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Bangladesh’s garment exports to Germany will continue to grow in future due to the high quality of products and competitive prices, German traders feel. Germany is the second largest export destination for Bangladeshi apparel after the US. As a member of the EU, Germany will continue its duty privilege for Bangladesh, said Manfred Junkert, DGM of the Confederation of the German Textile and Fashion Industry at a press conference on the sidelines of Heimtextil fair in Frankfurt recently.
Garment exports from Bangladesh to Germany have been increasing over the years. The Asian country exported garments worth $4.65 billion to Germany in 2015-16, $4.33 billion in 2014-15 and $4.37 billion in 2013-14, according to Export Promotion Bureau (EPB).
Talking about Brexit, Junkert said it was a serious issue for them as the UK is a big trading partner of Germany. If the UK leaves us (EU), there is a possibility of serious consequences for Germany, Junkert observed. The UK is the third largest export destination for Bangladesh after the US and Germany, with Bangladesh shipping apparel worth more than $3 billion to the UK a year. As a trade bloc, the EU is the largest garment export destination for Bangladesh. It offers a zero-duty benefit since 1971 under its Everything but Arm scheme. Bangladesh exported garments worth $17.15 billion to the EU in fiscal 2015-16, $15.36 billion in 2014-15 and $14.75 billion in 2013-14, according to EPB.
On the Transatlantic Trade and Investment Partnership or TTIP, Junkert said negotiations have stalled now with the change in power in the US. Usually, signing a free trade agreement takes six to seven years. Germany will have to wait more than this time to sign the TTIP. It now depends on the US government, Junkert maintained.
Concerns over future fine wool supplies have pushed the Australian wool market to its highest level since 2011. There have been sharp rises over the three days as the market continued with the rally in December. Finer microns were reasonably steady but 30-microns and coarser fell as much as 30 cents. The finer microns enjoyed the most support and extended their premiums over the broader microns which had less extreme rises. Buyers scrambled for quantity for most of the week, pushing lower spec types along with the better types.
Merino skirtings followed fleece types higher with the superfine types most affected. In line with pre-Christmas trends, the crossbred market was again fairly lackluster compared to the merino catalogue. All buying segments were active, with indent, forward sellers, processors and even some speculators working hard to secure wool. Chinese, European and Indian interests were all active in the market.
Even though 51,300 bales were up for sale, this week’s offering included one of the smallest percentages of merino wool for the selling season and there is concern over the amount of finer wool coming onto the market in future. The good season experienced across Australia is becoming evident at sales, with higher vegetable matter content wool being offered.
More than 20 leading international apparel brands have written to Bangladeshi Prime Minister Sheikh Hasina to express concern about the recent labour unrest in Ashulia and particularly the detention of union leaders. Those among the signatories are H&M, C&A, Esprit, Gapm Next, VF Corp, Primark, Inditex and Li&Fung. The letter urges the Bangladeshi government to adopt a wage board for the garment sector and suggests that the local increased cost of living is contributing to unrest among garment workers.
The letter requests the government to take steps to ensure the protection of workers' rights and pays special attention to the representatives of the workers who were arrested. The letter makes clear that the brands do not support any illegal strikes or violent protests but recognise that the root cause of unrest must be addressed through social dialogue; improving the dialogue on the labour market.
In what could be deemed a thinly veiled threat, the letter goes on to suggest that unrest among garment workers could cause damage to the reputation of Bangladesh as a reliable sourcing market. Explaining why it signed the letter, H&M said in a note that it was deeply concerned by the recent unrest in the Bangladeshi textile industry. For H&M group it is important that its products are manufactured under good working conditions, in all production countries.
The factories have re-opened and production has resumed. Factory management, trade union representatives and trade association Bangladesh Garment Manufacturers and Exporters Association (BGMEA) are now negotiating the terms for the terminated workers. H&M’s staff in Dhaka is monitoring the situation closely and are in close contact with the company’s suppliers, industry associations, trade unions and other buyers.
Avantex will take place in France from February 6 to 9, 2017. This is a trade fair dedicated to high-tech fabrics for fashion and research in the field, highlighting intelligent, connected fabrics, materials which combine nanotechnology and cosmetics, and surprising finishes and coatings.
The aim is to provide a pioneering offer, starting with raw material and continuing through to sales, for each segment. It’s a source for innovative products throughout the value chain. Start-ups will present their innovations and fashion solutions. Coloreel will exhibit its instantaneous dyeing machine for embroidery and Euveka, a robotic mannequin especially for pattern-making.
Wolford from Austria will exhibit its latest biodegradable designs. In addition, four European fashion schools with high-tech fashion origins will present their perspective on the future of the clothing and materials industries. Catwalk shows will showcase innovations and set them in motion.
Avantex has a vision of uniting high-tech companies and fashion product designers and managers and presenting a wealth of new developments and insights for the future of fashion. French firms will exhibit latest innovations in technical textiles, which will serve as basis for a fashion collection dreamed up by the show’s art directors. Avantex Paris belongs to the group of related trade shows organised by Messe Frankfurt France.
The textile industry in Pakistan has got a revival package. Results are expected in six months and to give a boost to the country’s dwindling exports. Import of cotton and man-made fiber will be exempt from duty and sales tax. Duty drawbacks on exports include four per cent on yarns/grey fabric, five per cent on processed fabrics, six per cent on home textiles/made-ups and seven per cent on garments, seven per cent for sports goods, leather and footwear and five per cent for carpets and tents.
A network of roads, highways and motorways will be laid, integrating different regions of the country. Interest rates have been lowered and investors are being facilitated. The zero-rated facility has been given to five export sectors in the budget.
Exporters are given incentives and will be liable to increase exports by five per cent from January to June 2017 and then by a further 10 per cent in financial year 2017-18. Dozens of power plants are being installed under the China Pakistan Economic Corridor. The objective is to ensure availability of cheaper electricity on a sustainable basis. The plan is that 10,000 megawatts of electricity would be added to the system by next year and 30,000 megawatts within the next few years.
With the end of economic sanctions and an investment boom, abundance of low-cost labor, Myanmar's emerging manufacturing industries is set for major growth. In a gap of less than two years, Japanese clothing retailer Honeys has increased the number of production lines at its second factory in Myanmar from five to 34.
The workforce at Yangon plant that produces shirts and jackets destined for Japan has also increased to around 2,600 from about 300 since it started operating in spring of 2015. Moreover, skill levels within the workforce have risen markedly.
In the early 2000s, Honeys began outsourcing production to China on a large scale. As labour costs began to rise, the company decided to shift part of its production to Myanmar where wages were less than one quarter of the level than that in China.
In 2012, Honeys became the first Japanese manufacturer to start production in Myanmar. It now operates two plants in the country churning out around 18,000 pieces of clothing a day. This accounts for 20-30 per cent of the company's sales in its home market. The company is now considering the construction of a third plant in Myanmar.
The Trans-Pacific Partnership is finally moving ahead. The new deal, to be signed in March in Chile will be called TPP-11. The move by the remaining 11 members of the TPP agreement indicates their commitment to free and fair trade. The agreement opens up the markets of the 11 countries to duty-free, quota-free trading within the bloc. The members of TPP now include: Australia, Brunie, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
The 11 countries in the deal represent 13.5 per cent of global gross domestic product - including the US would bring that total to 38 per cent. The deal has the potential to expand members which could include Indonesia, the Philippines, South Korea, Taiwan, Thailand and the UK in future negotiations. The US President, reportedly stated that US would consider joining the group if the terms of the deal are more favourable to its economy. The Japanese PM is of the view that the deal would spur growth and reform in Japan.
Speaking at the World Economic Forum in Davos, Switzerland, Canada's Prime Minister Justin Trudeau called the agreement the ‘right deal’. The Australian Prime Minister Malcolm Turnbull said the new agreement would leave the door open for eventual US participation. But, will the new TPP-11 boost the textile and apparel business? TPP-11 appears a damp squib for Vietnamese as none of the other countries in the block have any desire for Vietnamese apparel as much as the US. Having said this, Vietnam's textile and apparel industry will still get a small boost from the deal. Australia, Canada, Japan, New Zealand and Singapore depend largely on imported apparel mainly from China. Vietnam's duty-free access will give it an edge over its competitors in these markets.
The Indian government is focusing on its textiles and plastics industries that are already substantial contributors to both the country’s economy and to the world. Details of the performance of these industries and future prospects are some of this week’s featured stories on BizVibe, a B2B marketpalce that allows users to connect with over seven million companies around the globe.
The Indian textile and garment industry contributes almost 5 per cent to the $1.8 trillion Indian economy, and makes up 13 per cent of Indian exports. India is the second-largest exporter of textile and garment goods with a global trade share of approximately 5 per cent.
India’s technical textile industry is one of the fastest-growing sectors in the country that is expected to grow by over 20 per cent annually to reach $30 billion by 2020. Demand for technical textile products for medical, industrial, agricultural, and other uses is booming and India is one of the biggest technical textile markets in the world.
However, technical textiles in India are import-intensive products, which has led the Indian government to push new policies and strategies to shift industrial priorities. It has launched a scheme for promoting the usage of agro textiles in the Northeast region with an investment of over Rs 55 crores, while another scheme for promoting the sage of geotextiles with a financial outlay of Rs 427 crores is in the pipeline.
The European apparel and textile confederation, Euratex, has highlighted the need for European Commission to tackle trade barriers in China. It has asked the Commission to address sector-specific topics such as overcapacities in the man-made fibres and yarns production. The textile confederation has reiterated that China does not meet the five criteria required to qualify as a market economy.
Euratex has welcomed the reflection process carried out by the European Commission in the last few months to address the needs of the European industry and to tackle unfair trade practices. It has released its position paper on the Commission’s proposal to change anti-dumping and anti-subsidy legislation.
European Commissioner for Trade Cecilia Malmström in January 2016, Euratex has reiterated that China does not meet the five criteria required to qualify as a market economy, in its position paper. However, it adds that it is aware that the Commission has made efforts to tackle overcapacities and to strive for preservation of European jobs by proposing to change the anti-dumping and anti-subsidy legislation.
A research by New Danish has estimated that industry-wide environmental and social compliance in Bangladeshi readymade garment (RMG) industry would cost $2-3 billion. This work was undertaken as a part of the Bangladesh Priorities project in collaboration with Copenhagen Consensus Center and BRAC Research and Evaluation Department.
Carried out by a team of Bangladeshi economists led by Wasel Bin Shadat, Lecturer at the University of Manchester. They examined investments that will improve Bangladesh's RMG sector. Ensuring that companies comply with safety regulations is important not only for worker safety, but also to increase opportunities to export. The researchers claimed carrying out such investments could boost garment exports by around 10 per cent and help ensure the country reaches its export target of $50 bn. Better compliance across the RMG industry would require initial investments to improve physical infrastructure and fire protection, as well as funding for operations costs to maintain high levels of compliance from year-to-year, the report says.
The research evaluated current plans to create a new RMG Palli (Village) suited for garment production. The area would be an industrial park, with significant infrastructure for factories. The paper adds that a separate RMG zone would allow factories to form a cluster in a single geographic location which would reduce production costs, allow for simple transfer of knowledge and technologies, make pollution mitigation easier, and promote other positive spill-over effects. A Chinese firm has already performed feasibility and environmental studies for the 530-acre palli zone for Bangladesh that would include utility services, medical facilities, pollution treatment plants, daycare centres, and other similar infrastructure. The zone would employ an estimated 300,000 people at more than 250 factories. The research analysis estimates that a RMG zone in Palli would lead to additional 142 factories over the next three years, when compared to the long-run growth of the industry.
