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Lectra, the world leader in integrated technology solutions dedicated to industries using fabrics, leather, technical textiles and composite materials, has appointed Nathalie Brunel, Vice-President Sales, Fashion & Apparel. Based at Lectra’s headquarter’s in Paris, Nathalie reports to Edouard Macquin, Chief Sales Officer, Lectra and a member of the executive committee.
Brunel’s role is to support Lectra’s subsidiaries as they conduct the Group’s strategic roadmap through the deployment of an offer—integrating the PLM and the cutting room of the future—which is rooted in customer experience. Nathalie will notably work with six countries: United States, China, Germany, United Kingdom, France and Italy.
Edouard Macquin notes, the fashion and apparel industry, a historic market for Lectra, is the pillar of international presence. Customers’ expect a high level of expertise and advice to meet the challenges they face due to digitalisation of their professions. Brunel exults, the fashion and apparel ecosystem is clearly entering the digital era. He wants to bring Lectra’s value proposition to customers, facilitating their adoption of Industry 4.0 principles. It is crucial to meet the needs of companies facing a complex and fragmented market that is generating both local, and global, pressures.
Lectra is the world leader in integrated technology solutions (software, automated cutting equipment, and associated services) specifically designed for industries using fabrics, leather, technical textiles, and composite materials to manufacture their products. It serves major world markets: fashion and apparel, automotive, and furniture as well as a broad array of other industries.
The world’s biggest fashion retailer Inditex has reported increased revenues and profits amid its Q3 results. In the nine months up to October 31 the Zara owner posted net sales of £15.83 billion, up by 10 per cent as against £12.96 billion a year ago. Profits also jumped nine per cent to £9.08 billion, while gross margins touched 57.4 per cent. Meanwhile, EBIT grew six per cent to £2.64 billion.
This was driven largely by continued international expansion for the retail giant that opening 212 stores, including 60 Zara stores, 13 Pull and Bear stores and 30 Stradivarius stores, bringing the total to 7,504 spanning 52 markets.
Despite the cotton pink bollworm attack in many states, cotton output in India, the world’s biggest grower, may increase to a three-year high due to an increase in acreage of the crop this year. Maharashtra Textile Commissioner Kavita Gupta, who heads the state-run Cotton Advisory Board disclosed production is expected to rise to 37.7 million bales of 170 kg each in 2017-18 as against 34.5 million bales a year earlier, after the crop area under cultivation rose from a seven-year low. That would mean the biggest crop since 2014-15 when the harvest was 38.6 million bales, figures from the board record.
A bigger Indian crop and low domestic prices will likely enhance exports from the South Asian country amid greater demand from Pakistan, Gupta said. Shipments to Pakistan are seen rising to 1.8 million bales in 2017-18 from 7,90,000 bales a year earlier, she said. There have been some cases of pest attacks in Maharashtra, Karnataka, Telangana, Madhya Pradesh and Gujarat, Gupta said. Maharashtra has been the worst affected, with pink bollworms in some areas reducing output by about 15 per cent, she said.
Total cotton exports from India may rise by 16 per cent to 6.7 million bales in 2017-18 from a year earlier, while imports will probably drop by 45 per cent to 1.7 million bales, Gupta noted. The area under cotton this year climbed to 12.2 million hectares (30.2 million acres), a three-year high, from 10.85 million hectares, she added.
Apparel conglomerate VF Corporation, the parent company of brands like the North Face, Lee and Timberland, has acquired New Zealand-based Icebreaker Holdings. The purchase valued at over $100 million is notable because VF also owns another wool giant Smartwool. Post the news of acquisition, suggest Ibex, a smaller, high-end merino brand, has retrenched about half the staff at its main office in Vermont and was headed for bankruptcy (last week, Ibex announced plans to shut down).
Ibex CEO Ted Manning wrote in statement, “As much as Ibex has succeeded and created opportunities for itself, it has also dealt with the headwinds of seasonal volatility, shifts in the retail landscape and an ever-changing consumer.” While Icebreaker and Ibex may be poles apart, they are indicative of an industry facing a steady attrition of smaller, independent brands.
Experts say it’s a difficult time to be a small brand or a small retailer. The pressures have never been greater. The say the industry is going in the direction where a lot of more niche brands are being snapped up by larger companies. Icebreaker will be getting a bit more capital and access to distribution with the takeover. Consumers will benefit from cheaper Icebreaker goods. Earlier, as both were competitors, Smartwool and Icebreaker will now reposition themselves
Grasim Industries (Grasim) has entered an agreement with Century Textiles (CTIL) to manage and operate the Viscose Filament Yarn (VFY) business of Century Textiles for 15 years. The agreement to be completed in two months, will give Grasim the right to use the relevant assets of Century Textiles, however, ownership of assets will remain with CTIL. As per the agreement, Grasim would pay Rs 600 crore royalty and a refundable security deposit of Rs 200 crore, through internal accruals. CTIL’s VFY plant is strategically located at Shahad, Thane, close to customers mainly in Surat and JNPT port for raw material import/export. CTIL’s plant capacity is 25,000 tonnes (19,000 tons in VFY and 6,000 tons in Rayon Tyre Yarn). CTILs revenue from VFY business is Rs 962 crores with EBITDA margin of 19.3 per cent. Post the transaction, the combined business would have a total capacity of 46,300 ton and revenue of Rs 1,701 crore with EBITDA margin of 23 per cent.
The transaction, which would give Grasim access to capex light capacity expansion, new product (Rayon tyre yarn) and a wider base of customer — is estimated to be value accretive, generating net profit right from start of the arrangement. The transaction would continue to result in value creation in long term given the synergies related to operations, brand name and supply chain. The estimated cost of Greenfield project of this size and infrastructure is Rs 2,000 crore and the gestation period is of three years. Segment wise, outlook remains bright for: VSF, given the higher realisations and strong customer connect through Liva fabric.
Cotton textile exporters have welcomed the government’s decision to raise the Merchandise Exports from India Scheme (MEIS) by 2 per cent on labour intensive sectors. Ujwal Lahoti, Chairman of The Cotton Textiles Export Promotion Council (Texprocil) says the midterm review of foreign trade is progressive, growth oriented. The government has recognised the urgent need to address the challenges being faced by the exporters on account of the roll out of the goods and services tax (GST) regime by focusing on reducing procedural burden.
Earlier the MEIS rates for garments and made ups were increased from 2 per cent to 4 per cent. With current increase, the MEIS has gone upto 6 per cent. However, cotton textile exporters urged the government to include cotton yarn under MEIS and extend 3 per cent Interest Equalisation Scheme to merchant exporters. Exporters have also urged the government to cover fabrics under rebate of state levies (RoSL) and increase MEIS rates for fabrics to allow domestic procurements against Export Promotion Capital Goods (EPCG) Authorizations and Advance Authorisations without payment of GST for export production.
Meanwhile, the policy has disappointed manmade fibre segment. Srinarain Aggarwal, Chairman of The Synthetic and Rayon Textiles Export Promotion Council (SRTEPC) stated although the mid-term review had addressed a host of the issues from GST to ‘Ease of Trading’ across borders, it has grossly overlooked the manmade fibre segment of the country that has been reeling under GST with asymmetrical input taxes and inverted duty structure, besides facing fierce competition in overseas markets.
SRTEPC had sent various representations to the Ministry of Textiles and Ministry of Commerce and Industry. Recently, it had sent a list of 167 MMF items in these categories to the Ministry of Commerce and Industry requesting to increase the MEIS rates.
The Clothing Manufacturers' Association of India (CMAI) has hailed the mid-term review of the Foreign Trade Policy announced by the government on the recently as a progressive package to address several issues relating to policy and procedures. In a statement Rahul Mehta, President, CMAI said garment exports from the country have been declining steeply for several months and there are no sign of an early revival of overseas demand. In such a situation, the measures included in the review for facilitating exports and improving ease of doing business will be of great help.
Referring to the extension of the period for using scrips from 18 months to 24 months, he stated coupled with zero rating of GST on the sale of scrips, exporters will now be able to effectively and completely use the scrips. He also welcomed the trade facilitating measures of doing away with testing of samples for drawback purpose and extending the 24x7 clearance to a large number of seaports and airports. Introduction of e-sealing of consignments for exports is another measure that will facilitate exports, he added.
Mehta pointed out that garment exporters often faced problems arising from lack of coordination between commerce and finance departments, especially between DGFT and customs. The National Trade Facilitation Committee headed by the cabinet secretary envisaged the review will go a long way in improving coordination among various government departments and addressing grievances of exporters more effectively and promptly.
The focus of the committee on improving transparency, simplifying procedures and augmenting infrastructure will be of great help to exporters. Mehta welcomed the focus on MSMEs and labour intensive sectors and pointed out the garment sector was highly labour intensive and substantially in the SME sector. While thanking the commerce and industry minister, Suresh Prabhu for the positive measures in the mid-term review, Mehta requested the government to ensure timely refund of GST and drawback to exporters, since delays in these areas have been locking up working capital of exporters.
The European Union ambassador to Cambodia assured union officials that no sanctions had been applied on the garment sector in Cambodia. Former opposition leader Sam Rainsy and several civil society groups have called for sanctions on the garment industry following the dissolution of the opposition CNRP last month. In a meeting with Som Aun, President of the National Union Alliance Chamber of Cambodia, EU ambassador George Edgar said no sanctions had been taken. Aun announced, it was our priority to tell Edgar that the garment and footwear industry were vital to a lot of workers and their families and helped improve working conditions across the country.
He requested Edgar to convince the EU not to involve the in the country’s political issues and asked garment workers to continue working as normal. Edgar told Aun he understood the situation and would bring the Unions’ requests and concerns to his colleagues in Brussels.
Earlier this month, the Garment Manufacturers Association in Cambodia (GMAC) called on international buyers to continue ordering clothes and textile products made in the country over worries that the US and the EU could delay preferential treatment for Cambodian exports, however, three Union leaders filed petitions to EU and US ambassadors requesting that orders should continue. Fears abound that the US may remove preferential treatment for Cambodian exports offered under its GSP, while the EU could do the same for privileges provided through its Everything But Arms initiative.
The Ethiopian Textile Industry Development Institute has said during the last three months, Ethiopia earned $31.2 million from the export of textiles and garments. The Institute also noted the foreign currency generated from the textile segment has been steadily growing. Institute Communication Directorate Director Bantihun Gessesse has reported textile products have been exported to Germany, Italy, China and United States through AGOA.
The growing might of textile industries is triggering expansion of cotton farming by public, private sector and small scale farmers. Currently, cotton is cultivated in 42,000 hectares. Gessesse informs the Institute is providing training to cotton growers to maintain the quality of cotton.
Prevailing peace and stability, availability of abundant cheap labour, plenty of cheap energy from hydro power and flourishing industrial parks all over the country is attracting foreign investment in the sector. In addition, the government is encouraging foreign investors through the provision of various incentives including tax holidays, tax free capital goods importation, custom services provision on the spot and easily access to financial credit. World’s leading US textile company, HDM located its factory in Hawassa Industrial Park and has so far created 10,000 jobs.
India’s forecast for 2017/18 ending cotton stocks have been lowered substantially in the December WASDE, from 13.2 million bales to 11.7 million. This change partly reflects a 5,00,000-bale cut in production, only partly offset by a 3,00,000-bale cut in exports, but is mainly driven by a revision to 2017/18 beginning stocks and consumption. India’s official estimates of cotton consumption were recently revised back to the 2015/16 marketing year, showing higher use than USDA’s data. These revisions were concentrated on “non-mill use,” indicating consumption outside the usual commercial and industrial channels.
Market analyst note for some time stocks were tighter in India than USDA reports indicated but uncertainty remained about which component of the balance sheet might be incorrect. The revised consumption data from India’s Cotton Advisory Board lowers stocks nearer trade-consensus levels via higher consumption.
From 2015/16 to 2017/18, the most recently revised data suggest an aggregate of about 1.2 million bales more consumption over the 3 years than indicated in the November WASDE. This has a significant impact on India’s stocks-to-use, with 2017/18 stocks-to-use falling from 45 per cent in the November WASDE to about 40 per cent this month. These changes are significantly large to impact international balance sheets, with revisions to India accounting for half of lower 2017/18 ending stocks. Most of the remainder is due to Pakistan, owing to its greatly reduced crop, or higher exports from Australia, Brazil and the US.
