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Tirupur exporters body Tirupur Exporters Association (TEA) has said shipment of knitwear from the region have grown to Rs 20,730 crores in 2014-15 and is expected to touch the target of Rs 36,000 crores by 2016-17. At the 25th Annual General Meeting of TEA, President A Shaktivel said input factors were more or less favourable, which helped them to clock 15 per cent growth compared with 2013-14 financial year. At the moment, all-India market share of Tirupur in knitwear exports is 44.29 per cent. This figure would go up once the industry starts exporting synthetic-based garments, which have a market throughout the year globally, he added.
Backed by favourable cotton yarn prices, knitwear exports from Tirupur increased to Rs 20,730 crores up from Rs 18,000 crores in 2013-14; a growth of 15.52 per cent in rupee terms and 15.94 per cent in terms of foreign currency. The total readymade garment exports from India, for the first time crossed the Rs one lakh crore-mark in 2014-15 to touch Rs 1.03 lakh crores. Of this, knitwear exports were Rs 46,801 crores, with a share of 45.43 per cent, informed Shaktivel.
While expressing concern over the delay in proposed Free Trade Agreement with the EU, Shaktivel said that the Comprehensive Economic Partnership Agreement with Canada and Australia should happen before end of 2015 to increase exports to these countries.
www.tea-india.org
Fashion-consciousness on the rise
China has seen quick expansion of big brand names led by a sudden rise in fashion-conscious among consumers and the weak performances of world’s largest fashion retailers in their home markets in the US and Europe.
Though growing rapidly, the Chinese market is still at an early stage of expansion offering attractive opportunities for foreign apparel brands. As Magnus Olsson, Country Manager at H&M AB points out this year, China and the US would once again be their biggest expansion markets.
COS (short for Collection of Style), a high-end brand from Stockholm-based H&M is also on an expansion spree in several locations including a new store in the commercial area of Sanlitun in Beijing. Nearly 400 new stores are planned by H&M across the world, US and China would be hosting the highest number of these store. H&M entered the Chinese market in 2007 and opened 69 stores in 2014, totaling to 271.
GAP Inc, the San Francisco-based company, is focusing on the global market, particularly China. This way, the brand would reduce its dependence on North America, where it is struggling to win back consumers. GAP revealed that they would open new stores in Asia with a focus on GAP China, Old Navy China, and Old Navy Japan this year. As Susan Anderson, a senior research analyst at FBR Capital Markets & Co, observes the brand would open 115 stores in 2015, with a focus on China, sports brand Athleta, and Global GAP outlets.
China is also the second-largest market after Spain for Inditex, owners of Zara. Paul Rossington, consumer and retail analyst at global lender HSBC Plc, stated that China accounts for about 40 per cent of Inditex new store openings over the last couple of years.
Expansion still at a nascent stage
Even though China is gaining importance and becoming a top priority for fashion retailers, it is still far away from becoming their first source of revenue. Rossington says Inditex and H&M China represent just a limited percentage of their total global sales and until June this year, Inditex had derived about eight per cent and H&M, about five per cent form China. Thus, this shows that there is ample space for gains in the Chinese markets.
Many of their clients were looking at more investment in China, says Jessie Qian, Partner and Head of consumer markets at KPMG China as they were expecting a middle-class income to increase in the next four-five years. Besides, their flexible approach to online shopping has been crucial for success. Moreover, the expansion of brick-and-mortar stores, have been crucial to build brand awareness. However, this has not been enough to satisfy the huge demand for affordable fashion.
Qian says that as far as the retail industry in China is concerned, one can see that physical outlets may grow in single digits every year. However, e-commerce outpaces that growth, almost doubling the number.
A whitefly pest attack has caused massive damage to cotton crop both in Punjab and Haryana with farmers fearing considerable loss in kharif crop. Both states have asked growers to take remedial steps to prevent damage. The whitefly infestation has come as a major blow to farmers at a time when they had already faced huge financial losses when their wheat crop got damaged due to inclement weather conditions early this year.
The whitefly attack has even assumed political overtones as the Opposition has sought a CBI probe into the purchase of spurious insecticides for cotton crop, leading to heavy losses to growers. About 20 to 25 per cent of the cotton crop in Punjab is under the grip of whitefly attack. Surveys have been launched to assess the damage to crop. The total area under cotton in Punjab is about 4.50 lakh hectares. In some areas, the attack of whitefly was so severe that farmers were forced to uproot their crop. The last time such an attack was seen in 1977. Haryana is facing a 25 per cent loss and 4.47 lakh hectares of cotton area have been affected.
A textile processing park is coming up in Tamil Nadu for small and medium-scale units. About 50 small and medium units in Salem, Karur, Erode, Tirupur, Coimbatore and Madurai will benefit from the park when it is developed. The state government will extend a 25 per cent capital subsidy while the Union government will give 50 per cent subsidy.
The project was mooted in 2007 and is coming up on 260 acres. Coming up at a total project cost of Rs 500 crores, it will have 10 processing units that will have the capacity to process 200 tons of fabric (knitted and woven) and yarn. Another textile processing park will also come up in Tamil Nadu for larger textile processing units. An advisory committee will be formed for the textile sector in Tamil Nadu. It will play greater role in laying the road map for sustained growth of the textile industry in the state and make it a hub for textile manufacturing.
Tamil Nadu has announced a 15 per cent discount for silk fabric sales. The industry in Tamil Nadu is waiting for a textile policy, which will add to the growth impetus and act as a spur to export performance.
Bangladesh's garment exporters say the country’s interest rates are high compared to India, Pakistan, Vietnam and Indonesia. They want the government to reduce the rate as exporters see it as an impediment to growth. They say if this is not done, the industry would not grow at the expected level and the target of reaching exports of $50 billion by 2021 will be tough to achieve. Another of their peeves is that the US has suspended GSP facility for Bangladesh. They want the facility restored.
Bangladesh is the world’s second largest garment exporter. The garment industry now accounts for nearly 82 per cent of Bangladesh’s total exports. In the last 40 years since independence, poverty rate has fallen from 80 per cent to less than 30 per cent, GDP has averaged around five to six per cent for over 20 years, and the garment industry has had a lot to do with all this. It has transformed the economic and social landscape of the country.
When the Rana Plaza garment factory collapsed in 2013, a harsh spotlight suddenly shone on the country’s garment industry. That spotlight showed an industry in chaos, unsafe conditions, corruption, low wages and child labor. Cheap labor and lax regulations are part of Bangladesh’s draw. And the government has pitched its garment industry in that light to attract investment.
Korean businesses in the Los Angeles garment district are considering making a mass move to El Paso, Texas. Their business in Los Angeles is responsible for at least $10 billion in annual revenues as well as 20,000 jobs. An increase in minimum wage in California, coupled with rising rent and strict labor laws, are some of the reasons for relocation.
El Paso was once home to denim companies including Levi’s and Wrangler. It has abundant skilled laborers, fewer regulations, much cheaper rent and direct flights from Los Angeles. There's already a strong Korean presence in El Paso with more than 100 businesses in downtown El Paso, half of them owned by Koreans.
There is a feeling the shift to El Paso has been prompted by strict labor laws in Los Angeles and that some employers may be looking to El Paso to take advantage of lax enforcement of laws and a vulnerable new immigrant population. Los Angeles’ garment district were predominantly Jewish in the 1970s when Korean immigrants first began selling textiles there. Many had first emigrated from Korea to Latin America, where they operated successful fashion businesses, before migrating north to California.
Soon entrepreneurs were hiring their own designers and seamstresses and fortunes were created. But now, problems have arisen. Apparel manufacturing moved to China, Southeast Asia or other places with cheap labor and other ways to cut costs.
Zyda Rylands has takenover as CEO of Woolworths South Africa. Rylands will take responsibility for the entire food and clothing business across South Africa. Zyda has worked in many sections of Woolworths business including finance‚ HR and operations during her 20-year career with the business. Under her leadership‚ Woolworths Foods has transformed into a sizeable foods business with a reputation for quality‚ innovation and sustainability.
Since she was appointed, Woolworths Foods has seen a 83 per cent growth in turnover as well as a 240 per cent growth in profit. This year has been transformational for the group. Woolworths ensures each of its major businesses has a CEO who is clearly focused and responsible for driving growth and profitability. This better positions the group to deliver on its strategic objectives.
Woolworths Holdings Limited is an investment holding company and one of the top 100 companies listed on Johannesburg Securities Exchange. Its core business focus is the provision of retail products and services to upper and middle income customers in the southern hemisphere. The group employs more than 38,000 employees across 15 countries and trades in approximately 1,200 store locations.
www.woolworths.co.za/
Pushes up overall growth
The per hectare Bt cotton yield has grown significantly over the breakdown of area between rain-fed and irrigated land, in both cases, the rise has been the same. This made cotton cultivation profitable and a rise in yield in turn encouraged farmers to bring in more area under cotton cultivation. Farmers recognised the benefits of technology, and thus adopted it in a huge way. It is also clear that a rise in yield will translate into a rise in gross income.
Besides, a rise also means reduction in cost of production per kg of cotton, which would be moderated somewhat by the rise in cost of seeds. Bt cotton also enables almost complete elimination of all types of pesticides that deal with bollworm, since after the entry of Bt cotton, there has been a major reduction in the use of pesticides.
Moreover, there is a reduction of fertiliser and increase in the yield per kg of cotton. Per hectare, there is no need to apply any more fertiliser compared to when non-Bt cotton was being produced. The absolute use of water per hectare goes up by 15 to 20 per cent, where irrigation is available. The per kg use of water is significantly less though, since the rise in yield is 75 per cent.
A 70 per cent reduction in labour for spraying pesticides is also envisaged. Thus, rise in productivity of labour will be more than that of the yield. In turn, this would provide an opportunity to increase wages without increasing the total labour cost, leading to a rise in well-being in rural areas.
Exports and production on the rise
India’s global share of cotton in 2002 was 12 per cent, and now it is about 25 per cent, which makes us the largest producer of cotton in the world. Earlier there were zero exports and now we are exporting 25 per cent. Thus, cotton farmers have been able to establish the industry as a significant positive contributor to the country’s GDP.
Prices have had a moderating impact due to rise in production and reduction of cost. Also, the net income per hectare of land would go up significantly, taking into consideration the rise in income and reduction in cost. Meanwhile, rise in cotton production has also resulted in a rise in cotton seeds, which in turn would reflect in the price of cotton. The rise in cotton seed oil has in part met the rise in demand for vegetable oils because of higher incomes. Also, cotton seed cake is good for animal feed as it increases the fat content of milk, particularly, buffalos.
Yield can go up 700 per cent, with better management of farms and India can also increase production of cotton by another 30 per cent, thus benefiting the farmer as well as the economy.
India's garment exports could be hit by China's recent devaluation of the yuan. In fact, Vietnam one of India’s major rivals, has also devalued her currency by one per cent. China devalued yuan by four per cent, to boost exports. India’s garment exporters want the three per cent interest subvention on rupee export credit to be reintroduced with retrospective effect from April 1, 2015. They feel, garment exports will grow if India were to expedite free trade agreements with the EU, Canada and Australia. Right now, knitwear exports from India to EU have a 42.25 per cent share in total exports.
Vietnam has emerged a major competitor to Indian garment exports. Vietnam exported about $28 billion worth of garments in 2014-15 (against $16.82 billion by India) and out of this $4 billion worth of garments was destined for the European Union. Vietnam’s exports to Canada are double India’s exports to Canada. In another two years, Vietnam will enjoy the benefits of free trade agreements with the EU and the US. Exporters hope there is no drastic changes in forex rate. The industry hopes GST comes into effect from April 1, 2015.
The latest trends and innovations in laundry and dry-cleaning industry will be on display at Texcare International in Frankfurt from June 11 to 15, 2016. Held every four years, the show is recognised for bringing new products and ground-breaking services, while providing a platform to network and exchange know-how and information.
At the last Texcare International, 15,650 visitors attended the show to see new products and services offered by 262 exhibitors from Germany and other countries. At the forthcoming Texcare, the exhibition area has been expanded to accommodate more exhibitors. Messe Frankfurt is taking into account the increased demand for exhibition space, which could be felt at the last fair in 2012. Furthermore future-oriented product groups can now take advantage of the improved presentation opportunities.
