FW
Sri Lanka’s exports fell 2.5 per cent in January but industrial exports rose led by apparel and rubber, while imports continued to fall. Apparel exports rose 13 per cent and rubber exports rose 11 per cent. Imports were down 5.5 per cent with vehicle imports down 13 per cent.
The trade gap fell 9.1 per cent in January 2016 from a year earlier. Sri Lanka has a trade gap because the country has foreign exchange earnings beyond merchandise good exports including remittances and tourism. Imports are also driven by net foreign borrowings.
In 2015, exports fell 5.6 per cent and imports fell 2.5 per cent with remittances and inflows falling. But the country experienced a balance of payments deficit and a currency crisis as money was printed to finance the deficit and to enforce a rate cut as credit recovered. The printing of money prevented imports shrinking in line with the weakening net capital inflows.
In Sri Lanka mercantilism is ingrained and most people believe that currency troubles are not a result of monetary instability but due to the trade deficit, particularly oil or car imports. This year oil could not be blamed as oil prices collapsed. Mercantilist beliefs in Sri Lanka blame diesel in particular for inflation. Due to the prevailing mercantilism the central bank has been able to print money, generate inflation or currency collapses and get away with it, though it is getting increasingly harder.
"Myanmar’s clothing industry is set to grow tremendously in the coming years, according to a report in the latest issue of Global Apparel Markets from the business information company Textiles Intelligence. Freedom from military rule and reformist government policies are making things possible"
Myanmar’s clothing industry is set to grow tremendously in the coming years, according to a report in the latest issue of Global Apparel Markets from the business information company Textiles Intelligence. Freedom from military rule and reformist government policies are making things possible.
Myanmar a sourcing destination for brands
A turning point came on March 30, 2011, when a reformist president, Thein Sein, was sworn in as the leader of a military-civilian government. That is when would be-investors and garment sourcing companies based in the West started to turn their attention to Myanmar. The first Western brand to source from Myanmar was H&M in 2013 followed by Gap in 2014 and these companies appear to have paved the way for others to follow. Experts predict that there could be upto 1.5 million jobs in the garment industry by 2020 compared with approximately 230,000 in mid-2015, and that garment exports could rise from $1.5 million in 2014 to as much as $12 billion in 2020.
Prior to 2011, Myanmar had been subject to 50 years of military rule which made it a very poor country, plagued by bureaucracy and corruption, and isolated by international sanctions. But most of the sanctions have been removed in recent years and many countries have granted free trade or preferential trade status to clothing made in Myanmar.
Furthermore, foreign direct investment (FDI) in the garment industry has been growing at an impressive pace in recent years and, following the removal of sanctions, clothing exports from Myanmar shot up by 26.5 per cent in 2013 and by a further 27.4 per cent in 2014.
To plan for expansion, the Myanmar government has published a strategy for the textile and garment industry as part of a document entitled ‘National Export Strategy 2015-2019’. In particular, the industry has been advised to: move from operating on a cutting, making and packaging (CMP) basis to operating on an fob (free on board) basis; increase volume; improve quality; produce a greater volume of knitted products
Meanwhile, investments have gone into infrastructure like roads and ports in the country, and initiatives are being pursued to improve the industry’s international competitiveness and encourage sustainable production.However, experts opine that the country has outdated machinery, inadequate infrastructure and a banking system which remains ill-equipped to provide services to local citizens, let alone global companies.
Almost all the fibres used by Myanmar textile industry need to be imported as natural fibre production in the country is negligible. Furthermore, the industry lacks vocational training programs, and demand from Western retailers is unlikely to increase at a rapid pace as buyers are expected to proceed cautiously.
Consequently, the industry will need modern machinery, raw materials, skilled labour, social and environmental certification, energy sources which are reliable, a logistics infrastructure and a financing system which runs smoothly
According to the ‘Alliance’, a group of North American buyers, only 24 garment factories in Bangladesh are fully remediated, while more than half of the initially-identified flaws have been repaired. The group of 28 brands including Gap and Wal-mart said it has so far assessed fire, electrical and structural integrity of a total of 700 units.
The group also said explaining the progress half-way through its five-year tenure, that it also referred 36 factories to the official review panel after finding them ‘structurally unsafe,’ while suspended business with 77 units that failed to carry out the required remediation.
According to Ian Spaulding, Senior Advisor to the Alliance, a total of 24 factories have been fully remediated. We have verified that more than 49 per cent of all required repairs have been completed till date. That means that out of 48,500 issues identified during its inspections, more than 23,000 have been verified as being addressed or closed out, he explained.
After the Rana Plaza building collapse, global brands formed two groups-Accord and Alliance- following the outrage and assessed some 2,000 garment factories out of 4,500 garment units.
Ever since the Philippines was granted Generalised Scheme of Preferences Plus (GSP+) by the European Union (EU) in December 2014, an anticipated boost for garment exports failed to materialise. Receiving GSP+ status meant 6,274 Philippines export products were given duty-free access to the EU market. And while data from the Philippines Statistics Authority shows that overall exports to the EU have seen improvement in 2015, with growth of 6.8 per cent year-on-year, from 2.4 per cent in 2014, it’s not the monumental increase that was predicted.
Meanwhile, the textile experts attribute this to the scheme’s rules of origin – which restrict raw material sourcing from outside the south-east Asian country or its neighbours if it wants the resulting products to be covered by GSP+. As the Philippines have few upstream textile plants, local garment manufacturers rely heavily on foreign yarns for variety, the usage of which is restricted under GSP+.
Indeed, there appears to be only two commercial textile mills left in the Philippines, down from more than 50 in the 1980s. Of the five cited by Philippines news reports in 2015, one has now closed, with two revealing that they make products other than traded fabrics – for instance, souvenirs. Textile production in the country has fallen victim to high electricity bills and workers’ wages being high by regional standards.
In a significant development, four leading companies in the denim supply chain are unveiling a new project designed to provide a working roadmap towards more sustainable jeans production. This includes a prototype collection based on the most efficient use of resources. Archroma, the textile chemicals specialists and Garmon Chemicals, fiber producer Lenzing and denim fabric producer Royo have all joined forces for the 'Roadmap to Rational Denim' project, which is being launched at The Kingpins Show in Amsterdam and looks at producing denim in a more responsible way.
A staggering 1.84 trillion liters of water is used in the manufacture of jeans every month, with 11,000 liters of water needed to make one pair of jeans, and 167m pairs being produced each month. The idea for the project was to look to produce denim garments based on the most efficient possible use of resources, in particular water, at each stage of the production process – from fiber to finish. Each of the four companies contributed its expertise in a particular part of the manufacturing process to provide a working guideline towards more rational and sustainable production of jeans.
Aquafil’s ECONYL brand has partnered with Levi’s to develop a new men’s collection made from regenerated nylon that has come from waste materials such as fishing nets and spent carpets. ECONYL fiber helps divert global waste streams from landfills and oceans. It is used to produce a wide range of textile products, including socks, sportswear, underwear, swimwear, and carpets. This is the first time the regenerated yarn will be used in jeans.
This new collection is a sustainable move that aims to make a small dent in the ocean’s pollution and also sever a dependence on cotton production. By partnering with ECONYL for the first time, Levi’s aims to show its commitment to a sustainable supply chain.
There is no guarantee that there will be enough land available to meet the global demand for cotton, which is the main input for denim apparel in the future. In order to be a successful company in a world where resources are constrained, Levi’s believes it needs to continue towards achieving closed-loop apparel, while also seeking to incorporate other alternatives to virgin raw materials.
According to Giulio Bonazzi, the Chairman and CEO of Aquafil, his company foresees a world where everyday items don’t have to come at the expense of the environment. This new partnership is further proof that sustainable materials can be used to reinvigorate products that have been traditionally made. Levi’s is redefining the denim industry, he concluded.
The one-day congress - The Transformers, organised by the makers of Kingpins one day ahead of the eponymous denim trade show took place in Amsterdam prior to Denim Days that turns the Dutch city into the epicenter of denim.
The Transformers was dedicated to the dark side of the denim and clothing industry focusing on the topic of garbage and its avoidance. ‘The good, the bad & the ugly’ was the well-chosen subtitle which was meant to make clear in advance that the industry and retailers as well as the consumers do have options in improving the ecological situation by their product offer respectively their consumption behavior and it’s necessary to bring more transparency into the production cycles. This was the consensus between the panelists that included Robert Antoshak of Olah Inc., Michael Kininmonth of Lenzing, Miguel Sanchez of Archroma, Dr. Sedef Uncu Aki of Bossa and Marco Corti of Garmon among others.
Earlier, speakers representing the whole supply chain explained where garbage is produced and how to deal with it. Ten per cent of our turnover is made with sustainable products. But also the rest is produced in a way where we constantly try to minimize the formation of waste and the use of energy, according to Dr. Sedef Uncu Aki of Bossa.
Italy sees Iran as an attractive market for luxury goods. It’s thought Iran has more than three million high net worth individuals who are major and regular buyers of luxury goods. Iran could probably be worth about two per cent of the global luxury market once developed.
The sanctions on Iran over the past decade did not apply to cosmetics and many other consumer goods, but they made it difficult for European companies to own stores in Iran. In February, fashion house Roberto Cavalli opened its first shop in Iran, in the footsteps of leather goods maker Piquadro and men’s shirt company Camicissima. Versace is due to open a flagship boutique in Tehran soon, in franchise with a local commercial partner.
However, setting up businesses in Iran is no easy task due to a lack of appropriate retail infrastructure, high tariffs and banking restrictions. Iran is hungry for infrastructure investment as it emerges from financial isolation and it’s seeking a strong Italian foothold. Iran rejoined the global trading system in January following a deal to lift crippling sanctions in exchange for limiting its nuclear activities.
Italian firms appear to have adopted a more proactive attitude than their French luxury and fashion rivals. Some French brands such as Longchamp and Lalique are looking for distribution partners but have no plans to open boutiques.
Textile manufacturers in Coimbatore and Tirupur are trying to conserve air flow from compressors in their spinning and weaving machines to plug leakages and save energy. Many mills have robust air monitoring systems.
Compressed air is a key input for modern machines from spinning to weaving. Sealing off weak portions and optimising compressor capacity will reduce draw of power by textile machines, which are power guzzlers.
In Tamil Nadu’s textile belt, a large portion of the spinners belong in the category of small and medium enterprises. For an average mill with a capacity of 25,000 spindles, energy savings through air monitoring stand at 750 units every day. For the state’s spinning industry, the annual savings are estimated at Rs 200 crores.
Modern textile machines are operated by pneumatic systems, which use gas or compressed air for key processes. Compressed air needs to be clean, dry and devoid of impurities like oil or moisture. These can lead to defective garments, higher power consumption or even a sudden breakdown, risking higher capital costs for entrepreneurs. Maintenance costs of a compressed air system equal the price of the product in three years.
In modern weaving machines, compressed air ejected from fine nozzles moves weaved threads from one end of the machine to another, a process that was done manually earlier.
Indian spinning mills want the anti-dumping duty imposed on imports of viscose staple fiber to be scrapped. The feeling is that the levy could hit domestic textile manufacturers who are already reeling under a high cost of production and sagging export demand. India imports viscose staple fiber mainly from Indonesia and China. The fiber is one of the major inputs for manufacturing of man-made fiber yarn in India and is mostly used for the manufacture of fabrics made of poly viscose and viscose yarn.
One criticism of the anti-dumping duty is that it’s being used by domestic viscose staple fiber manufacturers as a shield to cover their inefficiencies and inadequacies in a competitive environment. The demand for viscose staple fiber is expected to rise on the back of rising disposable incomes. Lower requirements of resources land and water have made viscose staple fiber preferable to and more cost effective than cotton production.
Fabrics of viscose fibers are easily dyed and have excellent hygienic properties. India is the second largest producer of viscose filament yarn in the world. Depending upon the intended use, viscose fibers are made into textile or cord threads as well as staple fiber.
