Addressing the 2nd Bangladesh-India Cotton Fest 2020, M Shahrair Alam, State Minister for Foreign Affairs said India can help Bangladesh double apparel exports over the next five years since it is a crucial player in the global cotton market. Alam highlighted, Bangladesh is one of the largest cotton importers in the world and imports 98 per cent of its cotton from 42 countries. India is ideally positioned to supply high quality cotton to Bangladesh at competitive prices with lower costs of transportation and easier access to supplier, he added.

Organized by Bangladesh Cotton Association (BCA), Bangladesh Textile Mills Association (BTMA), Indian Cotton Association (ICAL) and India-Bangladesh Chamber of Commerce and Industry (IBCCI), the fest was attended by around 30 Indian companies. It was also attended by Salman F Rahman, PM Hasina’s adviser as the chief guest.

Struggling with a heavy debt load, Shandong Ruyi Technology Group has failed to repay the principal and interest on Rmb1billion bond. Referred to as the ‘LVMH of China’, Shandong Ruyi has built up total debt of more than $4 billion in the course of scooping up controlling stakes in famous brands including athletic apparel maker The Lycra Company and Gieves & Hawkes.

The group is not state-owned but has still felt the squeeze of Beijing’s ebbing support for debt issued by regional and local governments. After it negotiated with bondholders to delay an annual interest payment it had missed in March, the company had hoped for a rescue from Jining City Urban Construction Investment, a Shandong-based local government financing vehicle.

But in June that financing vehicle pulled out of the arrangement and refused to buy a 26 per cent stake in the company. Shandong Ruyi has an interest payment on another Rmb1billion bond, traded on China’s onshore market, due on Tuesday. The group’s international debt is also trading at distressed levels. The price of a $300m bond issued by subsidiary Prime Bloom Holdings due in 2022 has dropped to 20 cents on the US dollar, Bloomberg data show.

Rating agency Moody’s downgraded Shandong Ruyi’s issuer rating in March to Caa3 from Caa1, indicating the group carries “very high credit risk”. It also cut the rating on the bonds issued by Prime Bloom to Ca from Caa2.

Mian Zahid Hussain, Chairman, National Business Group, FPCCI has urged the government to allow duty free import of cotton yarn following the collapse of cotton crop in the country. Hussain urged for a waiver of the 5 percent customs duty and 5 percent regulatory duty on import of yarn unless the new crop hit the market. He further urged the government to discontinue import of excessive quantities of cotton and yarn to safeguard the rights of farmers, ginners, and textile millers.

He said, the area under cultivation for cotton is shrinking since 14 years while cotton output is also declining due to the apathy of the authorities. The last crop of cotton failed adding to the miseries of millions of farmers and threatening the textile sector which is behind 60 percent exports while providing jobs to 40 percent industrial labor.

The textile sector will need to import 14 million bales to keep their machines running on the back of unprecedented orders. This will hit forex reserves and result in other problems like diverting western importers towards China, which will leave local textile sector high and dry, Hussain added.

As per Polaris Market Research, global geotextile market is anticipated to grow by 8.8 per cent CAGR to reach $14.03 billion by 2026. The roadways segment will drive growth during the period, says Textile Value Chain. Geotextiles are extensively used in reinforcement of soil banks in bridges, pavements, roads, highway, and other construction sector. Their integral applicable functions include sealing, separation, drainage, filtration, and reinforcement in different substrates. Concerning their multifunctional characteristics, geotextiles are suitable for a range of industries and tend to find application in transportation, maintenance industries agriculture, and construction, among many.

Europe is expected to witness fastest growth in this segment during the forecast period. Some of the significant reasons behind this include increasing expenditure in the construction of roads, railways, airport runways, and pavements in the countries such as Italy, UK, Germany, and France.

These market players consistently undertake R&D for the launch of new innovative products to strengthen their product portfolio in the industry. In addition, the companies focus mainly on foreign investments in research and development to cater the rapidly growing demand. Big market players also focus on their business expansion through inorganic developments which increases the potential concerning expansion of customer base and also geographic expansion.

Some of the prominent industry players include Berry Global, Agru America, Inc., Carthage Mills, DuPont, Strata Systems, Mattex, Propex Operating Company Koninklijke Ten Cate, Kaytech, Tenax and Leggett & Platt.

First Japanese company to join The Fashion Pact, Asics will continue to promote sustainability in all areas of business. Asics has been focusing on climate change and last year announced its commitment to set science-based emissions reduction targets to limit global temperature rise to 1.5°C above pre-industrial levels, towards a net-zero future by 2050. Currently, Asics aims to reduce greenhouse gas emissions at business locations by 38 per cent, and by 55 per cent per product along the supply chain by 2030.

Demonstrating its commitment to ensuring the fashion sector is on the path to a sustainable future, Asics is also a signatory of the UNFCCC Fashion Industry Charter for Climate Action and a founding member of the Sustainable Apparel Coalition.

Asics has also received an “A-" score for latest response to the CDP’s annual Climate Change questionnaire for its actions to reduce greenhouse gas emissions and effectively address climate change. The performance scoring by CDP—a not-for-profit organisation that collects environmental data and runs a global disclosure system—is one of the most trusted standards among institutional investors, 515 of whom endorsed the assessment this year. Asics is one of the first sporting goods manufacturer in the world to receive the “A-" score.

Fashion Pact is a global coalition of companies in the fashion and textile industries which have all committed to a common core of key environmental goals in three areas: mitigating climate change, restoring biodiversity and protecting the oceans.

The pact was created and presented to heads of state during the G7 summit in Biarritz in 2019. Initially, thirty-two signatories across luxury, retail, fashion, sports and lifestyle joined this new industry coalition and committed to collectively spearhead transformation in their respective industries.

German sportswear maker Adidias AG plans to sell its brand Reebok, which it bought 15 years ago to take on archrival Nike on its home turf. As per Colin Wong, Portfolio Manager, Mawer Investment Management, this might be an attractive target for the firm to break into the US market. Some of the potential options before Adidas include pinning Reebok off as a stand-alone public company, or selling the brand to private equity, another major sports retailer or a multi-brand player like VF Corp.

Reebok’s net sales fell 7 per cent in the third quarter of 2020 to €403 million after falling as much as 44 per cent in the preceding quarter. In 2019, Adidas wrote down Reebok’s book value by nearly half, compared with 2018, to €842 million. The brand recently collaborated with celebrities like Cardi B and focused on women’s apparel, which put it in a better place, said Jessica Ramirez, retail analyst at Jane Hali & Associates.

Adidas expects its overall sales to drop in the last three months of the year as the reimposition of lockdowns in Europe would likely offset a return to growth in China and strong demand for running gear and products designed by singer Beyonce.

Dirk Van Den Berghe has quit as the CEO of Walmat-Asia, and is also likely to resign from Flipkart’s board of members. Having joined Walmart in 2014 as CEO of the Canada region, Berghe also served as the chief executive of Walmart China. His stint as CEO of Asia included overseeing the company’s growth in India, China and Japan besides focusing on global sourcing.

He also led the Walmart’s $16 billion investment in Flipkart in 2018, which gave it a 77 per cent stake in the homegrown etailer. Earlier this month, Flipkart cofounder Binny Bansal was named as a board member of PhonePe, after the digital payments company was spun off from its parent e-commerce firm. PhonePe cofounders Sameer Nigam and Rahul Chari were also named as board members. Bansal remains a member on the Flipkart's board and is also a shareholder.

Though COVID-19 has led to a surge in fashion ecommerce activities, few segments continue to rely on physical shopping experiences, luxury fashion being one of them. As Euromonitor International notes, global luxury fashion sales are set to decline 22 per cent by 2020-end as stores remain closed and consumers are devoid of personalized shopping experiences. The pandemic has also hit consumer confidence badly. Though high net worth individuals may not be feeling as squeezed as those in the lower-income categories, they too have curtailed spending on discretionary items. This has caused a massive shock to the luxury fashion industry across the globe.

Luxury fashion sales to decline

Since long, the personal luxury goods industry has heavily dependent on physical store experiences for consumers. However, the pandemic has accelerated the industry’s digital transformation and forced brands to shift their marketing budgets to digital platforms and social media. Closure of physical stores is expected to hit designer fashion sales harder than sales of lower-priced fashion items. As the Euromonitor report states, sales of designer clothing and footwear are predicted to decline 22 per cent in 2020, compared to 16 per cent for non-designer fashion and 20 per cent for personal accessories.

However, designer fashion category is also expected rebound faster than other categories. As more consumers return to stores, sales in this category may surge across all major FMCG markets.

Omnichannel retail to boost consumer connect

E-commerce sales of apparel, footwear and personal accessories across both designer and affordable categories are expected to surge to 28 per cent, 20 per cent and 16 per cent respectively in 2020. The most rapid increase will be witnessed in South Korea, where e-sales will surge to 36 per cent of total sales by 2020-end. This will be followed by China, which too will witness a rapid surge in both physical and online sales.

COVID-19 has encouraged brands to explore the complete potential of omnichannel retail. Though it has spurred online sales from 12 per cent in 2019 to 20 per cent in 2020, there has been a reinforcement of the importance of physical stores, especially for personal luxury goods sale. Hence, it has become important for luxury brands and retailers to establish a connection with customers and build brand loyalty amongst them.

As per Chris Wilcox, Executive Director, National Council of Wool Selling Brokers of Australia, current wool price levels will support demand for Australian wool by garment markers, weavers and knitters. Wilcox said prices of cotton and synthetic fibers have risen by more than wool in the past few months, competitiveness of Australian wool has improved significantly.

The ratio of (Australian wool price benchmark) Eastern Market Indicator to cotton price has fallen from an all-time peak of 7.92 in February 2019 to 6.32 in February 2020 and is currently sitting at 4.88, he said further adding, the ratio of EMI against synthetic fiber prices has also fallen from an all-time peak of 7.25 in February 2019 to 6.08 in February 2020 and currently sits at 4.66. For cotton, both current price ratio and the average since January 2020 are well below the levels seen through 2010s, he said.

However, the latest Australian Bureau of Statistics data on Australian wool exports in October showed the volume of exports to all destinations was down 2 percent. The volume of exports to China was higher compared to October 2019 although its value declined by 20 per cent. Similarly exports to Korea rose 43 per cent in volume while those to UK by 81 per cent. On the other hand, volume of Australia’s exports slumped by 54 per cent while their value declined by 72 per cent.

Bangladesh plans to sign a free trade agreement (FTA) with the Association of South-East Asian Nations (ASEAN) to enjoy greater market access in the bloc after graduating from the least developed country grouping.The FTA will offer Bangladesh three benefits including a big market to improve its performance and safeguard the duty privilege after graduation. It would also prevent Bangladesh from signing any bilateral agreement with other members of the bloc.

Currently, Bangladesh is at the final stages of negotiations with Indonesia for a FTA for duty privileges on select goods traded between the two countries. However, the negotiation is now facing a stalemate since Indonesia disagrees with some terms, particularly in regards to some major export items such as garments, under the proposed FTA. Bangladesh has been a member of the ASEAN Regional Forum since 2006, which would be an advantage for the country during negotiations

The ASEAN has become a vital market for Bangladesh due to its immense size. The region has a huge consumer base of 642 million people and a burgeoning middle-class with newfound spending capabilities.

By 2030, the ASEAN region will be the fourth-largest economy in the world. Its GDP increased from $2,373 billion in 2007 to $4,034 billion in 2016, according to a study titled 'Bangladesh A story of a Phoenix.'