FW
Pakistan’s textile exports fell 1.74 per cent in the first eight months of the current fiscal year 2016-17. In February, textile exports slid 6.48 per cent month-on-month and 2.53 per cent year-on-year. In February, machinery imports increased 41.93 per cent year-on-year but they decreased 18.47 per cent month-on-month. Imports of petroleum products surged 67.02 per cent year-on-year and rose 4.39 per cent month-on-month.
From July to February of the financial year 2017, food exports declined 11.79 per cent. Sugar exports slumped 88.38 per cent. Knitwear exports remained almost flat in July to February 2016-2017, while bed wear exports rose 5.07 per cent. Exports of readymade garments increased 4.3 per cent. Cotton cloth exports decreased 6.26 per cent. Exports of raw cotton nearly halved in the period under review.
Machinery imports accounted for 20 per cent of the total imports during the period and were up 42.36 per cent over the previous fiscal year. Oil import bill was up 20.97 per cent. Food imports soared 13.47 per cent in the first eight months of the current fiscal year. On the whole an improvement in exports from the value-added sector of Pakistan arrested a major revenue setback during this period.
Colombia Tex held in January saw a nine per cent rise in international buyers compared to previous year. This is a show for fabrics, textiles, findings and trimmings, machinery in the clothing and home industry.
The show hosted 510 exhibitors, mainly from Colombia, India, Brazil, Spain and Italy. Exhibitors showcased machinery, raw materials, fabrics, and finished garments among other products.
Exhibits included fiber preparation machines, knitting machines, spinning machines, testing equipment, weaving machines, non-woven and industrial machines, chemical blended textiles, mercerized and reflective fabrics, jeans cloth, lining and lacing, fancy yarn, wool, fibers, threads and yarns, buttons, buckles, zippers, ribbons, interlinings, labels, tags, knitted necks.
International buyers appreciated the quality and prices of goods on display at Colombia Tex 2017. The largest delegation of buyers came from Ecuador, with 178 buyers at the show. Companies from the United States were interested in raw materials and new ventures hoping to take advantage of the free trade agreement with Colombia.
Colombia Tex is one of the largest business platforms in Latin America for textiles, apparel, and full-package in categories including women’s wear, menswear, outerwear, athletic wear and swimwear, home textiles, uniforms, and casual wear, in knit and woven categories. Colombian vendors have duty-free access to the United States.
Bombay Thread Works is a thread manufacturing company operating for the last 30 years. “In the past, we manufactured spun polyester and now we are into embroidery yarn. Embroidery yarns are a new thing for us. We supply to big houses such as Vardhman and Oswal,” says Vishesh. Talking about new innovations Vishesh says, “We are focusing on embroidery yarns. These are usually silk threads but we have come up with a new innovation in embroidery yarns. The threads we make are called smart silk threads. It is a replacement for silk threads and is 40 per cent cheaper and increases productivity. Productivty is measured by breakage of yarns during production. For example, silk threads are most likely to break 200 to 250 times if the machine runs for 24 hours, whereas breakage ratio for smart silk threads is less than 10 in the same time period. It also helps clearer and crisp embroidery unlike normal thread.”
About competition and fake products, Vishesh says they educate people about the difference. “People’s perception are different area-wise e.g. In Delhi, people don’t switch to anything quickly, they are okay with what they are using for long. Secondly, the market is price sensitive. So they grab anything that is cheap, we try to maintain a balance by being cost effective.”
The firm conducts door to door marketing, makes people aware using all possible resources. “We also supply to Orient, Richa and Shahi Exports. We are dealing in the domestic market and also supply to exporters.”
As for challenges faced, “The biggest challenge is to educate people. That’s why we take part platforms like GTE. This is our second time, last time we were not prominent but this time we tried to ensure we have a better stall and placement.”
Taiwan-based textile maker, Far Eastern New Century is expanding its capacity in Vietnam. The ongoing capacity expansion plans are part of the company’s investment project in Vietnam to develop a supply chain for fabrics and garments over three years.
The company provides a wide range of petrochemical and textile products, such as polyester-related materials, knitted fabrics and apparels. Another plant in Vietnam, which would produce knitted fabrics, is set to begin production in the second quarter of this year. The new plant is expected to manufacture 6000 tons of knitted fabrics a year.
The company is likely to take advantage of global price increases in ethylene glycol, which would help increase prices of polyester fibers. The price of ethylene glycol is expected to hover at relatively high levels in the near future, as supply shortage problems in China are not yet completely resolved.
Far Eastern is also in talks with several global brands for its eco-friendly products, and is expecting higher revenue contributions from recycled fiber and textiles for this year. The polyester and textile businesses amount to more than 50 per cent of the company’s total sales. However, for whole of last year, the company’s consolidated revenue slid 0.92 per cent year-on-year.
"Foreign direct investment (FDI) in Bangladesh’s textile sector at the end of September 2016 stood at $2,438.21 million. Struggling with labour issues and energy shortages, the industry is ready to adopt advanced technology and skill training to get out of the turmoil. While the country is a favoured investment destination owing to its inherent properties such as abundant cheap labour, strategic location as a gateway to Asia-Pacific region, and a legislative framework conducive to doing apparel business."
Foreign direct investment (FDI) in Bangladesh’s textile sector at the end of September 2016 stood at $2,438.21 million. Struggling with labour issues and energy shortages, the industry is ready to adopt advanced technology and skill training to get out of the turmoil. While the country is a favoured investment destination owing to its inherent properties such as abundant cheap labour, strategic location as a gateway to Asia-Pacific region, and a legislative framework conducive to doing apparel business. It is also marred by weak infrastructure, inconsistent energy supply, lack of land, weak financial sector, corruption and red tape in the bureaucracy.
FDI inflows
Statistics from Bangladesh Bank reveals, South Korea has invested $758.08 million from September 2015 to 2016. The corresponding figures for Hong Kong are $421.7 million; British Virgin Islands invested $214.02 million and garnered the third spot among the highest FDI figures for Bangladesh for the period ending September 2016. The other countries that made a significant contribution to Bangladesh textile FDI during the same period are: Taiwan with $155.24 million, China $93.71 million, Singapore $67.4 million and India $66.71 million.
It’s the smaller nations in the neighborhood of Southeast Asia and Eastern Asia that have contributed in terms of FDI as compared to the combined FDI corpus of neighbouring giants China and India. FDI from the United States stood at a modest $33.02 million. Bangladesh government will have to facilitate ease of business in a big way to attract major investors from the West like France, Germany and US. This includes the setting up of adequate infrastructure whereby the textile industry can locate itself in clusters in a special economic zone with adequate facilities for both workers and the visiting industry honchos. China has already provided some assistance in this direction for Bangladesh to set up a special textile park. According to the Bangladesh government, negotiations are on and it won’t be long before this is realised.
Government initiatives
The government is proactively seeking FDI not only in textiles but also in the allied energy and infrastructure sectors that will help boost volumes in textile trade. Some of the measures already undertaken include favourable industrial policy, export growth incentives and Public-Private partnership launched in 2009 and ratified for further enhancement ever since. If policy indications are anything to go by then western world wants Bangladesh to further reform its labour laws and provide enhanced package of minimum wages to its workers. In addition, they have expressed concern about safety norms adopted by the industry. However, of late, Bangladesh has monitored the upgrade of safety norms and has made a marked improvement.
The big cache lies in resolving minimum wages. This may not get ratified soon as it’s bound to impact the cost competitiveness of Bangladeshi garments. The alternative available for Bangladesh is to boost FDI inflow from India. On a promising note, Bangladesh has signed 30 bilateral trade agreements and the current Trump administration has scraped the TPP that made Vietnam a favourable destination for textiles which goes in favor of bilateral trade pacts.
From the holistic perspective, major contributing countries to Bangladesh’s export earnings are China, South Korea, India, Egypt, UK, UAE and Malaysia. With bright prospects ahead, the textile sector is headed for an exciting period in the near future given the inclination of stakeholders, government and foreign players.
A cotton conference is scheduled to take place in Germany from May 16 to 18, 2017. The Global Cotton Conference will bring the entire sector together to shape a more sustainable future for the cotton industry. The conference will offer the opportunity to explore themes at the field level, in the value chain and in consumer facing businesses. Industry experts, business leaders and other key stakeholders will participate in the event to share perspectives on the keys to unlocking a better future for cotton.
Cotton is one of the world’s most important natural fibers. It’s used by nearly everyone and supports 250 million people’s livelihoods. The conference is being organized by Better Cotton Initiative. BCI is a not-for-profit organisation stewarding global standards for better cotton, and bringing together cotton’s complex supply chain, from farmers to retailers.
Better Cotton Initiative exists to make global cotton production better for the people who produce it, better for the environment it grows in and better for the sector’s future. BCI aims to transform cotton production worldwide by developing better cotton as a sustainable mainstream commodity.
BCI works with a diverse range of stakeholders across the cotton supply chain to promote measurable and continuing improvements for the environment, farming communities and the economies of cotton-producing areas.
Turkey’s export-oriented textile and apparel industry relies heavily on cotton imports. Turkey is the world’s second largest consumer of cotton. As the industry has been booming over recent years, Turkey’s cotton demand is also soaring and is expected to reach a 19-year high in 2017.
Rising cotton demand is due to Turkey’s increasing focus on in the European market. Cotton mills in Turkey had to lower margins to keep their market share in the European market to continue operating. Meanwhile Turkish mills have also been investing in new machinery and technology to increase quality and lower costs in order to get ahead in the very competitive international textile trade.
Turkish domestic cotton production is also forecast to surge by 21 per cent year on year in 2016-17. In fact Turkey is the fifth biggest cotton yarn producer in the world, having a five per cent share in global cotton yarn production. The recovery in Turkey’s cotton production is mainly driven by higher local cotton prices and more local farmers switching from planting low return crops such as corn to cotton.
However, lack of irrigation water and high production costs such as seed, fertilizer, fuel and electricity remain as main obstacles for the industry to grow.
UK’s fashion technology firm Metail has announced a partnership with Benit an arm of South Korean conglomerate Kolon. The deal will expand the reach of Metail’s game-changing technology in Asia, which allows consumers to discover, shop, share and try on clothes online in a unique and engaging fashion.
Metail’s aim is to digitise all of the world’s garments and people. It sees South Korea as the most mobile-focused, tech-savvy and fashion-conscious market in the world and feels Kolon, with its scale, stable of brands and market-leading fashion-focused IT services arm, is the right strategic partner.
Kolon is the fourth largest conglomerate in South Korea, with interests spanning manufacturing to construction, trade, life sciences research, environment, retail and fashion. Building on its leadership across multiple sectors, Kolon is now setting its sights on the fast growing South-Korean fashion e-commerce market through its technology branch Benit.
Kolon was looking for innovative and useful solutions for the development of the fashion market in the region and felt Metail's solutions were the most valuable. Consumers can’t try on clothes when buying clothes online. Kolon feels Metail can help overcome the difficulties in sizing and styling.
Through this agreement, Kolon hopes, fashion and distribution companies in the Korean market will be able to provide a useful and wonderful experience to customers.
Turkey’s textile exports to the EU increased 8.6 per cent year-on-year in 2016 while exports of apparel fell 2.3 per cent. The EU remains the largest exporting destination for Turkey’s textile and apparel products and the textile and apparel trade with the EU is expected to increase over the next few years. In 2016, over 64 per cent of total Turkish textile and apparel exports were destined for the EU.
Russian buyers are returning to Turkey after the political tension in November 2015 when Turkey downed a Russian jet. Textile and apparel exports from Turkey are also increasing to other markets like Iran, the US, Algeria, Israel, Poland and Bulgaria. Meanwhile, the depreciation of the Turkish lira is making exports easier.
Moreover, domestic market is also developing well and attracting more foreign investment. The domestic market is expected to grow by eight to ten per cent in 2017. An industrial rebound is expected in the country’s cotton production. The Turkish textile and apparel industry has a goal of doing exports worth 72 billion dollars in 2023. In order to achieve that target, Turkey has put increasing efforts to ensure national and regional stability and harmonious international trade relations.
India’s textile exports fell five per cent in 2016 compared to 2015. Demand remained sluggish and India has been losing out to China. That country’s cost of production remained almost flat and there has been currency depreciation. The Chinese currency has weakened nine per cent over the dollar. In contrast, the cost of production has increased sharply in India and the rupee has appreciated around five per cent. So India's receivable export proceeds have declined proportionately.
The past year has seen a 25 to 30 per cent jump in labor cost. Since labor is a major component of the overall cost, the cost of apparel production has risen proportionately. Overall, therefore, India's textile and apparel exports are estimated to remain flat in calendar 2017 as the benefits offered to the industry are negated by a sharp increase in the cost of production and appreciation in the rupee.
Demand for fabric from apparel makers has been subdued. The country's fabric production was tepid in April-September 2016, with a modest growth of two per cent. Demonetisation added to the challenges being faced by this fragmented and unorganised segment, seen in a six per cent fall in fabric production during the December quarter.
