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Vietnam’s textile and garment industry will use technologies such as AI and robots for work replacing humans. In 10 years, 86 per cent of workers will become redundant. A Hanoi-based company has dismissed 80 per cent workers as robots now undertake the work. The revolution is expected to have a big impact not only on labor intensive industries, but in all socio-economic fields.
Vietnam’s industrial production is mostly primary production which does not create high added value, with exports mostly raw materials. The production cost in Vietnam is much higher than that in other regional countries but China can make products at low cost because it has modern technology and large-scale production.
The biggest obstacle for Vietnamese enterprises is the outdated technology. It will take time and great effort but if Vietnam cannot catch up with the development pace in the world and the region, the country will have to face many risks including production decline. There might be a wave of outdated technologies from developed to developing countries including Vietnam.
The impact of the industrial revolution, both positive and negative, is unavoidable. The only thing Vietnamese enterprises can do is take full advantage of the opportunities and confront challenges.
A conference on achieving sustainable growth in the textile and apparel industry through manufacturing excellence will be held in Mumbai, October 6, 2017.
It will be hosted by the Confederation of Indian Industry (CII).
One session will be dedicated to deliberating upon the need for implementing standardized manufacturing systems and processes in order to attain manufacturing excellence. In many companies, the systems and processes are established, or rather discovered, by a trial and error method, while this need not be the case.
In today’s globalized world, the learning curve for organizations can be accelerated by use of benchmark operating procedures which once adopted can improve the system efficiency and output quality tremendously.
Another session will focus on the influence that innovation and new technologies have on manufacturing in terms of quality and cost. This session will include discussions on the use of the latest technology for producing better quality products more competitively; IT as a tool for effective planning and monitoring; development of smarter designs, better performance, efficiency, ergonomics and aesthetics; product lifecycle management – material savings/efficiency, resource efficiency etc; and use of integrated monitoring systems.
A third session will focus on ways to achieve high productivity and quality from the manpower employed in the industry. There will be discussions on current issues with the productivity and efficiency levels of the workforce in the textile industry; comparative assessment of the skill levels of Indian workers with top manufacturing nations such as China, Bangladesh, and Vietnam; skill gap present in the textile and apparel industry; and steps taken by the industry and government for reducing this gap and upgradation of skills.
"C&A, the global Dutch chain of retail clothing stores, recently launched a line of T-shirts certified by the Cradle to Cradle standard. This essentially implies they are designed and manufactured in an eco-friendly way and whose materials can be recirculated safely back into industrial materials or composted into the soil. For the company, it was no cake walk. It required a board-level commitment, close partnerships with contract manufacturers, an arduous search for replacements for problematic materials and some new messaging to customers."
C&A, the global Dutch chain of retail clothing stores, recently launched a line of T-shirts certified by the Cradle to Cradle standard. This essentially implies they are designed and manufactured in an eco-friendly way and whose materials can be recirculated safely back into industrial materials or composted into the soil. For the company, it was no cake walk. It required a board-level commitment, close partnerships with contract manufacturers, an arduous search for replacements for problematic materials and some new messaging to customers.
Transitionary phase
C&A backed up the aspiration with a range of sustainability initiatives, particularly related to its materials selection and supply chain. The company is the world’s largest buyer in volume terms of organic cotton, as per 2016 Textile Exchange's Organic Cotton Market Report. The circular economy initiative began at C&A from 2015 when the Brenninkmeijer family invited designer William McDonough to speak at its annual seminar. McDonough and the family discussed the idea of creating a ‘factory of the future’. Jeffrey Hogue, Chief Sustainability Officer, C&A, explained it was all about a world-class factory that would have all of the circular economy elements in it, where the water’s cleaner going out than coming in, 100 per cent renewable energy, great building, great livelihoods for the workers, high social and environmental standards and also a living wage. A three-person task force, from both the company and its foundation, set out to study how such a factory could be built, most likely in Bangladesh, China or India. But along the way, the group realised the factory of the future is a metaphor for something bigger, something that could be transformational in the apparel industry: to shift from a linear model to a circular model.
This realisation resulted in a partnership between C&A and the C&A Foundation to create ‘Fashion for Good’ in a renovated building in Amsterdam. The facility, which opened in March, houses programs for both early- and late-stage innovators, along with interactive exhibits and other initiatives that center around five aspects of ‘good’: good materials, good economy, good energy, good water and good lives.
Getting companies onboard
While taking the step was just the beginning. The greater task was in finalising suppliers who could live upto the desired expectation. C&A turned to Indore-based Pratibha Syntex, for help. Pratibha is a longtime C&A supplier, and a pioneer in many sustainability initiatives. For instance, almost 30 per cent of Pratibha’s factory power comes from the 5-megawatt solar panels it installed, and the company recycles more than 90 per cent of its wastewater.
It took seven or eight months to find dyes that would meet the C2C standard for the wide range of colours demanded by C&A. Organic sewing thread had to be imported from Switzerland, at 10 times the price of conventional thread. It took nearly a year to get the printing right for the t-shirt’s cotton care labels. Donald Brenninkmeijer estimated that the cost of making a C2C T-shirt is 5 to 10 per cent higher than a conventional one.
It was important that the product be launched much like any other, and not treated as a sideshow. Said van der Zee, chief merchandiser, C&A, if you truly believe that this is a game-changer in the industry and you really want to set this up for success — going not just for one-off but for continuous improvement and continuous increase — then you have to start with some scale because otherwise it never will be scalable.
Poised for success
Going by the initial response, C&A has charted a roadmap for more, and more complicated, C2C items to roll out in 2018 and 2019. First and foremost is to develop patterned t-shirts, adding stripes, embroidery and other design elements. A search is on for a C2C substitute for elastane — an elastic polyurethane material commonly found in hosiery, underwear and other clothing, which would allow for more stylish, form-fitting tops. Finding an elastane substitute also would open up new categories such as underwear. Nightwear is also on the agenda. Donald Brenninkmeijer hopes that half of C&A product introductions will be C2C-certified within a decade. This journey can be travelled alone. The company aims to encourage others to participate in this game changing movement. This is how the industry together can learn and develop a sustainable ecosystem.
The Hong Kong Research Institute of Textiles and Apparel (HKRITA) has found new technology to extract and reuse polyester fibers infinitely into new clothes. Each year only a fraction is recycled of the 80 billion pieces of clothing produced. The polyester fibers can be made into new garments straightaway with no loss in quality, which is why this new technology is being dubbed fiber-to-fiber recycling.
Compared to the production of virgin polyester, this method consumes 70 per cent less energy. HKRITA’s new methodology requires limited manpower, simple equipment that textile recycling companies may already own, and the water used in the process can be recycled. A HKRITA-patented chemical solution is used to break down cotton into cellulose particles in a process that combines heat and water and is separated from the fabric.
The goal is to have the technology ready for the market by 2020. Once ready, the technology will be made available to companies through licensing, the terms of which have yet to be decided by HKRITA, which will own the license.
HKRITA’s fiber-to-fiber method currently only works to repurpose polyester—a petroleum-based fiber found in most apparel—and further work is needed before it can recover other materials.
Indian spinners continue to face challenges. Exports are falling due to weak demand from China. Domestic demand has also slowed down amid inventory clearance prior to implementation of GST. However, a surplus cotton supply may offer Indian spinners respite during the second half of this fiscal. Global cotton production during this cotton year is estimated to exceed consumption after two consecutive years of shortfall. The resulting cotton surplus will create a downward bias in prices, which augurs well for the domestic cotton spinning industry.
The cotton crop output in the country is expected to grow by five per cent in cotton year 2018. There has been a 12 per cent rise in sown area, driven by firm cotton prices, which has made it remunerative for farmers to choose cotton against competing crops. While cotton yarn prices were holding firm till August 2017, despite demand side pressures, those have been corrected by five per cent in September 2017 due to sustained demand side pressures and in anticipation of softening cotton prices.
However, with further correction in cotton prices expected with the commencement of the harvest season in October 2017, spinners’ profitability is expected to improve during the second half of the current financial year.
Cultivation of sustainable cotton has never been higher, reaching 2.6 million tons in 2015-16 and representing around 12 per cent to 15 per cent of global cotton supply. Of the companies actively sourcing sustainable cotton, efforts are being driven by five frontrunners – IKEA, Tchibo, M&S, C&A, and H&M. The frontrunners are followed by eight companies which are well on the way to sourcing more sustainable cotton: Adidas, Otto, Nike, Levi Strauss, Woolworths, VF Corporation, Tesco and Kering.
IKEA, C&A and Adidas stand out for sourcing more than 50 per cent of the cotton they use as sustainable cotton. Eleven companies have a target for sourcing 100 per cent more sustainable cotton by 2020 or earlier: IKEA, C&A, M&S, Tchibo, H&M, Adidas, Otto, Nike, Levi Strauss, Woolworths and Decathlon.
Despite the positive uptake from international retailers and increasing supply of more sustainable cotton, and the fact that sustainable cotton accounts for 12 per cent to 15 per cent of total global cotton production, only around a fifth of this is actively sourced as sustainable. The remaining 79 per cent is traded as conventional cotton. The gap between available supply of sustainable cotton and uptake by companies presents a serious risk to the future of more sustainable cotton.
For the year through July, US imports of Vietnamese textiles and apparel increased by 5.36 per cent year over year. In 2016, US imports were a 2.27 per cent increase over 2015. However, worker’s wages and logistics costs have been rising, putting garment exporters in Vietnam under pressure, particularly in the face of fierce competition from regional rivals like Bangladesh, Myanmar and Cambodia.
Competitors have enjoyed preferential policies from their governments—including things like tax breaks to boost exports—where Vietnam hasn’t had as many perks. They’ve also enjoyed preferential trade status from major trade partners like the US and EU. Vietnam aims at exporting roughly $30 billion worth of textiles and garments in 2017, with the US taking 50 per cent of that total, followed by the EU with 20.5 per cent, Japan with 19.5 per cent and Korea with 7.5 per cent.
For the year through August, the country’s exports reached $19.8 billion but the target may not be reached since the bulk of the country’s big orders have likely already been placed. Legal amendments will be drafted to help domestic garment producers cut costs. Domestic textile and garment exporters will be supported with things like administrative procedures to help ease some of the other obstacles to competition.
Zimbabwe textile manufacturers are facing a liquidity crisis. They have appealed for the disbursal of foreign currency to ensure members meet their obligations and remain in business. People have resorted to buying foreign currency in the black market at exorbitant rates, thereby distorting prices on the market. Others are hoarding cash for speculative purposes.
The textile industry needs urgent intervention to avert a total collapse. The industry includes blanket and linen manufacturers and hosiery manufacturers. Manufacturers say once there is easy access to forex, the industry can start exporting and earn the much-needed foreign currency. They also want the export incentive to be raised from five per cent to 25 per cent.
The value of Zimbabwe’s clothing and textile exports has grown 165 per cent from 2012 to 2016. However, the apparel sector in Zimbabwe currently operates at less than 30 per cent of its capacity. The industry that once used to employ over 40,000 people now employs only 8000 workers.
Zimbabwe’s textile and clothing sub-sector consists of three components: production and ginning of cotton, transformation of lint into yarn and fabric, and the conversion of fabric and yarn into garments. There are also those companies that are in protective clothing that have been doing well because of the mines that are opening up.
In the first eight months of 2017 Germany was the EU’s largest foreign investor in Vietnam. German companies see Vietnam as a first-class investment destination. World-famous German textile companies investing in Vietnam intend to expand their investments, creating highly qualified jobs, a transfer of technology, and state-of-the-art labor conditions.
Although Vietnam has a good set of legal provisions, the competency of the staff working in the administration, particularly on the provincial and local levels, is weak. Decisions are often discretionary or made without profound knowledge of the legal rules. Rules and procedures are changed fast, sometimes without taking into account existing rules which contradict the new ones. Pharmacy and agriculture are the most recent examples, the automotive sector another.
Another problem is the lack of flexibility to meet the requirements of German companies. The EU and Vietnam are conducting final procedures for the signing of the EU-Vietnam Free Trade Agreement next summer. This agreement opens new opportunities for both Vietnam and Germany. Both want to create beneficial conditions in order to increase the bilateral trade volume to 20 billion dollars by 2020. Reduction of duties will further enable the import of high-tech solutions, both in machinery and services.
Over 200 manufacturers and exporters from 26 countries, including Turkey, are exhibiting their products and services at Africa Sourcing and Fashion Week, Ethiopia, October 3 to 6, 2017. Africa Sourcing and Fashion Week is the continent’s main trade show for the textile, apparel and technology industry.
With sustainability in fashion as its theme, the week has brought together over 70 Asian manufacturers of textiles and fabrics and a further 60 exhibitors in the apparel sector.
A conference running parallel to the trade fair will discuss the themes that are currently dominating the textile industry. It will focus on becoming particularly relevant to more and more fashion buyers and present new approaches to eco fashion and sustainable solutions. There will be a spotlight on various issues, including that of sustainability, with a particular focus on production, the environment and certifications. A fashion show, trend area and matchmaking platform are just some of the highlights.
International manufacturers of textile machines will also be showcasing new technologies for the African market. Italian textile machine makers will present a range of product innovations. Among the countries participating are Turkey, Bangladesh, Belgium, China, Germany, India, South Africa, Switzerland, Taiwan, UAE, the UK and the US.
