As financial results reporting season gains momentum, investors in textile sector are looking to splendid growth in profitability, which would probably match the financial year 2013 performance. Profitability of textile (sample firms) scaled four-fold to Rs 22.8 billion in three-quarters of financial year 2013 (9MFY13) as against Rs 4.4 billion in the same period last year. 

“Last fiscal year, FY-’13, was one of the better years for Pakistan textile sector in terms of sales and profits which was also reflected in more than 100 per cent price performance of our sample listed textile firms with market capitalization of over Rs 25 million,” says Zeeshan Afzal of Topline Securities.

Though shortage of power remained the perennial problem, especially in winter, the textile companies’ jump in profits by 400 per cent was mainly attributed to stable cotton prices and strong regional demand. 

Moreover, continuous depreciation of rupee against the dollar and cheaper financing also contributed to hefty earnings growth. In FY-’13, Pakistan exported $13bn worth textile products, up by 5.9 per cent in dollar terms but represented improvement by 14.7 per cent in local currency due to the drop in value of the rupee.

The growth in exports was attributed mainly to imposition of cotton floor price in China that encouraged Chinese textile manufacturers to import more yarn and grey cloth instead of converting yarn into costly local cotton. As a result, Pakistan’s yarn and grey cloth exports increased by 24 per cent and 10 per cent to $2.2billion and $2.7 billion, respectively, in FY-’13. The latest results of textile sector are expected to show continuous growth in export for FY-’14 on the back of sustained textile demand from China and substantial depreciation in local currency.

However, analysts caution that much would depend upon international cotton prices, though major volatility was unlikely to be seen in local cotton prices in FY-’14. The encouragement was based on estimates of Cotton Crop Assessment Committee (CCAC) which estimated Pakistan’s cotton production at 13.25 million bales in FY-’14, slightly higher over the 13.0 million bales produced by the country in FY-’13.

Exports and profits of the sector could also improve due to expected Generalised System of Preferences (GSP Plus) status from EU, as lower import duties would provide Pakistan a competitive edge in international markets. “Further operating environment of the textile sector may see further improvement in low interest rate scenario,” analysts said, the caveat, however, being the all-important improvement in energy situation.

The 2013 Théophile Legrand International Prize for Textile Innovation will be awarded on October 5 at ValJoly Eppe-Sauvage resort. The Théophile Legrand Foundation – Institut de France was created in 2007 by Christian Cambier, a descendant of Théophile Legrand. Théophile Legrand is the founder of the wool industry in Fourmies, France. 

Since 2009, two Théophile Legrand awards are granted annually. With a value of €18,000, these two awards celebrate two distinguished researchers and/or students who have created original material, fiber or fabric in the field of technical textiles; or an innovative textile design and/or a new textile industrial production technique. 

The goal is to foster innovation, research, and imagination by showcasing emerging technical and industrial creations. In 2009, the prize was awarded to Aurélie Cayla for inventing a smart textile that senses specific temperatures. In 2011 Munir Ashraf won it for creating a self-cleaning and antibacterial textile. Last year, Pierre-Alexandre  won the prize for a decontaminating textile to treat air and water. 

An innovative textile design project can be submitted for consideration providing the entrant or team of researchers is able to prove that the project, product and the invention of newly used elements are their own work. Selection criteria are the same for inventors of new textile fabrics as well as innovators of new processes of textile production. All entrants are judged on their creativity, originality, innovation to the field and the project’s ability to be industrially reproduced. 

The US has decided to suspend the payment of $ 147 million it annually makes to Brazilian cotton farmers. The payment to Brazilian Cotton Farmers Fund is made to prevent the South American country from legally retaliating against unrelated US imports. 

The US lost a case brought by Brazil in 2002 before the World Trade Organization. Brazil was joined by sub-Saharan cotton farming countries in successfully claiming that American cotton subsidies suppressed prices and hurt their impoverished farmers.

A World Trade Organization arbitration panel ultimately authorized Brazil to raise $591 million a year in retaliatory tariffs against US imports, and Brazil announced in late 2009 that it planned to target 222 categories of goods, including textiles, acetaminophen and certain intellectual property. That's when Congress stepped in and authorized the $147.3 million annual payments, in effect subsidizing the Brazilian cotton industry.

In fact, most US taxpayers will be stunned to know their country is making such a hefty payment to foreign farmers. Some people say Federal farm subsidies are bad fiscal, environmental and agricultural policy; bad water, energy and health policy; and bad foreign policy. They object to cotton subsidies, which divert huge money every year to fewer than 20,000 planters who tend to use inordinate amounts of water, energy and pesticides. 

Argentina’s Global Compact Network and Sustainable Textile Center has launched the Code of Conduct and Handbook of Textile and Fashion. The textile and fashion industry is important for Argentine economy, but from the point of view of sustainability, this industry often operates at the expense of the environment and social factors.

The code was developed by the Nordic Fashion Association and the Nordic Initiative Clean and Ethical (NICE) in partnership with the United Nations Global Compact (UNGC). The initiative for preparing a code, specifically for the textile and apparel sector, was proposed by the UNGC in May 2012 at the Copenhagen Fashion Summit in Denmark. 

Many companies recognize the need to collaborate and partner with governments, civil society, labor and the United Nations. The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with 10 universally accepted principles in the areas of human rights, labour, environment and anti-corruption. This can help ensure markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere. 

With over 10,000 corporate participants and other stakeholders from over 130 countries, the Global Compact is the largest voluntary corporate responsibility initiative in the world.