FW
Bangladesh’s RMG industry wants the reintroduction of the 10 per cent special corporate tax rate and a reduction of tax at source to 0.30 per cent from the existing 0.60 per cent. It also wants a special tax rate for the next five years.
Garment factory owners have included a proposal for duty-free imports of fire equipment, machinery, tube lights, bulbs, fire-proof paint for pre-fabricated building materials and industrial lighting protection equipments. Garment exporters have suggested a five per cent special cash incentive for exports to new markets and two per cent cash support for exports to the European Union for the next three years.
These proposals have been forwarded in the hope they are incorporated in the country’s forthcoming budget. Factory owners say they are investing a huge amount of money in carrying out remediation work and retrofitting according to the prescription of Accord, Alliance and the National Action Plan to ensure workplace safety.
Bangladesh’s currency has appreciated by 8.43 per cent against the dollar. And the cost of doing business, say factory owners, has increased by 12 per cent in recent times due to the wage hike and transportation costs. On the other hand, buyers want a reduction in prices of apparel items.
Though the garment industry continues to flourish globally, bad working conditions, low wages and long hours are some of the issues the industry is confronting in many countries. Now trade unions, civil-society organizations and the Dutch government are supporting an agreement which includes taking steps to improve working conditions in garment and textile production units in countries such as Bangladesh, India, Pakistan and Turkey.
The agreement has been drafted under the guidance of the Social and Economic Council of Netherland (SER). The coalition includes industry organizations VGT, Modint and Inretail, trade unions FNV and CNV, the Dutch government and the civil-society organizations Solidaridad, UNICEF Nederland, India Committee of the Netherlands, the Dutch Stop Child Labor Coalition and Four Paws Netherlands.
The coalition has agreed to tackle issues such as discrimination, child labor and forced labor, T will be done by having a healthy dialogue with independent employee representatives. It will also work towards achieving better wages, safe conditions and a healthier environment for employees. Also, the aim is to reduce adverse environmental impact, energy and chemical usage and waste, and the prevention of animal suffering.
SER said the coalition would enable the parties to work together on objectives that would be difficult to achieve individually, such as living wages, stronger trade unions and the reduction of excessively long working days. Participating unions will identify issues that affect their suppliers at all stages of the chain and will draw up an annual improvement plan. Trade unions and civil-society organizations will support the plans with their expertise and will involve their local partners their implementation. The Dutch government will try to reach agreements with governments in production countries to reinforce their health and safety inspectorate.
A joint report on activities will be issued each year for the first three years, and organizations. The coalition will secure funding for the agreement and aim to have it signed in June by at least 35 companies in the sector, who together represent at least 30 per cent of sales in the Netherlands.
"Cotton production in the United States is touted to recover in 2016/17. While consumption remains stable cotton planting in Northern Hemisphere countries commences this month. In 2016/17, world cotton area is expected to expand by 1 per cent to 31.3 million hectares. From December 2015 through February 2016, international cotton prices as measured by the Cotlook A Index averaged 69 cents"
Cotton production in the United States is touted to recover in 2016/17. While consumption remains stable cotton planting in Northern Hemisphere countries commences this month. In 2016/17, world cotton area is expected to expand by 1 per cent to 31.3 million hectares. From December 2015 through February 2016, international cotton prices as measured by the Cotlook A Index averaged 69 cents/lb.
Cotton an attractive proposition
However, prices for competing crops during the same period have fallen, making cotton more competitive this year compared to last. World cotton production in 2016/17 is projected to increase by 4 per cent to just under 23 million tons, as the world average yield is anticipated to improve by 4 per cent to 732 kg/ha. In 2016/17, India’s area is forecast up 4 per cent to 12.4 million hectares due to improved domestic cotton prices in 2015/16. Assuming yield is similar
Assuming yield is similar to the 4-year average of 522 kg/ha, production could reach 6.5 million tons in 2016/17. In March, the Chinese government announced a reduced target price for Xinjiang of 18600 yuan/ton.
As a result, area is likely to contract by 10 per cent to 3.1 million hectares and production to decrease to 4.6 million tons. Cotton area in the United States is projected to increase by 2 per cent to 3.3 million hectares and production by 9 per cent to 3.1 million tons. After production plummeted in 2015/16, cotton production in Pakistan is expected to jump 35 per cent to 2.1 million tons as yields recover.
After declining by 2 per cent in 2015/16, world cotton consumption is anticipated to remain stable at 23.9 million tons. Consumption in China is projected to decrease by 5 per cent to 6.8 million tons due to increasing wages, high domestic cotton prices, and low polyester prices. In 2016/17,
Vietnam’s cotton consumption is forecast to rise 16 per cent to 1.3 million tons, making it the fifth largest consumer. Consumption in Bangladesh, the sixth largest, could increase by 10 per cent to 1.2 million tons. After several seasons of growth, cotton mill use in India and Pakistan contracted in 2015/16 due to weaker demand. However, India’s consumption is projected to rise by 4 per cent to 5.5 million tons, and in Pakistan by 1 per cent to 2.2 million tons. After declining by 3 per cent in 2015/16, world cotton trade is expected to recover by 1per cent to 7.5 million tons in 2016/17, as consumption grows in import dependent countries. Vietnam and Bangladesh are likely to be
The two largest importers of cotton in 2016/17, with import volumes expected to rise by 25 per cent to 1.4 million tons and by 5 per cent to 1.1 million tons, respectively. China could see imports fall by 13 per cent to 936,000 tons. Exports from the United States are projected to increase by 1 per cent to 2.2 million tons while exports from India are forecast to decline by 13% to 1 million tons.
A few cloth remains found in Nepal have shed light on history of ancient textile industry in the sub-continent. A dye analyses was conducted by Ina Vanden Berghe at the Royal Institute for Cultural Heritage. The results of textile and dye analyses of cloth dated 400-650 AD and recovered from Samdzong 5, in Upper Mustang, Nepal were released by Margarita Gleba of the McDonald Institute for Archaeological Research, University of Cambridge.
Identification of degummed silk fibers and munjeet along with Indian lac dyes in the textile finds suggests that imported materials from China and India were used in combination with local produce. According to Gleba, there is no evidence for local silk production suggesting that Samdzong was a part of the long-distance trade network of the Silk Road.
The data reinforce the notion that instead of being isolated and remote, Upper Mustang was once a small, but important node of a much larger network of people and places. These textiles can further our understanding of the local textile materials and techniques, as well as the mechanisms through which various communities developed and adapted new textile technologies to fit local cultural and economical needs.
The cloth remains are of further significance as very few contemporary textile finds are known from Nepal. The dry climate and high altitude of the Samdzong tomb complex, at an elevation of 4000 m, favored the exceptional preservation of the organic materials. One of the cloth recovered is composed of wool to which copper, glass and cloth beads are attached. It was found near a coffin of an adult along with a spectacular gold/silver funerary mask
Samdzong 5 is one of 10 shaft tombs excavated by Mark Aldenderfer, (University of California Merced and Visiting Scholar of the McDonald Institute). The tombs were only exposed to view in 2009 following a seismic event that calved off the façade of the cliff, having been originally carved out in prehistory from the soft conglomerate rock of a massive cliff face.
Ludhiana yarn manufacturers have got some relief in VAT rates as there has been a reduction in VAT rates on all kinds of yarn, except polyester filament, from 6.5 per cent to 3.63 per cent.
This VAT reduction comes as a relief for spinning mills. Punjab has 165 spinning mills with 4.25 million active spindles, and consumes seven lakh bales annually. Fabric and garmenting units in Ludhiana preferred to buy cotton yarn from units located in other states. This hit yarn units located in Punjab. Due to the high value added tax, buying yarn from spinners in the state was costlier than bringing it from elsewhere.
Punjab is a major consumer of cotton yarn in the north and due to higher tariffs on local manufacturing entities an estimated Rs 9,000 crores worth of yarn is being imported annually from other states.
The modified tax structure will be a bulwark against dumping from other states. It will provide protection to Punjab based spinning units against cheap imports from other states which have a lower cost of production. Most spinning mills in Punjab had been underutilising their capacities for the last few years as there were no takers for the yarn produced at a higher price.
The Pentagon has teamed with the Massachusetts Institute of Technology for the creation of an institute which will develop high-tech fibers and textiles. The Revolutionary Fibers and Textiles Manufacturing Innovation Institute will be based in Cambridge, Massachusetts, and bring together a consortium of 89 universities, manufacturers and non-profit organisations.
By bringing together high-tech firms and textile makers, the institute aims to create fabrics that can see, hear, sense, communicate, store energy, regulate temperature, monitor health, change color, and more. The non-profit institute will seek to enable new defense and commercial applications such as shelters with power generation and storage capacity built into the fabric, and uniforms that can regulate temperature and detect chemical and radioactive threats.
The institute would pair companies like audio equipment maker Bose, computer chip maker Intel, and nanofiber manufacturer FibeRio with textile manufacturers and users such as Warwick Mills and shoemaker New Balance. In addition to the $75 million from the Defense Department, the institute will be funded with nearly $250 million from non-federal sources.
The Pentagon is the headquarters of the US Department of Defense and, encompassing more than six million square feet of floor space, ranks among the largest office buildings in the world.
"Along with its local advantages like cheap abundant labour and lots of land, Africa has the potential to emerge as a global power house in apparel production with the right government policies. Apparel production constantly shifts. It's often one of the first manufacturing businesses that go into a developing country, also the first to leave as the country grows and develops. And with"
Along with its local advantages like cheap abundant labour and lots of land, Africa has the potential to emerge as a global power house in apparel production with the right government policies. Apparel production constantly shifts. It's often one of the first manufacturing businesses that go into a developing country, also the first to leave as the country grows and develops. And with continued margin pressure, companies are constantly looking at new low cost, reliable sources.
The right mix for apparel industry
Africa has many of the ingredients that can make it a global force in apparel and textile exports. However, it will take some time for all these ingredients to come together and mirror what China, India, Vietnam and others have done over the last 30 years.
It has cheap, abundant labour along with water, power, cotton and lots of land. It has receptive governments and attractive investment conditions. But Africa still needs to build much more capacity coupled with vertical operations so that it can convert its raw material into yarn and fabric.
Many US and EU companies are already doing business here, including H&M, Tesco, Primark, VF Corp, PVH, Kohl's, Wal-Mart, Dillard's, Dollar General, IFG, Jones Apparel, Haggar, Academy, Belk, Dickies, Children's Place, Carter's and Family Dollar. While the value of current apparel exports is, in global terms, very small, Africa does have a history of garment production and exports. In 2014 Sub-Sahara Africa exported almost US$1bn in apparel value.
Advantage Afrcia
According to Chris Wynne-Potts, CEO at African Merchandising Services Africa has many advantages. It has abundant labour. By 2035, Sub-Saharan Africa will have the highest working age population (15-64) anywhere in the world – with more than 900 million people. Low wages: Kenya US$100 (per month), Lesotho US$90, Tanzania US$90, Madagascar US$65, Ethiopia US$50, Mauritius US$165.
AGOA renewed for 10 years till 2025 gives 45 countries in sub-Saharan Africa duty-free access to the US, with the added advantage of being able to use third-country fabric from anywhere. According to Gail Strickler, Sssistant US trade representative for textiles and apparel, this is a "game changer" and could quadruple its current exports and create another 500,000 jobs.
With the promotion of the apparel and textile industries, particularly in Kenya, Ethiopia and Lesotho; this sector is seen as being a major employer and reducer of poverty. These countries also have training centers and tertiary institutions to promote textile and apparel technical qualifications. Government incentives and tax holidays are offered by many countries to investors.
But Africa also faces some challenges in its growth path. Lack of locally produced, competitively pricesd export quality fabric. Africa grows plenty of cotton but almost all is exported as raw material. Currently, African spinning, knitting, weaving and dyeing represents only about 10 per cent of total improvement in infrastructure along transport routes, port efficiency, government red tape and streamlining export systems need continued work.
Experts opine that there is also a need for a clearly defined government policy on attracting investment, aggressive marketing of this policy in conjunction with potential investors.
The H&M Group’s annual report for fiscal 2015 was recently released. Sales including VAT increased 19 per cent in the 12 months ended November 30 to 209.9 billion Swedish kronor (roughly $28.5 billion) and operating profit was 26.9 billion Swedish kroner ($3.3 billion)—its highest result to date, despite a strong U.S. dollar which made purchasing considerably more expensive.
According to CEO Karl-Johan Persson sales developed well across all group’s brands, including H&M, H&M Home, Cos, & Other Stories, Monki, Weekday and Cheap Monday, helped in part by the 413 new stores that opened throughout the year, mostly in China (83) and the US (59).
The retailer now operates 3,924 locations in 61 markets (including Taiwan, Peru, Macau, India and South Africa, which were added in 2015) and plans to ramp up its number of store openings by 10 to 15 percent annually. For 2016, that will mean around 425 new stores, mostly in existing markets. But the retailer will also enter New Zealand, Cyprus and Puerto Rico for the first time, to bring the total number of markets H&M has a presence in to 64. The report noted that H&M’s 4,000th location will open this spring, meaning the chain’s store count has doubled in six years. In addition to brick-and-mortar openings, e-commerce will be offered in nine more of its namesake brand’s existing markets: Ireland, Japan, Greece, Croatia, Slovenia, Estonia, Latvia, Lithuania and Luxembourg. By the end of the year, customers in 32 countries will be able to shop the brand online.
The main focus of expansion in 2016 will be on Cos, which is now a globally established fashion brand with more than 150 stores in 30 countries. Persson said new markets for the higher priced brand will include the Czech Republic, Romania, Latvia, Malaysia and Saudi Arabia (via franchise). Also pleasing is the fact that our latest addition, & Other Stories, continues to be well received. Efficient logistics flows are essential and the least-polluting method of transport must be used,” the report said. “In 2015 a total of 90 percent of the group’s products were carried from suppliers to the distribution centers by rail or waterway.”
Also notable: 31 percent of cotton used last year was from sustainable sources (meaning either organic cotton, recycled cotton or cotton grown under the Better Cotton Initiative), up from the prior year’s 21 percent. Plus, more than 12,000 tons of clothing was collected in 2015 as part of H&M’s in-store Garment Collecting initiative.
Poor working conditions and low wages are public-relations problems that plague fast-fashion retailers and H&M—which doesn’t own any factories but contracts around 820 independent suppliers mainly in Asia and Europe—has been working to regulate both. Persson concluded, “For 2016 we see many opportunities, but are also well aware of the challenges that exist. We firmly believe that our customer offering and our investments will lead to increased market share, and will strengthen our position even further during the year.”
The upcoming ITMA ASIA + CITME exhibition in China is seeing a huge response. Reports suggest that leading textile machinery makers have already snapped up space at the exhibition which will be held from October 21 to 25 in Shanghai, China. Over 90 per cent of the 180,000 sq. mt. of exhibition space had been sold. The 2016 combined exhibition is expected to feature over 1,500 domestic and international textile machinery manufacturers from over 26 economies who will showcase advanced solutions and energy efficient machinery and processes.
Chinese exhibitors make up the biggest country group, booking over 65 per cent of the total exhibition space. The other top participating economies are Germany, Italy, Japan, Switzerland and Taiwan. According to Charles Beauduin, President of CEMATEX the high level of interest from exhibitors has reaffirmed ITMA ASIA + CITME as the leading marketing platform for textile machinery manufacturers seeking to tap the China market. “We are pleased to provide them with a recognised platform for their strategic promotion and will ensure that the combined show continues to be a relevant and effective platform for sellers and buyers to transact business and to take advantage of the vast potential that China offers.”
Exhibits at the combined exhibition are organised into sectors based on manufacturing processes, and spinning machinery. This is followed by finishing, knitting and weaving. In addition, the nonwovens sector has seen a 20 per cent increase from the last combined show in 2014.
China continues to expand the infrastructure construction sector, accelerate urbanisation and increase awareness of the environmental protection under the government’s 13th Five-Year Plan period (2016-2020). It is expected that demand for technical textiles and nonwovens products will rise in the coming years.
As per Gu Ping, Vice President of China Textile Machinery Association (CTMA), As China’s textile industry continues its transformation, demand for advanced machinery and technology is on the rise. Textile manufacturers need to keep ahead of the industry and readjust their strategy to enhance overall production efficiency. “They should adopt a longer-term outlook to focus on the quality of their products which will ultimately contribute to their company’s bottom line. This will lead to a demand for new machinery and technology to modernise and upgrade their existing textile equipment,” says Peng
Bangladesh government is forming a central fund for the readymade garment sector. There will be contributions from owners, buyers, government and other sources. Export-oriented factories would have to contribute 0.03 per cent of their freight on board price to the fund while contributions from the government and buyers would be voluntary. The labour ministry on March 27 formed a 10-member board to set up the fund, determine contributions and their realisation procedure and provisions for utilisations of the money for welfare of beneficiaries in the RMG sector.
Lien banks of the export-oriented companies would pay the amount to the fund as automatic claim over the FoB prices that would come in the banks’ possession. There would be two bank accounts for the fund –– one will be a beneficiary account and the other will be a contingency account. Money would be deposited equally in the two accounts as per rules. The premium of group insurance and health insurance would be paid from the contingency account.
Grants for workers or their family members would be taken from the beneficiary account while amount deposited in the contingency account would be used to meet the dues of workers of any closed factory if its owner is unable to pay the workers. An executive board has been formed for the readymade garment sector as the sector is the highest export earner. The executive board for other sectors will be formed gradually.
