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"All Pakistan Textile Mills Association (APTMA) has deeply disapproved the proposed Federal Budget 2017-18. It says, the government is not serious about implementing the Rs 180 billion Prime Minister's export led growth package as till now only Rs 1 billion has been released by the State Bank of Pakistan. The government has allocated only Rs 4 billion next year, which shows lack of seriousness in increasing exports."
All Pakistan Textile Mills Association (APTMA) has deeply disapproved the proposed Federal Budget 2017-18. It says, the government is not serious about implementing the Rs 180 billion Prime Minister's export led growth package as till now only Rs 1 billion has been released by the State Bank of Pakistan. The government has allocated only Rs 4 billion next year, which shows lack of seriousness in increasing exports. Chairman APTMA, Aamir Fayyaz, said this while addressing a press conference along with senior APTMA leaders Gohar Ejaz and Ali Pervez Malik.
Fayyaz said due to wrong government policies, the country’s merchandise trade deficit has reached $31 billion -- the highest in the history of Pakistan. The country’s exports, which was to the tune of $25 billion in 2013, has come down to $20 billion in 2017. The cost of doing business has increased despite considerable decrease in oil prices, in the international market the price of electricity has doubled. He said they were getting electricity at Rs 6.76 Kwh where as in 2017 electricity stands at Rs 11.30 Kwh.
He said the government has imposed duty on import of cotton in order to please cotton farmers. The government is bridging the deficit in trade gap by borrowing from local and international banks. The finance minister Ishaq Dar in his budget speech said export was on the decline due to international financial crunch, which was totally wrong.
Exports affected
Zahid Mazhar, Senior Vice Chairman, APTMA urged the government to present a federal Budget, which supports export oriented industries including textiles. The budget can be a game changer for the economy if it encourages exports, industry and employment. The government must avoid imposing additional taxes on the industry and removal of incentives would prove to be the last nail in the coffin of the ailing manufacturing and export sectors.
Zahid Mazhar, Senior Vice Chairman, APTMA urged the government to present a federal Budget, which supports export oriented industries including textiles. The budget can be a game changer for the economy if it encourages exports, industry and employment. The government must avoid imposing additional taxes on the industry and removal of incentives would prove to be the last nail in the coffin of the ailing manufacturing and export sectors.
Mazhar says, this is going to be the last opportunity to reverse the downfall of industry, exports and balance of payment. During the first 10 months of the current financial, trade deficit has already jumped to $26.555 billion from $18.951 billion of the corresponding period of the last Financial Year i.e. an increase of 40.12 per cent and if this trend will continue trade deficit for the current financial year would reach to a record level of $30 billion. Textile exports for the same period have reduced to $10.296 billion i.e. about 1 per cent lesser than the corresponding period of the last year. As against this, the textile Industry is running below capacity, although it has a potential to increase the exports of the country to $ 30 billion
Mazhar further demanded the government to ensure availability of raw materials by allowing duty/tax free import of cotton and polyester staple fibre. The country has already suffered huge losses due to failure of cotton crop for two consecutive years. It is therefore imperative to continue with the policy of import of cotton without duty and sales tax rather it will be suicidal to re-impose custom duty and sales tax on import of cotton.
Subsidies needed
He requested the government to ensure Zero Rating of all inputs in true spirit including packaging materials, spare parts and fuel and energy. Payment of all pending refunds of sales tax, which is more than Rs 200 billion resulting in creation of severe liquidity problem to the industry, duty drawbacks and incentive schemes claims should also be made without any delay. He also demanded to reduce the Turn Over Tax to 0.25 per cent from existing 1 percent. He further demanded proper allocation of funds against the Prime Minister’s export led growth package announced in the January this year, which envisaged payments of Rs 10 billion per month, whereas only Rs 2 billion has been released so far during the last four months, he added. He further demanded the government advise commercial banks to provide long term loans and working capital to the textile industry at competitive rates.
The Pakistan textile industry, contributes 60 per cent to exports, is capable to control the trade deficit, increase employment and achieve export target of 10 per cent of the GDP provided policies are made to support it instead of discouraging it.
"At present Asia’s yarn and fibre market is going through a period of substantial change, The leading trade platform in the region will more than double in size this October, expecting its exhibition space to expand by 115 per cent as more companies recognize its effectiveness to mirror the latest industry trends as well as attract a truly global audience: last year’s autumn edition drew trade buyers from 77 countries and regions. Around 400 companies, up from 319 last year, are predicted to exhibit this edition."
At present Asia’s yarn and fibre market is going through a period of substantial change, The leading trade platform in the region will more than double in size this October, expecting its exhibition space to expand by 115 per cent as more companies recognize its effectiveness to mirror the latest industry trends as well as attract a truly global audience: last year’s autumn edition drew trade buyers from 77 countries and regions. Around 400 companies, up from 319 last year, are predicted to exhibit this edition.
Wendy Wen, Senior General Manager of MesseFrankfurt commented that the Yarn Expo fairs have further solidified their status as amongst the best business platforms in the yarn and fibre industry in recent years they are also looking for a strong demand for chemical fibres from emerging countries in Asia at present, as well as a lot of innovation happening with fancy yarns which is attracting buyers from the likes of Indonesia, India and Korea.
With the fair’s leading reputation, a number of suppliers from Asia, Europe and elsewhere will showcase their latest collections of yarn and fibre products this October. Being one of the highlights of the show, the India Pavilion is comprised of some of India’s biggest names. Given the currently large market share of Indian yarns in China, Indian exhibitors value the show a great deal.The Birla Planet Pavilion, has gained in popularity in the previous autumn and spring editions. With three years of market experience in China, Birla Group has gained a solid reputation in the country by introducing their eco products. At present Uzbek cotton accounts for over 80 per cent of the total cotton consumption in Hebei province of Northern China.
Matching the current market trends, domestic exhibitors will feature in six highlighted display zones, are more to be demonstrated. Given the fact that more buyers from Asian countries are sourcing innovative products at the fair, the Fancy Yarn Zone in particular has grown in popularity. This edition it will feature around 50 companies showcasing their latest collections of fancy yarns, doubling in size compared to last year.Yarn Expo Autumn 2017, three other textile trade fairs are held concurrently from 11 – 13 October in the same venue.
"Autumn/Winter is important as it encompasses the festive season. For this season, people select festive wear, bright colours, great lustre, texture and cuts. On living upto the expectations of consumers, Manohar Samuel, President (Marketing), Birla Cellulose, the Pulp and Fibre Business, says that these are the demands for the festive season as much as the functional requirement of keeping the consumer warm and being comfortable also about quicker drying and easy to maintain an autumn/winter scenario. These are the aspects where consumer feedback shows our challenges."
Autumn/Winter is important as it encompasses the festive season. For this season, people select festive wear, bright colours, great lustre, texture and cuts. On living upto the expectations of consumers, Manohar Samuel, President (Marketing), Birla Cellulose, the Pulp and Fibre Business, says that these are the demands for the festive season as much as the functional requirement of keeping the consumer warm and being comfortable also about quicker drying and easy to maintain an autumn/winter scenario. These are the aspects where consumer feedback shows our challenges. “We have worked with the brands to augment most of our products and fabrics taking in their feedback. The Liva Accredited Partner Forum Members have also contributed in the innovation of these products in blends and weaves,” adds Samuel.
Talking about the Liva outlook, Samuel feels that Autumn/Winter 2017 for LIVA is going to be interesting because we have come out with a collection, which encompasses a lot of blends. This collection is in line with the global trends. Blends with polyester, nylon, acrylic, wool and linen are seen in our latest collection. Discussing about the influencing factors, he elaborates that the factors that influence the market are what consumers want and what they see as available. Because today at the click of a button they glance through global brands online and they would like to have products like those.“Our fabrics for the autumn/winter collection this time are heavier,” says Samuel.
Challenging scenarios?
According to Samuel, Liva has not been impacted much by the fluctuation in cotton prices because their cotton blends are fewer. But most of the impact is from the consumers and the brands being able to reach out to the different segments of the consumers who would be using these products. “In terms of imports, we have our man made cellulose fibres being imported into the country and in terms of export, the manmade cellulose based yarns and garments which are exported from India. The ‘Make in India’ concept has made us look at such products that are being imported, the reasons for their import and we have partnered with some of the customers here to get this right. For example, in India, we have partnered with a few trouser manufacturers for making the fabric and a similar version available in India,” avers Samuel. In garment export, manmade cellulose garments have done well because the LAPF (LIVA Accredited Partner Forum)has focussed on innovation, product quality and service based on the LIVA Standards. This is increased and is around 27 per cent CEGR when compared to competing fibre. Going ahead, the company would like to make the entire product system sustainable as well as the business.
Policy recommendations
To be globally competitive, we need to be part of trade blocks, which is something the ministry would be contemplating upon because it has to do with not only textiles and clothing but also other products and merchandise from India, feels Samuel. But most of the growth has happened in the clothing exports with countries who have been part of trade blocks, which can help the industry to become more competitive. The next option is about fibre neutrality because in India, man-made fibres have cascading duties, making it expensive and there is a skew towards cotton in terms of fibre share. The global market share is drastically different to India market share in term of man-made fibres.
World cotton production is forecast to increase seven per cent in the crop year that starts from August 2017. The higher 2017/18 cotton production projection is the result of favorable prices that are encouraging a rebound in area.
India, China, and the US are forecast to account for a combined 62 per cent of global cotton production in 2017-18.
Global cotton consumption is forecast to increase by two per cent as world economic growth recovers in 2017 and 2018.
After decreasing by three per cent in 2016-17, India’s consumption is forecast to recover due to competitive prices for its cotton yarn products, expanding capacity and the resolution of the consequences of demonetisation.
China’s mill use of cotton is forecast to increase by one per cent, accounting for 30 per cent of world cotton consumption. Mill use in Pakistan may grow by one per cent due to new incentives for textile exports while Bangladesh may witness a five per cent rise.
With over supply in major countries, cotton prices may remain subdued. Prices may also be tempered as China reduces its inventories by dumping cotton stock in world markets. Meanwhile, stocks in India, Brazil, the US and Pakistan are expected to rise in 2017-18 with larger crops forecast.
South Africa’s wool market traded lower at this week’s auction. Sentiment on the wool market was heavily influenced by the volatility and strengthening of the rand.
The 2016-17 wool growing season is nearing its end and at this penultimate sale prices particularly on the medium and shorter length wool declined significantly.
Demand for good quality long fleece wool remains good. The fierce rivalry between Lempriere, Standard Wool and Modiano continues unabated.
The rand was four per cent stronger against the dollar compared with the average rate at the previous sale. Major traders were Lempriere, Modiano, Standard Wool and Stucken & Co.
The average clean prices for the selection within the different micron categories for good top-making long fleeces were as follows: 18 microns decreased 1.7 per cent; 18.5 microns decreased two per cent; 19 microns lost 3.1 per cent; 19.5 microns moved down 1,9 per cent; 20 microns decreased with 1.9 per cent; 20.5 microns moved down1.6 per cent; 21 microns weakened 1.2 per cent; 21.5 microns decreased 1.5 per cent; 22 microns lost 1.1 per cent; and 22.5 microns decreased 1.5 per cent.
The Australian EMI lost 2.4 per cent this week. The Cape Wools All Wool Indicator lost 2.3 per cent.
Three synthetic fiber producers from the US have filed petitions alleging that dumping of fine denier polyester staple fiber from China, India, Korea, Taiwan, and Vietnam, and subsidised imports of the fiber from China and India, are causing material injury to the domestic industry.
The three producers have asked the US to investigate the dumping, subsidies, and injury and to impose anti-dumping and countervailing duties on the imports of fine denier PSF from the subject countries.
The petitions allege that producers in each of the five countries are dumping fine denier PSF in the US market at sizeable margins. China’s dumping margin is alleged to be 88.07 to 103.06 per cent, while that of India is 21.31 to 29.70 per cent.
The synthetic fiber producers who have filed the case are DAK Americas, Nan Ya Plastics and Auriga Polymers. They say such imports increased by 68 per cent from 2014 to 2016.
The allegations identify a number of significant national and regional programs, including preferential export financing, preferential income tax treatment, tax exemptions, rebates and credits on imports of inputs and capital goods used in the production of fine denier PSF and grants for fine denier PSF producers to assist in the development of export market and to protect against commercial risk.
Sri Lanka will get back GSP from the EU. The country first got the facility after the Asian tsunami disaster in December 2004 but it was then withdrawn in 2010 because of human rights violations issues.
With this restoration, Sri Lanka’s balance of payments and debt servicing issues could be resolved by increasing exports.
The EU remains Sri Lanka’s main export market, with more than 30 per cent of the country’s annual merchandise sold to Europe. The EU is the biggest single market for Sri Lanka’s apparel exports.
However Sri Lanka’s exports may not expand rapidly because of manufacturers’ inability to immediately enhance their production capacity.
Structural limitations, such as labor shortages, are also a barrier. A factor in the shortage of labor is the low wages paid by companies.
Increasing production capacity, above all, depends on attracting investment. Sri Lanka’s foreign direct investment halved in 2016 from the previous year. The fall was a result of international financial volatility and investors looking for more profitable production facilities.
Whereas Sri Lanka’s competitors, such as Bangladesh and Vietnam, are embarking on large-scale economic reform agendas, Sri Lanka’s relative reticence restricts its potential for growth.
In 2015, Vietnam, Pakistan and Cambodia had higher EU export earnings than Sri Lanka.
Top garment manufacturers, technocrats and technology providers recently got together to imagine the future of the garment manufacturing business in Bangladesh, in an event organized by Thread Sol.
The event explored a range of pivotal subjects set to impact the future of garment manufacturing in the country, in particular, three fundamental elements: resource optimisation, lowered costs and improved outputs.
Participants also took a closer look at how the best manufacturers in Bangladesh rely on a combination of technology and best practices to deliver timely output without compromising on quality or cost.
Factories in Bangladesh need automation and data analytics more than ever. The productivity gains could be significant as even a modest three or four per cent savings of fabric could add millions of profits that could be invested for the future.
Technology is a solution that can aid manufacturers in this dynamic industry. Some of the best manufacturers in Bangladesh have integrated technology into their set-ups and realised benefits. Manufacturers need to adopt the fast fashion environment of consumerism.
A recurring theme throughout the event was the notion that locking-in the right partnerships, with the right innovations, will enable apparel companies in Bangladesh to turn challenges into opportunities.
The event was organized by Thread Sol, a pioneer in enterprise material management for the sewn products industry.
Spinexpo trade exhibitions in France, US and China will present autumn- winter 2018 fibers, yarns and knitwear collections.
China Spinexpo will be held August 29 to 31, 2017, showcasing over 200 specially selected companies. This trade show caters to a growing mid-end domestic market and international brands manufacturing in Asia. The show continues to be a driving force in moving suppliers and buyers forward, urging them to bring fresh and new ideas in design, innovation and technical application.
Spinexpo France will be held July 3 to July 5, 2017. Products from leading top-level international exhibitors including 85 spinning mills, knitwear and machine manufacturers as well as the swatch studios, will be displayed at the show.
Spinexpo United States will be held July 18 to 20, 2017. The exhibition will feature 77 leading exhibitors, similar to those in Paris and is a B-to-B trade show attracting key influential brands from the American markets. Exhibitors will be showcasing innovative products with a focus on performance and functionality as well as new spinning and knitting techniques across core and fancy items. A special focus will be on a wider range of products with stock service, shorter lead times and faster delivery times.
Spinexpo is the industry’s leading sourcing exhibition dedicated to promoting innovation in yarns, fibers and knitwear.
Like-for-like sales in the UK were down 1.3 per cent overall for the month of May, while fashion stores were hit with a 3.6 per cent fall in year-on-year figures.
Fashion sales were negative in the first three weeks of May, while the figures for the month make it the fourth of the year recording no in-store growth, suggesting a worrying downward spiral for clothing retailers.
Home ware stores fared better, posting like-for-like growth of 1.2 per cent off a strong base this year, but the lifestyle goods sector was the major winner with a sales boost of 3.9 per cent year on year, buoyed by record tourist numbers and a weak pound.
Reduced spending, resulting from household budgets coming under increasing pressure from rising inflation and low wage increases, was being felt most by fashion retailers. They are facing turbulent times with rising operational costs, higher import prices and economic uncertainty.
These factors have resulted in higher inflation and therefore lower discretionary spend. Since shoppers need incentives to make purchases, retailers have chosen to run targeted, short-term discounting in an attempt to ignite spending and protect further erosion to margins.
The hope is that these turbulent times calm down and the right strategies pay dividends.
