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GST will have an effect on many sectors, including textiles and fashion. From raw material producers to readymade online distributors, every segment will feel the change, as consumer buying habits will be affected by the new tax regulations.
GST also includes specific sections that deal with compliance for e-retailers and online aggregators, adding more clarity to what has been a grey area in many aspects. Online consumer will have a better shopping experience with more sellers offering competitive prices and a larger range of choices compared to a scenario where established players share a consolidated market for the product.
A successful online fashion retailer is one with the best products and the best-targeted promotions. Irrespective of GST, a shopper buying apparel is still more likely to look for the best quality within a price point and the latest styles. The long-term focus will always be on correct sourcing, utilising real-time data, and gathering intelligence on consumer behavior and larger trends.
Strategic warehousing will be a thing of the past once a uniform tax hits the grassroots. These benefits are expected to trickle back into production and help the industry overall. Online platforms sell products that are the result of many co-operating segments in India’s large textile landscape, and a GST boost to producers and manufacturers will benefit online retailers.
Hanesbrands has entered into an agreement to acquire Australian intimate apparel retailer Bras N Things. Reporting Q4 and full-year 2017 results, including an 8 per cent fall in operating profits for the quarter, the big apparel player will pay $400 million for the specialty retailer and online seller of intimate apparel in Australia, New Zealand and South Africa. In 2017, Bras N Things recorded net sales of around A$180 million (US$144 million).
Sydney-based company sells proprietary bras, panties and lingerie sets through a retail network of around 170 stores and a growing e-commerce platform. Its three-year CAGR is 11 per cent and online sales last year rose by 71 per cent representing about 10 per cent of total sales. The company manages 154 stores in Australia, 10 stores in New Zealand and 7 stores in South Africa.
Post acquisition, Hanesbrands says its combined Australian commercial businesses would be the market leader in bras, panties, underwear, socks and babywear in Australia.
With textile traders downing shutters for three more days following the all India strike announced by traders from Tuesday, production of grey fabrics has taken a hit in the country's largest man-made fabric (MMF) sector. Production of grey fabric has decreased by almost 55 per cent in the last fortnight due to the textile traders' agitation against goods and services tax on fabrics. The daily production of polyester fabrics is pegged at 4 crore meters per day.
Most powerloom units in Bhestan, Unn, Sachin, Katargam and Ved Road are operating their units in single shift for the last many days. Traders had already observed two days strike in between. Sachin Weavers Association president Mahendra Ramoliya says powerloom weavers in Sachin GIDC manufacture around 50 lakh metres of fabrics per day. The production of fabrics has now come down to less than 10 lakh metres per day due to the ongoing strike. There is no opposition on 5 per cent GST in the weaving sector but the central government must provide refund for the accumulated tax credit. If refund will not be made the entire weaving sector will collapse after July 1.
Southern Gujarat Chamber of Commerce and Industry (SGCCI) secretary Devesh Patel, says a delegation from SGCCI and textile industry had met deputy chief minister Nitin Patel. They need increase import duty on Chinese fabrics and provide refund of accumulated tax credit. He said there cannot be two rules in the textile sector. If the textile processors are eligible for refund of accumulated tax credit, the powerloom weavers should also be considered for the same. There are less than 1,000 textile process houses in the country, whereas the strength of powerloom weavers in the decentralized industry is more than 20 lakh.
In 2016, Italy’s production of textile machinery rose five per cent compared to 2015. Domestic sales of Italian manufacturers increased 14 per cent. During the same period, exports grew by four per cent. Adoption of latest technologies, particularly cloud and cyber security technologies, had positive outcomes on productivity.
Orders index for textile machinery for the period from January to March grew 24 per cent, compared to the same period in 2016. The index data for the first three months of the year confirm positive signs seen by businesses in various foreign markets. A renewed climate of enhanced trust is currently perceived in the textile sector, triggered by the government’s commitment to enact a range of significant incentives for the country’s manufacturing system.
Italian textile machinery manufacturers comprise around 300 manufacturers, employing close to 12,000 people and producing machinery for an overall value of about €2.6 billion, with exports amounting to 86 per cent of total sales. Italy is the world’s second largest producer of machinery for the textiles industry. In the production of machinery for tanning, and for the footwear and leather goods industry, Italy accounts for over 50 per cent of world production.
Spain’s Unitin is a leading supplier of indigo dyed yarns and fabrics. The company has always been concerned to work with the most advanced standards, both on the technical as well as the environmental fronts, and is now giving one more step toward a zero waste policy.
Producing indigo warps and wefts in a continuous and modern machinery generates a certain quantity of leftovers. Approximately three to five per cent of total production is not usable and has to be rejected.
Now Unitin has the technology to reuse all indigo cotton leftovers and make yarn out of them. In order to assure that the yarn will have the right strength to be used in any textile application, either knits or wovens, the indigo cotton leftovers are mixed with recycled polyester fibers. Unitin also offers a few sets of sustainable fabrics made with the new recycled yarns with sustainable Tencel yarns. The use of the already indigo-dyed cotton eliminates the need to dye the yarn, saving water and energy. Also the final garment wash will demand less water and chemicals. All production is certified under the Global Recycled Standard.
Unitin is a part of Industrias Morera, a textile group specializing in dyeing and finishing on piece and yarn. It has been in the textile business since 1924, and is composed of four departments: yarn die, piece dye, upholstery and denim.
Lectra’s Fashion PLM 4.0 is proof of its commitment to empowering customers with the best technology possible as they take their first steps towards Industry 4.0. With the widest functional scope, the modular PLM solution acts as a connected, intelligent nerve center for today’s digital supply chain, from planning through design to production, ensuring a consistent flow of error-free data between processes, technologies and people, and providing companies with the agility to adapt to different business models and jump on trends quickly.
Fashion businesses are facing major challenges in today’s digital marketplace. They are taking practical steps to digitalize their value chain. Lectra’s vision–and fashion-specific digital solutions–are helping fashion companies adapt to this fourth industrial revolution. Industry 4.0 is not only revolutionizing how manufacturers operate, but also how brands and retailers need to function.
Lectra’s goal is to provide its customers with the technology and support they need to thrive and succeed in this new digital marketplace. Vertical manufacturers are interested in connecting their physical supply chain with their virtual supply chain– software, ERP, and WRMS. For them Lectra offers the most comprehensive solution: an end-to-end system designed specifically for fashion and apparel.
The global silk market has always been a lucrative business sector around the world. A recent report from markets and markets says, global silk market is projected to reach $16.94 billion by 2021, growing a CAGR of 7.8 per cent from 2016 to 2021. Growth can be attributed to technological advancements in sericulture, which directly increases the yield of silk, thereby affecting the silk market. Moreover, silk is a low capital investment industry, in terms of technology and labor, which is driving the silk market globally.
The Asia-Pacific region is the largest market for silk. This can be attributed to the presence of a large number of textile manufacturers, rise in export of textile goods, and growing demand from the domestic market. China dominates the silk market in the Asia-Pacific region followed by India due to easy availability of raw silk in the two countries. China is the largest producer of silk yarn and textile products.
Based on type, mulberry silk segment is projected to lead the silk market. Owing to its high strength, durability, and flexibility, mulberry silk is used in the production of textile such as apparel, wedding dresses, gowns, etc as well as in interiors such as pillows, wall hangings, and upholstery. The growing textile industry in the Asia-Pacific region is driving the demand for mulberry silk in the Asia-Pacific region.
Although demand for silk products is growing in Europe and North America, the Asia-Pacific region still remains the fastest-growing market for silk in terms of value and volume, and this trend is expected to continue till 2021. Demand for silk in China, India, Uzbekistan, and Thailand is primarily driven by increasing population and export of textile goods in these countries.
Garment manufacturers in India are looking at Ethiopia to set up manufacturing firms. They have lined up investments worth over Rs 600 crores in investments in that country. Companies setting up shop in the African nation include Raymond, Arvind, Best Corporation and JJ Mills.
Ethiopia gives duty-free access to the European and US markets. Labor cost in Ethiopia is half that in India and there is no requirement on investing in land and buildings. Power cost is also below Rs 2 compared with Rs 7 in India. Duty-free to the US and Europe is the key attraction, which India doesn’t offer. This is the reason Indian players are not able to compete with Bangladesh, Sri Lanka and other countries.
Ethiopia is developing industry estates and delivering them on a ready-to-use basis. Indian companies just need to move with their machines. Meanwhile Arvind is setting up a garment factory and is planning to invest around Rs 100 crores. Best Corporation, which will start production in the next six months, is setting up a 1000-machine factory at a cost of Rs 30 crores to meet the demands of the US market. Raymond is investing about Rs 130 crores in a plant to manufacture two million jackets. The company has expanded its footprint through the acquisition of a garment unit in southern Ethiopia.
Cotton output in India, the world’s biggest grower, may increase to a three-year high as some farmers have planted more of the fiber on better returns compared to other crops. Production is expected to climb to 37.5 million to 38 million bales in the harvesting season starting October 1, from 34.1 million bales a year earlier if the monsoon is normal in main growing areas, says Nayan Mirani, President, Cotton Association of India.
In India, domestic prices are still offering favorable returns for farmers. A bigger Indian crop will add to an expected decade-high harvest in the US, the top exporter, and a forecast increase in output in Australia just as China continues to unload inventories. That’s prompted global prices to drop 4.4 per cent this year after climbing 12 per cent in 2016.
Mirani says, it’s the right thing for the farmer to be in as long as the monsoon is normal and on time also it’s more a function of what the farmers earned compared with other crops.
According to the Cotton Association of India benchmark spot cotton prices were 3.7 per cent higher as compared with a year earlier. The November and December cotton contracts on the Multi Commodity Exchange of India are trading at a discount to the July contract, indicating production will increase and prices will start falling when harvesting begins in October, says Aurobinda Gayan, VP, research at trader Kotak Commodity Services.
Asia Pacific may be the world’s largest market for technical textiles during 2017 to 2027. More than 50 per cent of global technical textile revenues will be accounted for by the Asia Pacific region. Demand is likely to gain traction across Asia Pacific countries such as India and China. This market will register expansion at a value CAGR of 6.8 per cent. Global market for technical textiles is projected to grow at below average pace and register a value CAGR of 4.6 per cent. In terms of consumption, the market will exhibit a volume CAGR of 5.3 per cent.
Over 20 per cent of technical textiles produced in the world are procured for mobiltech applications. Demand for technical textiles is also expected to remain high across buildtech, indutech, meditech, geotech and oekotech applications. With respect to process used for manufacturing technical textiles, more than 45 per cent of technical textiles produced across the globe will be non-woven by the end of 2027. And this segment is likely to exhibit a value CAGR of more than five per cent.
Regions such as North America, western Europe, eastern Europe and the Middle East and Africa will showcase sluggish growth through 2027. Sales of technical textiles in Latin America, on the other hand, are likely to depict a relatively favorable growth at 4.5 per cent CAGR.
