FW
Global footwear exports have witnessed 25 per cent growth in volume terms over the last 10 years, reaching 13.9 billion pairs, an increase of 78 per cent in sales terms, or $122 billion says the 2017 edition of the World Footwear Yearbook.
On the other hand, exports dropped in value and volume over the last two years. Since 2010 Asia, which remains the global leader in footwear exports, has seen exports fall 2 per cent while for the same period, Europe has gained three points and now accounts for 13.5 per cent of world exports. A trend, which potentially indicates, renewed interest in European production, lead by Italy, Spain and Portugal. China, meanwhile, still represents 67.35 per cent of global shoe exports, followed by Vietnam with 7.5 per cent of the market share.
As for imports, Asia has seen an increase of 5 per cent over the last 10 years. This figure sits just ahead of North America with 23.9 per cent of the import market. Accounting for 36.9 per cent of global imports, Europe remains the leading import market for shoes. However, country wise the United States accounted for 19.6 per cent of imports in 2016, a figure on the decline.
Finally, the average price of an export is $8.84, a decrease in price of 2.3 per cent. A decline over the last two years, which is partly due to a growing interest in sneakers and casual shoes, and a decline in leather footwear production, which are more expensive.
CENTRESTAGE, organised by the Hong Kong Trade Development Council (HKTDC), will be held from 6-9 September, at the Hong Kong Convention and Exhibition Centre (HKCEC). The event will feature more than 210 fashion brands from 22 countries and regions. About 40 fashion events will be staged, including CENTRESTAGE ELITES, the opening gala fashion show, some 20 fashion shows, as well as designer sharing sessions, an industry forum, trend forecast seminars and networking activities.
HKTDC Deputy Executive Director Benjamin Chau noted that the inaugural CENTRESTAGE served to spotlight fashion brands and designer collections and reaffirmed Hong Kong’s position as Asia’s fashion capital. It was a delight that the first CENTRESTAGE received such widespread and enthusiastic support both at home and from overseas, says Chau and this year’s show will feature spectacular activities, attracting more than 210 fashion brands presenting designs from all over the world.
CENTRESTAGE will also host the finals of The Hong Kong Young Fashion Designers’ Contest 2017 (YDC). Designers and guests who attended today’s preview included designers Fiona Lau and Kain Picken of Hong Kong brand, FFIXXED STUDIOS; Felix Chung, Chairman of the Steering Committee of Fashion Summit (HK) 2017; artiste Vincent Wong, other exhibiting designers, fashion brand representatives and partners.
In addition, the Knitwear Innovation and Design Society will organise the Knitwear Symphony 2017 and the seventh Hong Kong Young Knitwear Designers’ Contest, while the fashion environmental NGO Redress will stage the grand final show of The EcoChic Design Award 2017. The Hong Kong Footwear Design Competition, organised by the Federation of Hong Kong Footwear and co-organised by the HKTDC, will also uncover more local design talent during CENTRESTAGE.
CENTRESTAGE will become “OPENSTAGE” on 9 September, the closing day and it will welcome public visitors aged 12 and above free of charge. The event will allow members of the public the chance to experience this major international fashion event and to check out the latest designs from leading brands.
From the famous Dhakai muslin, Bangladesh is known for its heritage textile products since ages. One of the main specialities of artisans is hand knitting specifically sweaters. Not just this, Bangladesh houses one of the largest knitting capacities in the world and has brought a revolution in automation in automatic knitting as well.
Earlier knitting and knitwear firms were centred in and around Narayangonj in Bangladesh. Today they are well spread throughout major garment manufacturing zones. The hosiery sector started expanding into knitting industry after the expansion of RMG sector since 1980s and 1990s, which greatly boosted their growth. In the last fiscal year 2016-17 when Bangladesh apparel export has seen lowest growth in 15 years, the knitwear export increased by 3.01 per cent. Knitwear export stood to $13757.3 million in FY 2016-17 while it was $13355.42 million. For the FY 2017-18, Bangladesh has set an ambitious target to increase knitwear export to $15.1 billion.
Gauging the viability
Figures reveal another picture for this industry, while cost of production of average single jersey regular ‘knitting’ varies between Taka 20-24 per kg the rate of knitting for the same fabric still fall within Taka 12-15 per kg. This is in turn making knitting industry an unviable proposition. While vertical composite industries are investing more in knitting to make sure seamless delivery and production of fabric. Account books of all the ‘knitting’ units show losses. Given this a scenario, reducing cost is important in ‘knitting units’. More importantly, price of ‘knitting’ job work must be increased.
Need for big ticket investments
In order to achieve the goal of $50 billion in RMG export by 2020, Bangladesh has to rely heavily on its knitting and knitwear industry. No wonder experts say the country requires more investment in ‘knitting’. In recent times, not many small cottage like knitting factories are built and it’s highly unlikely that further investments would pour into the industry. Most of the new machinery is bought by big companies to build vertical capacity reducing outsourcing in knitting. Investment should be done to reduce cost and to increase value addition. Knitting units should invest to increase productivity, efficiency, reduce cost and increasing automation.
IKEA, the world’s largest home furnishings retailer, has made a strategic decision to establish a Regional Distribution and Supply Chain Centre for ASEAN in Malaysia. The centre, to adopt the structure and technology of IKEA’s biggest Regional Distribution Centre in Germany, will be among the 10 largest Regional Distribution Centres of IKEA Group globally.
The home furnishings retailer headquartered in the Netherlands will invest RM908 million for the new centre that will manage an inventory of 9,500 stock keeping units (SKUs) worth RM6.6 billion annually. IKEA’s new 100,000 sq. mt. specialised warehouse will utilise its integrated ICT systems and automation to reduce the dependency on labour and significantly increase the efficiency and accuracy of its inventory management processes.
YB Dato’ Sri Mustapa Mohamed, minister of international trade and industry (MITI) stated that the project, which resulted from continuous engagements and facilitation by the Malaysian Investment Development Authority (MIDA), represents a significant milestone for both IKEA and Malaysia.
After hitting an over two-week high earlier in the session ICE cotton fell on Friday and has snapped six straight sessions of gains as concerns of crop damage due to Hurricane Harvey faded in top US producing regions. As Rogers Varner, President, Varner Brokerage in Cleveland, Mississippi says the track of Harvey was changed from going into the Delta to more or less southern and south western Texas and dissipating.
Cotton contracts for December settled down 1.68 cent, or 2.41 percent, at 68.15 cents per lb, snapping six straight sessions of gains. It traded within a range of 67.51 and 70 cents a lb. Still, at this time losses would appear to be minimal - at least in terms of overall US production, points out Louis Rose, Co-founder and Director of research and analytics at Rose Commodity.
Varner says the market is going lower over time. On ICE Futures US, speculators cut net long position in cotton by 6,516 contracts to 21,172 in week to August 22. Total futures market data showed total open interest fell 973 to 226,412 contracts in the previous session its volume rose by 11,341 to 28,120 lots. Certificated cotton stocks deliverable as of August 24 totaled 10,888 480-lb bales, down from 11,279 in the previous session.
A new project has jointly been launched by UNICEF and Bangladesh government called ‘Mothers@Work’ at Labour Ministry Auditorium in Dhaka. The project aims to support maternity rights of women workers and promote breastfeeding in the industrial sector, especially the ready-made garment sector.
The government further added this initiative comprises seven minimum standards including paid maternity leave; breastfeeding accommodations; provision of breastfeeding breaks and flexible working arrangements; and medical benefits and provision of day-care. These measures will address the challenges faced by young mothers who have to juggle between childcare and work.
UNICEF Bangladesh Representative Edouard Beigbeder pointed out most working women in the readymade garment industry are of reproductive age and many of them are mothers who are responsible for nurturing the next generation, yet the fear of losing their sole sources of income causes many women to return to work too soon, before they have even physically recovered and stopped breastfeeding.
Several labour union leaders, government officials, Directors and office-bearers of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) among others were present at the launch.
First, the sector was hit hard by Brexit and now it’s GST that has been haunting the textile & clothing (T&C) industry for some time. Meanwhile GSP Plus benefit accorded to Sri Lanka by the EU, which will facilitate duty, which includes free entry of specified textile products, including garments, in the EU is another challenge being faced by the industry. Sri Lanka is among the 12 countries to get this treatment. India does not get this allowance. Added to this, India’s proposed free trade agreement (FTA) with the EU is also in a fix, if recent reports are to go by. All these come at a time when Vietnam is to set to sign an FTA with the EU that takes effect from January 1, 2018, which would further challenge the business dynamics of the country.
T&C goods are exported to almost all countries of the globe. More than 175 countries are covered. The US is India’s top exports destination, which accounted for 20.5 per cent share of India’s total T&C exports. The others are: UAE (12.1 per cent), Ukraine (6.5 per cent), Bangladesh (5.7 per cent), China (5.4 per cent) and Germany (4.6 per cent).
Economies of scale
Bangladesh is already harnessing the benefit of duty free entry of its garments in the EU, being categorised as a least – developed country (LDC). It is also eligible to supply garments to India, duty free, under an FTA between the two signed a few years ago. Vietnam was a signatory to Trans Pacific Partnership Agreement (TPP). With President Donald Trump deciding to back out of TPP, the threat perception from Vietnam on India’s garment exports has diminished. But Vietnam’s proposed FTA with the EU has augmented severe competition to India. Unlike India, Vietnam has achieved economies of scale by setting up large size garment factories.
Competition has aggravated with Myanmar and Cambodia grabbing share of the pie. Myanmar is trying to increase its exports, which are worth about $1 billion. Ethiopia is getting duty-free benefits from both the US and the EU in terms of an agreement with the two countries. Wages in Ethiopia are as low as dollar 50 a month, helping it to achieve a competitive edge in the global market.
In such testing times, the good news is that China is gradually vacating the global market. China garment exports globally are currently valued at $173 bn to $174 bn. If India is able to grab a 10 per cent share, it would still be able to gain substantial export market.
Knitwear industry
knitwear exports from Tirupur are valued at about $1 billion in the first quarter of the 2017-18 fiscal, as informed by Sakthivel, Executive Secretary, Tirupur Exporters Association (TEA). About 99 per cent of India’s knitwear exports are from Triupur, which include T-shirts. There is no increase in exports in the above period due to slowing demand but the industry is awaiting orders and exports will pick up from August, Sakthivel says. The region’s total knitwear exports rose steadily from $5.56 bn in 2012-13 to $6.68 bn in 2013-14 to $7.62 bn in 2014-15 to $7.66 bn in 2015-16 and $8.27 bn in 2016-17. But the region lacks proper infrastructure facilities, particularly housing and R&D. The state government must address this issue, says Raja Shanmugam, President, TEA. India’s global share of exports is 3.86 per cent, of which Tirupur accounts for two per cent.
Meanwhile the duty draw back scheme will be continued till September. After that draw back rate will be pegged at 2 per cent. There will be no refund of excise and service tax now known as GST. The loss on this account is said to be around 5 per cent, according to exporters.
The price of Australian wool has bounced back after a 20-year lull. Wool farmers are benefiting from the best prices for their product in two decades. Prices are steady for fine wool and medium merino wool. One reason for the strong market is demand from China. Australia produced 3,41,000 tons of wool in the financial year ending June 2017, 75 per cent of which was exported to China.
The price of wool spiked 10 per cent in the first half of 2017 with strong demand and limited supply, prompting the ongoing strong market for the commodity. The shortfall in wool came as a result of low rainfall across Australia stunting wool growth.
Wool demand will continue to grow in the European Union and the US, the major international markets for imported woolen clothing. Demand for luxury woolen textiles is rising in major international markets especially China.
Prices are expected to peak next year before easing in real terms as wool production increases. And, by the end of 2021–22, prices are expected to still be relatively high, at around ten per cent above the 10-year average in real terms. Australia’s wool exports are forecast to rise by four per cent in 2017–18.
The global textile coatings market is expected to expand at a CAGR of 3.9 per cent between 2017 and 2025. Textile coatings are coatings that are used to coat various textiles, fabrics and yarns to protect them from heat, dust, soil, water, oil, grease etc. The coating shields the textiles and yarns from any sort of damage and helps keep them durable.
Rise in demand in protective clothing, building and construction, transport, medical, and industrial applications is driving the textile coatings market. Introduction of new innovative technologies or products is projected to open up new markets for textile coatings. Market players are striving to impart anti-bacterial and self-healing properties to textile coatings.
The Asia Pacific region held major share of the textile coatings market in 2016. The share of the product in the region is anticipated to rise at a faster CAGR between 2017 and 2025 due to the rising population, increasing demand for new housings, and the rising middle class income.
China holds a major share of the textile coatings market in Asia Pacific. The demand for textile coatings has been increasing in China and India, which is estimated to boost the market in the region. North America and Europe held share of a 28.6 per cent and 22.4 per cent respectively in 2016.
Madeira is a producer of top quality embroidery threads. The company has completed 10 years in India. It started by catering mainly to export companies, but then realized the need to tap domestic brands. Currently 80 per cent of the company’s business is from exporters while 20 per cent is from domestic brands. The target is to increase the local market share.
Progressing from introducing standard specialty products on a small scale to building the industry’s confidence in the product assortment, the company now is looking at ways of collaborating with machine makers so that both can benefit through the synergy of technology and innovative threads.
In future, Madeira is looking at technical applications like conductive threads. The company has seen consistent growth through innovation by looking to improve through knowledge sharing and introduction of new products. Madeira is looking not only to invent new threads but also suggest unique ways to use the threads in combination for different looks and effects. It tries to educate customers and make them understand the products and the different ways in which they can be used.
The company provides samples on what can be achieved with threads for its customers rather than giving shade cards. It participates in fashion exhibitions of Europe.
