Challenges before Vietnam garment and textile ind to face TPP
Registering a year-on-year surge of 6.1 per cent, Vietnam’s garment and textile exports only reached nearly US$8.5 billion in the first five months of the year. As reported by a number of enterprises, export orders tended not to increase, which was accompanied by a decline in export prices and increase in production costs, resulting in a lot of drawbacks in manufacturing and distributing products.
Such circumstances are taking place more severely among small and medium-sized enterprises, which are facing fierce competition with regional opponents from Laos, Cambodia, Myanmar and Bangladesh. This indicates that Vietnam’s garments and textile industry is being confronted with numerous challenges as consumers have been switching part of their orders to several other countries such as Cambodia, Myanmar and Laos due to export tax incentives to Europe and the US – the two largest export markets of Vietnam’s garment and textile sector. Meanwhile, Vietnam’s garment and textile exports to the US and EU are subject to an average taxation of 17 per cent and nearly 10 per cent respectively. If nothing changes, it is not until mid-2018 that the roadmap of tax reduction under TPP and EVFTA will take effect, which will therefore bring about a lot of disadvantages for Vietnamese enterprises in the process of competition with international opponents.
Moreover, China, India and Bangladesh, who are on the ‘upper floor’ compared to Vietnam in the global supply chain, are also implementing a number of active measures aiming to compensate for the downsides caused by their TPP non-membership, driving competition to new heights. Unless effective solutions are taken soon, Vietnam will surely become an ‘underdog’ on the world market.
Textile Exchange Sustainability Conference at Hamburg this Oct
This October, the Textile Exchange’s annual Textile Sustainability Conference is to be held 2016 in Hamburg, Germany from October 4-7.
This is where leaders in sustainability will congregate to share the kind of progress, knowledge and best practices that could improve the apparel industry.
The conference will host more than 300 attendees the world over representing all parts of the textile supply chain. Brands and retailers, marketing and communications departments, supply and value chain staff, designers and non-profits will all be able to benefit from the conference.
“Anyone interested in textile sustainability can pick up something from this event,” said Textile Exchange, a global non-profit organization aimed at accelerating sustainable practices in the textile supply chain, in a statement.
Topics that are likely to be discussed at the conference will include Flexibility and Equivalence in Certification, Supply Chain Mapping 101, Pricing: Shining the Light on Market Mechanisms, and taking responsibility for animals in the value chain, to name a few.
Fall/Winter 17-18 trends to be showcased at Première Vision, New York
All set to take place from July 19-20, Première Vision New York will present collections from 352 exhibitors, a trend area, and the unique Première Vision colour range, along with numerous seminars, fashion exhibitions and special creative collaborations. For the second edition in a row, Première Vision will be held at Pier 94, a venue with the right capacity for a show that continues to grow, according to the organisers.
Première Vision, a leading event for several years now for fabrics, textile designs and accessories, the event has also become a sourcing destination for leather buyers and industry professionals looking for new quality solutions and full packaging manufacturing services. Following January edition of this sourcing platform, visitors will discover a highly diversified selective offer this month.
Meanwhile, Première Vision and The Council of Fashion Designers of America (CFDA) have renewed their collaboration. In close cooperation with the CFDA, this partnership allows Première Vision to offer designers more targeted services and provide them with a range of support at Premiere Vision New York.
The collaboration comprises various activities, such as providing assistance to young brands and designers, particularly with small-scale orders; fashion presentations for CFDA Members, and working together to select the Première Vision Brand Ambassadors. Future cooperation will extend to manufacturing, a sector that Première Vision has been developing since January 2016.
Nobel laureate economist advices India on US govt.’s subsidies on cotton
Nobel laureate economist Joseph E Stiglitz is here in India. Speaking on the move the Indian government ought to take vis a vis the United States government’s subsidies on cotton, Stiglitz was quoted as saying, “Rather than engaging in activities such as shutting down NGOs, it will be much more constructive for the country if the Indian government challenged the United States government’s subsidies on cotton which tends to hurt cotton growers in India.
India is one country that is worst affected by subsidies for cotton in the United States, but unlike Brazil, it has not challenged the American government on this. If New Delhi manages to that and takes on the US on this issue, it will have a positive effect on the global community, Stiglitz reportedly added.
Stiglitz was speaking at a discussion organised by Azim Premji University on ‘Global Inequality: Causes and Consequences’ in Bengaluru yesterday.
The Nobel laureate said that the US would rather walk away from trade talks than get rid of its agricultural subsidies. This has been a major barrier to removal of agricultural subsidies.
Second edition of MU Prima, appointment with high-end textiles, accessories
Last year, Milano Unica inaugurated a brand new global project: Milano Unica Prima, the first international trade show dedicated to the pre-collections of men’s and women’s high-end textiles and accessories. On July 6-7 the second edition of Milano Unica Prima will open at Fieramilano city.
Milano Unica Prima is a project hinged on two key pillars: the presence of the world’s best fabrics and accessories manufacturers and the rapid anticipation – two months ahead of the traditional schedule – of the selection of textiles and accessories. A creative, business-focused event is a one of its kind initiative at the international level. The event offers a chance to establish a bridge between the upstream and downstream of the fashion supply chain, favoring the exchange of information and suggestions for customisation.
The show takes place in a period in which collections are still in progress and customisations can be developed from supplier-customer interactions.
The success of the inaugural edition in July 2015 was confirmed by the confirmation of entrepreneurs this year. Worth noting among the new entries is the participation of prestigious brands dedicated to women’s textiles that complete, in number and quality, with the high-end men’s textiles offering.
India, Sri Lanka to begin talks on ETCA pact
Later this month, India and Sri Lanka will begin negotiations to finalise the Economic and Technology Co-operation Agreement (ETCA), it is gathered.
Bilateral relationships between the two countries has deepened considerably since Sri Lankan President Maithripala Sirisena took over in 2015, Sri Lanka's Minister of Development Strategies and International Trade, Malik Samarawickrama reportedly said.
The ETCA is expected to help Sri Lanka gain better access to India's rapidly growing market. The minister is said to have said that India happened to be Sri Lanka's largest trading partner and the fifth-largest source of Foreign Direct Investment.
Sri Lanka is also negotiating a similar trade agreement with China, its second-largest trade partner. The pact would provide an opportunity for Indian investors to set up base in Sri Lanka and export to China with preferential access to that country's market.
Similarly, the island nation is also looking at signing trade agreements with Singapore, Pakistan, South Korea and Japan.
India’s strategy to beat Brexit
Following Brexit, India is considering recalibrating its strategy, including renegotiating its tariff offers, for the proposed free trade agreement (FTA) with the EU, with demands from key sectors for a separate trade pact with the UK gathering pace, according to sources. But with both the EU and the UK busy grappling with Brexit, serious trade negotiations are unlikely to start anytime soon.
Said Textiles secretary Rashmi Verma that Britain continues to be an important market for India, as it makes up for around 23 per cent of the EU demand for Indian textiles and garments. The Ministry of Textiles has requested the commerce ministry to look into the possibility of a bilateral preferential trade agreement (PTA) with the UK.
The UK accounts for over a half of India’s software services exports to the EU, 23 per cent of key engineering and electrical goods exports and 16 per cent of jewellery, precious metal and stones exports. So, senior industry executives from these sectors endorse an FTA or PTA with the UK. Britain alone accounted for 3.4 per cent of India’s goods exports in 2015-16, while the EU – including the UK – made up for 17 per cent.
Meanwhile, said Nasscom president R Chandrashekhar, once the current storm settles down, the UK will also be looking to compensate itself for no longer being part of the EU trade bloc.
HK to be promoted as Asia’s global business platform- HKTDC report
The Hong Kong Trade Development Council (HKTDC) tabled its Annual Report 2015/16 in the Legislative Council today. The report covers the second year of the HKTDC’s current three-year planning cycle, during which the Council continued to focus on three main objectives: helping Hong Kong companies, capitalising on the opportunities arising from the new global economic order, promoting Hong Kong as Asia’s global business platform and enhancing the competitiveness of small- and medium-sized enterprises (SMEs).
Looking back on his first year as HKTDC Chairman, Vincent HS Lo, reportedly said that the challenging external trading environment had adversely affected Hong Kong’s exports and consumer and investor confidence. He also highlighted the opportunities for Hong Kong arising from China’s Belt and Road Initiative and the HKTDC’s efforts to establish Hong Kong as the ideal business hub for the initiative.
During the 2015/16 financial year, the HKTDC staged its mega promotion, Think Asia, Think Hong Kong, in Toronto, Canada and Chicago, the United States that attracted over 3,300 North American business leaders. The Council also organised its first combined products and services promotion In Style in Hong Kong, Jakarta, as well as major promotional activities in cities across the Chinese mainland.
Exploring new opportunities and connecting business in response to the growing momentum of the Belt and Road Initiative, the HKTDC introduced a number of elements to its events including seminars, networking activities and business matching.
Meanwhile, business delegations were organised throughout the year to destinations along the Belt and Road routes in Central and Eastern Europe, the Middle East, South Asia and ASEAN (Association of Southeast Asian Nations). During the year, the Council opened new Consultant Offices in Tel Aviv, Israel and Delhi, India, expanding its global network to 46 offices worldwide.
Farmers give Bt cotton the go-by
There has been a major dip in demand for Bt cotton in India and farmers across the country have shown a marked preference for locally-grown varieties.
Against the 3,000-odd hectares that usually came under local varieties of cotton last year, this season around 72,280 hectares have come under locally grown varieties. Local cotton, which is resistant to diseases like leaf curl virus and pest attacks such as whiteflies, accounted for seven per cent of the total cotton acreage of 10.17 lakh hectares in north India this year. The acreage under local cotton is expected to increase to 25 per cent in the next two to three years.
With the monsoon covering most cotton-growing regions of the country, planting across Maharashtra, Gujarat, Telangana and Andhra Pradesh has picked up pace and farmers are trying to complete sowing operations before the cut-off dates.
The overall acreage across the country could come down to some 105 to 110 lakh hectares. The area under cotton cultivation was 119 lakh hectares in 2015-16.
The cut-off date for cotton sowing is around July 10 and can be extended to July 15, after which the growth of cotton becomes stunted.
Before the advent of Bt cotton in India, some 25 lakh hectares were under locally-grown varieties.
Chinese fitness craze lures athleisure business
Chinese consumers are taking to athleisure clothing in a big way. VF Corp, an apparel company that has brands in categories like sportswear and outdoor sports, has grown its Asian market from 20 million dollars to 1.2 billion dollars in the past decade, including over 600 million dollars in China alone.
GPS sport watches, compression leggings and hydration packs are the new must-haves for wealthy Chinese, pumping up the multi-billion dollar sportswear industry.
US companies have been moving fast to take advantage of the growing demand for athletic apparel and goods. Adidas is planning to open 3000 more stores in China in the next five years, expanding from 9000 to 12,000, after its 2015 sales in the region increased 18 per cent.
The sportswear market in China grew to 25.3 billion dollars in 2015 and is expected to grow to 43.1 billion dollars by 2020.
However as US companies are becoming bigger and bigger, they've been edging out Chinese sportswear sellers. Some companies in China are seeing a profit growth slowdown. The main drivers of the sportswear boom, the 2022 Winter Olympics and the potential boost from the end of China’s one child policy, have disproportionately strengthened international athletic-wear companies, leaving Chinese companies to decelerate.
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Chinese fabrics wreck Surat
Many units in Surat’s manmade fabric sector have remained shut in the last few months. The main reason is the import of under invoiced Chinese fabrics. Around eight crore meters of Chinese fabrics have been dumped in various parts of the country in the last year.
About 70 per cent of weaving units are operational but at less than 60 per cent capacity while the rest have shut shop. Around 90 per cent of units are not getting job-work from traders. Most textile dyeing and printing mills are without job-work. This is due to the dumping of Chinese fabrics and falling demand for polyester fabrics in the country. Around 1.5 lakh workers are currently jobless. Most of them have moved out of the city to their hometowns in Bihar, Uttar Pradesh and Orissa.
Around 45 per cent of weaving units--around three lakh power loom machines--have shut shop in the last three months. This has been due to dumping of under-valued Chinese fabrics at a cost of less than Rs 8 per meter.
Surat's manmade fabric sector contributes to around 40 per cent of the nation’s manmade fabric demand. The daily production of manmade fabrics in the city is pegged at four crore meters.
Ajay Tamta assumes charge as Minister of State, Textiles
BJP Lok Sabha MP from Almora constituency, Uttarakhand, Ajay Tamta has taken charge as Minister of State, Ministry of Textiles.
Prior to his election to the 16th Lok Sabha, Tamta served as a member of the Uttarakhand Legislative Assembly from 2007 to 2012 and again from 2012 to 2014. He has also served as a Minister in the Government of Uttarakhand, as Cabinet Minister during 2008 -2009 and as MoS during 2007-2008.
Blame it on yoga pants, for cotton’s market decline
"Now-a-days, more women are wearing yoga pants. The problem for cotton is two-fold. These yoga pants contain more synthetic fiber than denim and more fiber goes into denim than yoga pants. Even if you had 100 per cent cotton yoga pants, we’d rather see the denim market going strong because more weight goes into those products, Worsham said."
Cotton is still the No. 1 fiber for apparel at retail, although cotton’s market share has declined over the past several years.
According to Berrye Worsham, president and CEO of Cotton Incorporated, the research and promotion group that are funded by U.S. cotton producers and importers of cotton products to the United States, the one culprit creating cotton’s current challenges in the apparel market, it is the recent fashion trend that favors lightweight yoga pants over denim. This is a real problem for cotton, he said. This is a consumer trend which has caught up all over the U.S.A. recently.
Now-a-days, more women are wearing yoga pants. The problem for cotton is two-fold. These yoga pants contain more synthetic fiber than denim and more fiber goes into denim than yoga pants. Even if you had 100 per cent cotton yoga pants, we’d rather see the denim market going strong because more weight goes into those products, Worsham said.
Cotton use decline
Sales of denim, the biggest user of cotton, have dropped while sales of yoga pants and other active wear have grown over the last couple years. Most active wear is a big user of polyester and other synthetic fibers.
His comments came during the Southeast/Mid-South Young Guns Tour of Cotton Incorporated’s headquarters in Cary, N.C. During the tour, roughly 40 young cotton producers, in their 20s and 30s, from Alabama, Arkansas, Florida, Georgia, North Carolina, South Carolina and Virginia saw first-hand how their cotton research and promotion check off dollars are being spent.
Cotton farmers pay an assessment of $1 per bale plus one-half of one per cent of the value of the bale to fund Cotton Incorporated. U.S. importers of cotton goods also fund the work of Cotton Incorporated. The programme is administered by the Cotton Board in Memphis, Tenn. which conducted the ‘Young Guns’ tour. Cotton Incorporated’s budget is $76 million this year, down $4 million from 2015.
Cotton is still the No. 1 fiber for apparel at retail, although cotton’s market share has declined over the past several years. According to Cotton Incorporated, over the past 12 months, cotton’s share of the apparel market was 52.5 per cent.
In fact, cotton’s decline in share began in 2008 after enjoying years of robust gains since the mid-1980s when cotton’s share was just 43 per cent of the apparel market. Cotton’s strong market gains continued until 2007 when the natural fiber controlled an impressive 62 per cent of the apparel market. A major drop in cotton’s share occurred during the financial crisis in 2008 and 2009 which dropped demand for all textile fabrics.
Focus on active wear market
According to Worsham, cotton’s share of the apparel market will stabilize at 52 per cent and that efforts will work to move cotton’s share upwards again. Overall economic growth in the U.S. is critical for future gains, he said.
Cotton Incorporated is now focusing on the active wear market that is a stronghold for synthetic fibers, to further build cotton’s market share. Cotton Incorporated is enhancing its social media presence to reach consumers over more expensive television advertising, although advertising is still a key part of the group’s marketing strategy. Their new campaign, which started a year ago, is called ‘It’s your favorite for a reason.’ That’s a slight change from ‘Fabric of our Lives’ which is still the overreaching theme of our campaign. In the campaign, consumers, rather than celebrities, talk about their favorite cotton item and how that item makes them feel.
Cotton Incorporated uses paid advertising on Google, to further reach consumers looking for active wear. For example, when a consumer googles ‘best yoga pants,’ the ‘Fabric of our Lives’ campaign will pop up on the first page with suggestions for cotton yoga pants.
Consumer demand is still strong for cotton, despite the challenges. In fact, Cotton Incorporated conducted a survey of the textile trade in 2015 that show 68 per cent of the industry globally said they plan to use more cotton in 2016. Of that 68 per cent, 60 per cent cited consumer demand as the top reason, according to Worsham.
Consumer demand is still the most important component and that’s why you have to make sure that consumers still believe that cotton is a good thing, a viable choice in products today, Worsham concluded.
Vietnam adopts German textile technology
More than 600 business representatives and experts from Vietnam’s textile and support industries came face to face with Germany’s latest textile and apparel technologies. The event, held by the by the VDMA Textile Machinery Association and supported by the Vietnam Textile and Apparel Association (VITAS), provided an opportunity for companies to establish contact, exchange information and establish a mutually beneficial co-operation, VITAS deputy chairman Trương Văn Cẩm has been quoted to have said. According to Cẩm, German machinery is of high quality although its cost is high.
If Vietnamese textile manufacturers want to develop modern technology, they should co-operate with high-technology providers to catch up with global quality and labour productivity, feels Cẩm. In fact, a considerable proportion of technologies in Vietnam’s textile and apparel industry needs to be replaced to improve quality, especially those supplying cloth for export garment-making.
After signing Trans-Pacific Partnership (TPP), Vietnam is increasingly becoming a much preferred textile manufacturing location by companies worldwide. TPP will be instrumental in reducing 18,000 tariffs. Vietnam is almost a sole supplier of textiles among the TPP member countries and an important supplier of textiles and garment to big consumer markets like the US.
