FW
After the success of its first Source India Programme held at Hotel Grand Hyatt, Mumbai in 2010, the Synthetic and Rayon Textiles Export Promotion Council (SRTEPC) has now decided to organise the second edition under the MAI scheme - an exclusive Buyer-Seller Meet in Surat inviting buyers from Asia, the Middle East and Gulf, Africa and South American countries. The event will be held on August 13 and 14, 2016 at Hotel Grand Bhagwati, Surat.
The objective of holding the Mega Export Promotion Programme in Surat is to showcase Surat as the leading centre of production of synthetic fabrics in India and to highlight the Council’s initiative of ‘Focus Surat’ to further develop this thriving textiles centre as a hub of production and exports of synthetic fabrics in India. The event is primarily aimed towards aggressive selling of Indian man-made fibre textiles to leading apparel and textiles buyers in Asia, the Middle East and Gulf countries as well as Africa and South America.
The Buyer-Seller Meet will be widely publicised by the Council to attract leading foreign buyers. The buyers will be identified and selected by the Council with expert help and active guidance of the respective Indian Missions in each country and with the assistance of the foreign textiles and clothing trade bodies and chambers.
Buyers from United Arab Emirates, Saudi Arabia, Bangladesh, Sri Lanka, Vietnam, Afghanistan, Poland, Australia, United Kingdom, United States, European Union, Cambodia, Iran, Indonesia, Malaysia, Myanmar, Thailand, Kazakhstan Egypt, Ethiopia, Sudan, Nigeria, Morocco, Turkey, Peru, Colombia, Brazil, Guatemala, among others are being invited to make this event a success. Representatives of the leading international apparel brands and their buying houses of international repute based in India and abroad, and others connected with the import of textiles including the leading apparel manufacturers in India will also be present at the Buyer-Seller Meet to discuss and firm up business deals. Fashion shows will also be held to showcase ability of Indian fabrics/made-ups for the fashion needs of Asia, Middle East & Gulf, Africa and South America.
The Council proposes to select more than 100 member-companies of different product groups including suiting, shirting, made-ups, home textiles, dress materials, saris, yarn and fibres on a first-come-first served basis for participation in the Buyer- Seller Meet.
www.srtepc.in
Birla Cellulose, which is currently spearheading a unique initiative called LIVA Accredited Partners Forum (LAPF) to scale up the textile value chain, will now kick off a joint marketing drive to increase reach of its partners at the international markets.
“We will help the LAPF partners to promote their products at the international level by enabling them to take part at different marketing fora, apart from helping them with design developments and technology,” said Manohar Samuel, President, Marketing and Business Development at Birla Cellulose. He was talking at the LAPF conclave organised as part of the ongoing efforts to help the partners reach out directly to the leading women’s wear exporters and international brands.
After launching the LAPF to aggregate the top talent in the fabric industry, Birla Cellulose has roped in leading players like Shreeji, Mafatlal, Mercury, Karuna Tex, Svarn Tex, MI Industries, VSM among its 250 plus partners. Apart from enabling the LAPF partners to join the international marketing fora, Birla Cellulose will provide them chance to promote their products through special drives like Market Week and Mill Week, to be held abroad.
The company recently gathered LAPF partners and international brands at Delhi NCR. The initiative was held in collaboration with the Society of Noida Apparel Export Cluster. Around 40 LAPF partners showcased their innovations in LIVA fabrics to 160 garment exporters, including international brands such as Marks & Spencer, Macys, and GAP, apart from Shahi Export, Orient Craft, Pearl Global and Richa &Co. Top buying house such as Triburg, Impulse, LI Fung, and Asmara, domestic brands like Biba and ITC were also present.
The conclave also saw the unveiling of LIVA Spring Summer 2017 Collection with innovations like modal knitted slubs, modal denim, lurex embellishments in LIVA blends and modal yoga wear. The LIVA SS’17 would be showcasing the collection under two unique themes called Tropical Trails and Leisure Luxe.
www.adityabirla.com
With production and labour in China getting costlier, Western countries have turned their attention to Bangladesh for their denim requirement. Ability to produce bulk inventories at a cheaper rate and manufacturers realising the need to improve their supply chain to offer better quality has made Bangladesh one of the strongest denim destinations.
Data released by the US Department of Commerce suggests that Bangladesh stands at the third position as the largest denim exporter to the US after Mexico and China with an 11.3 per cent market share and industry estimates point out that the country also exports denim products worth more than $500 million to Europe every year.
According to the statistics released by BGMEA, the country registered a double-digit growth in the first half of 2015 in denim exports to the European Union, shipping denim products, especially trousers, worth €529.53 million to the EU during January to June 2015, marking a 23 per cent growth compared to the same period last year. All major retailers and brands including H&M, Levi’s, Uniqlo, Nike, Tesco, Wrangler, s.Oliver, Hugo Boss, Puma, Primark, JCPenney and C&A import their denim stocks from Bangladesh.
www.bgmea.com.bd
TRENDSPOTTING 2016: "While China continues to dominate the global market as the sourcing hub, a few international treaties and initiatives like TPP, AGOA, EU -Vietnam FTA etc, is expected to change the global sourcing landscape and new power centres are bound to emerge. Industry forecast suggests the market growth rate of developed countries will slowdown and big emerging economies like China, India will be the key driver of growth."
Trade treaties change the game
While China continues to dominate the global market as the sourcing hub, a few international treaties and initiatives like TPP, AGOA, EU -Vietnam FTA etc, is expected to change the global sourcing landscape and new power centres are bound to emerge. Industry forecast suggests the market growth rate of developed countries will slowdown and big emerging economies like China, India will be the key driver of growth. Even though dramatic sourcing shifts are unlikely in near future and China is likely to dominate, optimism hinges on potential opportunities from various international trade deals in the long term. “Although apparel imports from China into the US have remained largely flat, we are seeing a slow but steady shift away from China as businesses look to position their supply chains to take advantage of the forthcoming trade deals. Many vendors are looking at Vietnam due to the potential benefits from TPP (the Trans-Pacific Partnership),” explains Colin Browne, VP and MD of Asia Product Supply at VF Corp.
Explaining the long term impact of AGOA , Browne he says, “From a geographical perspective, sub-Saharan Africa is finally becoming a reality, especially now that AGOA has been extended. We are seeing an increased number of vendors visiting the continent and a number of deals being done. It will be a long time before it rivals the Asian supply base, but the size and availability of resource will allow it to become a dominant player over the next 25 years. As brands venture into such new markets, doing so with known and trusted factories or partners will make the journey less arduous and reduce risk to both parties. These deep, symbiotic relationships will be key to long-term success.” His opinion is reiterated as KL Lee, vice chairman of Esquel Group as he points out that after TPP conclusion in October, there are even more questions as to whether China will lose its leadership position in textiles and apparel. For those who continue with the old ways of manufacturing and not transforming, there is no choice but to move operations to the so-called ‘low-labour-cost’ countries. Esquel is pursuing a different approach: with innovation and using technology in the form of automation and process improvements, they will increase productivity and therefore reduce unit labour cost while improving quality consistency. So while Esquel’s workforce will earn more by sharing the company’s economic success, the company can remain competitive. Of course, Esquel is not only in China as it has facilities in Vietnam and Malaysia that stand to benefit from TPP.
Also as developed countries such as US, EU and Japan are focusing solely on highest-value stages of textile and apparel value chain, that are designing, marketing and distribution while manufacturing activities are concentrated in China, India and other developing countries such as Bangladesh, Vietnam, Pakistan, Indonesia, etc. Rick Helfenbein, President of TellaS Luen Thai (USA), and chairman of the American Apparel & Footwear Association (AAFA) opines the sourcing landscape is unlikely to shift dramatically in 2016. China may dip down a few notches, and Vietnam will move up, but the two combined will still hold nearly 49 per cent market share of the US apparel business. In fact, the top five countries – China, Vietnam, India, Bangladesh, and Indonesia – will likely have a 65 per cent market share of the US in 2016. The best strategy continues to be optimisation of the supply chain with a focus on price, quality, and speed to market.
Lack of sustainable environment a bug bear
Improving productivity and collaboration across the entire demand chain are also seen as key. From a sustainable investment focus perspective on the opportunities and risks in the supply chains and challenges in the procurement activities from developing countries continues to be a crucial factor the major textile and apparel players. Issues like disparity in wages, lack of basic human rights, child labour, strikes, unhygienic work infrastructure, exploitation of women labourers, safety hazards are rampant in the developing countries which is creating a major hindrance in the consolidation of global supply- value chain.
An Accenture and the World Economic Forum report, highlighted that while a business case can be made for improving conditions, human rights frameworks lay out an obligation on corporations to make sure every worker in their supply chain is paid a living wage, trumping other considerations. Garment workers in Bangladesh make merely 0.6 per cent of a EUR29 product in total earnings, well below the living wage, a recent report has found. In Bangladesh, many garment workers have to work 14-16 hours shifts each day (most often six days per week). In Pakistan, workers have to work 10 or more hours a day. In Thailand, during peak season, excessive overtime is common as factory owners are reluctant to hire additional workers. Unsafe working conditions continue to be a problem ot only in Bangladesh, but also in many developing countries. Often, workers face unsafe, cramped and hazardous conditions at work which can lead to health problems of the workers and to dangerous situations in the factories such as fires and collapses.
Trade Unions (TUs) have the potential to play an effective role in solving disputes between workers and employers. In many countries, internationally guaranteed rights such as the right to organise are highly restricted. Hence, many TUs are often tightly controlled, yellow unions exist, and TU members may be arbitrarily dismissed, detained or sometimes threatened with their lives. (e.g. in Cambodia 115, Pakistan116). In these cases, the potentially helpful role of TUs is diminished. However, international trade laws, United Nations are increasingly reinforcing the basic rights for the workers and determining the basic wages but in various places the local Governments are reluctant to implement them strictly to keep low production cost and maintain the market dominance.
Paul Forman, Group Chief Executive, Coats Plc says “In terms of strategies the importance of knowing your supply chain cannot be underestimated, wherever in the world it is. Ethical sourcing and corporate responsibility is increasingly becoming a competitive advantage for industry players. Consumers quickly punish weak unethical behaviour and increasingly reward outstanding performance, so there must be continued improvements in standards worldwide. The sourcing landscape is increasingly as much about the 'who' and the 'how' as much as the ‘where’.”
Future claims for responsible sourcing
It seems a good cost/benefit ratio was perfectly adequate for the successful procurement of textiles and clothing in the past, but now a whole range of other factors have to be taken into consideration, both on the sales and procurement market front including speed of innovation, volatility of demand, more effective product differentiation (e.g. by region) and, last but not least, the higher social and environmental standards in production expected by customers. Further, in the socio economic dimension, the management of supply chain is increasingly focusing on the procurement of raw materials, particularly cotton and leather), product safety (including the use of hazardous substances), and the carbon footprint of products, in the garment industry, about a quarter of CO2 is produced during raw material production, and half during the garment manufacturing process. Finally, it is to be seen whether and how sustainable procurement policies and potentially controversial aspects of the supply chain can have a positive or negative impact on enterprise value. Although environmental aspects are become increasingly important, the focus still tends to be on the social dimension at present.
"Out of 30 per cent of the total fabric export, 10 to 15 per cent goes to Bangladesh. Bangladesh is its largest export destination. Other than Bangladesh, the company exports to Turkey and Latin America. Since Bangladesh is now able to manufacture premium jeans products with capacity to handle good washes, Soorty Mills has expanded into garmenting in Bangladesh"
Soorty Mills is known for its variety of denim fabrics. The Pakistan-based company Pakistan with offices and manufacturing in Bangladesh produces fabrics under three categories: basic, high fashion and premium. “Our basic is not really basic but a bit higher than standard basic,” says Dhirendra Lodha, GM, Marketing and Merchandising at the company’s Bangladesh office, adding, “Our strength is more on stretch. We manufacture bi-stretch fabrics as well, which has Lycra in weft and warp, in both directions. It is a four way stretch fabric, very comfortable and is emerging as a big category.” The company has also extended its production to garmenting in Bangladesh.
Making a mark with stretch denim
In stretches, Soorty Mills has three categories. Cotton poly spandex, which is high stretch having fabric stretchability of 35 to 75 per cent and used for products like jeggings, the second category gets higher in weight and is meant for true five pocket jeans. “In the true five pocket for women, you will have cotton stretches and blended fabrics. The poly percentage goes down and the stretchability is about 25 per cent. The third category is for premium five pocket, essentially the blends and coatings on a basic denim. These are typically 10 to 10.5 ounces. In volume terms, it is lower but in value terms it is significant,” explains Lodha.
The company has the capacity of carrying out any denim processing technique from basic denim, coated denim, overdyed, multiple fibre blends, to specialty fibres. Elaborating on the Soorty’s USP, Lodha says, “All our products are made of branded Lycra. We don’t use spandex or elastane. We do a lot of our products on dual effects, which is a new age fibre blend with better recovery properties. We do modal blends, bamboo blends. We do special coatings like colour coatings, transparent coatings, all over prints, green cast denims, domo shades, lurex blends, metallic blends, special finishes, garment dyeing and so on.”
Expansion into garmenting in Bangladesh
Out of 30 per cent of the total fabric export, 10 to 15 per cent goes to Bangladesh. Bangladesh is its largest export destination. Other than Bangladesh, the company exports to Turkey and Latin America. Since Bangladesh is now able to manufacture premium jeans products with capacity to handle good washes, Soorty Mills has expanded into garmenting in Bangladesh. “Fashion is becoming very fast now. Every brand wants to do 12 to 14 collections a year. So you can’t keep increasing your lead time. And the lead time is getting impacted by the poor infrastructure. But there is no substitute for Bangladesh in the near future,” exclaims Lodha.
Its garmenting factory in Bangladesh is spread across two floors and has state of the art facilities. It is a Leed certified sustainable design with a focus on recycling and reusing. It uses wind energy and recycled water. Six months from now, the company aims manufacture 50,000 denims a day at this factory.
“Soorty is more into value added products. We are 35 years old company. We are more into denim but non denim is a small part of what we do and is more for in-house consumption. We started as a garment manufacturer in Pakistan. Now we have multiple facilities across Pakistan. We have a capacity of producing 2.5 million garments a month. Soorty is a vertically integrated unit having all processes from spinning to garmenting. In our denim facility, we produce 3.5 million meters of fabric a month. Another mill is in the establishing stage, which will add two million meters a month,” informs Naveed Ahmed, Manager Marketing and Public Relations, Soorty Mills.
While increasing its fabric production capacity to 5.5 million meters a month by next year, the company aims to increase its exports from 30 per cent to 50 per cent in the near future. www.soorty.com
Chinese sweaters, caps, pullovers, sweaters, children’s dresses, mufflers, and blankets are flooding Ludhiana, the hosiery capital of India. They look stylish, attractive and have a large variety of designs and cheap pricing, which make them popular among buyers. These Chinese hosiery items are priced around 15 to 20 per cent lower than locally made products.
It’s estimated that these Chinese imports have occupied around 20 per cent of the market. If an Indian cap costs Rs 400, a China-made cap costs around Rs 300. There are several reasons for the increasing share of such goods in the market. First, they are of better quality due to high class machinery. Also the Chinese government promotes technological advancements. If industrialists in Ludhiana want to install high-tech machines, they have to pay an interest of 10 to 13 per cent. In Japan they pay three per cent. But in China, the loan is interest-free. The industry in Ludhiana wants similar schemes that will promote it and enable it to flourish.
It’s estimated that Chinese products could have a much higher share in the cities of coastal India like Chennai, due to less freight charges. About 85 to 90 per cent of the demand of the woolen market in India is met by Ludhiana. Most of these units are small- and medium-sized.
The mass closure of dyeing units in Erode and other parts of Tamil Nadu has forced weavers in the state to process fabric in upcountry centers, resulting in high transport costs and increased lead time. The predominantly cotton-based spinning and power loom sectors across the nation have been facing severe recession in the last 18 months due to glut in global market and higher duties imposed on Indian textile products than on products from other textile manufacturing countries.
One solution is for textile manufacturers in Tamil Nadu to focus on future investments only in wet processing and further value addition to sustain the viability of 47 per cent of the spinning capacity and 22 per cent of the power loom capacity in the country.
It is hoped that the reopening of dyeing units in Rajasthan and the recently announced MEIS and IES export benefits for fabrics and other finished goods might improve market conditions in the coming months. Against this background, the Southern India Mills’ Association and the Powerloom Development and Export Promotion Council have decided to join hands to study the fabric market on a continuous basis and give feedback to the spinning and power loom sectors and also to the government.
Bangladesh’s export earnings from the US market touched double digit growth at over 11 per cent in the January-November period last year. Earnings from the US in this period of 2015 grew by 11.66 per cent compared to the same period of 2014. Earnings from readymade garment product exports to the US in the 11 months increased by 11.41 per cent compared to the same period of the previous year.
The country’s readymade garment sector has shown good performance in recent months. RMG export earnings from the US in July to December of financial year 2015-16 grew by 15.17 per cent compared to the same period of financial year 2014-15. Double digit export earnings growth in the US market is attributed to good competitiveness and improvement in factory compliance on the part of Asian country’s exporters.
Shaking off the negative impact of the Rana Plaza building collapse and the political turmoil Bangladesh, has started to gain space in the US market riding on the commitment and efficiency of entrepreneurs. Moreover, the ongoing factory inspection by Accord and Alliance is encouraging US buyers to come to Bangladesh.
The apparel and footwear market in the Philippines is registering strong value growth, supported by consumer and business confidence. Increased appetite for these products is stimulated by increasing disposable income of buyers, especially among young professionals in urban areas. There are a growing number of department stores and apparel and footwear specialists in the local market. Sportswear, although among the smallest categories, continues to have strong double-digit growth.
Foreign brands are entering the local market. The presence and opening of shopping malls nationwide make it easier for multinationals to find suitable locations for their brands. The Filipinos’ stronger western fashion awareness, both in style and different brands, cultivated by their exposure to the internet, is another positive factor.
There is an assortment of brands, appealing to a wide range of consumer segments across gender and income groups. A wide network of outlets, strategically located in shopping malls and retail districts nationwide, enables brands to cater to a large base. Apparel and footwear continue to be dominated by smaller players whose brands comprise more than half of value sales.
Sportswear will continue to have the fastest growth in the medium term and will be driven by sports-inspired apparel and footwear.
British top fashion's and most contradictory designers, Vivienne West wood reported a sales, for the year up December 31, 2016, increased 11 per cent, but margins were under pressure following challenges in the retail market and adding to its woes was the weak pound post Brexit. During the period, the company saw a 37 per cent increase in wholesale sales and a 5.3 per cent rise in retail sales, boosting its full-year turnover to £37.5 million, as against a turnover of £33.7 million during a year ago period.
Despite these setbacks, the brand “continues to remain attractive to its wider customer base as sales growth demonstrates,” however, the company suffered a dramatic drop in pre-tax profit which fell to £1.9 million when compared to £2.3 million in 2016. Westwood says drop in profitability was due to a 19 per cent increase in cost of sales due in part to the weak pound post the EU referendum. The brand is now focussing on alleviating these constraints by reviewing pricing and working steadfastly towards cost cutting. The brand is also working on a strategic review of the business targeted at creating a new operating structure. These measures it disclosed will allow it to optimise processes and overall efficiency of the business.
