The Bangladesh Textile Mills Association has thanked the government for imposing Tk4 tax on sale of per kg yarn instead of the proposed 5 per cent value added tax (VAT) in the fiscal year (FY) 2019-20. The association had previously urged the government to keep locally produced yarn out of the VAT net, keeping 0.25 per cent source tax and 5 per cent advance tax (AT) on machinery, spare parts and raw materials unchanged. Currently, yarn manufacturers pay Tk3 as VAT on per kg yarn sale.

A pickup in H&M’s revenue growth at the start of the third quarter, helped by a heat wave in Europe, is boosting optimism that the retailer may have returned to a level of sales growth that could gradually put the inventory issue behind it. H&M has pledged to reduce discounts for a fourth consecutive quarter as it aims to reduce its buildup of unsold garments. Inventory dropped slightly as a proportion of sales, easing to 18.2 per cent at the end of May from a record 18.9 per cent as of last August.

The retailer’s composition of inventory has improved, implying it will become easier to sell garments. The family-controlled company has a goal of eventually reducing stock-in-trade to 12 per cent to 14 per cent of sales, a level last seen three years ago.

H&M has also cut this year’s store expansion plan by 26 per cent while pledging more investment in e-commerce. H&M now expects 130 net store openings, further decelerating from a rate that exceeded 400 in recent years. Most of the new H&M stores will be outside Europe and the US as the retailer seeks faster growing markets.

Cheryl Abel-Hodges is the new CEO of Calvin Klein. Calvin Klein is a part of PVH Corp. Abel-Hodges has previously served as group president, Calvin Klein North America and The Underwear Group. Since joining PVH in 2006, Abel-Hodges has held various leadership positions across the organisation. As group president for Calvin Klein North America, she helped set the strategic direction for the brand, driving a consumer-centric approach. Within The Underwear Group, Abel-Hodges led the development of PVH’s underwear platform, overseeing design, merchandising, product development and planning for all of PVH’s underwear and women’s intimates businesses.

Her strong management abilities, together with her consistent track record for operational excellence, are expected to provide strong direction for the Calvin Klein team. Calvin Klein is one of the leading fashion design and marketing studios in the world. It designs and markets women’s and men’s designer collection apparel and a range of other products that are manufactured and marketed through an extensive network of licensing agreements and other arrangements worldwide.

Bangladesh’s yarn and fabrics exports rose 20.46 per cent between July and May. There are 450 spinning mills and nearly 1,300 small and medium weaving mills in Bangladesh. At least six large spinning mills have started exporting specialised cotton yarn, which is very fine, to Indonesia, Sri Lanka and Turkey. Emerging garment producing countries such as Ethiopia, Myanmar and Cambodia are also potential export destinations for Bangladesh’s yarn and fabric producers. Although there is a lot of demand for yarn and fabrics from Bangladesh, consumption from garment factories is also growing to feed rising garment exports. If domestic spinners and weavers produce more yarn and fabrics, Bangladesh will have more export potential.

Since yarn prices in Bangladesh are lower than in other countries, Bangladesh’s exports are set to see good growth. Companies come to Bangladesh to buy yarn because the country is strong in the production of cotton yarn and many other countries have started manufacturing mixed yarn. In case of mixed yarn, millers use other ingredients with cotton. Turkey a strong manufacturer of knitwear with finer yarn has become a good destination for Bangladeshi product.

However, for higher production of yarn and fabrics, the country needs more investment in the primary textile sector.

For this year Bangladesh may fix a target of a 7.03 per cent growth in apparel export earnings. Earnings from knitwear exports are expected to grow 9.92 per cent and earnings from woven products are expected to grow 7.15 per cent. The target has been proposed considering the world economic outlook, policy changes at important export destinations, stakeholder feedback, supply chain capacity, changes in exchange rates, and global business trends. Already Bangladesh’s exports to the US market have increased.

But there are challenges. Bangladesh has to attract investment from China and capture work orders from global apparel buyers, who are relocating from China. There is also a need for new market exploration, product diversification and a shift to value-added products to grab a bigger market share.

Apparel contribute 84 per cent to the country’s total export earnings. Bangladesh has already witnessed double-digit growth during the July-May period of the current fiscal year. The capacity of the country’s garment sector has increased. The inspection by Accord and Alliance has helped remediate factories and prompted factory owners to emphasise workplace safety, which has eventually lifted the country’s image in the eyes of foreign buyers. Of the top ten green garment factories in the world, seven are located in Bangladesh.

"Even though demand for ethical fashion is rising, there are several reports that throw light on the ongoing labor abuses both in India and across the world. One such report by Trasparentem uncovers multiple violations at five factories in Malaysia. These factories supply to well-known Western brands like Nike, Global Brands Group (which creates licensed products for the likes of Calvin Klein and Juicy Couture), Asics, Under Armour, Target, Fruit of the Loom , Primark and Brooks are among the brands directly implicated."

Even though demand for ethical fashion is rising, there are several reports that throw light on the ongoing labor abuses both in India and across the world. One such report by Trasparentem uncovers multiple violations at five factories in Malaysia. These factories supply to well-known Western brands like Nike, Global Brands Group (which creates licensed products for the likes of Calvin Klein and Juicy Couture), Asics, Under Armour, Target, Fruit of the Loom , Primark and Brooks are among the brands directly implicated.

Report highlights precarious conditions of Malaysian laborers

The kinds of issues uncovered during Transparentem's 18-month investigation include the charging for recruitment fees for laborers in Malaysia. These fees, ranging from $745 to $4, 356 are high enough to compel laborers to sell their homes, mortgage land or borrow money from the bank. These laborers, who are often migrants from nearby countries like Cambodia, the Philippines and Sri Lanka, are also misled about the amount they'd actually be making once they started their new jobs — so much so that many came to regret taking the jobs in the first place.

The underpay and excessive recruitment fees are compounded by disciplinary fines that these workers have to pay if the machinery breaks down while they’re using it or if they don’t achieve their production targets or make mistake in their work. For some laborers these fees pile to such an extent that they end up owning more money to their employer than their wages.

Besides payment issues, other issues that plague these workers include the verbal and physical abuse that they have face from their managers. They are also forced to live in unhygienic and overcrowded spaces.

Brands rise against inhuman factory conditions

Though the conditions are bleak, some brands are taking responsibility to change these situations. Transparentem's approach always contacts the implicated brands before releasing its findings to the media. Its founder, Benjamin Skinner, a former investigative journalist believes when you name and shame specific factories, the brands that work with them are more likely to sever ties to avoid blame In the case of the Malaysian factory investigation, of the 23 brands implicated, 17 have already begun remediation efforts.

One such instance is of brand Brooks, which expressed its willingness to share the cost of recruitment fee reimbursement with one factory, even though it had technically never authorised the factory to produce its apparel. The brand also stopped sourcing from that partner since 2015. However, Nike refused to accept responsibility for the abuses by its subcontracting on the pretext it had never authorised the two implicated factories to make their products.

On the other hand, brands Primark and Target were praises by Transparentem for pushing improvements in factories they had stopped sourcing with. That the investigation is having a positive effect on other facilities can be seen from the fact that four unnamed buyers extended their remediation efforts to another Malaysian factory not even included in Transparentem's report. Though still a lot needs to be fixed in Malaysian fashion manufacturing, the increase in number of conscientious brands proves that companies are ready to take responsibility for the ethicality of their supply chains.

Through a partnership with IFC, Levi Strauss hopes to meet its corporate sustainability objectives to reduce greenhouse gas emissions and water use in its supply chain. IFC is a member of the World Bank Group. As the largest global development institution, with deep sectoral and wide regional expertise, IFC is well placed to provide support to this important and necessary initiative. Levi Strauss is one of the world’s leading brand name apparel companies.

IFC will work with 42 designated Levi Strauss suppliers and mills in ten countries to identify and implement appropriate renewable energy and water-saving interventions that will reduce greenhouse gas emissions, lead to improved water efficiency and wider adoption of renewable energy supply options. The work, which will take place in Pakistan, Bangladesh, Sri Lanka, India, Mexico, Lesotho, Colombia, Turkey, Egypt, and Vietnam, will incorporate IFC’s Partnership for Cleaner Textiles approach for reducing resource consumption and wastewater pollution.

The global textile, apparel and footwear industry is a major driver of industrialization and economic growth in many countries, employing 60 million people, the majority of them women. But the industry also contributes as much as eight per cent of total global greenhouse gas emissions and uses sizable amounts of water in cotton farming and textile production.

India’s power loom weavers and business owners want the current GST rate for power loom trading to be retained at five per cent. They say, any change would negatively affect their bussiness. Instead the power loom sector hopes for more assistance and a stable tax rate. Many power loom manufacturers are small-scale businesses. Weaving units have also asked for release of funds under the Technological Upgradation Fund Scheme and say delay in release of these funds could hamper their expansion plans, which are meant at generating thousands of jobs.

The Powerloom Development and Export Promotion Council (Pdexcil) acts as a bridge between the government and the power loom industry. It organizes buyer-seller meet-cum-exhibition events in India as well as in places like China, Dubai, Sri Lanka as well as Germany. The participation of power loom entrepreneurs in these international events supports them in their export activity. Under skill development programs intended to provide skilled workers to the textile industry, Pdexcil has almost completed its target by successfully completing training of 1,297 candidates in the main phase and another 90 under the additional allotment for SC/ST candidates. Pdexcil also enrolled 223 power loom workers under the group insurance scheme and also facilitated exposure visits covering 977 weavers.

Vietnam's textile and garment exports to the EU could rise tenfold once the free trade agreement takes effect. The FTA will be signed after nine years of negotiations, and immediately afterwards 70.3 per cent of Vietnamese products exported to the EU would be free of tariffs. Textiles and garments are currently subject to an average tariff of 9.6 per cent in the EU, but it would gradually reduce to zero over seven years.

The EU is the second largest importer of Vietnamese textiles after the US and its imports from Vietnam are growing by seven per cent to ten per cent a year. Major textile companies of Vietnam will see orders increase dramatically when the trade deal comes into force. Some plan to link up with domestic suppliers in the yarn-forward supply chain in order to comply with proof of origin rules and take advantage of the trade agreement. The high quality standards that are mandatory under the deal are expected to boost Vietnam’s pace of reform and international integration.

However, grasping the opportunities arising from the FTA would not be easy since the tariff breaks are only for goods that meet quality standards and rules of origin. Domestic value must account for at least 40 per cent of the final product.

Between 2006 and 2016 exports of clothing from the United States to Mexico increased by 32 per cent. Due to Mexico’s proximity, and ease of business, US companies have focused on their southern neighbor to carry out their clothing exports.

US companies have also seen business opportunities in Mexico and have ventured to expand their network of stores throughout the country. Gap for example, has 69 stores, Nike, with 19 establishments and Levi’s, with 47 points of sale. One of the main partners of foreign companies in Mexico is the distribution company Grupo Axo, which operates almost 750 stores in Mexico, with PVH Corp as one of its main customers, through Calvin Klein and Tommy Hilfiger. Another of the companies managed by Grupo Axo in Mexico is Guess, with 53 stores open in the country. Abercrombie & Fitch, Victoria Secret and Coach are other brands of the group currently being managed in Mexico, as well as in Chile.

The dynamics in the rest of Latin America is totally different. While the business with Mexico has grown, exports of American clothing to the rest of the region have plummeted by 26.5 per cent between 2006 and 2016.