FW
H&M has initiated several steps to improve conditions of workers at its suppliers. One of its major goals has been to ensure that factory employees are represented by trade unions to negotiate collectively.
For this it is training factories on workplace cooperation, negotiation skills, collective bargaining and labor law.
The group facilitates dialogue between employers and employees at the factories and in the labor market in countries where its products are made.
Almost 300 factories are enrolled in the workplace dialogue and industrial relations programs while more than 3, 70,000 factory workers are directly covered by democratically elected worker representation through its programs run in Bangladesh, Cambodia, China, Ethiopia and India.
The goal is to have democratically elected worker representatives and improved wage management systems in place at its supplier factories by 2018.
The group is also trying to make sure that wage issues are negotiated and that workers have knowledge about their wages, benefits and rights.
Such systems are being implemented at an increasing number of factories - 140 until the end of 2016, and an additional 96 during 2017.
Factories in Bangladesh, Cambodia, Indonesia, India, China, Turkey and Myanmar are participating in this program.
In a bid to herald change in the entire fashion industry, the group is focusing on collaboration projects with partners to train management and workers on workplace cooperation and dispute resolution.
Germany is keen on India’s FTA with the European Union. Talks on the free trade pact started in 2007 but have been marred by flip-flops and disagreements. The last round of talks was held in 2013 and the discussions have remained deadlocked on issues including tariffs on automobiles and wines and spirits.
India has decided to unilaterally terminate all existing investment treaties with EU partner countries in place of a model Bilateral Investment Treaty. Germany wishes India had not done this.
Germany feels India and the EU should not focus on issues like tariffs and import duties but instead on the larger issues involved.
India and Germany are set to ink a series of agreements to further deepen ties in key areas of trade, investment and energy, besides exploring ways to step up defense cooperation.
Both India and the EU have reservations on China’s decision to put billions of dollars in infrastructure projects including railways, ports and power grids across Asia, Africa and Europe. A strand of the China-Pakistan-Economic Corridor cuts through Gilgit and Baltistan in Kashmir, which India claims are illegally held by Pakistan.
Germany is ready to conclude a government-to-government agreement with India in defense procurement and feels India is a strategic partner for Germany and provides stability in Asia.
Cotton made in Africa (CmiA) certified cotton is processed all over the world in all major textile production countries. The aim of the Cotton made in Africa Supply Chain Workshop, held in Coimbatore/India mid-May, was to further establish CmiA in India where demand is also increasing. There were 80 experts who attended the meeting, representing actors along the textile value chain.
Christian Barthel, Director Supply Chain Management at Cotton made in Africa, presented examples of best practice, demonstrating how Cotton made in Africa can further be integrated in the textile supply chains in India.
One of the CmiA partners is the cotton trader Stadtlander stated that as an internationally oriented company in the cotton trade, a great importance has been attached to reliability and dynamism. Cotton made in Africa also work in accordance to these values says Maximilian Daebel of Otto Stadtlander during the workshop, According to Lorenz Reinhart, working for the swiss-based, international cotton trader Reinhart, CmiA is a key component of the strategy of the company.
Through its worldwide network along the textile value chain, Cotton made in Africa ensures that CmiA cotton can be purchased cost-neutral, all over the world and at any time. This enables companies on the one hand to combine their sustainability goals with their procurement targets in the best possible way. CmiA thereby maximizes its support for smallholders in Africa, helping them to improve their living and working conditions, and protects the natural environment. A global comparison shows that CmiA cotton saves over 500 liters of water on every T-shirt. in 2016 around 50 million textiles bearing the Cotton made in Africa label were brought onto the market. At present 30 companies market Cotton made in Africa products.
Talking about the Cotton made in Africa,it was initiated in 2005 by Hamburg. Michael Otto as an independent initiative. Today it is the largest initiative for sustainable cotton in Africa and links 695,000 African smallholders and around 30 textile companies with each other along the worldwide supply chain. The products can be identified by the Cotton made in Africa label.
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.
