FW
Bangladesh doesn’t hope to get any significant benefits by joining the Trans Pacific Partnership (TPP). Exports anyway get tariff-free access to markets in most TPP member-countries like Australia, Canada, Japan, Singapore and New Zealand.
In fact Bangladesh’s income from duty on imports from those markets will fall if it joins TPP as the country will have to reciprocate to some extent by reducing import tariffs for partner countries. So, Bangladesh will see a dip in revenue earnings from import duty since TPP member countries like Singapore and Japan are two major sources of Bangladesh’s imports. In the fiscal year 2015, the country sourced some 10 per cent of its total imports from Singapore and Japan. Currently import duties contribute around 27 per cent of the total revenue earnings of Bangladesh.
Under the TPP framework, Bangladesh will get free market access to the US, but to achieve this the country will need to improve standards in some areas. But what’s certain is that Bangladesh will face competition from Vietnam once the Trans-Pacific Partnership comes into force.
Vietnam is among the 12 countries that are part of the TPP. Under the agreement the member countries have a vast scope to derive mutual economic benefits through duty relief.
Moroccan textile companies are looking at reaching out to new markets abroad. The country’s industrial strategy has made textiles a priority. Companies are investing in dye finishing, printing and dyeing and knitting. In fact, Moroccan companies participated for the first time at Premiere Vision Salon Manufacturinng Istanbul (March 23-25) with the objective to reach new international markets and canvass outsourcer.
One factor that has always been to Morocco’s advantage is its proximity to Europe. The other is the relatively lower wages and the natural skill and dexterity of its workers, most of whom are women. The textile sector in Morocco covers five types of activity: warp and woof; knitted fabric; jeans; sportswear; and household textiles.
Textiles and clothing sector plays a major role in the country’s economy. It is the top industrial employer, providing about 2,00,000 jobs to 42 per cent of the labor force working in the industry. Textiles represent 40 per cent of Morocco’s industrial exports.
Some advantages the Moroccan textile industry enjoys are market knowledge and a mastery of European standards; ability to meet shipping and delivery deadlines; competitive advantage in transport costs, pricing and service. In Morocco, the state provides platforms, coordination and funding for marketing Morocco’s textile products and capabilities. The country has a simplified and integrated logistics system that guarantees delivery of products on time and allows the manufacturer to concentrate on production.
Knitwear makers in Bangladesh are now integrating their existing composite units with more facilities. Composite units are one of the main strengths of the country’s knitwear sub-sector that sources more than 90 per cent of fabrics from the local market. Traditionally a knit factory having its own knitting, dyeing, sewing and finishing facilities is known as a composite.
Global brands and retailers now prefer their sourcing units to have more integrated facilities like washing, printing and embroidery on the premises or under single ownership mainly to ensure compliance in the whole supply chain. This helps buyers trace and ensure all safety and other requirements if all the units are on one premise or surrounding areas or have the same ownership. Big brands and buyersdo not want to risk their reputation by sourcing from any unit that is not compliant.
Policy support, especially cash incentives up to 25 per cent for local fabric sourcing, has also helped entrepreneurs set up composite units. The number of composite units ranges from 400 from 500.
Value addition by the composite units is nearly 100 per cent as they source fabrics from the local market. The knitwear sector as a whole adds value to about 75 to 80 per cent because the basic raw material, cotton, is being imported.
US company Globe that makes clothing for firefighters is now using ‘Wearable Advanced Sensor Platform’ (WASP) tracks heart rate, heart rate variability, estimated core body temperature, respiration rate, activity levels, posture, and other physiological factors, as well as 3D location inside a building in its clothes. These high tech products have the capability to interact with their user or environment, by tracking and communicating data about the wearer or environment to other devices through embedded sensors and conductive yarns.
Firefighters experience extreme physiological stress during the course of their duties. Stress and overexertion account for 50 per cent or more of firefighter line of duty deaths. Factors that affect firefighter responses include exertion of work performed, elevated thermal environment, wearing heavily insulated protective clothing, carrying heavy equipment, as well as individual health status, fitness level, medication, and hydration levels.
Recent advances in technology have brought together the apparel, technology, and textile industries to develop new capabilities in fabrics with the potential to change how athletes, patients, soldiers, first responders, and everyday consumers interact with their clothes and other textile products.
WASP is the world’s only system for real-time monitoring of physiology and location designed for firefighters and first responders.
globeturnoutgear.com/
The yarn market has been stable in Bangladesh thanks to the declining cotton prices worldwide. Yarn stocks at spinning mills in Bangladesh have gone down amid rising demand from garment exporters. Garment exports increased 9.47 per cent year-on-year in the July-February period of the current fiscal year.
Bangladesh has recently overtaken China as the largest cotton importer in the world as China has stopped importing cotton due to its huge stockpile. As of August, China's cotton stock stood at 64.58 million bales, which is half the annual global production. China’s stock rose because of a drop in consumption that resulted from higher production costs and shortage of workers. In 2015, Bangladesh imported 6.1 million bales of cotton, which was 5.59 million in 2014.
The changing composition of readymade garment exports from Bangladesh in recent years has created a steady demand for yarn and cotton in the local market. This shift has taken place primarily because of two reasons: the necessity of establishing backward linkages to improve delivery response time for effective competitiveness; and the relatively small investment that is required to establish these linkages in the knitwear sector.
Investments in composite knitwear manufacturing units have gained momentum in the last 8 to 10 years, creating a substantial demand for good quality yarn and in turn demand for cotton for spinning.
The government of India issued the Cotton Seed Price (Control) Order which fixed a uniform price for seeds of Bt cotton, across all cotton-growing states. Under the order, a 450-gm packet of Bt cotton seed would be capped at Rs 800 for the 2016-17 seasons, compared to the current range of Rs 830 to Rs 1,030.
But the real point of contention between seed companies and the major developer of Bt cotton technology, Mahyco Monsanto Biotech, an arm of the US seed giant Monsanto, is the royalty payment, technically known as ‘trait fees.’ This was slashed a steep 70 per cent from Rs 163 plus taxes per 450-gm packet (the standard unit for Bt seeds) to Rs 49.
Incidentally, Mahyco Monsanto Biotech, which dominates the market, has threatened to ‘re-evaluate’ its India operations. In particular, it has challenged the Centre's power to fix trait fees as being contrary to various laws - in 2009. Mahyco Monsanto Biotech has also argued that the order restricts farmers' access to the latest technology.
Things became complicated when state governments started intervening in seed pricing. The genesis of the issue was that Mahyco Monsanto Biotech was initially the sole licensed producer of Bt technology under its brand BOLLGARD I (BG I) and charged a trait fee of Rs 1,250. Inevitably, this resulted in a sharp jump in cotton seed prices from Rs 500 to Rs 1,800.
The government’s decision to step into this corporate battle is hard to explain. But it did so in December last year, with the Cotton Price Control Order, which empowered it to fix a uniform national price of cotton seeds including Bt cotton and trait fees.
To commemorate the World Water Day, Levis Strauss announced it is making its innovative Water Less finishing techniques available to the public in an effort to encourage water conservation and create impactful change across the apparel industry.
The techniques were introduced by the company’s designers in 2011 and it reduced water used in garment finishing by up to 96 per cent. Since implementation, Water techniques have helped the company save more than 1 billion liters of water.
In addition, Levis Strauss also announced its participation in the White House Water Summit, where the company communicated its goal to train 100 per cent of corporate employees on water conservation through its ongoing partnership with Project WET, a non-profit that offers water education to help people understand and value water and ensure a sustainable future.
Despite eyeing 4 per cent growth this year, Mexico's textile sector faces looming threats including the Trans-Pacific Partnership (TPP) and Donald Trump's proposal to barricade its US border – which some executives estimate could trigger $2 billion in annual trade losses.
According to Juan Alfonso Ayub, President of main textiles trade lobby Canaintex, a 6 per cent to 7 per cent jump in export value will drive this year's hike and domestic demand is also set to increase as a sagging peso fuels import substitution. Ayub notes the TPP is a rising red flag at a time when Mexico continues to lose market share to Vietnam and other formidable Asian rivals. We are very worried, Vietnam is an evident risk to our country and enjoys big government subsidies, said Ayub. Fifteen years ago, Mexico was the number one or two suppliers to the US. Now they are the fifth or sixth.
As a part of the game-changing potential of the TPP, Latin America's second-largest economy negotiated a 16-year, 25 per cent average duty phase-out for 80 key apparel and textile products. Yet Ayub says that's insufficient to protect suppliers from Vietnamese competition and the lingering risk that China will use its neighbour to triangulate exports.
A court order has prevented textile maker Alok Industries from selling its assets or changing its equity structure till a winding up petition filed by HSBC against the company is settled. The court set the date for next hearing on April 6.
HSBC has filed a petition on behalf of a consortium of unsecured lenders led by VTB Capital, to liquidate Alok Industries and settle outstanding dues of $55 million from a loan of $125 million that the company had taken. For it, the company had offered guarantee in an off-shore holding company which has no assets that can be seized by these lenders.
Alok Industries is in the process of undergoing a strategic debt restructuring in which a joint forum of 25 banks led by State Bank of India that lent around Rs 13,000 crores to the company decided in January to convert the loans into a 65 per cent equity stake.
SBI Capital Markets has since been mandated to run a formal auction process to sell the core businesses as a whole or in parts, and had called an extraordinary general meeting earlier this week.
While the process is aimed at repayment of secured lenders, mostly public sector banks, it has no proposals for unsecured lenders, who as the term suggests rank lower in the repayment scheme.
www.alokind.com/
Exporters of textile and leather products in Pakistan want a zero-rating regime available to them. They say this will help them compete with their rivals in international markets. Pakistan’s exports of textile and leather products have been persistently declining. And the exporters’ margin of profit is a meager 4 to 5 per cent. Local taxes and levies are reducing the liquidity of export oriented sectors. Increasing prices of raw materials, high banking service charges, high export refinance rates and the uneven taxation system are added reasons for falling exports.
Exporters want electricity and gas tariffs to be reduced and that the export sector should have a separate head of account in the tariff structure. They also want export-oriented industries to be ensured with a regular supply of all utilities to run the manufacturing units without any interruption.
Another complaint of theirs is that trade organisations are not consulted during the preparation of policies and neither are their recommendations included in decision making. Sales tax refund claims are pending approval. They say any delay in implementing the zero-rating regime would not only make it difficult for exporters to meet targets it would also make things worse for the already deteriorating sector.
