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Factory owners and workers in Cambodia's garment and footwear industry can’t agree on the minimum wage level. Owners say any rise in wages would devastate factories already struggling to make a profit after last increase. There is also a debate among labor unions about how high they want the minimum wage to rise. They have yet to arrive at an agreement.
The footwear and garment sector employs about seven lakh people and accounts for the lion’s share of the country’s exports. In November 2014 the minimum wage for garment and footwear workers was hiked by 28 per cent but faced strong resistance from employers. The industry meanwhile is on a downward trend. It shrank to four per cent in 2014 and has to be compared with the 35 per cent growth of only a few years ago. The 500 or so factories in Cambodia have reported reduced orders. Employers say this is because of the wage protests and strikes, which they claim has damaged buyer confidence. Cambodia’s minimum wage is now double that of competitor Bangladesh. So the sector’s ability to compete regionally is under strain.
Rapid wage hikes, frequent strikes, political instability, and negative media coverage have damaged the competitiveness of Cambodian factories.
The company outlined the challenges and opportunities Chinese apparel manufacturers are facing in the context of China’s Ministry of Industry and Information Technology’s 10-year strategic plan: ‘Made in China 2025’. This plan aims to help the Chinese economy develop its capacity for value-added manufacturing and smart industrial production.
Lectra perspective on ‘Made in China 2025’
Daniel Harari, Lectra CEO, and Andreas Kim, Managing Director of Lectra Greater China, shared their perspectives on what ‘Made in China 2025’ means for this rapidly evolving market and how technology-driven smart production can help Chinese companies speed up product development and add value to their design and manufacturing activities. This would help differentiate them from competitors in emerging markets by providing their customers with better service, more innovative style options and a superior-quality product.
“China’s apparel manufacturing industry has driven the country’s economy for the past three decades but the industry is now dealing with an economic slowdown, higher wages, bigger environmental awareness and more limited resources. Contenders in Cambodia, Vietnam and Bangladesh can compete on cost, while advanced economies such as the US, Germany and Japan are pulling ahead in terms of technology. If Chinese brands want to stay competitive, they need to distinguish themselves by focusing on enhanced value and services, brand quality and creativity,” said Daniel Harari.
Key focus areas for Chinese manufacturers
Lectra identified five key areas where Chinese apparel manufacturers could benefit from adopting best-in-class practices to meet Made in China 2025’s ambitious goals: innovation, differentiation, industrial excellence, collaboration and transformation. The company also presented ways in which technology and lean methodologies—key components of Lectra’s offer—can help with reaching these objectives.
Daniel Harari highlighted how seamless data sharing from design to production facilitates interactive, real-time collaboration. And how using Lectra smart technology with machine-embedded intelligence across the production chain can optimize efficiency, reduce waste and improve overall product quality. He also emphasized the crucial role of effective change management in ensuring a successful transition to smart production.
“There are still variations in quality standards and efficiency among Chinese manufacturers, but the ‘Made in China 2025’ plan has put strong guidelines in place to solve these issues. China is ready to move on from its role as ‘the world’s factory’ and become an innovative global leader in apparel manufacturing. By investing in innovation and smart technology, Chinese apparel manufacturers can shift their focus to operational efficiency and product quality, reinventing their offer and ultimately turning ‘Made in China’ into a real mark of excellence,” concluded Andreas Kim.
COTTON USA delivered US cotton sourcing assistance to major apparel industry players at the Texworld and Première Vision trade shows in Paris, while continuing to display its ‘Love My Cotton’ global advertising campaign. Supima and COTTON USA together exhibited at Texworld and it jointly exhibited with Cotton Incorporated at Première Vision. For COTTON USA, this was a venue to promote US cotton and its global marketing and licensing programme as the shows represented the largest combined exhibition of the world’s apparel manufacturers.
COTTON USA had four companies from different countries expressing interest in becoming licensees. Besides, 24 COTTON USA-licensed mills from China, Hong Kong, Indonesia, Korea, Pakistan, Thailand and Turkey displayed their products at the exhibition.
Information on the Cotton LEADS programme and global developments in the cotton and apparel sectors was supplied at the booth apart from garnering support and COTTON USA licensing. COTTON USA helped buyers and manufacturers looking for cotton garments and cotton yarn suppliers to identify new business contacts, where various segments of the cotton textile supply chain met at the booths.
The booths were visited by international brands and retailers, which included, Gerry Weber and Original Marines and Marks and Spencer. USDA FAS Counsellor David Salmon and FAS Agricultural Marketing Assistant Laurent Journo also visited, which was an honour for COTTON USA and Supima. His Excellency M Shahidul Islam (The Ambassador of Bangladesh in France) was also welcomed by COTTON USA. A meeting with His Excellency Ghalib Iqbal (The Ambassador of Pakistan in France) was also held.
Bangladesh is still seen a good sourcing destination by German retail giant Lidl, as it is set to increase its garment purchase from there by 20 per cent this year. The company purchased 251 million apparel pieces from Bangladesh last year. Lidl purchases garments worth $700-$800 million from Bangladesh per year. The country is an important source for apparel items for Lidl and they purchase a substantial volume from there. Other sourcing countries have become expensive due to higher costs of production and a shortage of workers there.
Thus, Lidl will increase their purchase of garments from Bangladesh in the near future. The company has long-term plans for Bangladesh, as the country is on the road to improvement in terms of compliance and diversification of fashion and technology uses in garment production.
Lidl prefers purchasing garments from factories that invest in water saving and green technologies. The company is set to start a water-saving technology or WST next month in the factories from where it purchases garment items in Bangladesh. It will pay higher prices to buy the garment items, if any company invests in WST. Initially, 30 factories will have WST, those that are capable of adopting the new technology. Gradually, it will be adopted in other factories too. Lidl aims to reduce water use by 50 per cent.
Australia’s wool market dipped a little last week, it produced only 33,000 bales. On the second selling day though, it improved and prices began moving upwards again. The market registered a small loss of 6 cents as measured by the EMI, overall. Buyers supported the best superfine wool, which was found in a designated superfine sale in Sydney. The Merino fleece types were generally only down 10 cents for the week.
The overall market tone affected the crossbred wools and dipped, then recovered, while a small supply of carding wools saw prices increase marginally. Prices in USD terms were 28 cents lower because of lower Australian dollar, and prices for European customers closed 26 cents lower over the course of the week. Overseas buyers generally decided to wait and watch because of the falling prices and hesitated to purchase large quantities.
Purchasing managers this year prefer to continue to purchase smaller quantities on a hand-to-mouth basis. For them, the risk is lower, though the cost is higher. This attitude does not allow for the regular forward planning for shipment of greasy wool from country of origin, combing of the wooltop and then further shipment to the spinning factory. Eventually, raw material would need to be secured, or contract prices for delivery at some point in the future by the companies planning price offerings for final garments in the 2016-17 season.
There’s a huge risk given the inherent volatility of the wool market in allowing the raw material price to fluctuate on the open market when the delivery price of the finished product has been contracted. Thus, the market should see the forward buying activity go up when the larger orders are placed in the next couple of months.
Apparel retailer American Apparel has received a cautionary letter from the New York Stock Exchange. The letter mentioned it was not adhering to compliance guidelines because “it has sustained losses which are so substantial in relation to its overall operations or its existing financial resources. that it appears questionable, in the opinion of the exchange, as to whether the company will be able to continue operations and/or meet its obligations as they mature.”
American Apparel has been asked to come into compliance by November 15, 2015. If their plan is approved, the exchange will continue monitoring the company and review its progress on executing the plan, the filing by American Apparel said. If the company doesn’t submit a plan or if the exchange deems the plan unacceptable, it will start delisting process.
In a securities filing, the company said it was reviewing the exchange’s issues and has started preparing a plan on how to return to compliance. However, it added, there is no assurance that it will be able to submit a plan that addresses all problems and concerns of the stock exchange.
American Apparel, for its second quarter ended June 30, 2015 reported that net sales decreased 17.2 percent to $134.4 million from $162.4 million for the same period in 2014. Excluding the year over year impact from foreign exchange and stores closed in 2014, net sales decreased 14 percent from the same period in 2014.
www.americanapparel.net
Commerce and Industries Minister Govindas Konthoujam distributed cheques under the North East Region Textiles Promotion Scheme (NERTPS) among 110 Self Help Groups (SHG) of 11 Handloom clusters from Bishnupur district.
Konthoujam in his speech said that such useful schemes should be properly utilised by weavers and they should work with sincerity and dedication. “To receive the second instalment, weavers must show interest and provide their best efforts to bring out the best quality products and take part in the upcoming training sessions so that the textiles ministry grants weaver with the remaining payment,” he added.
He explained that the present schemes will be strictly monitored by the ministry of textiles through the Geographical Information System (GIS). With GIS, the ministry will be able to monitor all activities of the weavers ranging from training to weaving online. The broad objective of the NERTPS is to develop and modernise the textile sector in the North East Region by providing government support in terms of raw material, seed banks, machinery, common facility centres, skill development, design and marketing support.
www.texmin.nic.in
Traditional weaving methods are thriving in Uzbekistan. The Fergana valley in Uzbekistan manufactures and exports silk. Uzbek traditional embroidery techniques are in trend as fashion and historical costumes.
One of the fabrics is embroidered with silk threads. It’s called suzani. Another is ikat woven with hand-spun silk yarn. Ikat from Uzbekistan uses a resist dye process whereby the warp yarns (vertical threads) are bound and dyed by hand before being woven with weft yarns (horizontal threads). Printed ikat designs are often worn by Uzbeks themselves, who can’t afford the premium quality imparted by pure silk fabrics.
Gossamer threads unravelled from the cocoon of the silk worm are spun into the finest raw silk yarn, and bundles of silk threads are hand painted and dyed using the relief technique before being woven on hand looms.
Fashion brands have consistently sought Uzbekistan textiles. While both suzani and ikat being important cultural and household items in Uzbekistan, the current trend for sustainability, craft and ethical products has helped spark a revival of Uzbek textiles in international fashion.
Ikat designs are being reinterpreted for their contemporary customers — bloggers, models, globetrotters. The tunics and harem pants reflect the nomadic, caravan lifestyle of bygone Silk Road traders.
With the promise of Trans-Pacific Partnership (TPP), Vietnam is seeing a wave of investment from foreign textile and garment manufacturers keen to cash in on the tax benefits. Vietnam’s clothing makers are in a race to find the right suppliers as its own textile mills only produce a fifth of the country’s needs today.
The TPP being negotiated by 12 countries, including the US, promises major tax cuts for Vietnam’s garment exports, but only if they use fabric made locally or in other TPP countries, which excludes China. However, the raw material for more than half of the garments made in Vietnam comes from China as sourcing locally is tough and expensive. Even some zippers or some special raw materials are very difficult to find.
For years, Vietnam has focused on far less capital intensive part of the global garment business: cutting and sewing the final products for export. Value addition to the products is low. Businesses that do not have the capital to invest are stuck waiting for large domestic or international producers to build up their local fabric supply. So, for Vietnam’s thousands of small and medium-sized garment makers, the benefits of TPP are not too obvious.
About a 100 handloom weavers in Tamil Nadu will be offered training for 50 days under the Integrated Skill Development Scheme (ISDS). During training the weavers would also be given a daily stipend of Rs 150. The training imparted to weavers in the centre would help them develop new designs and come out with diversified products with improved quality to meet changing market needs and enhance their earnings.
In the first batch, 20 weavers will be trained and all 100 weavers will be covered in the next 10 months. The training centre is equipped with all necessary infrastructure facilities, including looms, motorised jacquard boxes, computerised design machines, computerised card punching machines, and motorised winding machines to help weavers upgrade their skills and get updated with emerging technologies.
ISDS was launched to address the manpower needs of textile and related segments including handicrafts, handlooms, sericulture, jute and technical textiles and develop a cohesive and integrated framework of training based on industry needs.
The scheme envisages a substantial skill program, which aims to develop around 30 lakh persons in the next five years. Skill development and entrepreneurship programs for women are a specific focus of the scheme. It also seeks to connect entrepreneurs to mentors, incubators and credit markets, foster innovation and entrepreneurial culture, improve ease of doing business and promote a focus on social entrepreneurship.
