FW
Chinese textile and clothing exports fell Chinese textile and clothing exports fell by 7.4 per cent in 2016, with far reaching effects, according to the latest issue of Textile Outlook. As a result, China lost some of its share of world markets. The fall in Chinese textile and clothing exports extended to yarns, fabrics, knitted clothing and woven clothing.
Rising labour costs and production costs in China are mainly to blame for the fall in exports as production shifts increasingly from China to lower cost countries such as Bangladesh, Cambodia, Myanmar and Vietnam. The impact of falling exports has been felt in many sectors of the Chinese textile and clothing industry. It has also been felt in a number of other Asian countries especially those supplying products of higher added value.
Supplies of textiles and clothing from Japan, fell by 14.8 per cent in 2016 to their lowest level in over a decade. Supplies from Hong Kong declined by 16.9per cent while those from South Korea fell by 10.1per cent and supplies from Taiwan were 9.9per cent lower. On the other hand, China continues to dominate its major markets and there are no signs that such dominance will come to an end any time soon. In the US market.
Furthermore, China stands to make increases if the USA continues to adopt a more isolationist and protectionist stance under President Trump. In particular, the decision of the USA to withdraw from the Trans-Pacific Partnership (TPP) free trade agreement may enable China to fill the vacuum and take a more prominent role in international trade. Some authorities believe that China could even replace the USA as the pre-eminent player in global economic affairs.
China is in the process of negotiating a new economic trade area called the Regional Comprehensive Economic Partnership (RCEP). If this comes to fruition, it will cover all ten nations which are members of Asean (Association of Southeast Asian Nations) including Brunei, Cambodia, Indonesia etc.
Chinese textile and clothing producers are also expected to benefit from strong growth in demand among domestic consumers in the next decade. Some projections estimate that clothing sales in China could climb to as much as US$300 billion by 2019.
"Considered an alternative to Indian garment industry, Sri Lankan apparel industry has seen tough times of late. However, it still accounts for over 46 per cent of Sri Lanka’s total exports and generates the highest industrial employment opportunities to over 300,000 directly and 600,000 indirectly, which includes a significant number of women. Gauging the importance of the industry, the government has developed research, innovation and design. The sector also maintains high ethical standards and is highly praised for its compliance and labour rights practicing than any other competitive countries."
Considered an alternative to Indian garment industry, Sri Lankan apparel industry has seen tough times of late. However, it still accounts for over 46 per cent of Sri Lanka’s total exports and generates the highest industrial employment opportunities to over 300,000 directly and 600,000 indirectly, which includes a significant number of women. Gauging the importance of the industry, the government has developed research, innovation and design. The sector also maintains high ethical standards and is highly praised for its compliance and labour rights practicing than any other competitive countries. However, on August 15, 2010, the EU suspended Sri Lanka’s GSP+ status, which impacted the industries growth dynamics.
Vision 2020 the way forward
The Sri Lankan government has set out a vision to position Sri Lanka among the top 10 high quality apparel -manufacturing countries in the world by 2020 turning in $8.5 billion in revenue. The country is working with leading international brands such as Victoria’s Secret, Gap, Liz Claiborne, Next Jones New York, Nike, Ann Taylor, Tommy Hilfiger, Marks & Spencer. However, Sri Lanka’s textile and clothing industry’s export earnings of the first two months of running year recorded decline despite the full order books of large-scale manufacturers. Sri Lanka’s exports statistics of February 2017 show a declined by 2.7 per cent year-on-year (YoY) to $868 million after falling 1.1 per cent in January 2017, extending the year-to-date decline to 3.2 per cent YoY to $1.73 billion. On the other hand, according to Sri Lanka Apparel Export Association, total apparel export has decreased $102.1 million in 2017 January-February over the same time of previous year.
US is biggest destination for Sri Lankan textile and apparel products. Apparel categories being exported are: sportswear, lingerie, loungewear, bridal wear, workwear, swimwear and children’s wear. UN Comtrade data shows, Sri Lanka is the second largest brassieres supplier to both the EU and the US, accounting for about 10 per cent of the supply in each of these markets. In addition, it is also the third largest swimwear supplier to the US, with 8 per cent market share, trailing only China and Indonesia. Apparel export to the US declined in February 2017 compared to previous year. And as Sri Lanka Apparel Exporters Association (SLAEA) Chairman Yohan Lawrence says, as an industry, its apparel industry stakeholders should look at markets other than US and the European Union, without losing the foothold on them.
As per Euromonitor, the country’s industrial production of textiles amounted to only $0.85 billion, while it imported more than $2.2 billion of such items in 2014. UN Comtrade data highlights that China and India are the Sri Lanka’s major sources of textiles, accounting for 35.1 per cent and 28.5 per cent respectively.
If the country aims to achieve the slated target, then raw materials imports for apparel production, should be reduced gradually by enhancing and encouraging foreign investments. Labour shortage problem can also be removed by bringing more women into the workforce. And lastly, the country needs to diversify its products and look for new markets to expand exports.
According to a new research report by Fung Global Retail and Technology, Zara which was once a fast-fashion pioneer that brought new styles to its shelves quickly, has been knocked off its perch by online brands that are able to design a product and have it ready for sale in as little as a week.
Online stores ASOS, Boohoo, and Misguided, which specialize in fashionable and affordable clothing for young adults, are using social media to keep on top of trends. They've streamlined their supply chain and moved production closer to key markets, enabling them to speed up the design and manufacturing process.
According to the report "Fast fashion is becoming ultrafast fashion," and this issue for chains such as Zara and H&M, where their success was built around this unique business model. These new online stores are also constantly refreshing their products to drive customer frequency.
Boohoo, which launched in 2006 in the UK, grew sales by 51 per cent in the year ending in February 2017. ASOS, which launched in 2000, grew sales by 26 per cent in 2016 compared to the year before. Missguided, which launched in 2009, increased sales by 75 per cent in the fiscal year ending on March 31, 2017.
The report also says that they have an "agile supply chain," Initial designs are made in small batches, and if they're popular, more are rolled out. This strategy allows them to match supply with changing demand.
Flexibility in the supply chain is key. In its most recent quarterly results, H&M announced a 3 per cent drop in net profits, and CEO Karl-Johan Persson commented that he would be investing significantly in making the supply chain faster and more adaptable to keep up with the pace of changing demands.
Lastly, these online retailers use Zara's tactic of keeping production close to the headquarters and in key customer markets. According to the report, Inditex, the parent company of Zara, sources 60 per cent of its products in Europe. Boohoo similarly sources over 50 per cent of its products from the UK.
The admission to the WTO opened a wide door for the Southeast Asian country to enter the global playground, According to the Ministry of Industry and Trade, Vietnam has maintained an annual average economic growth of 6.29 percent since 2007 despite impacts from the global financial and public debt crises.
Vietnam’s per capita gross domestic product (GDP) increased from just 730 USD in 2006 to 2,228 USD in 2015 and reached 2,445 USD in 2016.The economic structure has shifted towards increasing the proportion of industry and services while reducing the ratio of agriculture.
Vietnam has recorded an annual export growth of 12-14 percent since it became a member of the WTO. In 2016, the country’s export turnover increased by 3.5 times against 2006.Moreover, after 10-year membership, Vietnam has attracted over 22,000 foreign direct investment (FDI) projects with a total registered capital of nearly 300 billion USD.
The country has already signed 12 bilateral and multilateral free trade agreements (FTA) and concluded negotiations on the EU-Vietnam Free Trade Agreement (EUFTA) and the Vietnam-Korea Free Trade Agreement (VKFTA).
Vietnam is also forging ahead with negotiations on four other FTAs, including the Regional Comprehensive Economic Partnership (RCEP), which is expected to become a century FTA stipulating all trade activities of the whole ASEAN region. Such agreements are opening up opportunities for Vietnam to develop stronger and have free trade relations with 55 global partners, including those in G7 and 15 out of the G20 members.
Former Deputy Minister of Industry and Trade Luong Van Tu, stated that Vietnamese businesses have seized opportunities as the flow of FDI into the country surged. They have also accumulated experience and received technologies and management skills from big companies of developed nations such as the US and Japan.
On the other hand former WTO Director-General Pascal Lamy pointed out saying that Vietnam is a successful example of international integration as the country has taken advantages of human resources and labour productivity. Its dominant sectors include electronics, garment-textiles and farm produce.
The experts recommended Vietnam to restructure businesses, developing infrastructure services and green logistics as well as increasing investment in science-technology to create products with high added value for exports.
Gap’s comparable sales for the first quarter of fiscal year 2017 were up two per cent versus a five per cent decrease last year.
Comparable sales for Old Navy were positive eight per cent in the first quarter this year versus negative six per cent last year. Gap reported negative four per cent versus negative three per cent last year and Banana Republic achieved negative four per cent versus negative 11 per cent last year.
The group has made substantial improvements in product quality and fit, and its increasing responsive capabilities are enabling it to better react to trends and demand. It is focused on delivering the best possible product and customer experience, and its ability to leverage a portfolio of iconic brands and operating scale uniquely positions the company for long-term growth.
It updated its diluted earnings per share guidance for the first half of fiscal year 2017 to be down mid-single digits when compared with the adjusted diluted earnings per share for the first half of fiscal year 2016.
Foreign currency fluctuations negatively impacted earnings per share for the first quarter of fiscal year 2017 by about nine percentage points of earnings per share growth.
Comparable sales for fiscal year 2017 are expected to be flat to up slightly.
Tirupur will help Orissa in setting up new manufacturing units. This also means the Tirupur knitwear industry will get skilled workers from Orissa rather than untrained laborers.
Experts from Tirupur have visited Orissa to oversee the training programs and suggest changes that need to be incorporated to suit knitwear production.
The idea for this initiative came in the wake of an increase in the flow of laborers from Orissa to Tirupur during recent times, but at the same time these workers were found not to be fully suited for the specific needs that were expected by the apparel manufacturers in Tirupur.
As a result many workers from Orissa wound up doing unskilled work and eventually were found moving to other clusters.
The initiative will thus provide an impetus to the apparel cluster in Tirupur, which does not have to train a rookie worker to cater to the specific needs in the production process and at the same time the trained workforce in Orissa will gets quality employment.
Orissa’s textile policy offers a 60 per cent subsidy on building and common facilities, 25 per cent subsidy for new machinery, Rs 1 crore interest-free working capital loan, minimum wage of Rs 220 for eight hours and a reimbursement of Rs 1,500 for new factories, giving employment for new laborers.
Detroit has hired a new sustainability director who will guide the city’s efforts to strengthen the economic, social and environmental well-being of the city’s residents, neighborhoods and businesses. Joel Howrani Heeres began his new position on Monday, May 22. In this role, he will lead a new sustainability office, which will work to strengthen coordination among Detroit’s municipal departments; build partnerships with neighborhoods, businesses and philanthropic and non-governmental organizations; secure new funding for the city, achieve operational savings for the city.
In Detroit, sustainability issues have a direct effect on residents’ daily lives, from public transit options. Detroit has achieved several sustainability-related milestones in recent years, including the launch of the QLine streetcar, conversion of the city’s 59,000 streetlights to LEDs, adoption of green demolition practices for vacant home demolitions, securing $9 million in federal funding to enhance the city’s resiliency, opening a 10-acre solar array at O’Shea Park, and $11.7 million in investments to renovate 40 city parks and playgrounds. Howarani Heeres’ appointment and the creation of a sustainability office will support and accelerate these types of projects.
More than 150 cities nationwide have established sustainability offices, and Howrani Heeres will build on the experience of those cities to bring best practices to Detroit. Howrani Heeres was chosen from among a field of more than 200 applicants from across the country. A Detroit resident for 13 years, he has served in multiple roles in municipal government, non-profit organizations and the corporate sector, including his most recent role leading the City of Detroit’s efforts to improve its enterprise data governance and expand public access to City information as Director of Open Data and Analysis in the city’s department of Innovation and Technology.
David Manardo, group executive for operations expressed his feelings saying that he is excited to have Joel join the team and look forward to him developing sustainability programs and policies that will tangibly improve the lives of all those who live and work the city.
Howrani Heeres received a master’s degree in urban planning and a bachelor’s degree in economics and anthropology from the University of Michigan.
Annual profits of Marks & Spencer have dropped by 64 per cent. Weak clothing sales were compounded by restructuring costs.
Clothing and home ware sales tumbled by 5.9 per cent in the first three months of 2017. The retailer also reported a weaker-than-expected performance from its food halls, where underlying sales fell by 2.1 per cent. Sales in the fourth quarter were hit by calendar changes that saw key December sales days and Easter fall outside the quarter.
With inflation eating into the profits of the once reliable food offering, and a string of one-off expenses slicing into profits elsewhere, the net result has been to send pre-tax profits tanking by nearly two-thirds.
The planned restructuring of M&S has come with a cost and has impacted profits, but the business is still strongly cash-generative and the company has reduced its net debt.
But the 132 year old retailer is starting to stabilise market share and importantly has seen full price market share growth as it has removed excessive discounting.
M&S has a new chief executive. He is seeking to revive the retailer’s declining profits. His biggest job is turning around its clothing arm, which used to rely on heavy discounting to attract shoppers.
For the fourth quarter of financial year ’17, Lakshmi Machine Works’ total sales saw a 22.32 per cent sequential increase and a 5.07 per cent year on year decline.
Its operating profit for the quarter amounted to Rs 90.86 crores and its EBIT margin stood at 12.76 per cent. The company reported PAT of Rs. 68.33 crores, which represents a sequential quarter on quarter increase of 30.02 per cent and a year on year increase of 18.92 per cent.
Lakshmi Machine Works is a textile machinery manufacturing company. The company operates in two business segments: textile machinery segment, which consists of spinning preparatory machinery, accessories and parts, and another segment, which consists of machine tools, foundry division and advanced technology center.
The company’s capacity utilisation levels have, for some time, hovered around 65 to 70 per cent. It feels the south is an attractive market for its range of products. More than 40 per cent of its textile machinery sales happens in the south zone. While the south zone tops in sales, inflow of new orders for Lakshmi is primarily from the west, followed by the south and the north.
Lakshmi is planning new product roll outs. It would, in the next four years, offer the entire range of machinery from blow room to ring frame.
Cotton productivity in Maharashtra has improved.There has been a 50 to 70 per cent improvement in productivity in Jalgaon district. The yield has risen from 8 or 10 quintals to more than 15 quintals.
For the first time, Maharashtra overtook Gujarat in terms of cotton production with a record yield of some one crore bales. Usually Maharashtra produces 70 to 80 lakh bales.
While rain fed cotton seed varieties yield 8 to 10 quintals per hectare, irrigated cotton seed varieties yield around 35 to 40 quintals per hectare. The focus is on irrigated cotton seed varieties.
Farmers are being advised on seed quality, fertilisers, nutrients and pesticides.
Jalgaon region of Maharashtra has a high concentration of ginning units. Jalgaon has some 4.5 lakh hectares under cotton and around 1,50,000 farmers cultivate the crop.
Maharashtra processes about 80 lakh bales annually.
Jalgaon is rich in volcanic soil, which is well suited for cotton production.
If the farmers producer better quality and quantity of cotton, ginners stand to gain. Productivity of farmers in Maharashtra is as low as five quintals per acre or 12.5 quintals per hectare. This is extremely low compared to that of Gujarat, who get Rs 2,000 per candy more than farmers in Maharashtra.
