Faced with an acute shortage of sea containers, exporters in Tirupur are shifting to air transport to ensure their garments reach the marked destinations before Christmas and New Year. Though this may increase their shipment charges significantly, exporters are willing to absorb these costs rather than losing clients by failing to deliver on time.

The global container trade has been hugely impacted by the pandemic, the Suez Canal blockage in March, suspension of operations at China’s Yantian port in June, and the recent typhoon in China. This has resulted in huge congestions at certain ports in the US, Europe and China, causing a major shortage of containers. Exporters don't have a choice but to pay ten times the cost to transport by air, says Raja M Shanmugham, President, Tirupur Exporters’ Association.

CMN Muruganandan, Partner, Gomatha International, Tirupur adds container shortage is forcing companies to bear the additional costs of air transport. If they fail to ship their garments, clients will source from other countries, like China, Taiwan or Vietnam. This will badly hurt the industry, he adds.

Fashion suppliers in China fear regional lockdowns will have serious long-term impacts on their stock levels, profit margins and retailer relationships. As per a Drapers Online report, since July 7, China has enforced lockdowns in urban areas throughout large areas of Eastern China, including parts of Beijing, Shijiazhuang, Nanjing and Heilongjiang, China's northern-most province. The lockdowns have led garment and textile factories across the country to temporarily close, while workers have been instructed to self-isolate at short notice.

This has caused chaos for fashion suppliers that are struggling to get hold of textiles and garment components, and to ship in to the UK without incurring additional fees for both the fabric and the shipping. Closure of factories is leading to an acute shortage of elastane fabric which is currently in high demand. Suppliers have been panic buying stock to book as many containers as they can before it runs out. They are also reporting steep rises in the costs of containers

Because of the lockdown, some retailers are asking suppliers to shoulder the increased costs of shipping. They are putting in bigger orders to try to ensure stock levels and shipping fees have increased because of the uncertain environment.

Suppliers warn retailers could experience severe stock delays. However, businesses that do not export material from the Far East have been able to take advantage of the challenging environment as they have been able to pick up orders due to these delays.

Exporters say, the delay in announcement of the Remission of Duties and Taxes on Export Products (RoDTEP) rates is hurting their liquidity position as they are unable to book fresh orders The RoDTEP scheme was launched on January 1, 2021. However, the government has not yet announced the rates for this scheme. Secondly, the government has also not cleared the Rs 15,000 crore due from the MEIS scheme for the period between April and December 2020.

Exporters have approached finance ministry, commerce ministry, PMO for the clearance of the MEIS dues, and for clarity on RoDTEP rates. However, there is now a new uncertainty on fund reallocation as the government announced ROSCTL scheme for garments segment.. The scheme provides Rs 17,000 crore to clear the pending dues of exporters. In addition, Rs 2,000 crore has been provided to clear the arrears of services exporters for 2019-20 under the now-defunct Service Exports from India Scheme (SEIS).

A Sakthivel, Chairman, Apparel Export Promotion Council (AEPC) has hailed the government‘s decision to remove anti-dumping duty (ADD) on viscose staple fibre (VSF). In January this year, AEPC along with other organizations in the VSF value chain had appealed to Prime Minister to remove ADD on VSF to address issues related to VSF spun yarn availability and price to prevent job losses and halting of production across the VSF textile value chain.

The removal of protectionist tariffs on VSF will align domestic VSF prices with the global VSF prices making the entire Indian VSF textile value chain globally competitive. It will boost production and exports of these products, says Sakthivel. The decision will also provide a fillip to the man-made fiber (MMF) sector, adds Smriti Irani, Former Textiles Minister, who now holds the women and child development portfolio.

Bangladesh’s RMG shipments dipped 16 per cent year-on-year in July due to the Eid vacations, weeks-long lockdown, and a severe container congestion in the Chittagong port. During the month, Bangladesh exported apparels worth $2.60 billion against $3.08 billion worth of apparels exported last July, reports Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Most of Bangladesh’s RMG products were exported to the EU and the US as demand in these two regions increased after reopening of shops. June, July and August are peak months for Bangladesh apparel exporters as they export around 40 per cent of their total RMG products during this period, says Shahidullah Azim, Vice-President, BGMEA

However, Eid vacations, factory closures and container congestion at the Chittagong ports, disrupted exports this year, he adds. Azim predicts exports will revive as manufacturers get huge orders from buyers around this time. Faruque Hassan, President, BGMEA has urged buyers not to penalize suppliers for any reasonable delays caused by the lockdown.

Production levels in many factories have significantly reduced alongside maintaining the health protocol standards and the cost of operation has increased due to workers’ transportation requirements and ensuring sanitization, he adds.

A significant increase in domestic cotton and cotton yarn prices over the last six months has made Indian cotton less competitive in international market. This may lead to garment exports migrating to other countries such as Bangladesh, Thailand, and Vietnam, say exporters.

Unrestricted export of cotton and cotton yarn, particularly to competitors such as Bangladesh, Vietnam, and Thailand with an advance settlement is causing a regional scarcity of these raw materials and driving up their prices, says a report by the Textile Value Chain.

This is impacting exporters’ businesses as they have six-month contracts with importing countries for finished goods. The sharp spike in cotton prices, ranging from 30 to 60 per cent in the last six months, has also increased production costs, says Lalit Thukral, President, Noida Apparel Export Cluster.

In the last six months, India’s cotton and cotton yarn exports have increased by 56 per cent whereas apparel shipments have risen by just 24 per cent.

A new study by the International Cotton Advisory Committee (ICAC) suggests cotton could help the textile industry become more climate-friendly as cotton binds CO2 more effectively than other crops. The cotton plant has a positive effect on the climate and absorbs carbon dioxide more effectively than others, says Roland Stelzer, Managing Director, Cotonea, an organic brand founded in 2003, that has helped set up cultivation projects for organic cotton in Uganda and Kyrgyzstan and has personal knowledge of all the stages along its production chain.

The ICAC study says, nylon production produces the highest amount of greenhouse gases compared to seven other fibre types. Cotton production results in the second lowest rate of emissions. The amount of cotton needed for 1,000 gm of fibre absorbs more than 2,500 gm of CO2, adds Stelzer. He believes, the spreading information via the media regarding the environmental friendliness of cotton will help the industry make cotton more attractive to fashion designers and producers.

A large percentage of growth in apparel companies across the world is driven by an Asian workforce. Yet, few of these companies hire Asians in top leadership positions, says a report by the Women’s Wear Daily.

A 2017 survey by the non-profit Asia Societyhad shown, 27 percent of the participating Fortune 500 companies do not have Asian representation in their list of highest ranking senior executives. Consulting companies including McKinsey do not focus on the origin of their leaders while the Council of Fashion Designers of America (CFDA) doesn’t have a breakdown on its corporate leaders. Further, a review of the leadership team of over a dozen of apparel companies shows, most of their top executives are white and male, with just a few exceptions.

Limited opportunities for Asian employees

UmranBeba, Chairperson, Asia Society’s Global Talent and Diversity Council, and Partner, August Leadership says, Asian professionals are not promoted to the next level in the same manner and with same speed as their western counterparts. Their leadership is mainly limited to the rank of a Chief Financial Officer like in the case of Sunil Doshi from the Fossil Group, AnurupPruthi from Centric Brands and Harmit Singh from Levi Strauss & Co.

American companies are also known to reserve a significantly smaller percentage of executive roles for their Asian employees. As per a survey by Asia Society, American tech companies employ only 14 per cent Asians in executive roles while their total workforce comprises 27 per cent Asians.

These figures reflectAmerica’sdiscrimination against a well-educated and affluent group. Still, the country has 20 million Asians in its workforce, that are growing faster than its ethnic groups, says the Pew Research Center. The percentage of Asian representation in American workforceis likely to further rise to 9.7 percent by 2050, addsthe Census Bureau.

Initiatives to boost Asian presence in corporate world

The percentage of Asian employees in American workforce is highly unbalanced, views Bing Chen, President and Co-founder, Gold House. The non-profit organization works to advance Asian representation in corporate leadership through its ‘Gold Rush’ accelerator program. Through this program, the NGO connects Asian entrepreneurs with business opportunities, organizes funds for their startups, and increases their presence on corporate boards. Driven by Michelle Lee, Editor-in-Chief, Allure and designers PrabalGurung and Phillip Lim, the program launches new ventures in fashion, beauty, food and beverage. It intentionally focuses on Asian start-ups to increase Asian participation in the n the business world.

Traditional fashion corporations are also launching new diversity initiatives. For instance, Levi Strauss & Co appointed African-American Elizabeth Morrison as its new chief diversity officer in November. The company aims to hire around 50 per cent of future employees from diverse backgrounds. It has launched several new programs to hire people from different ethnic backgrounds, affirms Harmit Singh, CFO.

PVH Corp too plans to increase the number of Black, indigenous and people of color at its corporate levels by 50 per cent by 2026. Such initiatives by fashion companies are however, likely to progress at a painstakingly slow pace, concludes Beba, Asia Society and August Leadership.

Over the last 20 years, India’s textile and apparel exports declined from 24 per cent in 2001 to 11 per cent in 2020. Exports of cotton yarn declined from 2 per cent to 1 per cent while RMG exports fell from 11 per cent to 4 per cent. According to a report by CRISIL Research, cotton yarn accounted for India’s total textile and apparel exports in the last financial year, while RMG exports accounted for 28 per cent. Lack of FTAs and increased competition are some of the reasons for India’s dismal exports over the years.

India’s loses share to low-cost competitors

As per Textile Today, the textile industry accounts for 11 per cent of India’s total $313 billion exports. It also employs around 45 million direct employees and 60 million employees in the allied industries. However, over the last few years, the sector has lost share in the cotton yarn market to competitors Vietnam, Bangladesh and China. The Indian apparel segment too suffered from increased competition from these nations.

The sector was further pushed to the edge in 2020 as the Central government reoriented export incentives according to World Trade Organization guidelines. Though it later launched the Remission of Duties and Taxes on Export Products (RoDTEP) scheme to decrease tax burden on exports, incentives for exporters are unlikely to improve, says the CRISIL Research report.

PLI to boost MMF-based RMG exports

The recently announced PLI scheme for man-made fibers (MMF) and technical textiles is expected to boost India’s MMF-based RMG exports. It is also expected to increase India’s share in the global export market over the medium to long term. To be successful, the scheme needs to be supported with trade negotiations and investments. India can fill the void created by China by making continuous and concentrated efforts to boost exports to the EU and US, says the CRISIL report.

The US-China trade war has created a demand for Indian originated RMG exports in the global market. India can explore this opportunity to re-establish relations with global brands. It needs to sign new trade agreements and lower import duties in key export destinations. By doing this, India can increase presence in global trade and help brands reduce their dependency on China.

Nitin Spinners’ profit in Q1 FY2021-22 surged to Rs 60.01 crore for the period ended June 30, 2021 as against loss of Rs 42,85crore in the period ended March 21,2021.

As per Equity Bulls, the company reported total income of Rs.553.86 crore during the period ended June 30, 2021 as compared to Rs.511.75 crore during the period ended March 31, 2021. It reported EPS of Rs.10.67 for the period ended June 30, 2021 as compared to Rs.7.62 for the period ended March 31, 2021.

The company posted net profit of Rs.60.01 crore for the period ended June 30, 2021 as against net profit of Rs.9.15crores for the period ended June 30, 2020.

The company reported total income of Rs.553.86 crore during the period ended June 30, 2021 as compared to Rs.219.91 crore during the period ended June 30, 2020.

It reported EPS of Rs.10.67 for the period ended June 30, 2021 as compared to Rs.(1.63) for the period ended June 30, 2020.