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Texcare International continues to expand. For the first time, Messe Frankfurt is opening Hall 9 in addition to Hall 8 for Texcare International 2016, to meet exhibitor demand for additional exhibition space, as well as to offer more space for new and young companies.
The inclusion of hall 9 offers improved presentation opportunities for exhibitors and, owing to the increase in the area covered and the number of exhibitors, the organisers expect the fair to be even more attractive to visitors.
Industry 4.0 will be a key factor at the coming fair. Intelligent networking of machines and product flows optimises processes, saves energy and changes the occupational profile. Many processes in modern industrial laundries and dry cleaners are already fully automatic. These processes can be further optimised by machinery and plant linked in ‘SmartFab’ terms and capable of exchanging information not only with each other but also with an enterprise resource planning system. For example, there could be an ‘intelligent wardrobe’ to regulate the laundry process at the customer’s.
Energy and resource efficiency continue to play a vital role in modern textile care. How can water, electricity and heat consumption be further reduced and intelligently controlled? In the textile-service field, sustainability is becoming a new quality feature along the entire value chain – from cotton growing to bed sheets in the hotel.
The demands on personal protective clothing and equipment are growing continuously. In addition to coatings, garments include sensors and electronic components that can, for example, warn of poisonous smoke or measure the wearer’s body temperature. Making highly complex functional clothing is a top subject at Texcare for manufacturers, research institutes and at the Texcare Forum.
www.texcare.messefrankfurt.com
The core topic discussed by a panel of researchers and scientists during the Sixth Open Session of the 74th Plenary Meeting of the International Cotton Advisory Committee (ICAC), a technical seminar was around the theme of ‘Elimination of Insecticides from Cotton Production: Is This Possible?’
While the boll weevil has historically been cotton's biggest archenemy, there are multiple secondary pests that continue to drive insecticide use, including the whitefly in Pakistan and India. This year, as much as two-third of the cotton crop in India's state of Punjab suffered damage from a whitefly outbreak. With so much at stake, the use – and sometimes overuse – of insecticides is understandable, as farmers do everything they can to protect their livelihood. Globally, more than $15 billion was spent on various insecticides in 2013.
“Fortunately, we don't necessarily need to completely eradicate the use of all insecticides to do a lot of good," says Francesca Mancini, a pest and pesticide specialist with the United Nations Food and Agriculture Organization (FAO), adding, “The elimination of HHPs [highly hazardous pesticides] from cotton production would contribute enormously to reducing risks to the environment and human health."
Many insect problems, the panellists agreed, aren't caused by the chemicals themselves, but rather by their improper use. Farmers who apply the wrong chemicals at the wrong time exacerbate the problem. Great strides could be made toward reducing the amount of insecticides used, and increasing their efficacy, through education of growers. One such approach, they said, is integrated pest management (IPM), which emphasizes the growth of a healthy crop with the least possible disruption to agro-ecosystems and encourages natural pest control mechanisms.
www.icac.org
On International Human Rights Day, labour network Clean Clothes Campaign (CCC) joins more than 25 countries in a global call on major brands such as H&M, GAP, Levi's and Inditex to make sure Cambodian workers receive $177 as a first step towards a living wage.
In addition, the organisations support the Cambodian union coalition to make sure a controversial Trade Union Law will not be passed before genuine and inclusive consultation with civil society and trade unions is guaranteed by the government of Cambodia.
Stores of H&M, Adidas and others will be targeted in street actions in the US, Europe and Asia. In Cambodia, thousands of workers from a coalition of eight unions will rally the streets in three provinces, wearing stickers saying: 'We need a living wage!”
In October, the Labour Advisory Council (LAC), a tripartite wage-setting body voted to approve a new minimum wage of $140, to be implemented in January 2016 for Cambodia’s 700,000 garment workers, despite objections from a number of unions. This insufficient $12 wage increase is a slap in the face to workers who have been organizing for over a year to demand a fair minimum wage of $177.
Cambodia recently saw another wave of mass fainting in garment factories. In August 2015, nearly 400 workers fainted in four factories across Cambodia. On July 2 alone, 38 workers lost consciousness in a factory in Phnom Penh. In 2014, the Ministry of Labor recorded that more than 1,800 workers collapsed in 24 factories. Mass fainting have been linked to malnutrition, high targets and long working hours, as a consequence of low wages and the need for workers to survive.
A coalition of Cambodian unions are joining together to demand that the brands immediately ensure a minimum wage of $177 is paid in their Cambodian suppliers and negotiate directly with Cambodian unions a binding agreement to achieve living wages, decent purchasing practices, stable employment, and union rights for the long-term. They also urged the government to refrain from passing the law until genuine consultation has taken place with independent unions.
Cleanclothes.org
Mexico and the US are major trade partners. Of late, Mexico’s economy is witnessing growth with its unemployment and debt constantly declining. Mexico’s geographic location between North and South America is beneficial for exports, which has made it the seventh largest export market in the world and the most important one in Latin America. The economy of Mexico is the 15th largest in the world in nominal terms and the 11th largest by purchasing power parity, as per the data provides by International Monetary Fund.
The Mexican textile industry has a long history of making fibers, cloth and other textile goods since at least 1400 BCE. The textile industry remains important to the economy of Mexico although it has suffered setback due to competition by cheaper goods produced in countries such as China, India and Vietnam. The proactive government policies of the country have also supported the industry in a big way. Mexico offers an ideal investment location for companies active in the clothing and textile sectors. It has a highly skilled and economically competitive workforce and excellent access to world-class inputs and technologies. Moreover, its geographical location and extended network of Free Trade Agreements (FTAs) make it a strategic hub from which to export to major markets in North and South America, the EU, EFTA and beyond.
While Mexico imports cotton products majorly from USA and India, textile and apparel goods manufactured in the United States enter Mexico duty free under the North American Free Trade Agreement (NAFTA).
According to a report by investment information and credit rating agency ICRA, India’s apparel exports are likely to increase to $18 billion in calendar year 2015 and to $20 billion 2016 against $16.5 billion in 2014. The growth in India’s apparel exports will be supported by its expectations of increase in the global apparel trade and partly due to benefits of depreciated rupee.
However, warning sign in the report say that “depreciated rupee is unlikely to remain as a sustainable advantage in long-term as India’s market share in world’s trade has not significantly changed despite depreciation of Indian Rupee during last three years. As per the report, China, Bangladesh, Italy, Germany, Vietnam and India will the top six apparel exporting countries.
Over the last decade, India’s share in global apparel exports has remained modest at 3 to 4 per cent despite being one of the world’s largest cotton producer and manufacturer of man-made fibres with world’s second largest spinning and weaving capacity. China, Bangladesh and Vietnam are able to realize the benefits of the new trade arrangement (WTO’s agreement on textile and clothing) and hence increasing their share in global apparel trade substantially.
According to the report, fragmented nature of the weaving, processing and garmenting industries with low levels of modernisation, higher cost of production, modest share of non-cotton apparel and reliance on imported machineries across the textile chain have been the key factors which had constrained growth in India’s apparel exports. Domestic apparel industry expected to maintain the growth rate witnessed in the past, driven by steady consumption demand growth. Apparel trade globally is expected to maintain the momentum in 2015 and 2016. However, apparel exports in India will increase along with global apparel trade, it said.
www.icra.in
"TAL example indicates at the larger picture in China where manufacturing anything from clothes to toys was considered extremely cheap once upon a time due to low wages and production costs. However, now with complicated government policies and the country’s quest to move to higher-value manufacturing, the situation is changing."
Production moving to South Asian countries
TAL has already started moving its pants production from China to Malaysia, where it has another factory, and it is also expanding base in Vietnam. However, TAL would continue to run its other factory in China making dress shirts since shirt making according to the company is more complex as well as more profitable than pants, because the fabric is thinner and puckers more easily.
TAL example indicates at the larger picture in China where manufacturing anything from clothes to toys was considered extremely cheap once upon a time due to low wages and production costs. However, now with complicated government policies and the country’s quest to move to higher-value manufacturing, the situation is changing. On one hand, Chinese government is following complete automation of its industries and has also unveiled a 10-year plan to put the nation at the forefront of technologies like 3-D printing and high-end machine tools, on the other, local governments are almost doubling the minimum wages forcing manufacturers to close factories. No wonder, companies like Coach Inc have moved their production to Southeast Asia.
Domestic manufacturers are combating rising production and labour costs in the textile and apparel industry, which has also led to China losing its status as the mass producer of goods. China’s costs have risen so quickly and to the extent that importing countries are moving to many other Southeast Asian countries such as Malaysia, the Philippines, Indonesia and Vietnam that offer low production and labour costs.
Losing status as manufacturing powerhouse
As Stanley Lau, Former chair of the Federation of Hong Kong Industries points out, the situation in China is only going to worsen. Federation of Hong Kong Industries is a trade group for 3,000 manufacturers, mostly with factories on mainland. He forecasts between 2014 and 2017, 10 per cent of mainland factories owned by Hong Kong-based manufacturers would close. The number of Guangdong factories owned by Hong Kong companies declined to 32,000 in 2013 from a 2006 peak, owing to again rising wages and difficulty in getting skilled workers, as per the analysis by Justina Yung of Hong Kong Polytechnic University for the federation.
This year, wages and benefits in China are expected to climb 8.6 per cent, lower than the previous year’s 10.3 per cent growth rate, according to the Economist Intelligence Unit. China’s average labour cost of $3.27 an hour in the manufacturing sector is two-thirds higher than Vietnam’s and a quarter above Malaysia’s.
Many leading western players turned to neighbouring markets like India, Bangladesh, Vietnam, Indonesia, and Cambodia after sourcing from China started becoming expensive. However, despite having sufficient capacities to cater to the needs of western players, India, Indonesia and Vietnam are facing constraints due to recent increase in minimum labour wages. So their attention is now moving to Malaysia, Myanmar and other such low cost destinations.
India’s textile and garment exports rose 0.6 per cent in the first half of the current fiscal from a year before. The share of textile and clothing exports in the country’s overall exports has risen to 13.5 per cent this fiscal. At present, man-made fibers like polyester attract a 12 per cent excise duty, but cotton, the competing fiber, attracts none. This duty disparity has distorted the domestic consumption pattern in favor of cotton, which is contrary to the global trend.
The industry has long been complaining that the duty disparity is preventing domestic producers from scaling up operations and, consequently, hurting India’s export competitiveness in man-made textiles. While man-made fibers account for around 70 per cent of the world’s total fiber consumption, they make up for less than 30 per cent of India’s demand.
There are plans to rationalise duties on man-made fibers, simplify labor laws and facilitate more working capital to mills. The excise duty on man-made fibers may be reduced to six per cent from the current 12 per cent. Women may be allowed to work at night, especially in garment factories. The textile and garment sector is the largest job provider after agriculture, employing around 45 million people.
As per a Asia Development Bank study, Bangladesh textile value chain is rising faster than any other Asian country. Reason: shift of low cost manufacturing from China to Bangladesh. In fact, companies Singapore, Japan, Taiwan and South Korea, which have traditionally relied on low cost production in China, have had to adjust. Intraregional trade within the labor-intensive Asian textile industry is still increasingly dominated by China but Bangladesh and Vietnam are emerging as important players, says the ADB report on Asian Economic Integration, 2015.
In the meantime, domestic value added shares of Japan, Korea and China have declined six to eight percentage points during 2000 to 2011. Apart from rising domestic value added shares, the foreign value added to Bangladesh and Vietnam exports is also increasing at a much faster pace than that experienced by the rest of their peers (excluding China).
With rising production costs in other economies, operations are being set up in countries like Bangladesh and Vietnam. Governance gaps and lack of focus have undermined performance in some special economic zones in Asia, while successful zones have managed to build close ties with the domestic economy. Bangladesh has attracted FDI in garments and generated new trade, but has had limited success in upgrading and diversifying special economic zone exports.
"As per IndustriALL Global Union affiliate, the Southern African Clothing and Textile Workers Union (SACTWU) an estimated 2,000-3,000 workers have been losing their jobs every year. There is a strong labour architecture in South Africa and the working conditions in the garment industry are better than in many other parts of the world. This is due to the bargaining strength of the union, which has also resulted in better wages in the South African garment sector"
While South Africa enjoys the status of being one of the biggest garment producers on the African continent, production has been declining in the country over the last one decade. This has led to massive job cuts leaving thousands unemployed. However, the situation seems to be changing with the industry ready for a bounce-back business and job creation.
SACTWU initiates ways to increase employment
Several factors such as trade liberalisation, increased imports from Asia and the relocation of South African producers to neighbouring countries and lower wage regimes in Lesotho and Swaziland made an adverse impact on the flouring garment industry in South Africa over the last 15 years. Estimates suggest that almost 150,000 jobs were lost in the industry when South African clothing manufacturers found themselves in a fix as the influx of cheaper clothing from Asia began flooding the local markets. They had to pull shutters on their businesses.
As per IndustriALL Global Union affiliate, the Southern African Clothing and Textile Workers Union (SACTWU) an estimated 2,000-3,000 workers have been losing their jobs every year. There is a strong labour architecture in South Africa and the working conditions in the garment industry are better than in many other parts of the world. This is due to the bargaining strength of the union, which has also resulted in better wages in the South African garment sector.
There are several minimum wages in South Africa and the unions are working to close wage gaps. A top wage for a skilled garment worker is around 950 Rand (US$67) per week. For a lower skilled worker it could be around 700 Rand (US$49) per week. SACTWU prioritises centralized bargaining as the mechanism to achieve the best wage outcomes for workers. SACTWU negotiates in three national bargaining councils for the clothing, textile and leather sectors and the outcomes affect over 100,000 workers. In 2015 sectoral wage increases were above inflation.
Gradual turnaround on the cards
However, the garment industry in South Africa is now slowly witnessing business growth. Despite job losses, SACTWU has remained well organised with about 80 per cent of workers in the sector belonging to the union. SACTWU is fighting back hard against retrenchments, downsising and closures while building its influence and engaging on policy at a national level. The union has upheld its tradition as a fighting union, yet it engages employers and government in dialogue and has made significant gains on sourcing locally and pushing back on trade liberalisation.
Simon Eppel, Researcher at SACTWU points out, while the industry continues to lose jobs even today, the numbers are down substantially with the efforts of SACTWU. On balance employment in South Africa’s textile industry is growing – it is up by 1.5 per cent in the last year. With the government support and SACTWU’s campaign for jobs, employment in the garment industry seems to be on a positive growth path. The South African government is also advocating greening of the industry to make it more sustainable by implementing energy efficiency measures and assisting companies to replace old machinery with more modern equipment.
Another effort to revive the growth potential is SACTWU’s ‘buy South Africa campaign’, where the union enters into agreements with major companies and institutions to support the local industry. Since the early 2000s, SACTWU has been running a campaign to buy locally-produced textile products by appealing to consumers on how buying South African will affect the community. Through mass campaigns and fashion shows with factory workers to showcase the clothes they make, SACTWU engages with consumers to influence the choices they make. Even government departments and state-owned companies are encouraged to buy South African products when tendering for public procurement.
Retail sourcing sees a change
In June 2015, a South African clothing textile and leather tripartite seminar called by SACTWU, was held in Cape Town. The event was held alongside the Cape Town Fashion Festival with the key address given by Minister of Economic Development Ebrahim Patel who spoke of the government’s commitment to a green manufacturing sector. Presentations at the seminar included supportive policy and initiatives from the government to maintain the sector and jobs as well as best practices by industry for greater efficiencies in production and energy and water consumption that have been achieved with state support.
South African retailers mostly depend on the traditional retailing model which often results in two scenarios but they are under pressure to change their model because of increased competition from foreign retailers that have entered the domestic market. Now retailers use technology to analyse what is being bought in store, understanding what customers want, when they want it, so instead of placing orders on forecast demand for a whole season ahead, current trends are analysed to present the customers with the most attractive products in the shortest possible time.
Together with inflation in Asia and a weak Rand, many believe that quick response provides opportunities for South African producers. The model relies on close proximity of the producer to the retailer, with a maximum lead time of six weeks. South Africa is well placed because industry support and a commitment from local producers has resulted in better standards and efficiencies, reducing lead times.
Now SACTWU has called for the clothing industry to submit a report on actions taken to implement the commitments made under the Youth Employment Accord (YEA). The union is of the view that instead of just complaining about the problem of youth unemployment, it is time that every signatory of the Youth Employment Accord (YEA) must take accountability for what they have done to meet their commitments.
Sactwu.org.za
China’s trade performance remained weak in November, with exports falling by a more-than-expected 6.8 per cent from a year earlier. Imports fell 8.7 per cent. The country will have to do more to stimulate domestic demand given persistent weakness in overseas markets. China’s trade performance remains weak as the trade value is likely to drop 8 per cent for the whole of 2015 versus an increase of 3.7 per cent in 2014. This clearly reflects a de-leveraging process in the manufacturing sector that has dragged down the demand for commodities.
Economic growth dipped to 6.9 per cent in the third quarter, dropping below the seven per cent mark for the first time since the global financial crisis. China has allowed its currency, the yuan, to slowly weaken to near four-month lows against the dollar, but its exports will be significantly helped only by a drastic devaluation.
A number of policies were announced last month to encourage foreign trade and help exporters, admitting that the picture for foreign trade was complicated and grim. The central bank has already cut interest rates six times since last November and reduced the amount of cash that banks must set aside as reserves while the government has eased restrictions on home buying to boost the sluggish property market and is trying to ramp up infrastructure spending.
