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Tamil Nadu has offered to set up mini textile parks for handlooms and textiles. The state will bear 50 per cent of the total cost for creating infrastructure facilities such as laying of roads, sewage treatment plant, captive power plant and telecommunication. Ten entrepreneurs could form a cluster and set up a mini textile park on ten acres of land after registering a Special Purpose Vehicle. They should buy the land on their own and establish a minimum of 10 work sheds in the park to avail of the subsidy for the infrastructure.
The total investment on buildings and machinery should be more than two times the amount spent for creating infrastructure facilities. The establishment of such parks is expected to help improve the standard of living of handloom and power loom weavers. The handloom industry is the second largest employer in Tamil Nadu after agriculture. Tamil Nadu accounts for nearly 30 per cent of the country’s handloom textiles production and 50 per cent of exports. It has over six lakh handloom units and 1,400 cooperative societies. Handloom weaving with products ranging from duster cloth to silk saris is a common occupation throughout the state.
However, demand is disappearing for traditional handloom products owing to changing consumer preferences. The industry lacks infrastructure to upgrade the looms.
Cotton yarn import to Bangladesh has increased by more than 25 per cent in the first seven months in 2016. Local spinners have termed this as a threat for the sub-sector of the country's primary textile industry. Sources in the industry feel that if the trend continues, it would badly affect the backward linkage industry that meets nearly 80 per cent requirement of the local knit sector.
From January to July this year, Bangladesh imported 207,644 tons of cotton yarn says Bangladesh Textile Mills Association (BTMA). In 2015, a total of 295,330 tons of cotton yarn was imported and the figure was 280,283 tons in 2014, BTMA’s data points out. A major portion of the yarn was imported from India. In recent times, yarn is also being imported from Indonesia as well.
Former BTMA president, Jahangir Alamin said this was alarming for the local spinning industry that has the capacity to meet the knit sector's requirements. But it is worth a thought that the country cannot produce a few grades of yarn used for producing high value added products, he added.
Local millers can meet 35 to 40 per cent of the woven sector's fabric requirement, and the rest is met through import, he went on to add. Around 430 local spinning mills supply more than 80 per cent of the raw material for the country's knitwear sector and 35 to 40 per cent of the woven sector, according to BTMA.
Hong Kong-based companies are increasingly eyeing relocation of their production or diversification out of mainland China due to rising production costs. And India could well become their go-to destination. States they are particularly interested in are Gujarat, Maharashtra, Andhra Pradesh, Tamil Nadu and Karnataka. These states have developed industrial parks for private investors to set up their production plants. Infrastructure and amenities such as ports, connecting roads, electricity, water supply, sewage-treatment facilities and communication networks are provided.
Also all five states have made efforts in tax reforms to streamline registration and payment of Value Added Tax and Central Sales Tax through online services. India provides for low cost manufacturing versus other Asian economies such as Vietnam, Bangladesh, Indonesia, Sri Lanka and mainland China. Currently India’s labor costs are lower than those in China and almost all of the countries in Southeast Asia, with the exception of Myanmar. India’s wages are a third of the wages in mainland China and roughly half the wages in Indonesia.
India has a huge buyers’ market and the country has potential in low value added product manufacturing like apparel, shoes, clothing and textiles. Another key consideration for factory relocation is the import tariffs levied on manufactured products originating from India and whether this country has entered into preferential trade deals that lower import tariffs. India has been an active player in Asia. US import tariff rates for Indian yarn-related products range between zero and 2.7 per cent.
European Union retailers hope for a lot from the FTA with Vietnam. It’s expected to boost European growth and job creation in the retail sector. Vietnam is EU retail sector’s second largest source of fast-moving consumer goods after China. There is also a growing interest for investment in retail stores in Vietnam. The scale of the potential gain for the sector is enormous. For EU retail, FTA with Vietnam is more important than the agreements with the US, Canada and Japan combined.
EU retailers currently import eight per cent of fast-moving consumer goods from Vietnam, a figure still well behind the 50 per cent imported from China, but growing fast and set to get a boost from the elimination of tariffs under the FTA, which would lower costs for importers and European consumers. Even without the FTA, EU clothing imports from Vietnam increased by 3.2 per cent in 2015.
Among Vietnam’s key export items, garment and textile exports grew 4.2 per cent year-on-year in the first eight months of 2016 and footwear exports grew 8.1 per cent. The agreement is also expected to boost Vietnam’s development, already considered an exceptional success story, with per capita income rocketing from 100 dollars in 1986 to 2100 dollars in 2015.
Cotton Incorporated, the research and promotion company for cotton has joined hands with Archroma to present what they believe is the first ever dye derived from cotton plant residues. It began when Cotton Incorporated had approached Archroma and challenged it to develop a dye option that may represent the first opportunity in modern textile history to create and colour a fabric using a single plant source. Archroma has come out with EarthColors, an innovative method of creating dyes in warm, ternary shades from nature. In fact, the EarthColors application on cotton by-products marks the first time the cotton plant has been used to actually dye cotton fabrics.
The patented technology addresses two key concerns of the textile industry: sustainability and traceability. These sulphur-based dyes are designed for use on cellulosic fibers such as cotton. While most dyes in the textile industry are synthetic, using petrochemicals (oil) as a base, EarthColors is a biosynthetic alternative that makes use of natural waste from the agricultural or herbal industry.
There is an ample supply of cotton biomass. The global volume of cotton harvesting and ginning by-products that includes burs, stems, immature bolls, lint, sticks, and leaves can be as much as three million tons per year. One 480 lb. bale of cotton, for example, can produce 150-200 lbs. of usable byproducts.
Each batch of EarthColors dye offers a high level of traceability in the form of a hangtag with a Near Field Communication chip. The data on the chip, which can be accessed by Archroma customers and even consumers through a smart phone, explains the manufacturing process of the dye and where the natural materials were sourced. Similarly, every bale of cotton grown in the US receives a bale identification tag. The tag allows cotton businesses to trace the journey of the bale as far back as the facility where the cotton was ginned.
The apparel industry in Britain is worried about the impact of Brexit. For now retail sales continue to be strong and consumer spending at home is high. British brands continue to perform well in export markets and London is still home to the best talent in the global fashion industry.
Also retail sales suffered only a slight dip in August, after a strong July. The weaker pound since the referendum boosted sales of luxury items to foreign tourists by making them cheaper.
But high street retailers feel prices may rise as the weak currency makes it more expensive to import goods from overseas suppliers. Many fashion designers wanted to stay on in the European Union, and there are fears about the impact of exiting on exports, costs and Britain’s ability to attract design talent. The EU accounted for 70 per cent of British textiles and apparel exports in 2014.
From home grown start-ups to international fashion houses, every business in the industry has to play a major role in ensuring Britain makes a success of Brexit. The country has to take advantages of the opportunities that leaving the EU gives it and plays to its strengths as a great trading nation.
This year, textile trade show Milano Unica was held at Fiera Milano Rho, the located on the outskirts of Milan from September 6 to 8. The new location marks a return of sorts for the show which moved out only to be at the centrally located Fieramilano¬city convention center. Then, it moved for one season to Rho in 2006 before returning to Fieramilanocity until last February. Both exhibitors and attendees were pleased with the show’s new location.
The show featured two international pavilions, the Japan Observatory section and the Korea Observatory section. This season, Milano Unica partnered with Fiera di Vicenza to bring Origin Passion and Beliefs, a three-day event featuring international designers and Italian manufacturing. In addition to Italian fabric and trim resources, the show also included other upscale European mills such as French couture fabrics maker Goutarel.
Jewelry designer Antoanetta Ivanova was the only Los Angeles exhibitor at the named trade show where she displayed her Antoanetta fine jewelry collection in Origin Passion and Beliefs, a new section at the show devoted to connecting international designers with Italian manufacturing facilities. This was Ivanova’s first time at Milano Unica but her second at Origin which was earlier held in Vicenza. The show comprised of several sections, the important ones being Moda In and Moda In Accessories for men’s and women’s fabrics and trim and the Shirt Avenue for shirting resources for men and women. Then there was IdeaBiella for upscale menswear mills from the area around Biella, a city in Italy’s Piedmont region.
Milano Unica was founded in 2005 when several longstanding Italian trade shows joined forces to show in a central location. Since its launch in Milan 11 years ago, Milano Unica has grown to include editions in Shanghai and New York. Besides, it also has a pre-collection show called Prima MU which is being been held in Milan for the last two years in the month of July.
"Patagonia Inc, the US-based sustainable outdoor clothing brand has revamped its supply chain in order to maintain its ethical standrads. The brand’s core philosophy was in conflict with its strategy to chase the mass market appeal. The $800 million outdoor apparel empire has earned a loyal customer base for offering heavy-duty jackets, backpacks and long underwear at premium prices, with vows to “build the best product” and “cause no unnecessary harm."
Patagonia Inc, the US-based sustainable outdoor clothing brand has revamped its supply chain in order to maintain its ethical standrads. The brand’s core philosophy was in conflict with its strategy to chase the mass market appeal. The $800 million outdoor apparel empire has earned a loyal customer base for offering heavy-duty jackets, backpacks and long underwear at premium prices, with vows to “build the best product” and “cause no unnecessary harm.”
Struggles with ethical issues in production line
Since 2008, Patagonia has tripled its profits and the company maintains a reputation for transparency and socially responsible behavior with its customers. But it is also facing challenges to retain strict code of ethics while chasing mass-market dream. In fact in 2010, German animal-rights group Four Paws claimed to have found evidence that farms supplying down feathers to Patagonia were force-feeding geese to fatten their livers for foie gras. In 2012, Patagonia discovered brokers were charging migrant workers thousands of dollars for job placement at the company’s factories in Taiwan—a practice human-rights groups say is a form of slavery. Adding to it, recently People for the Ethical Treatment of Animals posted a video online depicting grisly abuse of sheep at South American ranches that sold wool to Patagonia.
Each accusation caught the brand off guard as it has been promoting itself for its high ethical standards . However, corrective measures were immediately taken. While in Taiwan the brand worked with suppliers to repay workers, in other cases it cut ties with suppliers and rebuilt supply chains from scratch, even as it pursued global expansion and launched new product lines.
Companies often run into “a huge disconnect—where (marketing teams) are ready to tell the story before operations and supply-chain teams are ready and able to confirm it,” said Alexis Bateman, a researcher at MIT’s Center for Transportation and Logistics. “It’s possible they know where the farm is, even who the farmer is, but not what’s happening 365 days a year. Clarifying the brand’s struggles Yvon Chouinard says “When you’re trying to clean up your supply chain, you can’t believe how deep you have to go,”
With plans for increasing its market globally Patagonia has added retail partners across five continents, invested in e-commerce and launched new product lines. Along with its journey Patagonia has been struggling with serious issues related to its product supply chain time and again. While on one hand the brand was sorting out issues in Taiwan, PETA was planning a campaign against the company’s wool supplier. Within 24 hours, they learned, PETA would be posting a video to its website showing rough treatment and mutilation of sheep during shearing.
The footage was partly shot on farms within the Ovis 21 network, a collective of more than 160 ranches in South America, PETA and Ovis said. Ovis 21 was a supplier for all of Patagonia’s wool products, including sweaters, hats and socks. Within days Patagonia announced it would stop buying wool from Ovis 21. The retailer had to scale back plans to boost production of its newest wool items, including a line of long underwear the company spent three years developing and had launched just a month earlier.
Instant corrective measure to retain USP
“Although we weren’t specifically auditing for animal welfare, these were just not good practices,” Ricardo Fenton, co-founder of the farm network said. Ovis is working to fix the issues more broadly across its network through its continued efforts with the nonprofit Textile Exchange’s International Working Group, which includes Patagonia, to develop an industrywide “Responsible Wool Standard.”
Meanwhile Patagonia assembled an in-house task force to rewrite the company’s criteria for wool growers and find new suppliers. For the past year, Marcario has met regularly with the wool team and personally approved standards for castration, shearing and lamb birthing. Task-force members were on hand for shearing and the birth of lambs at several farms. In July, Patagonia announced an agreement with two ranches in Oregon and Utah, which will grow wool for the retailer’s socks. Patagonia has identified another supplier for the rest of its wool products, but has yet to sign a contract. While Patagonia is still seen as a leader in how it addresses social and environmental issues, the company and the industry as a whole should be more proactive about rooting out problems, say experts.
The Obama administration recently decided to file a WTO trade enforcement action against rice, wheat and corn price support programs of the People’s Republic of China. And, supporting the government in its move, the US cotton industry has applauded the decision of the Obama administration.
At a press conference to announce the trade enforcement action against Chinese rice, wheat and corn support on September 13, US officials said China’s use of market price support for the three key crops has been in excess of its commitment of no more than 8.5 per cent of the market value under World Trade Organization rules. But it is said China’s market price support for these products is estimated to be nearly $100 billion in excess of the levels China committed to during its accession to the WTO.
Industry leaders are of the view that a similar action should be taken against China’s excessive support programs for cotton farmers which they argue have contributed to a one-third reduction in US cotton acreage since 2011. Members of the House and Senate Agriculture committees and other members of Congress also participated in the briefing.
Besides, China’s synthetic fiber subsidies that are the reason of causing even more stress in the world fiber markets than its cotton support programs, according to Gary Adams, president and CEO of the National Cotton Council (NCC) of America. Adams noted that cotton is the only agricultural commodity with an explicit mechanism that allows for the multilateral evaluation of domestic support, export subsidies and market access. This came up through the semi-annual dedicated discussions established by the WTO in December 2013.
Encouraged by successful fund-raising by women’s wear brand ‘W’, several mid-sized apparel makers have initiated talks with private equity firms to raise funds for their business. One such company is Esjay International Pvt. Ltd and the other is Soch Apparels Pvt. Ltd. The former has hired bankers to raise funds in the range of Rs 50-100 crore, it is heard. Their previous attempts to raise funds were unsuccessful because of differences on valuations.
The said company is in discussions with private equity investors to raise about Rs 50 crore by diluting about 15-20 per cent in the company. The Sunil Jhangiani-led Esjay launched the Chemistry brand way back in 2004. Jhangiani, whose family owns Esjay, failed to raise money in 2013 because of a disagreement with investors over the firm’s valuation.
Bengaluru-based Soch Apparels Pvt. Ltd, the owner of women’s wear brand Soch, is also in plans to raise funds from investors. The Boutique Investment Bank is helping Soch find investors.
The third company is Dixcy Textiles Pvt. Ltd., the owner of the Dixcy Scott underwear brand, is also planning to raise about Rs300 crore from private equity investors. Currently, it is in the process of hiring investment bank Avendus Capital Pvt. Ltd to help it to find investors.
The size of the Indian women’s apparel market will reach $20 billion in 2020, from $13 billion last year growing at an annual average pace of 10 per cent, according to estimates by Avendus Capital. The branded portion of this market that was approximately 17 per cent in 2015 is expected to exceed 38 per cent n the next 10 years.
