FW
Zara will launch a fund for workers in Turkey. These 140 workers were at a factory that closed down without warning. They will be reimbursed for unpaid wages, severance pay and unused vacation time. The popular fast fashion retailer faced criticism when shoppers at an outlet noticed tags attached to garments. These tags were put by unpaid workers, who spelt out their plight in messages.
The total for the 140 workers left with three months of unpaid wages amounts to only 0.01 per cent of Zara’s annual sales. Homegrown brand Zara leads the fashion industry in Spain. Zara is the flagship brand of the Inditex Group. Inditex, which has a market capitalization of 113 billion dollars, is one of the world's largest fashion retailers. It owns 7,405 stores and employs 1,62,450 people. The company has helped to reshape the fashion industry with its ability to quickly produce and turnaround cheaper fashion items.
Some of the world’s biggest brands source garments from Turkey. Among them are Primark, Inditex and H&M. It can be difficult for brands to know exactly what their suppliers are doing. Factories may subcontract work without a brand’s knowledge to meet tight deadlines and Turkey’s proximity to Europe makes it convenient for fulfilling last-minute orders.
Nonwoven is an established sector in developed countries, while some work needs to be done in markets where it is still in its infancy. Internationally, nonwoven sector will experience growth. Affordability and awareness are the two important factors that will push exponential growth in this sector. Govind Periwal, CEO, Pioneer Hygiene Products’ says quantity, consistent quality and affordability are important for the nonwoven and technical textiles sector to grow in developing markets like India.
Pioneer Hygiene Products has a current annual capacity of 6,000 metric tons of PE films and is India’s largest breathable PE film manufacturer. In the past five years, many companies have stepped into India to focus on hygiene products. Global giants like P&G, KC and Unicharm are active players in the market. The issue is slow penetration in rural areas, feels Periwal. When it comes to diapers, pullup pants are gaining momentum, in India.
Hygiene and infrastructural sectors will drive growth of nonwovens. GST, will help with in promoting the nonwovens sector as it will push domestic manufacturing,.
The Apparel, Textile and Footwear (ATF) show will take place in South Africa from November 21 to 23. Buyers from chain stores, independent retailers, boutiques, importers, distributors, factory managers and other decision makers will meet 140 international manufacturers and suppliers from China, South Africa, Indonesia, India, Hong Kong, Bangladesh, Belarus and Estonia.
Manufacturers from China will display a range of products exclusively for Southern African buyers which include fashion garments and footwear, sportswear and sports footwear, safety boots, denim, home textiles, fashion fabrics, yarn, interlinings, trims and fasteners, fashion accessories such as bags and scarves, and much more.
Fashion, lifestyle and pop culture trend analysts will focus on trends from global-to-local, local-to-local and local-to-global perspectives. This will include pioneering African trends and the effect these will have on lifestyle, fashion, advertising, retail and emerging consumer markets.
A presentation will look at the disruptions that businesses and retailers are facing. It will cover areas such as macro trends affecting business and retail; current consumer attitudes, technology and the retail space; the future of retail; the changing face of corporate culture; and evolving company structures.
A cut and paste approach does not always deliver results in South Africa. Consumers’ fashion appreciation is unlike that of other regions. There will be a discussion on the challenges of and opportunities in apparel retail in South Africa.
Pakistan is likely to allow the textile industry to import cotton to meet its requirements. The industry wants the four per cent customs duty and five per cent sales tax and other non-tariff restrictions on import of cotton to be withdrawn so as to enable the industry to meet its export commitments.
Restrictions on import of cotton from India and Brazil have already spiked the price of local cotton to above Rs 7000 per maund as the country is going to harvest a short crop for the fourth consecutive year. In comparison, Indian cotton is available at around Rs 6000 per maund. Pakistan’s cotton production is estimated to be around 12.6 million bales for 2017-18. Cotton prices in Pakistan will remain on the higher side due to the growing demand for the commodity by textile and spinning sectors and higher costs of imports.
The textile industry is the backbone of Pakistan's economy. It contributes more than a 61 per cent share in the country's exports and is the largest foreign exchange earner and employment generator. The textile sector has been a major beneficiary of GSP Plus. Pakistan’s exports of textiles have increased by 55 per cent in value terms in 2016 over 2013.
India’s apparel exports fell by 40.75 per cent in October 2017 compared to the same month of the previous year.
Exports of manmade textiles, including yarn, fabric, made-ups etc during the month dropped 8.26 per cent. However, exports of cotton textiles, including yarn, fabric, made-ups, handloom products etc increased by 2.21 per cent.
Exports of jute products, including floor covering, grew by 6.29 per cent while carpet exports dropped 33.03 per cent.
Overall, India’s exports of goods in October 2017 fell by 3.59 per cent compared to October 2016. This brings to an end a 13-month run of continuous increase in exports.
The main reason for the decline in exports is the implementation of GST which led to a shortfall in working capital with exporters.
Cumulative value of exports for the period April-October 2017-18 registered a positive growth of 5.63 per cent over the same period last year.
The value of imports during October 2017 was 4.91 per cent higher over import value in October 2016. Cumulative value of imports for the period April-October 2017-18 registered a positive growth of 17.77 per cent over the same period last year.
In future, India’s apparel exports are expected to increase considerably. Total exports of textiles and apparel are expected to touch 82 billion dollars by 2021.
For the first nine months of 2017, Lenzing’s revenue climbed 9.4 per cent. This increase is attributable to higher prices for all three fiber generations. Ebitda rose 23.9 per cent, corresponding to an ebitda margin of 23 per cent, up from 20.3 per cent in the prior-year period. Earnings before interest and tax (EBIT) increased by 34.6 per cent, resulting in a higher EBIT margin of 17.3 per cent. Profit for the period improved by 35.3 per cent and earnings per share rose 36 per cent.
Lenzing successfully captured value in a very positive market environment. The company opened an application innovation center in Hong Kong aimed at boosting regional innovation capabilities and strengthening its offering to all partners along the value chain. New applications for Lenzing fibers will be developed and tested at the new facility, among them applications for recent innovations such as the Tencel Luxe branded lyocell filament, the Refibra branded lyocell fiber and the EcoVero branded viscose fiber.
Sales and marketing offices were opened in Turkey and South Korea in the first half of 2017. The direct contact to customers and well-equipped showrooms featuring products made of Lenzing fibers serve as the basis for providing even better customer support.
Sri Lanka wants to encourage apparel exports.
Globalization and liberalization figure in the agenda. Opportunities will be provided for businesses to thrive as opposed to governments getting into business themselves.
Bottlenecks hindering growth will be looked at seriously. Laws and regulations will be updated. Land and rent acts would be modified to encourage private entrepreneurship.
The apparel industry wants the customs ordinance to act as a facilitator than as a regulator. It favors flexible working hours and a five-day work week that would be beneficial for workers and help the industry as well. Also favored are a new exchange management law and new inland revenue laws.
Sri Lanka is moving toward exports of value added products. Processes in the industry are becoming more machine-operated and adopting advanced technologies and machineries.
Production may be outsourced to countries such as Bangladesh, Vietnam or Ethiopia while value creation and addition will be done domestically.
The country is moving toward becoming a sourcing hub with regard to the apparel export industry and in the process reducing the export of non-value added or low-value added garment products while introducing increased industrial technological modernization.
Sri Lanka is the largest source for Victoria’s Secret lingerie and women’s wear.
India’s trade deficit has widened to its highest level in nearly three years this October. Merchandise exports fell 1.12 per cent from a year earlier, dropping for the first time since August 2016, dragged down by fall in gems, jewelry and textile exports. A large number of exporters have been unable to meet their export orders despite a revival in global demand as billions of dollars were stuck under the new nationwide tax – GST-- launched in July. Refund of input tax credit under GST has been stuck since July, hitting exports. Goods imports were up 7.6 per cent from a year earlier.
Higher crude oil prices and a more than a quarter jump in volume from a year ago pushed up India’s petroleum imports, helping to widen the trade gap. Crude prices have rallied, sending Brent crude to its highest since June 2015, a worry given that India imports most of its energy needs.
Although merchandise trade deficit rose sharply in October, it may not be a source of alarm, as the average trade deficit for September-October is in line with the trend in the months of July and August. One opinion is that exports should be kept out of the purview of GST as paying the tax first and getting a refund is cumbersome, complex and complicated.
GST has put micro, small and medium enterprises in a spot of bother. In the earlier tax regime, entities with a turnover of Rs 1.5 crores per annum were exempt from payment of excise duty. That threshold has been lowered to Rs 20 lakhs under GST. Furthermore, job work units, which were previously not liable to pay taxes, have been brought under the GST net, leading to a disruptive impact on industries such as textiles and gems and jewelry where job workers are an integral part of the supply chain.
Two provisions most likely to hurt such enterprises are the reverse charge mechanism that makes a purchaser liable to pay taxes on procurement from unregistered suppliers and the matching principle wherein ITC can be claimed only when the purchase invoice matches with the sales invoice uploaded by the supplier and GST has been paid by the supplier.
Sectors surviving largely on the basis of tax evasion, such as micro units in steel sector, plywood sector, and a section of traders, are likely to find the going tough.
In textiles, given the imposition of taxes on value addition at each stage of the manufacturing process, as well as job work, organized, integrated players are likely to gain at the expense of decentralized units undertaking a single activity.
Grasim, a part of Aditya Birla Group, has posted consolidated net revenue of Rs 13,646 crore for the quarter ended September 30, 2017. This is an increase of 63 per cent over Rs 8,386 crore in second quarter of previous fiscal, which did not include the erstwhile Aditya Birla Nuvo Limited (ABNL).
During the quarter, VSF prices remained firm globally driven by tighter supply ex-China on account of output curtailment due to environmental factors. The domestic VSF market saw restocking of the inventory leading to increase in sales volume by 5 per cent year-on-year. The viscose business EBITDA for the quarter was at Rs 468 crore on the back of higher realisation and improved operational efficiencies. Results for the quarter also include revenue of Rs 200 crore and EBITDA of Rs 61 crore of VFY business, now part of Grasim post ABNL merger.
Grasim has recently stated its VSF business will continue to focus on expanding the market in India by partnering textile value chain, achieving better customer connect through Brand Liva and enriching the product mix through a larger share of specialty fibre.
Domestic caustic soda prices witnessed an uptrend driven by healthy demand and supply constraints in the global market arising from environmental considerations in China and weather-related disruption in the US. Production from Veraval plant (erstwhile ABNL) contributed to 7 per cent year-on-year growth in caustic soda sales volume during the quarter.
