FW
Recommendations to help exports
The panel asked for priority in gas availability and immediate refund of all outstanding claims of sales tax, DLTL and customs rebate to reduce the cost of doing business and make the industry compatible in the region. The committee raised serious concerns about the dismal condition of textile industry with continues decline in exports despite getting GSP plus status, decline in investment, shortage of gas and high power tariff and increasing cost of doing business. Pakistan’s textile exports declined 17 per cent in July 2015 against the same period of last year.
The committee asked the government to liquidate pending refunds to textile exporters as early as possible. It further asked Federal Board of Revenue to release sales tax and customs refunds which are pending for the last three years.
Government intervention need of hour
The committee said sales of cotton crop is about to begin and the government should address textile exporters' concerns immediately. Chairman All Pakistan Textile Mills Association (APTMA) S M Tanveer urged the government to give direct subsidy to cotton growers instead of sticking to procurement one million bales. As per Muhammad Zubair Motiwala, Chairman Pakistan Apparel Forum (PAF) the World Bank projects global apparel market to touch $1.18 trillion by 2020 and $2.11 trillion by 2025. However, Pakistan is in a disadvantages position in the global market due to its wrong policies.
Various studies have shown, Pakistan’s compound growth rate textile and apparel export from 2005 to 2013 stands at 3.6 per cent against 11.3 per cent in India and 16.2 per cent in Bangladesh. Pakistan’s, value addition for every one million bale is $1.17 billion against $179 billion in India and $6 billion in Bangladesh. Pakistan’s electricity tariff is $0.15 kWh (highest among the three) against $0.13 kWh in India and $0.09 kWh in Bangladesh. Pakistan's gas tariff is $6.27 per mmbtu against $4.66 in India and $1.86 mmbtu in Bangladesh.
Pakistan's installed capacity utilisation is less than 70 per cent due to non-availability of energy on 24/7 against over 90 per cent both in India and Bangladesh. Pakistan's corporate tax rate is the highest at 34 per cent against 25 per cent in India and 27.5 per cent in Bangladesh. Pakistan is the only country whose currency appreciated five per cent during 2013-15 against 2.7 per cent depreciated in India and 0.7 per cent in Bangladesh.
To highlight the problems being faced by textile players of the country, All Pakistan Textile Mills Association (APTMA) presented a nine-point proposal to the Federal Textile Board. APTMA’s nine point proposal includes: withdrawal of various surcharges on electricity, withdrawal of GIDC and the recent hike in gas tariff, zero-rating to textile industry, long-term finance for ginning and spinning sector, export re-finance to spinning and weaving sectors, five per cent export incentive for capturing non-traditional markets, a uniform tax rate of three per cent on the whole textile value chain, cracking down on dumping and smuggling, and immediate release of the pending payments.
www.aptma.org.pk
Officials in Bangladesh are worried that any delay in forming of rules on labour law could be a crucial issue when top officials of the Sustainability Compact review progress in workplace safety of the country’s apparel sector. Top officials and representatives from the European Union (EU), US, Canada, the Netherlands, the UK and ILO will be present at the second review meeting scheduled to be held in Dhaka in November.
According to those involved in the process, Bangladesh apparently has failed to comply with some important conditions of the Compact. This includes formulation of rules to implement the labour law and extend those to the export processing zones (EPZ) or making necessary changes in the existing EPZ law, and completion of factory inspection.
Some requirements were met by the government, which included appointing 200 additional inspectors and launched publicly accessible database. However, it failed to formulate rules even two years after the law was amended and finalise the new EPZ law till date. The EU published a technical status report on the Compact, recently, which termed the adoption of the rules as a matter of ‘highest priority’.
A senior government official, when questioned, said that so far, the government has met all the requirements except the formulation of the rules, which might be the 'hot' issue in the upcoming review meeting of Compact.
Sources, though, believe that nay further delay in meeting condition might result in an unfavourable effect on the efforts to revive the GSP in the US market and continue enjoying the same benefit in the EU market.
The central government and the local government of Xinjiang Uygur Autonomous Region in China, over two years, have come up with several positive policies. These support the development of the local textile and garment industry, attract textile and garment enterprises from outside Xinjiang to invest and set up mills in the region. This has prompted fast development of local textile and garment industry.
The local textile industry would have more than 10 million spindles by the end of 2015, say experts. Liu Yanning, Head of administrative office of Xinjiang textile industry avers the industry in the regions made further progress merchandising and attracting investment, this year. Textile and garment enterprises from other areas outside Xinjiang had invested in 118 projects in Xinjiang, by the end of June. This included 58 textile projects with total investment of yuan 26.75 billion and 60 garment and home-textiles projects with total investment of near yuan 2.93 billion. The local industry’s fixed-asset investment had hit yuan 7.05 billion, up 187 per cent over the same period in 2014.
This year, four million new spindles will be installed, which would add up to the total textile production capacity of over 10 million spindles by the end of 2015. The total processing capacity of the garment sector is 50 million pieces and 67,000 jobs. The textile production capacity went up from the 5.5 million spindles in 2012 to 7.60 million spindles last year. It would further go up to 10 million spindles at the end of 2015. Yanning says that at this pace, the textile industry is expected to hit the target of 20 million spindles.
Wool, cotton, polyester prices are on a downward spiral and Chinese cotton has dropped as much as 40 per cent since January 2014. Also, the dip in price of crude oil and gas has made transportation more economical. Cotton prices started to fall last year due to the abandonment of a disastrous government’s stockpiling policy in China. This year though, prices have been relatively stable supported by the expectations of a lower end of the season stock level. According to forecast, this is expected to dip by 5 per cent year-over-year in the 2015-16 season.
Transportation costs as well as polyester yarn, has been affected because of the recent falls in crude oil and gas prices. Polyester yarn is made out of crude oil derivatives. Prices of polyester reduced considerably due to a sharp drop in the derivative’s cost, in the second half in 2014. Moreover, polyester was under pressure because of the fall in cotton prices as it has to stay cheaper than cotton to remain competitive.
In 2014, Australian wool prices were relatively stable in AUD, but became cheaper in USD terms due to the strong US dollar. Wool prices recovered though, in recent months, because of China’s low stock availability and strong demand.
Thus, since textile prices have fallen through the years, will clothes get cheaper and will these savings get passed along the supply chain? It seems not, for, as per market analysts, the cost of raw material in apparel production consists of only around 10 per cent of the total cost. The cost of production, packaging and shipping into the US does not exceed 30 per cent and the labour cost is merely between 0.5 per cent to 1 per cent.
Italian fabric production declined 4.1 per cent in the first semester of 2015 compared to the same period last year. The country’s textile exports recorded a 2.3 per cent loss in the first five months of the year. At the same time, fabric imports into Italy declined by four per cent, resulting in a trade surplus. Wool fabric exports recorded the strongest growth, followed by linen, while all other fibers saw their sales abroad decrease.
In the first five months of 2015, Germany was as always the first outlet for Italian exports, with a 10.6 per cent share of the total, though it recorded an 8.3 per cent decrease. Romania, the second destination for Italian fabrics, also declined by 4.3 per cent and so did France, Italy’s third textile market, by 1.3 per cent.
Among non-European destinations, exports to Tunisia plunged by 27.9 per cent. At the same time, exports to China grew 12.7 per cent and those to Hong Kong by 9.8 per cent. These two destinations together now represent the second biggest export outlet for Italian textiles. A 15.2 per cent expansion was also recorded by the US, which is the fourth biggest market for fabrics made in Italy.
Bangladesh's apparel makers are finding it tough to carry out factory remediation program. Remediation programs were started last year after completion of initial inspections by western retailers. Garment factory inspections were launched to identify workplace risks and ensure safety compliances after the Rana Plaza building collapse that killed more than 1,100 workers. Some 3,000 garment factories have so far been assessed.
One reason for the slow pace of remediation is the unwillingness of many factory owners to repair flaws. Another is non-availability of safety equipment including fire doors, sprinklers and experts to install them. The recent political instability added to the difficulties. But apparel makers claim that most identified flaws have already been fixed, and that the main stumbling block is shortage of funds.
A factory needs to spend a sizeable amount to fix safety flaws. Some apparel makers are unwilling to spend their own money for improvements. They are looking for financing sources, either from Accord or Alliance, or others. There are some 3,500 garment factories in operation throughout Bangladesh though the real number is supposed to be higher as there are many units that are not affiliated with trade bodies and do sub-contracting.
Vietnam is one of the world’s top apparel exporters. But 70 per cent of its textile makers are working as sub-contractors on medium and small scales and are still weak in fiber manufacturing, weaving and dyeing. Almost all input materials come from China and Korea. The rate of locally-made products in the sector stands at a mere 55 per cent due to the weak weaving and dyeing capability.
Weaving and dyeing projects fail to receive licenses due to their high risk of environmental pollution. What’s needed is zoning off regions and areas exclusively designed for weaving and dyeing and equipped with infrastructure and waste treatment facilities.
Vietnam faces another challenge. Once the Trans-Pacific Partnership (TPP) comes into force, regulations on the origin of goods will follow. Vietnam must follow TPP’s yarn-forward rule of origin which requires that only textile and apparel products using the US and other TPP countries’ yarns and fabrics qualify for the benefit of the agreement.
The strength of Vietnam’s textile and garment industry is that only a small capital investment is called for. The payback period is quick because of a short capital turnover. The industry gets preferential policies. Greater product differentiation and specialisation can boost margins.
CHIC Autumn will take place for the first time from October 13 to 15 where around 600 exhibitors are expected to display their range. In March 2016, the Spring edition will take place at the modern National Exhibition and Convention Centre, Shanghai, opened last year. Along with CHIC Autumn, Intertextile Shanghai will take place at the same fairground.
The CHIC autumn event caters to domestic market opening the way for Chinese consumer market for smaller high-end brands with less volume. Matchmaking, networking and further activities will be organised to connect international brands with Chinese retailers underlining the position of CHIC as mediator in the fashion business.
The autumn edition, is spread across smaller area compared to the spring edition held in March. It gets ready as a platform to focus on the merchandise and not so much on branding through enormous image booths. The new date in October will focus on spring/summer collections in all categories including women’s wear, menswear, kids’ wear, shoes/bags/accessories and swim/bodywear.
Much like the March edition, the concept of ‘Show in Show’ will continue. London PURE organiser will host around 50 exhibitors at its pavilion called PUREShanghai. Six brands from UK such as Henry Todd, Raaah, Dabra, Ness, Virgos, Pearls & Portraits will exhibit their collections along with brands from Poland, Thailand, Greece, Turkey, Trinidad & Tobago, Spain, Croatia, USA and Australia, who will be joining PUREShanghai in October.
Preview in China, the South Korean trade show will also be participating at CHIC in October. The Brazilian show association Abicalcados will have a pavilion. And France with brands like Léo & Ugo, Johntex, Zyga, Urbahia Paris and Italy with brands such as Paola Graglia, Giovanni Fabiani will be participating with their respective national pavilions.
En.chiconline.com.cn
Victoria & Albert Museum (V&A) in UK will host India festival 'The Fabric of India’, from October 3, 2015 to January 10. This is the first major exhibition to explore the dynamic and multifaceted world of handmade textiles from India, spanning from the 3rd century to the present day. Showcasing the best of the V&A’s world-renowned collection together with masterpieces from international partners and leading designers, the exhibition will feature over 200 objects, many on display for the first time.
Visitors can expect a stunning range of historic dress, heirloom fabrics, and cutting-edge fashion. India’s rich natural resources for making and decorating textiles are unrivalled. Its varied geographical regions and climates provide a huge range of plant fibres and natural dyes for the cultivators, weavers, dyers, printers and embroiderers of the subcontinent.
Over centuries, most regions developed specialities based on local conditions, such as the golden silks of Assam, the fine cottons of Bengal, or the red dyes of south-east India. Craftspeople use an astonishing range of skills to process raw materials and produce regionally distinctive dyes, weaves, prints and embroideries. The exhibition will display rare pieces collected over the years depicting rich textile heritage of the country.
As the world's leading museum of art and design, the V&A promotes the practice of design and increases knowledge, understanding and enjoyment of the design world.
The Haryana Skill Development Mission (HSDM) of the government of Haryana has signed a MoU with the Apparel Made-Ups & Home Furnishing Sector Skill Council (AMH SSC). The MoU was signed by Subhash Goel, IAS and Roopak Vasishtha, CEO and Director General, AMH SSC under which all the training providers of HSDM, across Haryana will get aligned to the AMH SSC for the skill-training in the apparel, made-ups and home furnishing sector by aligning their course curricula to the National Occupational Standards (NOSs) of the AMH SSC and shall be assessed and certified by the AMH SSC.
The certifications of the AMH SSC, which has been formed by the NSDC would have national/international recognition and would help the youth of Haryana state not only to get decent employment in India but they would also become eligible for international openings. This step would also immensely contribute to the ‘Skill India’ and ‘Make in India’ missions of the Indian government.
www.sscamh.com
