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Italian textile machinery manufacturers saw a decline in orders during the second quarter of 2024 compared to the same period last year. The drop, attributed to a cautious global market, was particularly pronounced in foreign markets, which account for a significant share (86 per cent) of total orders.
The ACIMIT index, a measure of order intake, fell by 17 per cent to 49.8 points (base 2021=100). This decrease was driven entirely by a 22 per cent decline in foreign orders, with the index for those markets reaching 48.8 points.
However, a bright spot emerged in the domestic market. Italian orders saw a 25 per cent increase compared to Q2 2023, with the index reaching 57.3 points. This suggests a potential rebound within Italy.
Despite the overall decline, order backlogs remain healthy, providing Italian manufacturers with 4.3 months of assured production. Additionally, capacity utilization is expected to rise from 61 per cent in the first half of 2024 to 64 per cent in the latter half.
ACIMIT President Marco Salvade attributed the slowdown in foreign markets to global geopolitical uncertainty. This trend is further confirmed by declining Italian textile machinery exports (excluding China and Egypt) in the first quarter of 2024.
S&P Global has joined the International Textile Manufacturers Federation (ITMF) as a corporate member. The move, following the merger of IHS Markit with S&P Global in March 2022, enhances S&P Global Commodity Insights’ extensive coverage, which spans chemicals, oil and gas, power, metals, agriculture, and shipping.
ITMF’s Director General, Christian Schindler, expressed pleasure at the partnership, highlighting the mutual benefits of collaboration within the textile industry’s value chain.
Tatiana Bondar, Associate Director at S&P Global, emphasized the strategic advantage of joining ITMF. She noted that access to ITMF’s reports, statistics, and surveys will deepen S&P Global’s understanding of the fiber and textile industry.
Participation in ITMF’s exclusive activities, such as annual conferences and specialized workshops, will provide valuable insights and enhance S&P Global's market proximity. Bondar believes this integration will allow S&P Global’s fibers team, present across EMEA, Asia, and America, to offer significant value to ITMF and its members.
This partnership underscores the importance of being embedded within the industry to access crucial information and expertise, facilitating better service and informed decision-making.
With Finance Minister NirmalaSitharaman set to unveil the Union Budget for fiscal 2024-25 soon, various sectors within the textile industry hope for policies addressing their specific needs and promoting overall growth.
The luxury fashion sector seeks reforms to enhance global competitiveness. PremDewan, Head-Retail, Corneliani, OSL Luxury Collections, highlights key expectations including duty structure reduction, GST simplification, customer-friendly policies, and retail infrastructure development.
He recommends a reduction in the import duties to international standards and simplification of compliance standards for products like shoes and leather. Additionally, Dewan advocates for a re-evaluation of PAN and Aadhaar requirements for high-value purchases to encourage domestic spending. He believes increased investments in retail infrastructure will position India as a premier shopping destination, boosting both the luxury industry and the broader economy.
K KLalpuria, CEO and Executive Director, Indo Count Industries, anticipates a budget emphasising textile manufacturing. He hopes for measures to promote infrastructure development, sustainability, and supportive policies within the industry. Such initiatives will help India become a global leader in textile manufacturing, fostering innovation and competitive advantage, he says.
Harsh Saraf, Founder and Director, SuperSox, seeks new policies to integrate knitting, processing, and garmenting industries while also modernising them. He supports the continuation of the 15 per cent concessional tax rate for new manufacturing firms to boost investor confidence and support the ‘Make in India’ initiative. Saraf also stresses on the importance to improve labor laws for the expansion of production facilities. Further, he also calls for increased support in innovation and R&D to create environment-friendly processes and superior products.
The domestic cotton spinning sector is set to rebound in FY25 with an anticipated growth of 6-8 percent, driven by modest increases in realisation and a 4-6 percent rise in volume, as per a report by ICRA. This marks a recovery after nearly two years of decline due to falling yarn prices and muted domestic demand.
Over two-thirds of all cotton yarn produced is used domestically, with recovering downstream industries such as home textiles and ready-made clothing beginning to show signs of revival. After a growth spurt on a reduced base in FY24, exports are expected to normalise in FY25. Although global demand remains sluggish, a shift in sourcing preferences away from other countries will mitigate the impact on exports.
K Srikumar, Senior Vice President and Co-Group Head, Corporate Sector Ratings, ICRA, notes, gross contribution margins for spinners, which contracted sharply by approximately 20 percent Y-o-Y in FY24 amid weak domestic demand, recovered by an estimated 5 percent in Q1 FY25. This recovery trend is likely to continue throughout FY25. Consequently, operating profit margins are expected to expand by 100-150 basis points, supported by scale benefits and cost-saving measures undertaken by industry players.
The past two years saw a dramatic decline in domestic cotton prices, which peaked in H1 FY23 at a lifetime high of Rs 284 per kg. With a recovery in demand and an anticipated decrease in the area planted to cotton, average prices, which fell by about 26 percent Y-o-Y in FY24 due to a decline in world prices and weak demand from end-user groups, are expected to rise slightly in the near future.
ICRA alaoexpects a slight increase in capital expenditure announcements in FY25, driven by the need to modernise machinery, demand from the China Plus One strategy, and strengthening domestic demand from downstream garment companies.
To expand their market in Japan, the domestic apparel industry needs to capitalise on the free trade agreement (FTA) between the two countries, states Apparel Export Promotion Council (AEPC). The Council leads a delegation featuring over 2,000 exhibitors at the India Tex Trend Fair (ITTF) in Tokyo from July 23-25, 2024.
The fair features prominent Indian exhibitors from across the country displaying a diverse range of readymade garments (RMG) across various categories, including summer and winter collections, notes SudhirSekhri, Chairman, AEPC. Japanese brands, including Sumitomo Corporation, MUJI, Toyoshima, Marubeni, Mitsubishi, Koyo Trading, United Arrows, and MYK Fashion will also participate in the trade fair.
With Indian apparel having duty-free access to Japan under the Indo-Japan trade agreement, compared to a 9 per cent duty for Turkey and 9.5 per cent for China, Indian readymade garment manufacturers and exporters will benefit from participating in this fair, Sekriemphasises
A robust Indian garment industry, with a complete value chain and unique offerings, provides substantial scope for Japanese trading companies to source from India. Additionally, there are stronger opportunities for trade diversion as China's share in this market continues to decline. Known for their flexibility, Indian suppliers can cater to both small, customised orders and large-scale orders, he adds.
Vardhman Textiles has outlined an expansion plan worth Rs 2,000 crore. The plan includes execution of Rs 1,000-crore expansion and modernisation projects for the spinning division.
For this division, Vardhaman Textiles plans to launch new an open-end project to add approximately 35,000 spindles at a project cost of around Rs. 300 crore. The company also plans toreplace 60,000 existing spindles with 77,000 new spindles, resulting in a net addition of 17,000 spindles. These projects will be completed by May 2025.
The company also plans to enhance its fabric manufacturing capacity by undertaking two major initiatives: routine modernisation and debottlenecking, and a new project focused on manmade fiber-based fabrics, with an initial investment of approximately Rs. 300 crore, to be completed by 2025.
Additionally, Vardhman Textiles plans to increase the consumption of the green power. Currently, green energy accounts for only 2.5-3 per cent of the company’s total power usage. It now plans to boost this to 25-30 per cent through significant investments in solar and wind energy. This green power initiative aligns with global sustainability trends and is both commercially viable and environmentally responsible.
The Rs 2,000 crore investment by Vardhman Textiles is driven by several strategic considerations. The ‘China Plus One’ trend, where global brands diversify their supply chains by sourcing from countries other than China, has created a favorable environment for Indian textile companies. Additionally, recent government policy changes, such as the introduction of the RoDTEP scheme, have enhanced the feasibility and competitiveness of using imported cotton in production.
Vardhman Textiles is also making a significant investment in technical textiles manufacturing, starting with an initial capacity of 15 lakh meters per month. The first phase of this project will focus on producing 70-80 per cent polyester and 20-30 per cent nylon textiles for applications such as sportswear, activewear, industrial uses, and defense materials. This strategy move will involve an investment of Rs320-330 crores for its first phase.
Leveraging existing relationships with clients like Columbia and Decathlon, Vardhman aims to diversify its customer base to include new markets and industries. The company is optimistic about the synergies with current customers and potential for expansion, with plans for a second phase contingent on the success of the initial setup.
Pakistan plans to implement a track and trace system (TTS) to prevent tax evasion in the local cotton and ginning industry, announced RanaTanveerHussain, Minister for Industry and Production and National Food Security and Research at a meeting with the Pakistan Cotton Ginners Association (PCGA).
Emphasising the critical role of the industry in the rural economy,Hussain highlighted its potential to generate employment for the skilled and semi-skilled workforce. The meeting also addressed concerns regarding additional taxation on cotton seed in the federal budget for FY2024-25.
Hussain stated, application of the TTS to locally produced cotton bales would help prevent tax evasion and protect both local farming communities and the industrial sector. The government also plans to enforce the Cotton Control Act in collaboration with provincial governments, he added besides assuring the delegation of considering proposals regarding sales tax on seed cotton and cotton seed cake.
Further, the minister pledged to discuss the new taxation measures with the Finance Division and Federal Board of Revenue to address the challenges faced by the local ginning industry. During the meeting representatives from the Cotton Ginners Association called for the rationalisation of taxes to benefit the local industrial sector and promote cotton crop output.
The delegation noted, having produced over 8.4 million cotton bales last season, Pakistancould potentially increase this crop output to 20 million bales with supportive policies. Rationalising sales tax will enhance tax compliance and help curb tax evasion in the country, it added.
The apparel industry is undergoing a metamorphosis, driven by a confluence of consumer demands and technological advancements. Products are becoming smarter, greener, and designed for a life on the move.
Transformational trends reshaping apparel
Sustainable fabrics: Consumers are increasingly demanding eco-friendly clothing. In fact, sustainability has become a non-negotiable factor. A Textile Exchange study revealed that the global recycled polyester market is expected to surpass 48 million tons by 2025. Brands are responding with a focus on organic cotton, recycled materials like polyester from plastic bottles, and bio-based fabrics derived from plants or microorganisms. For example, Patagonia, a leading outdoor apparel brand, is renowned for its commitment to sustainability, using recycled materials in a significant portion of its product line. Biotechnology is also making waves. Brands are exploring lab-grown textiles and natural dyes, paving the way for a more sustainable future. For example Mylo uses mushroom leather by Bolt Threads. Then there is algae-based fibers by Algae Apparel to reduce environmental impact. A McKinsey & Company study predicts the bio-based textiles market will reach $40 billion by 2030.
Tech-powered transformation
Big data analytics are playing a pivotal role, allowing brands to glean valuable insights into customer behavior and preferences. This empowers them to design products that resonate with their target audience, like Adidas utilizing data to personalize shoe recommendations. 3D technology is another game-changer. Eco-conscious brands are leveraging 3D modelling software to create garments virtually, minimizing fabric waste during the design process. Automation is gradually creeping into manufacturing, with robots handling tasks like sewing and cutting, leading to increased efficiency and potentially lower production costs. Levi's for example is integrating conductive threads and biosensors into garments, creating a market projected to reach $5.5 billion by 2024 as per Grand View Research. Software like Optitex allows virtual prototyping, minimizing fabric waste and enabling customization. A Smithers Pira report suggests the on-demand apparel market will touch $36 billion by 2025.
Comfort reigns supreme
The rise of athleisure and remote work culture has fuelled demand for comfortable clothing. Fabrics with a focus on breathability, moisture-wicking properties, and stretch are dominating the market. Lululemon's Athleisure dominance is a testament to this trend. Even formal wear is embracing comfort, with brands offering relaxed tailoring and wrinkle-resistant fabrics. In fact, the lines between activewear and everyday wear are blurring. As per Statista the global athleisure market is expected to reach $547 billion by 2024. Also, knits are gaining momentum as knitwear offers superior comfort, flexibility, and breathability, making it ideal for casual and activewear. A report by Textile World reveals the global knitwear market is projected to grow at a CAGR of 4.3 per cent until 2027.
Customization on the rise
Consumers are also opting for clothes that reflect their individuality. On-demand customization, allowing personalization of size, design, or even prints, is gaining traction. Brands like Nike are offering customizable sneakers through their app, catering to this desire for unique pieces.
Fibers adapt and evolve
Fiber innovation is keeping pace with these trends. Natural fibers like merino wool are gaining traction due to their inherent moisture-wicking and odor-resistant properties. Recycled polyester is another popular choice, offering sustainability benefits without compromising on performance. Blended fabrics are also on the rise, combining the strengths of different fibers to create garments with specific functionalities. While wovens still dominate formal wear, knits with advanced engineering are making inroads into casual and athletic apparel due to their comfort and versatility.
For example Cotopaxi, a purpose-driven outdoor apparel brand, uses recycled and Bluesign-approved fabrics in technical gear. This ensures durability, performance, and minimal environmental impact. Their success story exemplifies the growing consumer demand for clothes that are both functional and eco-conscious.
Indeed, the apparel industry is at a tipping point. Technology, sustainability, and comfort are reshaping the way we think about clothes. As these trends continue to evolve, one can expect more innovative and functional garments that cater to our ever-changing needs.
Gold Long John, a leading supplier of performance footwear fabrics, is making a significant move towards sustainability by integrating Empel No-Wick, a cutting-edge waterless and PFAS-free finishing technology, into their Vietnam mill operations. This innovative platform excels at preventing wicking more effectively than any competing chemistry while being entirely water-free and free of PFAS chemicals.
Martin Flora, President of Global Business Development at GTT, highlighted the significance of the partnership, noting that the Oeko Tex-certified Empel platform symbolizes the future of high-performance finishes. This technology eliminates the need for water and harmful chemicals. He pointed out that Gold Long John played a key role in preparing Empel No-Wick for commercial use and is essential for expanding this clean chemistry across Southeast Asia.
Gold Long John, renowned for its leadership in performance footwear fabric production, was the first major mill to adopt and help commercialize Empel. In 2023, they installed Empel production machinery at their Vietnam facility and are now planning to expand to Taiwan. Kevin Wen, President of Gold Long John, highlighted that this move not only positions them at the forefront of global sustainability but also enhances product performance and innovation.
Empel No-Wick proves that cleaner manufacturing processes can deliver superior performance while minimizing environmental impact.
On August 21, 2024, leading German textile companies Bruckner, Groz-Beckert, the Karl Mayer Group, and Thies will host a symposium in Blumenau, Brazil. The event, held at NS Armazem, Fortaleza, will focus on the rising demand for warp knitted elastic fabrics.
The past two to three years have seen a significant surge in demand for these fabrics, presenting both opportunities and challenges for the Brazilian textile industry. While there is potential for growth and market leadership, the production of warp knitted elastic fabrics requires different methods compared to conventional textiles.
To support the Brazilian industry, the symposium titled "Production of Warp Knitted Elastic Fabric" will feature technical presentations, best practices, and showcases of the latest innovations. Industry experts, stakeholders, and visionaries will share their insights and experiences.
The event aims to foster knowledge exchange and enhance cooperation within the industry. Interactive sessions and discussion panels will facilitate networking and collaboration among participants. The symposium will be conducted in Portuguese.
By organizing this event, Bruckner, Groz-Beckert, Karl Mayer, and Thies aim to help Brazilian companies adapt to market trends and capitalize on the growing demand for warp knitted elastic fabrics.
