeks of fashion’. “It’s the same thing that TJ Maxx does. They’ve created an environment that if I go in there, I have to buy now because it won’t be there the next time I go back. At Macy’s, it’ll still be there and if I wait long enough, they might give it to me for free with enough coupons.” Edward said it upfront. At both the above stores, the price marked is the price you pay. The obnoxious markdown is absent there.
HKL Magu, Chairman Apparel Export Promotion Council (Sponsored by: Ministry of Textiles, Govt. of India) will be having their 40th Foundation Day celebration of AEPC on 22nd February at Auditorium, Apparel House, Gurugram.
Amitabh Kant, IAS, CEO, Niti Aayog will be the chief guest for the Foundation Day.
The Micro, Small and Medium Enterprises (MSMEs) are apprehensive as exports of readymade garments fell by 8.4 per cent post GST. Data reveals exports of readymade garments dropped by 8.4 per cent to $1.39 billion, also Cotton yarn and fabric exports fell by 9.6 per cent to $0.84 billion. Animesh Saxena, an MSME garment exporter explained issues faced by MSMEs during the early GST days continue to trouble the sector. The GST is yet to become a Good and Simple Tax for the country, the low trade figures explains that quite well. Profitability is badly hit as Indian garments are not able to withstand global competition. Duty drawback rate as well as the ‘not very smooth’ GST refund mechanism is leading to a lot of complication.
The Federation of Indian Exporters (FIEO) in a statement said labour intensive sector including garments could not perform well in exports due to the continuing effects of the new taxation in the country. FIEO said, ‘A slowdown in exports from labour-intensive sectors like garments, carpets, handicrafts and man-made textiles was largely due to liquidity crunch as tax refunds have been getting blocked since the introduction of goods and services tax. Exporters have been asking the government to look into the refund issue “seriously” by undertaking a drive so as to clear all cases by March 31, 2018.
Marimekko and Uniqlo, the Japanese global apparel retailer, announced their partnership on a special edition collaboration collection which will be available for a limited time only. The new collection for women will comprise a complete line of items that brighten lifestyles by combining the timelessly bold and vibrant print designs of Marimekko with the quality and comfort of Uniqlo’s casual street style. .
It’s a balance both labels emphasised as they presented the collection, on which they worked in unison for the last five years. The partnership was initiated by Yukihiro Katsuta, Vice-President of Uniqlo owner Fast Retailing and Director of Research and Design for the Japanese brand. According to Yukihiro Katsuta and Tiina Alahuhta-Kasko, CEO of Marimekko, the collection, available only at Uniqlo stores and on the retailer's website, is not aimed at a specific target. Both labels claim they share a similar approach to fashion, expressed by timeless, quality clothes which last, and put a premium on comfort, and both labels also overlap in terms of clientele.
To create the collection, Marimekko designers suggested dozens of motifs to the Uniqlo creative team. The latter eventually chose six of them, of which five come from Marimekko's archives and one, 'Kukkia rakkalle', was created by young designer Maija Louekari. All of them were designed using the printing techniques of Marimekko's Helsinki factory for inspiration. The intention of Uniqlo and Marimekko was to "allow everyone to express their own style, cheerfully and boldly." And while nothing has been decided yet, Uniqlo is accustomed to serial partnerships.
National Cotton Council economists note few key factors that will shape the US cotton industry’s 2018 economic outlook.
In recent months, cotton prices have grown despite the increase in world production. Although the current supply/demand chain are bearish, strong US exports, a weaker US dollar, heavy speculative buying and large mill fixations have supported prices, however, for the coming year, projections of record ending stocks outside of China could see prices soar.
In the long term perspective, several positive factors point to a more optimistic outlook for the cotton industry over the next few years. The world economy is improving and stronger growth is estimated in 2018 and 2019.
International cotton demand is increasing with current forecasts calling for an increase of approximately five per cent in 2017, which is more than double the previous five-year average. China will begin the next round of reserve auctions next month. A successful auction in 2018 could ensure that China remains the larger cotton importer.
Jody Campiche, the NCC’s vice president, Economics & Policy Analysis, says, World mill use is expected to exceed world production in the 2018 marketing year and global cotton stocks are projected to decline by 5.4 million bales in the 2018 balance sheet. In NCC’s annual Economic Outlook, she noted the global stocks decline is due to reduced inventories in China. China’s stocks are declining with USDA estimating a fall of 8.0 million bales in 2017. In 2018, an additional 10.0 million bale reduction in total stocks is expected.
World production is estimated to be 119.3 million bales in 2018. World mill use is projected to increase by approximately three per cent in 2018 to 124.8 million bales with most of the growth from China, Vietnam and Bangladesh. The US will remain the largest cotton exporter with a market share of 39 per cent in 2017 as against 40 per cent in 2016. China is currently the top export market for the 2017 crop year, followed by Vietnam and Pakistan. World trade is projected to be higher in the 2017 marketing year, but increased competition from other major exporting countries has led to a fall in the U.S. market share.
Welspun India, one of the largest home textile manufacturers in the world, has introduced a patented, end-to-end traceability process called Wel-Trak. This innovative process ensures customers and consumers can trace the provenance of the cotton raw materials throughout the supply chain from farm through to the retail.
Wel-Trak delivers end-to-end traceability using automated data capture using RFID, customised software for validation and robust IT & ERP systems to enable smooth operations across all stages of the production process.
Dipali Goenka, CEO and Joint Managing Director, Welspun India explains, all customers across the globe are happy about Wel-Trak as it is unique in the textile industry. Having a mechanism in place that enables them to track the source of the final product right back to the specific farm it comes from definitely adds value and transparency to the whole process.
The proprietary process permits traceability of any product back to its fibre source, through a state-of-the-art solution, thus ensuring transparency and real time information. Welspun announced a partnership with Oritain Global, a world leader in the use of scientific traceability to determine provenance of food, beverages, pharmaceutical and now extended to cotton fibre. This partnership ensures independent validation of Welspun’s supply chain using a method of chemical fingerprinting to identify the origin of the cotton fibre used for its home textile products. This exclusive tie-up with Oritain’s traceability technology supplements Wel-Trak and demonstrates Welspun’s commitment to full transparency and traceability of its home textile products throughout the supply chain.
VF Corporation has made history by becoming the only apparel company in the world to get placed into the list of World’s Most Ethical Company for the year 2018.VF Corporation, a global leader in branded lifestyle apparel, footwear and accessories, has now been placed in august company with the likes of Microsoft, Dell, Salesforce and Adobe, among a few others, in the list chosen by the Ethisphere Institute. The company’s ethical business standards and practices enabled VF it to become an honoree.
Steve Rendle, VF’s Chairman, President and CEO exults, “This honour has come as testament to integrity, commitment and passion of our 65,000 staff around the world who are doing the right thing across VFs global enterprise.” All participants are given scores which provide them with valuable insights into how they stack up against leading organisations.
A total of 135 companies from 23 countries representing 57 industries were recognised as ethical companies in 2018. The award will be bestowed on 13 March. Major parameters they are assessed on are: Ethics and compliance program, corporate citizenship and responsibility, culture of ethics, governance and leadership and innovation and reputation. These companies are shortlisted on Ethics Quotient (EQ) framework.
Ethisphere, a global leader in defining and advancing the standards of ethical business practices, has been honouring World’s Most Ethical Companies who recognise their critical role to influence and drive positive change in the business community and societies around the world and work to maximize their impact wherever possible since 2007.
