FW
Corporate Human Rights Benchmark has ranked apparel companies in the world on human rights issues. Marks & Spencer and Adidas figure high followed close behind by H&M, Gap, and Nike. At the bottom of the pile are Kohl's, Macy's, Walmart, Under Armor and Fast Retailing.
Businesses were assessed on human rights policies, governance, processes, practices and transparency as well as how they respond to serious allegations. CHRB aims to make corporate human rights performance easier to see and simpler to understand for a wide range of audiences - inside and outside companies.
Leading companies are those that have recognised the moral imperative, business case, and commercial viability of taking action on human rights. There are a large proportion of companies that are performing poorly, with an average score per measurement theme of between 20 and 29 per cent. Thirteen out of the 30 apparel companies assessed fall in this category. These low performing companies spell dangers of human rights abuse of workers.
In the CHRB's apparel industry criteria, the highest scoring area was transparency, followed by policy, with companies scoring lowest in remedies and grievance mechanisms. The main finding is that many companies are yet to implement the UN guiding principles and other internationally recognised human rights and industry standards.
Bangladesh’s garment exports to non-traditional markets increased 3.4 per cent year-on-year in July-December of the current fiscal year. For Bangladesh, non-traditional markets are those other than the European Union, US and Canada. Of the non-traditional markets, Bangladesh’s garment exports to Japan registered the highest growth in the July-December period. Japan is the biggest export destination for Bangladesh in Asia. Apparel exports to Japan rose 6.55 per cent.
Japan wants to reduce its dependence on China. Right now more than 80 per cent of Japan’s apparel imports are from China. The country is looking at Bangladesh as an alternative. Other promising non-traditional markets for Bangladeshi garments are Russia, Australia and China.
Bangladesh began giving cash incentives on garment exports to emerging markets to offset the fallout from the global financial meltdown in 2007. These cash incentives on export to non-traditional markets drove growth over the years.
Subsequently, exports to India, China, Russia, Japan, South Africa, Turkey, Brazil, Chile, Mexico, South Korea, Malaysia, Australia and New Zealand started to rise. The cash incentive for apparel exporters was five per cent in 2009-10, four per cent in 2010-11 and two per cent in 2011-12. They still receive a two per cent incentive for exports to new destinations.
"Demand for Indian yarn in China has been growing substantially from last October. However, there continues to be pressure on prices. “In short-term, we expect the market to consolidate with an increase in business between suppliers of consistent quality and direct manufacturers in China. In long term, we are sure importers will increase their sourcing from India owing to better business culture adopted by leading Indian suppliers,” believes N Ravindranathan, Joint Director, Texprocil."
Demand for Indian yarn in China has been growing substantially from last October. However, there continues to be pressure on prices. “In short-term, we expect the market to consolidate with an increase in business between suppliers of consistent quality and direct manufacturers in China. In long term, we are sure importers will increase their sourcing from India owing to better business culture adopted by leading Indian suppliers,” believes N Ravindranathan, Joint Director, Texprocil.
Strategies to survive and succeed
Global yarn production is on the rise over the past three years, owing to various regional agreements and rules of origin restriction. However, in the present scenario of doubtful TPP and other regional agreements, it will be survival of the fittest in the entire textile sector in general and spinning sector in particular.
He explains, “Yarn import into China has declined only marginally over the last year compared to previous two years. Big change is India and Pakistan are losing market share to Vietnam in supplying to China due to tariff advantage, investment by Chinese companies in Vietnam. Apart from Bangladesh, some African and South American countries are emerging as major consumers of Indian yarn. India is already a top supplier of yarn to more than 25 countries in the world.”
He says, increase in import volumes from Vietnam and Indonesia owing to tariff advantage is not a major concern. Quality conscious yarn importers in China are keen to source more and more yarn from India. “If you see month on month import into China, it can be observed that there is a declining trend in import from Vietnam and market share of India is gradually increasing,” he avers.
Expectations from Yarn Expo
Indian exporters of yarn are continuously exploring marketing opportunities in textile conversion centres around the globe to overcome fluctuations in raw material prices and related disruption in export to China. China being the single largest importer of yarn, any fluctuation in import volumes in to China affects the entire value chain around the world. “We need to have a very reliable market research to monitor demand supply situation on real time basis,” he says.
“We, at Texprocil, facilitate expertise in international marketing for the advantage of Indian manufacturers and exporters. We undertake various studies to enhance the competitive strength of Indian manufacturers and primary market research in unexplored markets so as to balance loss of business in some countries,” points out N Ravindranathan.
Indian exhibitors are looking forward to meet Chinese customers at the Fair to get a feel of present market condition and business prospect over the next six months’ period. There are no expectations of spot booking at the Fair. It’s more a meeting point with international buyers.
"Joint show from FashionTime Designers opened the fourth day of the Fashion Week. Brand La Trevi chose flying cranes as the key theme of the collection - the birds scattered on the blue suit, on lapels of the outwear and dresses. The collection also featured cashmere coat in peach-color, scarlet suit and dark-blue A-silhouette dress with flared sleeves. The collection from the designer Olya Gerasimenko was sustained in delicate peach and powder shades. Sunrise color employed for the dress translates the delight and reveals femininity just like the tender light-green sundress on thin straps or cropped top with a basque. "
Joint show from FashionTime Designers opened the fourth day of the Fashion Week. Brand La Trevi chose flying cranes as the key theme of the collection - the birds scattered on the blue suit, on lapels of the outwear and dresses. The collection also featured cashmere coat in peach-color, scarlet suit and dark-blue A-silhouette dress with flared sleeves. The collection from the designer Olya Gerasimenko was sustained in delicate peach and powder shades. Sunrise color employed for the dress translates the delight and reveals femininity just like the tender light-green sundress on thin straps or cropped top with a basque. Family line was demonstrated by the brand Family Hope. The collection featured ethnic patterns hence golden embroideries and velvet fabrics. The combination of denim with scarlet lining and adornment in the shape of glittering scarlet crystals looked fresh and intriguing. Brand Alisia Fiori presented the collection for the little ones. It seemed that dresses for girls were inspired by the Victorian style - wristbands, shirtfronts, white frills and reserved collars, all referred to the best fashion traditions for the daughters of noble houses.
Graphic features were the signature of the evening gowns from BORODULIN`S brand. Designers Alexey and Anna Borodulina decided to cut off the spares, leave only a couple of dominant colors and make a stake on exclusive carved patterns. Ornaments, stately as the quirks of iron lattice, turn a female into an unapproachable and magnificent fortress. Classic mixture of black, red and white does not disturb from a variety of cuts and adornments. Perforation and lace, reserved jump-suits, unbelievably beautiful wraps and capes is hardly the complete list of all the discoveries in the fall-winter collection of the brand.
Designer NIKOLAY LEGENDA for the first time in history of the brand presented the male collection ISSUE 8 BEAUTIFULBOYS. Among others, the clothing line included coats, shirts with a waistband reminding of robes, kimonos, metal-coated bombers and light puff jackets in fluorescent colors. Despite the monochrome and reserved characteristics of the collection there were some bright accents - jackets with branded jacquard logotypes, fur sweatshirts and animal prints.
Collection from the brand Design Studio by Oksana Fedorova was distinguished by minimalism, monochrome color palette and straight lines that were underlined by the stripe being collection's principal print. Business-lady style could be traced in the flared pants with creases, cashmere pullovers and basic cotton shirts. Distinct silhouettes are built by the wide belts with massive buckles on the waist and baggy fine-cut sleeves.
PORTNOY BESO brand displayed extremely trendy collection. He tried to reveal the female's dark side, the side of the goddess-temptress. Bombers worn on a naked body, leggings glittering with silver, bustier dresses embroidered with beads preformed in bright colors, flared and keeping shape. Sequined mini-dresses came alongside with maxi looks that featured deep cuts unclothing the perfect legs of the models. Among the more romantic looks there were, for instance, silk and slim nightgown dresses.
Multiple layers and mixtures of the fabrics were employed by the brand AKA NANITA that combined embroidery by bugle beads, cellular lace, languid velvet and brocade. Skirts were worn atop the culottes while trouser suits performed in the color of melted ice-cream demonstrated brave side splits. Free waistline was sometimes on the waist like in the loose silk pants, sometimes it shifted to the hips - like in dresses and coats. Cranberry red, golden, black and silvery grey dominated on the catwalk.
Fashion show from designer Yury Pitenin and his St Petersburg brand Saint-Tokyo was some sort of experiment of texture and shape. Color gradation could be clearly traced in the clothing line: from black and white monochrome to green, olive green, terracotta, bright red and wine red. Designer placed a stake on details and asymmetric lines. The runway featured multi-layered dresses, baggy puff jackets, clamdiggers with pockets hinting at the sport chic, sequined flowing pants along with the geometric silhouettes, lace skirts and glossy fabrics.
Conceptual clothing from Lumiér Garson is all about the material expressions. In previous collections designer Jean Rudoff pondered about fashion and its tiring effect, about the impossibility to return to childhood, about the memories slipping away. Fall-winter collection embraces many different themes. It tells about the fashion labels that erase individuality. It is about anxiety and reality that is sensed as the Post-Apocalypse world. It is the history about surviving people and traces of furnace oil on the raincoat or paint on the shirt. It is about the girls in dresses that are half pink with ruffles and half straight and black. Around, there is an airless space, the purity is impossible, the innocence is lost. The best way out is deprivation and asceticism, the best way out is to get ready for the battle. Wear a mask, khaki jacket, take a tactic backpack and never forget who you are.
Rebellious spirit of an ambitious girl in the big city was caught by Keti Topuria and her brand KETIone. Oversize parkas and asymmetric sweatshirts with the neckline opening one shoulder highlighted the street style and supported sport crop-tops, bodies and hoodies. Usable garments were performed in the optimistic spring color palette - khaki, beige and bordo.
The presentation corner featured the project #ТОЛСТОВКАМЕЧТЫ (DREAMHOODY). The project offered visitors to design a comfortable and trendy individual hoody. One could choose the color, model, signs and prints. The most complicated part is to determine the design whereas to get a dream hoody is as simple as that, at least authors of the project think so.
"Indian exporters are hoping for a revival in cotton yarn exports as Chinese cotton auction started at a 25 per cent premium over the prevailing fibre rate in India. Despite robust demand from Bangladesh, overall cotton yarn exports remained under pressure during the current financial year due to sluggish demand from China. For the April–December 2016, India’s cotton yarn exports slumped by 12 per cent to 872.19 million kg from 987.21 million kg in the corresponding period last year."
Indian exporters are hoping for a revival in cotton yarn exports as Chinese cotton auction started at a 25 per cent premium over the prevailing fibre rate in India. Despite robust demand from Bangladesh, overall cotton yarn exports remained under pressure during the current financial year due to sluggish demand from China. For the April–December 2016, India’s cotton yarn exports slumped by 12 per cent to 872.19 million kg from 987.21 million kg in the corresponding period last year. Cotton yarn exports from India rose by a marginal 4.29 per cent at 1,307.11 million kg for the financial year 2015-16 from 1,253.33 million kg for the previous year.
The first day of Chinese auction quoted cotton prices between Rs 51,000 and Rs 56,000 a candy (356 kg) as against Rs 42,000 a candy currently prevailing in most local markets here. This means, Chinese cotton is costlier by a wide margin. Also, the cotton being auctioned in China is up to seven-year old. By nature, the quality of natural cotton starts deteriorating after two-three years as the fibre starts growing yellow. Still Chinese spinning mills are buying cotton for blending with fresh cotton. But, because of high prices, India tends to gain despite 3.5 per cent levy of duty by China on import from India.
Demand Trends
India is competing with Vietnam as China allows zero duty import from there. So, instead of cotton, Chinese textiles mills would move to purchase cotton yarn from India. As Siddhartha Rajagopal, Executive Director, The Cotton Textiles Export Promotion Council (Texprocil) says, “Cotton yarn exports will turn positive this year after a steep decline last year.”
Cotton yarn demand from domestic mills have also revived owing to prices rise by five to seven per cent in the last two-three weeks. Yarn price follows the trend of cotton price movement with a lag of 1-2 months. Today, cotton prices have risen sharply this calendar year with the benchmark Shankar 6 variety hitting to the level of Rs 12,188 a quintal, the highest in five months. Cotton (Shankar 6) price has jumped by over 10 per cent this calendar year. This level of cotton price was earlier seen on October 8, 2016. International price of cotton at 79 $-cents per pound is also all time high.
Yarn demand from overseas buyers remained slow since October price hike in cotton as importers held their orders in anticipation of price fall. But, now they believe that cotton prices are not going to come down. So, they are booking cotton and cotton yarn. The overall demand has revived in the last few weeks, opines Manikam Ramaswami, Chairman & MD, Loyal Textile Mills.
Recent Care Ratings report forecasted India’s cotton yarn output to decline by five to seven per cent to 3,936 million kg for the financial year 2016-17 riding on sluggish demand in past months with substitution taking place from manmade fibre (MMF) as well as distressed direct yarn exports due to lower demand from China. Yarn demand in other export markets will be healthy, the report said. After declining by 10 per cent in 2011-12 cotton yarn production increased by over 14 per cent y-o-y to 3,583 million kg in 2012-13. In 2013-14, production increased by about 10 per cent to 3,928 million kg. High cotton prices and easy availability of MMF at competitive rates led to slower growth of production of cotton yarn. Meanwhile, spinning mills have urged the government to extend 2 per cent tax benefit to yarn sector under Merchandise Exports from India Scheme (MEIS).
Standards relating to the treatment of birds throughout the supply chain will be merged. Responsible Down and Global Traceable Down Standards will be merged into one global standard. It’s hoped that combining and improving the best attributes from each of the current standards will result in a best practice standard. The two organizations active in this field are: Textile Exchange and NSF International.
Currently more than 80 brands have chosen to certify their down supply chain to either the Responsible Down Standard or the Global Traceable Down Standard. Together Textile Exchange and NSF International are committed to an open and transparent process to merge the standards by creating an international working group with representatives from brands, suppliers, animal welfare groups and other interested parties. These same stakeholders were involved in the development of the current standards.
US-based Textile Exchange founded in 2002, is a non-profit organisation that works to minimize the negative impacts on water, soil, air, animals, and humans created by the textile industry.
NSF, founded in 1944, develops standards and tests and certifies products to these standards for the water, food, health sciences and consumer goods industries to minimize adverse health effects and protect the environment.
Lenzing wants to explore investment opportunities in Indonesia. The Austrian company has been operating in Indonesia since 1978 through a subsidiary named South Pacific Viscose (SPV), which operates as a producer of staple fiber and sodium sulphate viscose. Customers are supplied with high-quality fibers for textile and nonwovens not only in the Asian region but in nearly all continents as part of the global market presence of the Lenzing group.
Asia is an important market for the Lenzing group. It’s where Lenzing generates more than half of its fiber revenues. More than half of the group’s fiber production capacity is located in Asia. Its largest plant is located in Indonesia. Indonesia has a significant textile industry, which represents one of the largest industrial sectors of the southeast Asian island state.
Lenzing, based in Austria, supplies the global textile and nonwoven industry with high quality, botanic cellulose fibers. Its portfolio ranges from dissolving wood pulp to standard and specialty cellulose fibers. Lenzing has a focus on profitable growth based on environmentally friendly specialty fibers. The company will expand its production capacities for specialty fibers. It will also expand and modernize its existing dissolving wood pulp production. The company produces 9,65,000 tons of fiber for the global textile and nonwoven markets.
Aditya Birla Group firm Grasim Industries has proposed to increase foreign portfolio investors’ investment limit to 45 per cent from 30 per cent to enhance its weightage in the indices floated by Morgan Stanley and other large global financial institutions. The move will attract fresh investment in the stock from large foreign pension funds which mimic the index for their investment strategy.
Current FPI investors in the company include Aberdeen Emerging Markets Fund, Aberdeen Global India Equity, New World Fund and Citibank besides a clutch of foreign depositories. Morgan Stanley Capital International created its first global index in 1968 and now manages about 1.60 lakh indices including country-specific and various sectors.
Aditya Birla Group is in the midst of reorganisation of the promoters’ holding in the group company. It is in the process of merging Aditya Birla Nuvo with Grasim Industries and spinning off the financial services into a listed entity.
Last October, the company split the face value of the equity shares to Rs 2 each from Rs 10 each as a pre-cursor to the proposed merger and listing of the financial services business. Post-restructuring, Grasim will have a consolidated annual turnover of Rs 61,500 crores with a 68 per cent contribution from the manufacturing sector which includes cement, textile, chemicals, insulator and solar and 32 per cent from financial services and telecom.
Christian Dior has emerged the world’s largest apparel company, according to Forbes. The second is Nike. In the third place is Inditex. Among all the top 2000 companies named by Forbes, there are 29 apparel companies that made it to the final list. After measuring their revenue, profit, assets and market value, Christian Dior, Nike and Inditex were crowned the top three spots in the global apparel market.
Christian Dior notched up sales worth $41.6 billion dollars in 2016 and a profit of $1.7 billion. Its assets were worth $68 billion. Through its over 40 per cent stake in luxury goods conglomerate LVMH, Christian Dior also benefits from the financial performance of respected product lines such as Dom Pérignon, De Beers, Veuve Clicquot, and Givenchy.
Nike is a US sportswear giant. It recorded more than $32 billion in sales and $3.8 billion in profit over the fiscal year ending 2016. The brand has an intensive celebrity athlete endorsement. Nike’s financial performance in the global market is expected to be even better over the next few years.
Inditex owns some of the world’s most popular high street fashion brands such as Zara, Pull & Bear, Bershka, Massimo Dutti etc. The company achieved revenues of $23 billion in 2016.
"Cotton and yarn prices have been upbeat in the last three months. China however hasn’t participated in this rally much – typically Yarn Expo is a time for bulk buying as both buyers and sellers meet physically. “For last couple of years, it’s been a buyers’ market, however I feel this Expo will see a shift towards sellers. This Expo has been keenly looked at by all to see Chinese buyers will embrace global yarn prices or not,” says Sanjay K Jain, MD, TT & Chairman NITRA."
Cotton and yarn prices have been upbeat in the last three months. China however hasn’t participated in this rally much – typically Yarn Expo is a time for bulk buying as both buyers and sellers meet physically. “For last couple of years, it’s been a buyers’ market, however I feel this Expo will see a shift towards sellers. This Expo has been keenly looked at by all to see Chinese buyers will embrace global yarn prices or not,” says Sanjay K Jain, MD, TT & Chairman NITRA. They are exhibiting the full range of cotton yarn from 20/1 to 60/1 in both organic and conventional cotton. Carded and combed yarn for both weaving and knitting are being offered.
Highlighting business dynamics in China, Jain says yarn imports have been negligible from January as China refused to accept higher prices – however shipments have been brisk till Mid Feb. Volatility always impacts business flow and this year is no exception. There is a lot of confusion in the minds of people and no one knows what position to take. Yarn exports to China which were high in October to December, have almost dried up now. The Expo will decide the shipment flow for the next two months. The changed dynamics have kept prices within control, if China accepts higher prices, then we can expect higher prices in the days to come.
Strategies to deal with current crisis
Trends in global yarn production and yarn stocks low margins and losses have kept yarn production low, while consumption is marginally up hence, yarn stock levels are low. China’s decreasing yarn import is causing exporters to search for new markets. In the wake of this, Bangladesh is always the next best market.
He says, Vietnam and Indonesia yarn export to China is increasing, on the back of no import duty, while India and Pakistan lose due to the levied import duties. To which, he says that it’s a common story for India everywhere. “We are losing to non-preferential tariffs vis-à-vis our competition. Government is also not giving MEIS to yarn despite us being at a disadvantage and having so much surplus yarn. The main focus should be the domestic demand from India due to increase in fabric and garment production in India.”
Jain says irrespective of TPP withdrawal, India will continue to be a big force in the global yarn trade for a long time to come. In times of crisis, a company should live by the day – world is too volatile and uncertain to make any predictions and strategy. It’s dangerous to carry open positions in today’s market – they could be some nasty surprises, concludes Jain.
