Sri Lanka’s economic fallout made headlines in the last few months. Pakistan is also on a similar path with most of the country’s foreign currency reserves fast depleting and inflation levels rising to unprecedented levels. The country’s exchange rates are also on a downfall while interest rates have reached irrationally high levels. Pushing all leaders and policymakers to develop new ways to navigate through this situation, All Pakistan Textile Mills Association (APTMA) is urging them to introduce the following reforms.

Achieve political and economic stability

APTMA’s first recommendation is for Pakistan to achieve political stability. A volatile political environment is impeding policymakers’ ability to introduce short term macroeconomic policies. It is also compelling them to make frequent U-turns on policies, leading to non-completion of many ongoing projects. Another cause of concern is the unstable exchange rate that continues to threaten the progress achieved by sectors like textiles. Pakistan’s exchange rate has been on the decline for last few months. On July 27, 2022, the value of one dollar in Pakistan reached its highest levels of Rs 237 (Pakistani). This large-scale devaluation in exchange rates is making textile materials in Pakistan more expensive and exports less competitive.

Make exchange rates competitive

To tide over the situation, Pakistan needs to abandon the widespread misconception that exporters welcome rupee devaluation. The central bank and government need to focus on achieving a competitive exchange rate and actual exchange parity. Foreign exchange achieved through exports is the cheapest with only 3 to 4 per cent cost and no compulsion to return it and no interest rates. Moreover, the government cannot ignore the need to introduce new long-term policies featuring lower interest rates. It also cannot ignore the need for more investments and reformed policies to boost the confidence of investors and markets in Pakistan.

Revolutionize economy at grass root levels

Further, Pakistan needs to empower its youth to revolutionize economy at the grass root levels. It needs to abolish policies that lead to a hike in interest rates besides incorporating more individuals into the economy and increasing labor supply.

Reduce import bills

In FY22, Pakistan’s current account deficit increased 517 per cent compared to FY21. To counter the risks of mounting debt, Pakistan needs to take few steps immediately. First, it needs to reduce the import bill by at least $5 billion, especially energy’s, through ensuring energy efficiency. Second, Pakistan needs to limit its use of gas for productive purposes. It needs to introduce new energy conservation measures.

Pakistan also needs to reduce its import bills by over 25 per cent and save $6 billion. It needs to implement both price and administrative measures to curtail consumption; curtail domestic supply of gas and reduce consumption and waste by 18 per cent; fastrack calibration of cooking burners to save 200 MMCFD of Gas/RLNG.

Open new bank accounts

Another important measure is reducing external pressure on ‘hawala’ from $10 to $5 billion through documentation. It needs to introduce new schemes enabling State Bank of Pakistan to open new bank accounts with a pre-approved overdraft facility of Rs 10,000 to be used as seed money for entrepreneurship. Lastly, it needs to make tariffs more competitive to boost exports.

More value-addition to exports

Pakistan also needs to add more value to its exports to improve its global image. For this, it needs to create an industry-friendly atmosphere that focuses on improving quality by adding new processes, products, and entering new markets.

Abolish tariffs on MMF

Another measure that needs to be adopted is abolish tariffs on MMF that prevents Pakistan from participating in the booming market. Lastly, Pakistan needs to focus on textile exports to boost economic growth. It needs to ensure consistent energy supply at regionally competitive tariffs. The government needs to provide regionally competitive terms for the sector to help Pakistan achieve economic stability and subsequent growth.

The recent success of high-end apparel manufacturing nations like Sri Lanka can be attributed to three defining characteristics including robust secondary supply chains, high-skilled staff and a cost-competitive location. Sri Lanka has one of the most skilled workforce besides being strategically located, says Norman Collier, Director, Stretchline Holdings. The company is the largest manufacturer of narrow elasticated fabric in the world. It is also a major supplier of covered elastomeric yarn and textile coating and bonding solutions.

Building robust secondary supply chain in Sri Lanka

Having commenced operations in Sri Lanka in 1996, Stretchline currently has seven production plants and over 3,400 employees in the country. The company has partnered companies like MAS Holdings to build a robust secondary supply chain in Sri Lanka, adds Collier. MAS Holdings has some of the most advanced production plants in Sri Lanka. Even 25 years ago, these plants were more advanced than the factories in the UK, adds Collier.

Producing for some of the world’s best-known high-end intimate and activewear brands like Victoria’s Secret, Nike, Lululemon and PVH, the Sri Lanka workforce has become highly skilled. “There is also a strong alignment between the high-end segments specialized by Sri Lankan manufacturers and local available resources. Manufacturers in the country have been focusing on higher –margin businesses to pay their workers more,” explains Collier.

This strategy also enables the Sri Lankan apparel sector to invest in research and development, innovation and capacity development.

A strategic move under five-year plan

The Sri Lankan apparel industry has a bright future ahead, says Collier. His company Stretchline continues to invest in Sri Lanka under its ongoing five-year plan. The market is an important part of its overall strategy. Stretchline has made significant contributions in central warehousing, yarn dyeing and its rubber covering plant.

The company has also made significant investments to make production facilities more environmentally-friendly and sustainable. It does not expect operations to be severely impacted by the country’s current downturn. The company aims to use the current downturn in business to strengthen its presence in the other locations beyond Sri Lanka, affirms Collier.

The 8th Vietnam Textile Summit 2022 will be organized from September 22-23, 2022. Highlighting the latest policy developments in Vietnam’s textile and apparel industry, sourcing strategy, supply chain, digital transformation, labour shortage, sustainability, etc, the two-day conference will include a keynote speech, panel discussion, and other networking activities. It will be open to both onsite and virtual participants worldwide, according to the event’s organizer ECV International.

Despite the challenges brought about by the COVID-19 pandemic, the turnover of Vietnam’s textile and garment industry grew by 22.5 per cent to $8.84 billion over the same period last year. The country’s manufacturers and their partners are exploring new opportunities in the global textile and garment market. They currently export their product to markets such as United States, Europe, and Japan.

Vietnam still imports many raw materials used in the textile industry. It also faces an acute labor shortage, climate change issues and a volatile trade market. The Vietnam Textile Summit will offer valuable insights on the future prospects of Vietnam’s textile and apparel industry to attendees.

Puma will organize a global event on September 06 to discuss solutions for some of the fashion industry’s most pressing sustainability challenges such as waste, materials and climate change. The brand has launched the platform PUMACOP.com, where users can learn more about the event and register. The event will also be streamed live on this platform.

Taking place in London and to be streamed worldwide, Conference of the people will feature Puma’s industry peers, activists, NGOs, experts, ambassadors and consumers, who will discuss tackling waste, using more sustainable materials, stopping climate change, protecting forests and finding ways for the industry to collaborate to achieve results sooner.

Actress, model and activist Cara Delevingne will host the event alongside Puma CEO Bjørn Gulden and Puma CSO Anne-Laure Descours.

Becoming more sustainable as a company has been an important pillar of Puma’s strategy for many years. Earlier this year, the company announced that it had reduced its carbon emissions, including the use of renewable energy certificates, between 2017 and 2021 from both its own operations (-88 per cent) and its supply chain (-12 per cent), in spite of strong sales growth in the same period. By 2025, Puma aims to make nine out of 10 products with more sustainable materials, the company said in a press release.

The value of Bangladeshi taka has depreciated to 102 for one single dollar from 86 taka in January 2022.

A sliding local currency usually translates into higher earnings for the exporters since their products become more competitive in the global markets but when it comes to Bangladesh garment makers, it brought little cheers thanks to a host of reasons including substantial increase raw materials cost, hike in shipping charges and inflation, which is seen as a direct fallout of the Russia-Ukraine war.

Managing Director.Narayanganj-based Plummy Fashions, says,exporters have not been able to reap the maximum benefit from the fall of the Taka consequent to raw material prices going up even if global buyers are not raising goods’ prices accordingly.

Kutubuddin Ahmed, Chairman, Envoy Textiles, adds, since the company was importing raw materials at higher costs, it doesn’t gain much from the depreciation of Taka.

For the first quarter ended June 30, 2022, Sangam (India)’s net profit declined by 1.7 per cent to Rs 52.53 crore against a net profit of Rs 53.44 crore for the quarter ended March 31, 2022.

The company’s total income declined by 2.62 per cent to Rs. 718 crore during the period ended June 30, 2022 as compared to Rs. 737.31 crore during the period ended March 31, 2022.

The company’s EPS declined by 3.10 per cent to Rs. 11.86 for the period ended June 30, 2022 as compared to Rs. 12.24 for the period ended March 31, 2022.

On a year-on-year basis, Sangam India’s net profit surged by 307.53 per cent to f Rs 52,53 crore for the year ended June 30, 2022 as against net loss of Rs 12.89 crore for the year ended June 30, 2021.

The company’s total income increased by 73.87 per cent to Rs. 718 crore during the period ended June 30, 2022 as compared to Rs.412.95 crore during the period ended June 30, 2021.

Its EPS surged by 271.79 per cent to Rs.11.86 for the period ended June 30, 2022 as compared to Rs.3.19 for the period ended June 30, 2021.

Pakistan's textile exports dropped by 10 per cent to $1.54 billion in July 2022 compared to $1.71 billion in June 2022, as per reports by the All Pakistan Textile Mills Association (APTMA).

On a yearly basis, textile exports dropped by 5 per cent, compared to $1.47 billion recorded in July 2021, showed the provisional data released by APTMA. In July 2022, the percentage of textile exports in total exports reached 66 per cent.

The decline in exports can be attributed to lack of energy supplies, which reduced textile export growth from double digits to single digits. APTMA had earlier urged authorties to restore gas and RLNG supply of the export-oriented industry on an urgent basis.

Pakistan’s textile sector accounts for a major share of country’s exports, which are vital for the cash-strapped economy. Pakistan suffers from low foreign exchange with policymakers mostly scrambling to ensure dollar inflows. In such an environment, many experts have stressed on exports, especially in a rupee-depreciating environment.

The Indonesian government aims to increase its national textile and textile product (TPT) exports by 15 percent per year by 2025.

Until now, TPT was considered as a major contributor to the Indonesian economy, along with the recovery from the COVID-19 pandemic. As a social safety net and foreign exchange earner, the textile industry is able to absorb a workforce of 3.65 million people or 18.79 percent of the total workers in the manufacturing industry.

The Minister of Industry also stated that the textile industry has a strategic role in the industrialization process.

With such a large role and contribution, the government spurred the utility of the textile industry to return to its pre-pandemic utilization level, which was between 60-80 percent so that it could support national exports.

Compared to last year, the value of textile exports increased significantly by 28 percent. This increase was driven by apparel and yarn.

Industrial investment also increased by 6.4 percent until the first quarter of 2022 compared to the same period the previous year.

As one of the priority sectors, the textile industry is an inseparable part of the Making mIndonesia 4.0 program.

The Making Indonesia 4.0 agenda for the textile industry in Indonesia is directed at making the national textile industry a leader in the production of "functional" clothing.

The Uttar Pradesh government plans to introduce a new textile policy to boost investment and increase employment generation capacity in the state.

The state has initiated the process of acquiring land for the establishment of Mega Integrated Textile and Apparel Park in Harodi under the PM Mitra Scheme of the Union Textiles Ministry.

The government also plans to set up an apparel park in Noida with an investment of Rs 3,000 crore. Land for developing the park has been arranged. The apparel park will house about 115 export-oriented textile units with an investment of Rs 3,000 crore, which is likely to provide employment to about two lakh persons.

The policy says that this region is full of skilled weavers but the irony is that because of Banarasi silk saris, the focus is only on Varanasi thus pushing the weavers of other regions into an unorganized sector.

Trousers &Shorts, and T-shirts—together accounted for 40 per cent of total apparel imports by Germany in the first three months of 2022. Trousers & shorts comprised 27.65 per cent of all apparel imports worth $9.755 billion during January-March. T-shirts was the second largest product 13.19 per cent share in total imports.

Germany’s import of trousers & shorts was valued at $2.697 billion during the first quarter of 2022, while T-shirts import was $1.287 billion during the same period,. Among other products, Germany’s import of jerseys was valued at $1.215 billion, shirts $847.579 million, dresses $644.264 million and innerwear $515.516 million, jackets& blazers $371.452 million, socks $328.487 million, coats $303.761 million, accessories $230.369 million and baby wear $197.984 million/

Germany’s total apparel import stood at $39.913 billion during January-December 2021. Of this, trousers & shorts accounted for $9.576 billion, jerseys $5.515 billion (13.82%) and T-shirts $4.396 billion.