FW
ContiTech has opened a new facility in China for coated fabrics. ContiTech is a leading supplier of technical elastomer products and a specialist in plastics technology. This is its first international production site for elastomer coatings outside Germany.
The plant produces high-performance coated materials for a variety of applications. The product range includes robust concertina wall materials, which connects railway carriages together, or fabrics for protective equipment, dry diving suits or life rafts.
This is an ultramodern and climate-friendly facility equipped with leading production technology that can only be operated by a few companies worldwide.
The plant aims to set benchmarks for an ecological and energy-friendly manufacturing. Based on cutting-edge facilities for waste air treatment, the site stays below Chinese emission limits more than ten times. Its thermal insulation systems are also said to significantly help save energy.
ContiTech supplies customers in China and further Asia and is already selling coated fabrics in China, such as diaphragms for automotive fuel management or robust and weatherproof materials for folding bellows used in railway vehicles.
With the new plant, customers will benefit from local production possibilities, expertise and local service capability. The company already supplies calendered material and other semi-finished goods for air springs and transmission belts.
Vietnam is looking for cooperation with Thailand in the areas of textiles, design and administration.
Vietnam has the skills and ability to become an apparel production hub for international buyers, but it lacks upstream and midstream channels. Thailand’s textile and garment industry, on the other hand, has an entire supply chain cycle from upstream to downstream, from yarn manufacturing to apparel manufacturing. It also includes fashion design.
Therefore, establishing a fully vertical integrated supply chain between Thailand and Vietnam will help the countries sustain their competitiveness.
Trade turnover between the two countries totaled ten billion dollars last year, a year-on-year increase of 12.5 per cent.
Last year, Vietnam earned 76 million dollars from yarn exports to Thailand and spent 194 million dollars on importing fabric from the country.
The co-operation of the two sides would also help the industry better exploit the Asean market of 600 million people, when the Asean Economic Community becomes effective by the end of the year.
With increasing costs in China, as well as competitiveness with other industries, many garment and textile producers have shifted their production base to Asean countries, including Vietnam.
Vietnam has signed, and is negotiating, a number of free trade agreements. Thai enterprises want to enhance co-operation with Vietnamese firms to produce fabric and materials in Vietnam to take advantages of benefits brought from trade agreements.
Spain’s textile sector is coming out of the recession.
The number of Spanish suppliers of fabrics, fibers and accessories such as buttons had plunged by about a third since 2008. Spanish textile firms were slow to innovate and adapt to the increasingly fast-changing demands of the fashion industry.
Many company bosses in the sector still have a mentality of industrialists, not of entrepreneurs. But last year, the number of textile firms stopped falling for the first time since 2008, stabilising at around 3,500 companies. The sector is benefitting from Spain's economic rebound - growth stood at 3.2 per cent in 2016, double the eurozone average -- and the disappearance of less competitive firms. The firms that survived were those that were export-oriented, able to diversify their order book and respond more quickly to customers' demands.
Spain's textile exports, which account for 60 per cent of sector-wide sales, rose by seven per cent last year. The focus on international sales adopted by major fashion retailers has also pushed smaller firms to modernise and shift their focus to activities with higher added value.
Companies have also diversified away from fabrics destined only for fashion and now also make technical fabrics for the automobile, agriculture or sports sectors.
Spinning mills in south India can expect stable cotton prices and supplies.
The cotton production for the 2016-17 season will probably be more than adequate to meet the demand from spinning mills. This should check a further rise in the price of cotton. Moreover international prices are expected to be benign as well thanks to a bumper crop in Australia, an 18 per cent increase in production in the US and restricted imports by China.
If cotton prices remain stable from here on, it will help contain raw material costs for a few quarters ahead. Meanwhile, higher domestic demand for textiles and garments and higher exports will improve demand for yarn.
Leading mills such as Vardhman Textiles, KPR Mills and Ambika Cotton Mills have reported double-digit year-on-year growth in sales over the past three quarters, although exports have been subdued.
And despite the high cotton prices and the challenges related to demonetization, these companies managed stable operating margins over the past three quarters in the range of 18.5 per cent to 20 per cent. Thanks to the robust performance, stocks of these firms have rallied substantially in the past year and are now trading close to the 52-week high prices.
Raymond has ordered 98,000 meters of khadi fabric from the Khadi and Village Industries Commission (KVIC).The order is worth over Rs 2 crores. This is the largest ever order received by KVIC from any corporate giant.
Of the total 98,000 meters of fabric, 32,000 meters will be supplied by the end of this month and the rest by May end.
Earlier, in January and February, Raymond took more than 6000 meters of various different fabrics from KVIC for testing and sampling. As per the agreement Raymond will procure a minimum of Rs 2.50 crores worth of fabric every year.
After joint visits, Raymond has selected various clusters from Gujarat, Rajasthan and other places to procure grey and finished khadi fabric. Raymond will also provide design inputs to create high end designer wear using khadi fabric.
Khadi is heralding the entry of corporate and private sector giants into marketing of khadi fabric and thus providing sustainable employment and livelihood support to the artisans.
KVIC is taking several initiatives to increase the sale of khadi, which today stands under one per cent among total textile sales in the country. In the financial year 2015-16, khadi sales stood at Rs 1,510 crores. For 2016-17, KVIC expects to achieve a turnover between Rs 1900 crores to Rs 2000 crores. The target is to achieve Rs 5000 crores in two years.
India’s new textile policy will focus on a three-pronged approach to boost the growth of the Indian handicraft sector, which is facing tough competition from international players.
The approach involves incentivising expansion of the production base for quality manufacturing of handicraft products used for interior decoration and lifestyle purposes.
The policy is focusing on promoting premium handicraft products for the niche market along with preservation and protection of heritage and endangered crafts.
The new policy aims to achieve 300 billion dollars of textile exports by 2024-25 and envisages the creation of an additional 35 million jobs. Various initiatives have been launched to strengthen textile production and encourage the industry to cater to domestic and international markets efficiently.
The textile industry is a diverse sector, which includes everything from small handloom factories to large garment plants. The sector operates in both organised and unorganised forms and is known for its close association with agriculture.
The government is encouraging investment in the textile sector through 100 per cent foreign direct investment via the automatic route.
In 2014-15, the industry recorded a growth rate of 5.4 per cent. As far as machinery is concerned, 24 per cent of the world’s spindles and eight per cent of the world’s rotors are present in the country.
Some 57 garment factories in Laos produce clothing for exports, 28 factories produce clothes for exporters and the domestic market, and the remaining 31 factories produce parts of clothing.
These factories create 27,000 jobs for local people, with 90 per cent of jobs going to women. These factories have FDIand the FDI has come mainly from Thailand. This is 60 to 80 per cent. The remaining is from France, Hong Kong, Italy, Taiwan. Now the new investment is coming in and it is mainly from Japan. Japan has set up four new factories. Japan is shifting investment away from China. The investment has gone into machinery, merchandising. These factories are mainly into men’s wear and women’s wear.
The EU is the main clothing export market for Laos, while Japanese investors are interested in moving their clothing production base from China to Laos.
In 2016, Laos’ garment exports to the EU fell ten per cent; to Japan fell five per cent; to the US fell 21 per cent decline; and to Canada fell 56 per cent.
However Laos’ garment exports to other countries increased 64 per cent.
Shortage of workers is a chronic problem in the sector, resulting in a reduction of garment exports.
The European Union has threatened suspension of trade privileges for Bangladesh if labor standards are not improved further. The suspension would mean that Bangladesh would have to pay 12.5 per cent duty for exports to the 28-nation bloc.
At present, the country enjoys zero-duty access under the EU's Everything But Arms (EBA) scheme.
Bangladesh will need to demonstrate that it is taking concrete and lasting measures to ensure that labor rights are respected.
Under GSP (Generalised System of Preferences) regulation, beneficiaries are required to respect international principles of human rights and labor rights in order to continue to benefit from this preferential trade regime with the EU.
The EU wants Bangladesh to address issues pertaining to freedom of association and collective bargaining. It has called for full freedom of association for workers in the export processing zones, and allowing workers' organisations to associate with their counterparts from outside the export processing zones.
In 2015, Bangladesh was by far the largest exporter to the EU under the EBA scheme. The country accounted for 65.7 per cent of the EBA exports.
Last fiscal year, Bangladesh's exports to the EU stood at 18.68 billion dollars , which is 54.57 per cent of total exports in the 12-month period.
Vietnam in the first two months of this year has seen an increasing foreign direct investment from China.
A total of 721.7 million dollars of Chinese FDI was recorded in Vietnam in the two-month period, up 152.78 per cent year-on-year, accounting for 21 per cent of the country’s total FDI. China has become the second largest FDI contributor to Vietnam, after Singapore.
There is a clear trend of transferring Chinese capital into southeast Asian countries including Vietnam. In other southeast Asian nations such as the Philippines, Malaysia, and Thailand, Chinese investors are also pouring money in giant projects.
Chinese companies’ investment in Vietnam in January accounted for 22 per cent out of the country’s total foreign direct investment in the month.
This placed China in the third position among foreign investors in Vietnam in January, just behind Singapore and South Korea.
By the end of 2016, China’s total FDI in Vietnam placed China in the eighth spot among foreign investors in Vietnam compared to the thirteenth spot China was in in 2012.
Most Chinese-invested projects in Vietnam are concentrated in areas which have cheap labor but face a high risk of pollution such as garment and textiles, hydropower, steel production, chemicals and cement.
Bangladesh’s denim shipments to the US have remained stagnant for the last seven years.
Among the reasons for the slow growth are the growing popularity of overdyed fabrics and higher imports from the US' neighboring country Mexico.
In recent years, the US has increased denim imports from Mexico due to competitive prices and shorter lead times. Besides, American retailers get duty benefits for sourcing from Mexico. Bangladeshi garment imports are subjected to 15.62 per cent duty upon entry to the US, while Mexico’s wares get duty-free access. Moreover, although the US does not produce a lot of garment items for export, American manufacturers, especially those in Los Angeles, make a huge quantity of denim products.
Another important reason for the slow growth of denim exports is that US retailers purchase low-cost denim products in bulk from China.
Despite slow growth in denim exports, Bangladesh still remains the third largest supplier in the US market. Only China and Mexico supply more denim to the US than Bangladesh does.
The share of Bangladesh in the US denim markets is 12.03 per cent, while that of China and Mexico is 26.04 per cent and 25.40 per cent.
Bangladesh presently has around 30 denim producing factories.
