FW
Bangladesh has decided to take stern action against garment factories that fail to conduct structural, fire and electrical assessment. Punitive action includes stopping factory production. Some 11 garment factories, which were unwilling to be assessed in the past, say they are now interested in receiving the free inspection service. Roughly 1,500 factories, which remain outside the purview of Accord and Alliance, are expected to be assessed by a government-ILO joint program and ILO is paying the cost of inspection.
The joint assessment program began in November 2013. Some 800 garment factories have so far been assessed under the initiative, while Accord and Alliance inspected their listed factories within the set timeframe. The assessment program was reportedly delayed due to non-cooperation of factory management and inconsistencies in information including factory addresses and contact numbers the ILO received from apparel industry associations.
Earlier, the deadline for the free assessment of garment factories was set at April, 30, 2015. It has since been revised to July 31. After the expiry of the revised deadline, building and factory owners have to bear the cost of assessment. The assessment covers factories that are members of either the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) or the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
Pakistan's textile mills want import duty on polyester staple fiber (PSF) to be abolished. They want imports of specialty fibers including acrylic to be allowed at zero per cent import duty enabling the industry to diversify its product base.
They also want imports of viscose staple fiber, which is not being manufactured locally, to be allowed at zero per cent customs duty. The country’s textile industry is predominately cotton based with an odd fiber mix, i.e. 80 per cent cotton and 20 per cent manmade fibers. The global trend is 70 per cent manmade fibers and 30 per cent cotton.
Mills say the proposal to increase customs duty on PSF imports would not only make export-led textile goods unviable but also make PSF-based textile goods for domestic consumption unaffordable. Already, they say, cheaper imports and smuggling of fabric and synthetic yarn have made inroads into the domestic market due to the present high polyester tariff.
Pakistan’s textile industry is unable to produce the exportable surplus, in particular manmade fiber-based textile products, to benefit from the enormous opportunities under GSP Plus of export of synthetic-based textile products.
The country’s textile industry finds itself unable to compete in man-made fiber textile and clothing products owing to the protection extended to local PSF.
The Russian clothing and footwear market has been suffering due to low demand and consumer sentiment since 2014. This has forced many European brands to exit the market. China on the other hand is losing its position as the world’s leading garments manufacturer and this has opened Russia’s doors for other Asian countries.
Studies suggest that from the beginning of 2015, the Russian clothing and footwear retail market declined by 25–35 per cent in volume terms. It is, however, expected to grow at about 3.5–4 per cent by the end of the year in terms of value to reach 3.21 trillion rubles ($60.9 billion), according to Y-Сonsulting analysts’ estimates. In the first quarter of 2015, sales volume declined by 42 per cent and 19 per cent in value. The mid-range segment has experienced the most severe drop. Since 2014, many international clothing brands made an exit from the Russian market, including Italy’s OVS, British New Look and River Island, and Germany and Hong Kong headquartered Esprit, with more on their way out.
Russia opens doors to China’s neighbours
With China’s position as world’s number one destination for cheap textiles on decline, its neighbouring Asian counties such as India, Bangladesh, Vietnam, Thailand, and Indonesia have gained importance and access to the market like Russia.
Vietnam Textile & Apparel Association (VITAS) statistics reveal between 2005 and 2011, the country’s garment exports increased by 32 per cent, while China's exports increased by 15 per cent and exports from India, Turkey, Malaysia and Thailand increased by about 7 per cent. There are two major factors that make garment imports to Russia from these counties more competitive than from China, - the prices and the lower import duties imposed by the Russian government.
Bangladesh and Vietnam are on the list of seven largest apparel exporters to Russia, according to on Consulting Group data. Although their shares are not as big as China’s, the growth is more impressive. In 2012-14, imports from Bangladesh grew at 25.59 percent and Vietnam at 16.96 per cent while imports from China fell by 4.48 percent.
Vietnam National Textile and Garment Group (Vinatex) says, the European Union will continue to be Vietnam’s major market in the coming years. However, with Moscow no longer levying high tariffs on Vietnamese apparel products, its exports to Russia will increase. Recently, Vietnam signed a free trade agreement with the Eurasian Economic Union (EAEU) comprising Russia, Belarus, Armenia, Kazakhstan and Kyrgyzstan. Russian authorities expect this agreement to become a model for Russia’s further integration with other members of ASEAN trade bloc.
Asian imports and domestic production
While imports from emerging Asian countries to Russia are on the rise, the Russian government supports expanding domestic manufacturing capacity and improving production efficiency. There are 653 large and medium enterprises and about 4,000 small companies in Russia engaged in the garments and textile industry, according to government statistics. The industry is witnessing shoots of revivals since the crisis of 2009.
According to Souzlegprom (Russian Union of Entrepreneurs of Textile and Light Industry), domestic manufacturers benefit from Russia's Light Industry Development Strategy, which provides state support for textile and garments manufacturers, including modernization of technological base and enhancing their competitiveness, among other measures. Last year, the Russian government banned using imported textiles for manufacturing of military uniforms, leisurewear, underwear, bedclothes, hats, socks, pillows and shoes to boost domestic production.
Inspections on hundreds of small and medium-sized garment and textile factories in Vietnam will be carried out soon. The aim is to improve safety and working conditions in the sector. Another goal is to improve the knowledge and skills of labor inspectors.
Over the next five months, around 160 firms will be inspected across 12 provinces. The campaign will take place across a readymade garment sector that employs around 2.5 million workers. The companies that will be inspected will mainly be small and medium-sized enterprises, outsourcing companies, those that have no direct relationship with exporters.
Inspectors will be trained on how to plan, implement and evaluate the campaigns so that similar initiatives can be carried out in future. A risk mapping exercise was carried out in 2014. Around 25 companies in the readymade garment sector were visited by inspectors trained in standard procedures. The finding then was that there were significant risks of non-compliance in the sector and identified the main causes as poor understanding of the law and a failure to grasp the benefits of compliance.
Vietnam is a strong garment sourcing destination. Gamrents making industry is one of the most important in Vietnam, accounting for 13.6 per cent of the country's export turnover and 10.5 per cent of the country's GDP.
Pitti Uomo will be held in Italy from June 16 to 19, 2015. This event takes place twice a year and remains one of the world’s most important platforms for men’s clothing and accessory collections and for launching new projects in men’s fashion.
With its dynamic continuously evolving geography, Pitti Uomo picks up all the new moods and trends in fashion. This year, a new section goes beyond gender distinctions to dictate a precise kind of style. Unconventional will present the most vibrant voices in luxury underground styles. The future look for menswear are being explored by Futuro Maschile. There are sections dedicated to fashion research such as Touch! and l’Altro Uomo.
Women’s collections no longer be presented under a gender sign but distributed around the fair according to styling criteria. Global brands use the event to launch new projects and present new concepts. Little-known brands see Pitti Uomo as the place for establishing their identities and generating business.
Over 30,000 visitors attended the last edition representing the world’s major department stores and small retailers. Forty per cent of the vendors at this edition will be coming from more than thirty countries and there will be approximately 1150 brands.
www.pittimmagine.com/en/corporate/fairs/uomo.html
Technical Fiber Products (TFP), UK-based speciality wet-laid nonwoven manufacturer is a leading nonwoven manufacturer. The company is doubling its production capacity with the installation of a state of the art third manufacturing line. TFP’s wet laid nonwoven materials have been developed specifically to significantly improve the mechanical properties of a composite with minimal modifications to the manufacturing process necessary. The lightweight veils can be interleaved between reinforcement plies to provide a means to significantly improve the interlaminar toughness of a composite structure, increasing resistance to both mode-I and mode-II fracture.
The materials have been specifically designed to provide multiple benefits and enabling a high quality surface finish whilst simultaneously imparting surface functionality such as conductivity, EMI shielding and corrosion and abrasion resistance to a composite structure.
Other benefits include the use of dielectric nonwovens to prevent galvanic corrosion, which occurs when aluminium or other metals come into contact with carbon fiber in a composite structure.
The nonwoven provides an extremely uniform, lightweight barrier between the two materials to isolate them, stopping an electrochemical reaction occurring. In addition, the ultra lightweight veils are designed as an effective carrier or support for adhesive films, ensuring a minimum weight addition whilst improving handling and setting the bond line.
TFP’s range of fire protection materials also delivers highly effective passive fire protection at the surface of a composite without compromising the integrity of the structure.
www.tfpglobal.com/
Spinners want Tamil Nadu to reduce VAT on cotton, cotton yarn and man-made yarn to two per cent from the present five per cent. Tamil Nadu has a 55 per cent share of the total spinning capacity in India. But since cotton production in the state is insufficient, mills have to source it from other states. But logistics costs and fuel prices and various other factors have hiked their production cost making them less competitive compared to mills in other states.
Sale of cotton yarn in Tamil Nadu attracts five per cent sales tax, whereas it is only two per cent for yarn from neighboring states. This difference also increases the cost of finished goods within Tamil Nadu and on inter-state sales, making them expensive as compared to the price of yarns from other states.
Considering this, mills want Value-Added Tax (VAT) to be reduced to safeguard the spinning industry in the state and save livelihood of millions of workers in the textile industry. They also want the one per cent market cess levied on cotton waste to be abolished.
The VAT is a tax on the consumption of products. It is referred to as an indirect tax because it is typically collected by intermediaries (manufacturers, retailers etc.) rather than collected directly by the government.
Apparel exporters from Tirupur have welcomed the reduction of repo rate by 0.25 per cent. However, they say the interest rate cut would be helpful to quote competitive rates and sustain in the global market only when banks pass on the measures to small and medium enterprises and exporting units.
The reduction in the interest rate comes at a time when there is no sign of a decisive economic recovery in the global market and when there is continued deceleration in China’s economy. Key policy rates have been reduced by 25 basis points from 7.5 per cent to 7.25 per cent with immediate effect and at the same time Cash Reserve Ratio has been kept at four per cent of net demand and time liabilities.
The repo rate is the rate at which Central Bank of a country lends money to commercial banks in the event of any shortfall of funds. Repo rate is used by monetary authorities to control inflation. In the event of inflation, central banks increase the repo rate as this acts as a disincentive for banks to borrow from the central bank. This ultimately reduces the money supply in the economy and thus helps in arresting inflation.
The central bank takes the contrary position in the event of a fall in inflationary pressures. Repo and reverse repo rates form a part of the liquidity adjustment facility.
A recent report by the Textile Exchange, 2014 signified the beginning of a turnaround for the organic cotton market. After three years of steady decline, year 2014 saw 10 per cent growth in overall organic cotton production.
The report says that the news is a sign that the textile industry is moving together towards finding solutions to reduce carbon footprint. Across the industry, there has been noticeable improvement in business practices, stronger communication between supply chain tiers, increase in certifications, and evidence of longer-term planning to increase sustainability efforts.
The reports says that while many factors contribute to this important shift, most of the growth can be attributed to increased market demand with more and more companies showing commitments towards including organic cotton and setting targets explicitly for increasing their organic cotton use; improved supply chain linkages with brands and retailers working to secure their supply of organic, resulting in better connections between organic cotton farmers and the textile supply chain.
www.textileexchange.org
While it has been a hot topic of discussion at all textile and clothing conferences and seminars, the shift in manufacturing is being noticed in major importing countries such as the US and UK. For instance, as per recent UKFT data, there are 58,000 businesses in the fashion and textile supply sector in the UK, which contribute around £12billion in gross value to the UK economy per year. These companies contribute annual exports of more than £8.6billion ($13billion) at wholesale.
Also according to the British Fashion Council research, the value, including retail sales, of the UK fashion industry to the UK economy grew from £21billion in 2009 to £26billion in 2014, with the fashion sector as a whole estimated to support 797,000 jobs in the UK. Brands like Margaret Howell, Marks & Spencer, John Lewis, Jaeger, Arcadia Group and River Island are increasingly sourcing from within UK.
Experts point out that closer to home sourcing is on the rise owing to factors such as speed to market, quick accessibility and easier visits to factories, check on production quality and a better gross margin. The shift is also being witnessed in the US. Textiles and apparel segment still lags behind but there has been an increase in production of about 2.4 per cent domestically, up from 1.75 per cent in 2003. The New York-listed American Apparel, for instance, operates one of the largest sewing factories in North America.
www.ukft.org
