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To ensure expansion of the cane and bamboo industry of the region, the Ministry of Textiles and Development of North Eastern Region (DoNER) has signed a MoU. The MoU envisages close coordination between the two ministries so that the cane and bamboo sector gets requisite assistance and create employment opportunities in the region. Additional MoUs were signed between different Central and State agencies and investors and promoters.
The two-day Northeast Investors Summit was organised jointly by Ministry of Textiles and Ministry of DoNER in collaboration with industry associations FICCI and CII.The Summit intends to showcase the NE as a global destination for investment and explore the possibility of bringing in convergence of efforts of various ministries and Northeastern States to attract investment in the NE.
Textiles minister Smiriti Irani also announced that from the next academic session master craftsmen from the handloom industry would be giving lessons at National Institute of Fashion Technology (NIFT). Touching on the rich tradition of the handloom and handicraft sector of the region, she said that the Centre has invested in infrastructural projects worth Rs 52,000 crore to help investment opportunities as part of the Act East Policy.
The minister also announced an investment of Rs 820 crores in sericulture sector of the region. She said the investment from the Centre would enable employment of close to four lakh families. Giving out details of the funds sanctioned by the Ministry, Irani said that projects worth Rs 1,040 crores has been alloted for the region for textile promotion schemes in handloom, handicrafts, sericulture, apparel and garmenting.
Increasing competition and rising labour costs in China are forcing apparel makers and retailers from Japan to shift focus away from the country, while some have reverted to domestic production. In 2016, women's apparel company Itokin, headquartered in Tokyo, withdrew all its operations in China after the company concluded that there is no prospect of its earnings improving there. In February the same year, the company was brought under the umbrella of Tokyo-based investment fund Integral. Although the company had 300 stores in China at its peak, intensifying competition with local rivals had eaten away at corporate profits.
Womenswear retailer Honeys, headquartered Iwaki, in Fukushima Prefecture, is well on its way to close its flagship stores and department stores in China. While continuing to open new outlets, it plans to close about 270 stores in the three years through this spring, bringing its total outlet count to 430. According to an official of the company it is not only at department stores but also shopping centers where the competition has been intensifying. Other Japanese apparel companies are reviewing their manufacturing strategies in China too.
Earlier, many Japanese manufacturers moved their production facilities to China in pursuit of cheap labour but increasing labour costs have jeopardized their competitive edge as a low-cost manufacturing. Even though the country is no longer enjoying double-digit economic growth, average wages are increasing by 10 per cent a year.
Currently contributing 5 per cent to India’s GDP and 14 per cent to overall index of Industrial production, the textile sector was once one of the key industrial sectors in India. A study by Wazir Advisors and PCI Xylenes & Polyester says, the sector has potential to grow 5 times to around $ 500 billion market.
However, in recent times, textile companies have been feeling the heat, and many smaller countries have surpassed India in terms of share of exports in the global supply chain. What was once an advantage for India (lower energy, labour costs, compliance costs, etc) is now becoming the advantage of other countries.
Unlike many of its other neighbours, the requirements to manage obligations on energy and environment are stringent in India. Productivity lags behind other producing countries. Thus, new technologies are required and as also skilling staff to use these technologies. But all is not lost for the sector. There is an opportunity to turn things around. Emergence of Big Data Analytics and Industrial Internet of Things (IIoT) provides an amazing tool for the sector to explore and invest in process changes, resource optimisation and technology upgrades to double the energy/resource productivity.
The Indian textile industry with support from government should focus on technology upgrades and doubling resource/energy productivity - extracting maximum value out of its resources (considering that we have our presence in the entire value chain from fibre to garments). Once we do it all other disadvantages would be sort mitigated. Budget provisions will have to care for other business fundamentals but all benefits should help the industry move towards adaptation of new technologies and the utilisation of funds made available to the industry have to reflect progress on these key aspects.
The textile sector nearly came to a standstill in the first few weeks after demonetization. As an after effect, many small garment units were unable to pay wages to workers and production. However, with the situation improving steadily and the Union Budget coming up, the industry is optimistic about the year ahead. What Arun Jaitley announces on February 1 will determine whether the industry’s optimism is warranted.
A Sakthivel, Chairman, Federation of Indian Export Organisations and textile industry veteran says, the industry does not expect too many sops from the Budget. After the big Rs 6,000 crores special package announced last June, the industry does not expect major sops. The two key demand from the industry, submitted to the government, concerns the Goods and Services Tax (GST).
Analysts say the industry is lobbying hard for export tax exempting. Another issue is that a lot of products are transported right through production. Something goes for printing outside of the primary factory and then comes back. The government should exempt the industry from the tax as well, Sakthivel felt.
Others however, have more specific suggestions on what the budget’s thrust should be. V D Zope, Chairman of The Textile Association (India), stressed that more focus needs to be put on the garments segment, to boost exports. The industry should also push for more polyester cotton consumption, he believed. But more important is what Jaitley is expected to give to exporters. Vope says, the focus should be on exports and more incentives needs to be given.
Gokaldas Exports, a well know manufacturer and exporter of men’s, women and children’s apparel and outerwear, has entered into a MoU with the government of Andhra Pradesh for setting up of four apparel manufacturing units in the next three years in Chittoor District. This will involve an investment of approximately up to Rs 200 crore which is likely to generate approximately 5,000 new jobs.
The company says the investment is however, subject to terms and conditions as requested and sought by GEL including appropriate infrastructural support and relevant incentives and subsidies being made available to GEL with the government of Andhra Pradesh.
In terms of skill base in the garment industry, Pakistan is way behind Sri Lanka and Bangladesh, Firoz Rasul, the president of the Aga Khan University, says. He was speaking as the chief guest at the 17th convocation of the Textile Institute of Pakistan (TIP) held at, Bin Qasim (Ghakkar Phatak). Rasul said he admired TIP’s work, significance and its impact. He added that textile was one of the most important sectors of the country and considered the backbone of Pakistan’s economy.
Pakistan was the eighth largest exporter of textile in Asia, fourth largest producer of cotton and third largest consumer of cotton in the world. It is also the world’s second largest cotton yarn exporter and third largest cotton cloth manufacturer and exporter, he informed. He appreciated the fact that the sector provided employment to about 40 per cent of the industrial labour force and accounted for eight per cent of the total GDP.
However, Pakistan lacked quality and innovation in engineering and technology development. Rasul also highlighted the energy crisis, shortage of gas supply and power cuts for the reducing number of textile mills in the country. He observed production capability was low because of obsolete machinery and technology while in the long term, cotton as a crop would not be viable in Pakistan with its scarce water resources.
Denim designer Maurice Malone of Williamsburg Garment Company (WGC) believes the US garment manufacturing industry is poised for growth driven by small to mid-sized brands. WGC is an American denim brand manufacturing in US Malone is a 30-year veteran of clothing design and production. WGC is doing its part to drive American infrastructure as it expands into manufacturing its own knit products and establishing a manufacturing line for others to utilize.
On why denim manufacturing has moved overseas, Malone says it was not fair to say automation and foreign production didn't erode the American garment manufacturing industry, on the contrary it were manufacturers themselves. The goal of corporations is to maximize profits for investors. In contrast this was against the Chinese philosophy of keeping people working by choosing larger volumes for smaller margins while sacrificing higher profit per piece.
On why manufacturing units moved overseas, the Malone opines Americans almost always choose to buy cheaper textiles than buying American. That is why American producers not claiming the luxury sector must find ways to steam line production process and offer a better product at competitive prices as per the WGC goal. Consumers seek lower cost products, companies move production to lower cost areas to stay competitive. This happens even if people want to see products made in America.
Aiming to reverse the snowball effect, Malone believes Americans should start small and develop their own production chains within the US. This would help reverse the outflow. For consumers, the goal of the manufactures must be to produce reasonably priced, completive goods.
Is it possible to grow an exclusive brand in the digital world? That in short is the whole idea of a debate staring at the luxury fashion industry where growth has slowed. This at a time when digital technologies have allowed other sectors to expand globally. The mood in the luxe sector is grim. Global volatility and stock market uncertainty have led to an overall slowdown. A report by McKinsey and London-based publication Business of Fashion last month revealed, nearly 70 per cent of surveyed fashion executives, investors and industry observers believe conditions for the industry have become worse.
According to Achim Berg, a lead author of the McKinsey report and leader of the firm’s apparel, fashion and luxury practice, the key message is that 2016 was a really bad year for the industry, probably the worst one since the financial crisis. That was especially true for the luxury part of the industry which was a bit surprising because everyone knew that the year gone by was bad. But it was never expected to be so bad.
Some brands have turned to new technologies to connect with an increasingly digital consumer who demands immediate gratification, quick service and ever-new ways to interact with old brands.But the luxury world, by its very nature, can seem out of place with trends in today’s marketplace.
Many brands are trying anyway, though for now success seems limited. The McKinsey and Business of Fashion report forecasts annual online sales of luxury fashion will increase fourfold to 12 per cent of total sales in 2020 from an anaemic 3 per cent in 2010. Perhaps no other innovation has garnered more attention in recent years than the “see now, buy now” process in which a designer’s collection is presented on a fashion show runway to the usual select cadre of press and retailers, but also streamed on the web.
In a move that could help further development of Cambodian apparel industry, Phnom Penh, the capital of Cambodia was host to an exhibition and conference for a visiting delegation of Bangladesh companies. Talking on the occasion, Abdul Ahmad, President of the Federation of Bangladesh Chambers of Commerce and Industry said there are several opportunities for investment and trade in various sectors for each member of the Bangladeshi delegation. In fact, they were eager to hear from Cambodia on what it can offer and where Bangladesh companies could invest.
Bangladesh’s envoy to Cambodia, Saida Tasneem said although trade between the two countries was minimal at just $6.7 million per annum, there was potential for cooperation between the countries which could benefit both.
Kumar Mangalam Birla, owner of diversified conglomerate Aditya Birla Group has increased his shareholding in Aditya Birla Nuvo by purchasing shares from minority investors including 3.86 per cent from Anil Ambani-owned Reliance Mutual Fund for Rs 775 crores. The merger will make Grasim one of India's largest diversified companies with a healthy mix of business with steady cash flows and long-term growth opportunities.
The plan includes listing the financial services company, with Grasim owning 57 per cent, the promoters 16.6 per cent and the rest by the public. With this, Aditya Birla Nuvo will merge with Grasim Industries. The stake purchases that boosted Birla's holdings to 62.77 per cent from 58.39 per cent, invited criticism from proxy advisory firms and local investors, who said it was against interests of minority shareholders. Reliance MF, the second-largest shareholder after Life Insurance Corporation of India, sold almost its entire stake.
Birla's unlisted private firms Turquoise Investments & Finance and IGH Holdings bought about 57 lakh shares between December 2016 and January 2017. Apart from Reliance Mutual Fund, the identity of the other sellers could not be ascertained. It has been also noted that the acquisition is part of its plan to increase shareholding in group companies under the creeping acquisition route allowed by the Securities & Exchange Board of India.
