Clothing Manufacturers Association of India (CMAI) has launched the CMAI Arbitration Cell. The Arbitration Award will offer legal strength to the recipient. The cell will provide support to the members, consisting largely of MSME manufacturers. CMAI has designed its Arbitration Rules and Regulations keeping in mind the industry practices and while time ensuring fairness and equity to all stakeholders.
CMAI’s Research on Indian Domestic Market estimates the market size is around Rs 6.5 lakh crores. Even a minuscule if 1 per cent disputed, delayed or denied payments, the amount be around Rs 6,500 crores. This clearly underlines the need for a quick, efficient, and economical mechanism for resolving such disputes and complaints.
Speaking at the launch Shaunak Thakker, Lawyer and Fellow of the UK Arbitrators, underlined the usefulness of the arbitration process, and complimented CMAI for introducing this concept in their activities. Rajesh Masand, President, CMAI, informed the Panel of Arbitrators of CMAI will include leading members of the industry with impeccable credentials, legal luminaries, as well as individuals of high repute. The Panel will also include members from other trade associations from all over the country.
A book on CMAI Arbitration Rules and Regulations was also released by former President Ashok Rajani and other dignitaries. CMAI also launched the CMAI membership card which offers members a variety of benefits and discounts from close to 25 topbnrands and retailers of the country.
Cotton yarn prices have increased over 20 per cent in the past three months in India. Prices of superior quality yarns 40 CWC and 60 CWC have increased to Rs 405 a kg from Rs 330 and Rs 500 from Rs 415, respectively, in the past three months. Yarn prices normally keep pace with the raw material i.e. cotton. Yarn prices move in tandem with cotton and demand in the apparel sector. The demand for garments has seen a northward trend after the opening up of Covid related restrictions Cotton prices have sky rocketed and have not come down even with the onset of the new cotton season. Domestic prices have galloped in line with the global trend due to lower production and supplies. For instance 30 counts CCH yarn, used by hosiery units, is currently quoted at Rs 340 to Rs 345 a kg. When the Covid pandemic broke out in the country in March last year, the yarn was quoted at Rs 165 to Rs 170 a kg.
While Shankar-6 cotton prices have increased 80 per cent since October last year, 40s count hosiery yarn rates have gone up only by 58 per cent during the period. However the policy is to let cotton growers enjoy the current good prices they are getting.
Guess’ net revenue for the third quarter increased 4.4 per cent. Compared to prior year quarter, net revenue was up 13 per cent. Net earnings for the third quarter increased 140.5 per cent. Compared to fiscal 2021, third quarter earnings were up 13.3 per cent. Diluted earnings per share (EPS) increased 150 per cent in fiscal 2020.
Earnings from operations rose 190 per cent in the third quarter of fiscal 2020. Compared to the 2021 quarter, earnings from operations increased 47.7 per cent. Operating margin in the period increased 6.5 per cent to 10.2 per cent from 3.7 per cent in the third quarter of fiscal 2020, driven primarily by lower markdowns, higher initial markups, overall leveraging of expenses and lower occupancy costs, partially offset by higher performance-based compensation. Operating margin was up 2.4 per cent to 10.2 per cent from 7.8 per cent in the same prior-year quarter, driven primarily by lower non-cash impairment charges, lower markdowns, higher initial markups and overall leveraging of expenses, partially offset by higher performance-based compensation.
All in all, Guess delivered a 10 per cent operating margin in the period, driven by strong gross margin expansion, as a result of lower promotional activity and improved IMUs in spite of increased freight costs related to the supply chain disruptions experienced in the market.
Arise Integrated Industrial Platform and Fiber Trace has started a new pilot program in Benin. The partnership aims at enabling vertically integrated mills in the Republic of Benin to trace, verify and audit the lifecycle of their garments from spinning mills to stores, sharing the journey of Benin premium cotton with end consumers. The aim of this agreement is also to improve Benin’s position in terms of textile innovation and technology, improving visibility, resilience, securing economic competitiveness and creating a thriving value chain for African agriculture as the country is expected to reach a 98,000 ton cotton processing capacity a year by the end of 2023.
Arise Integrated Industrial Platform is a pan-African developer and operator of industrial parks committed to help Africa thrive. Fiber Trace embeds luminescent pigments on the fiber at the spinning mill. The pigments, indestructible throughout the entire textile processing cycle, can be read and tracked at every stage of the supply chain, and each audit is recorded on the blockchain making the information secure, accessible and irrefutable. Fiber Trace will provide transparency and true custody of supply chain solutions for brands and suppliers across the globe working with African manufacturers and supporting the growth of best practices in agriculture on the continent.
Stocks of polyester fabric are mounting in Chinese mills. As per a CCF Group report, the operating rate of downstream fabric mills in Haining, Changshu, Xiaoshan and Shaoxing is falling, disfavoring a rigid demand for polyester fiber. Falling feedstock prices have discouraged sales of polyester fiber too. Downstream buyers would rather cut the run rate than hoard stocks. The processing fee of the whole industrial chain is shrinking. Players' mindset will not recover until feedstock prices stabilize. Even if buy-the-dip appears, it is simply a transfer of polyester inventory. Polyester companies are still expected to face a big pressure to cut production during the Lunar Chinese New Year holiday.
The rapid ups and downs of raw materials have disrupted market sentiments. Fabric traders and end-users who make finished goods were hurt the most with volatile raw material prices. Prices of raw materials surged when the regulation of energy consumption was strict in late September and October, while buyers needed to prepare feedstock for the coming online shopping spree in November. As a result, many downstream players placed orders and even hoarded up a large quantity of fabrics. However, feedstock prices dropped rapidly later. Most fabric traders, especially those who purchased for speculation, faced serious losses. Some even canceled their orders with fabric mills.
Fashion for Good, the global platform for fashion and textile innovation for a better tomorrow, launched the ‘Sorting for Circularity Project’ in India to understand the pre-consumer and post-consumer textiles waste streams. This consortium project to pilot sorting and mapping solutions in India, aims to build an infrastructure towards greater circularity for future.
With the Sorting for Circularity India Project, Fashion for Good calls on stakeholders within the textile waste sector in India to collaborate to map the Indian textile waste landscape. Data and resources volunteered are crucial to obtaining real world estimates beneficial to mapping the landscape and successfully testing technologies that are best placed to address the challenges.
The project is a joint initiative of Fashion for Good with partners, adidas, Levi Strauss & Co., PVH Corp, Arvind Limited, Birla Cellulose and Welspun India. A key technology partner for the project is Fashion for Good innovator Reverse Resources who provides the analysis of pre-consumer textile waste streams in addition to designing and running the pre-consumer pilot. The project is supported through catalytic funding provided by Laudes Foundation.
As a strong textiles manufacturing and consuming country, India offers a large streams of pre-consumer as well as domestic post-consumer waste. In fact, pre-consumer waste is only partially recycled, with the remaining portion mostly downcycled to products of inferior quality. And domestic post-consumer waste is tough to trace, with limited data to understand waste, quantities, composition, and other factors key to recycling. As Katrin Ley, Managing Director, Fashion for Good says, “India is a critical hub, not only for textile production and consumption, but also as a global post-consumer textile waste destination. This project is pivotal to understanding the size of this considerable market and providing the incentive, tools and means for the industry to benefit from the wealth of this untapped resource.”
In fact, India is also one of the largest recipients of global post-consumer textile waste, with millions of tonnes, worth over €100m, of discarded textile being brough into the country and then manually sorted at various hubs. What’s more, there is very little information on this imported waste.
Moreover, there are no technologies that organize, categorise and sort materials to ensure quality textile waste is accessible for recyclers, who require sorted feedstocks in large volumes. Other challenges for recyclers include significant barriers to the growth of chemical recycling technologies in India.
The Sorting for Circularity India project will address all these challenges and build an accessible infrastructure for manufacturers, sorters, collectors, waste handlers and recyclers in India. Over 15 months, the project will demonstrate a new textile value chain across three phases. Firstly, by obtaining an overall understanding of the textile waste supply chain of pre- and post-consumer textile waste in India. Secondly, by identifying and piloting technologies that enable the traceability of textile waste and its accessibility to existing recyclers. Thirdly, it will be providing recyclers access to textile waste feedstocks that meet the quality parameters of advanced recycling technologies, giving these technologies an incentive to scale in India.
Many Indian textile manufacturers have collaborated on this project. As Abhishek Bansal, Head Sustainability, Arvind explains. “Recycling technologies are going to be the future of the industry and to get there we need access to traceable, high-quality textile waste for all waste streams. We will be looking at efficiently recycling traceable textile waste and help along in building a new textile waste value chain in India. This project is a great opportunity to help organise the India textile waste market, making it traceable and accessible to recyclers, manufacturers, and brands.”
Birla Cellulose is also partnering this project as H K Agarwal, Business Director Designate, Birla Cellulose opines “A collaborative approach to building a reliable and robust supply chain of pre- and post-consumer waste is crucial for scaling the circular business model for the fashion industry and for Birla Cellulose to reach our ambitious goal of scaling circular fibres such as Liva Reviva to 100,000 tonnes per year by 2024. This project can have a huge social impact by creating more value from waste by collection, segregation and upscaling of textile waste and create a win-win situation for all stakeholders while making fashion more sustainable. Birla Cellulose is excited to be part of this partnership.”
In an open letter to the chairman of Apparel Export and Promotion Council, CMAI chairman, presidents and secretaries of all garment and hosiery associations and prominent garment and hosiery manufactures, Rikhab C Jain, Chairman, T.T. Ltd has written the stats put forward by CITI and Spinning Associations to the Minister of Textiles, Commerce and Railway, Piyush Goyal on cotton and cotton yarn price rise is skewed and incorrect. He writes, indeed there are conflicting interests within India’s textile industry but no stakeholder should give wrong information, incorrect, skewed and twisted data about the impact of over 70 per cent rise in cotton prices within last few weeks.
Jain highlights CITI statement that cotton accounts for 55 to 60 per cent of yarn cost and yarn cost account 20 to 25 per cent of the garment and made up cost is untrue thereby creating a wrong impression on decision makers. Jain counters CITI statement that says yarn cost for garment is 20 to 25 per cent only. “Yarn cost for garment, made up and hosiery articles will range from 40to 65 per cent depending upon lower segment, middle segment or higher segment products. Obviously packing cost and value addition is more in case of elite products but even their yarn cost is not less than 40 per cent. In case of fabric, yarn cost may touch even 80 to 85 per cent. For instance, for white cotton knitted fabric the value addition is just 15 to 20 per cent,” Jain writes.
He goes on to say “Spinning Mill Associations and CITI have wrongly printed papers to impress that rise in cotton prices and cotton yarn prices have not gone up in tandem.” Cotton yarn prices have moved up over 65 per cent against cotton price rise of 80 per cent in the post COVID period. This clearly shows, yarn prices has moved up much more than warranted. “Even if cotton cost is taken as 60 per cent of yarn cost, yarn prices should not have increased by more than 50 to 55 per cent (assuming 10 per cent inflation in other costs).” And this has impacted clothing prices at a time when consumers are hard up on spending.
Jain goes on to explain as price of knitting, processing and margins of spinning mills have increased, garment and apparel sector must raise the issue of increased burden due to cotton and yarn price rise. “Lot of spinning mills earn reasonably but not unduly. Lets not speculate in cotton, not disturb the textile industry, the mother industry of India.” He argues, the facts presented to the minister are wrong and disturbing and were presented with an objective that the government should not to take any action against speculation and cotton speculators.
In his letter Jain has urged all garment, apparel and hosiery, made ups, fabric manufacturer including Khadi and handloom to take immediate action on the crisis due to rising cotton prices. He sums up by saying “Let fresh representation be made to the government and spinners associations. CITI in fact is not an apex textile body but only a new version of Indian Cotton Mills Federation (ICMF).”
US apparel sellers are seeing customers returning to stores. Customers returning to schools and offices are shopping more at physical stores following the easing of Covid curbs. People stuck at home during lockdowns turned to comfortable joggers and sweatshirts, but reopening of schools, workplaces and public spaces following vaccinations has prompted them to splurge again on street wear, including jeans and shirts. The start of holiday season has been promising. Customers have come out early to shop and have been responding well to assortments. Retailers have shrugged off holiday inventory concerns, confident they have ample goods despite port congestion and some factory closures. American department store chains delivered strong results for the fiscal third quarter.
American Eagle Outfitters’ inventory at cost at the end of the third quarter increased 32 per cent as it deployed pricier air freight to navigate global supply chain issues. The apparel chain has been beefing up its logistics game. Total net revenue increased 24 per cent from a year earlier. American Eagle revenue jumped 21 per cent while that of the brand Aerie, which sells leggings and bras, rose 28 per cent. Similarly Abercrombie & Fitch’s net sales rose ten per cent. Sales at Macy’s stores rose 35.6 per cent.
With Coronavirus cases increasing again in Europe, it will have a massive impact on the Bangladeshi readymade garment sector, given that it is the largest destination for clothes manufactured in Bangladesh. Bangladesh sends over 50 per cent of its exportable goods to the European Union markets.
Europe has once again become the epicenter of the pandemic, with many European Union nations recording the highest Covid cases in recent days. Bangladesh is concerned about the current spread of Coronavirus in major EU markets. The readymade garment sector had started getting orders and had been on track after overcoming the pandemic last year. The entire workforce was a victim of Covid during the lockdown. Workers lost wages during from March to May of 2020 alone, mainly because there were not enough orders to keep factories afloat. Some 82 per cent of workers’ income declined. By June 2020, export orders had fallen by 40 to 45 per cent compared to 2019. Workers also faced critical challenges to their mental health and overall emotional well-being, being worried about both the pandemic and their financial futures — providing for their families, feeding them, and caring for their children.
For the first 10 months of 2020, Sri Lanka’s apparel and textile exports grew by 21 per cent. The overall export and deemed export industry is facing serious challenges in logistics, both in terms of cost and lead times. Additionally global apparel brands are pursuing an in-country verticality strategy for sourcing their products.
Fabric and accessory manufacturers say that by encouraging the local apparel and textile industry, the industry has potential and is poised for certain growth if the environment remains conducive. This in turn can support the economic needs of the country. The Fabric & Apparel Accessory Manufacturers Association (FAAMA), which is the governing body of fabric and apparel accessory manufacturers in Sri Lanka and a subsidiary association of the Joint Apparel Association Forum Sri Lanka (JAAF), expressed its concerns and recommendations in writing to the CBSL Governor Nivard Cabraal.
However, a move by the Central Bank of Sri Lanka requiring apparel exporters to use only local currency for domestically sourced inputs has caused a furore across the biggest foreign exchange earning sector. Fabric and apparel accessory manufacturers sell their products directly to apparel exporters (locally and overseas) hence their businesses are classified as deemed exporters.
The entirety of industry invoicing to apparel exporters has always been in dollars, euros or sterling pounds. The raw materials they require, such as yarns (both cotton and synthetic), dyestuff, chemicals etc, including machinery and spare parts, are not available locally and have to be imported from different countries around the world. Payment for such materials and machinery needs to be settled in dollars.