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First, the sector was hit hard by Brexit and now it’s GST that has been haunting the textile & clothing (T&C) industry for some time. Meanwhile GSP Plus benefit accorded to Sri Lanka by the EU, which will facilitate duty, which includes free entry of specified textile products, including garments, in the EU is another challenge being faced by the industry. Sri Lanka is among the 12 countries to get this treatment. India does not get this allowance. Added to this, India’s proposed free trade agreement (FTA) with the EU is also in a fix, if recent reports are to go by. All these come at a time when Vietnam is to set to sign an FTA with the EU that takes effect from January 1, 2018, which would further challenge the business dynamics of the country.
T&C goods are exported to almost all countries of the globe. More than 175 countries are covered. The US is India’s top exports destination, which accounted for 20.5 per cent share of India’s total T&C exports. The others are: UAE (12.1 per cent), Ukraine (6.5 per cent), Bangladesh (5.7 per cent), China (5.4 per cent) and Germany (4.6 per cent).
Economies of scale
Bangladesh is already harnessing the benefit of duty free entry of its garments in the EU, being categorised as a least – developed country (LDC). It is also eligible to supply garments to India, duty free, under an FTA between the two signed a few years ago. Vietnam was a signatory to Trans Pacific Partnership Agreement (TPP). With President Donald Trump deciding to back out of TPP, the threat perception from Vietnam on India’s garment exports has diminished. But Vietnam’s proposed FTA with the EU has augmented severe competition to India. Unlike India, Vietnam has achieved economies of scale by setting up large size garment factories.
Competition has aggravated with Myanmar and Cambodia grabbing share of the pie. Myanmar is trying to increase its exports, which are worth about $1 billion. Ethiopia is getting duty-free benefits from both the US and the EU in terms of an agreement with the two countries. Wages in Ethiopia are as low as dollar 50 a month, helping it to achieve a competitive edge in the global market.
In such testing times, the good news is that China is gradually vacating the global market. China garment exports globally are currently valued at $173 bn to $174 bn. If India is able to grab a 10 per cent share, it would still be able to gain substantial export market.
Knitwear industry
knitwear exports from Tirupur are valued at about $1 billion in the first quarter of the 2017-18 fiscal, as informed by Sakthivel, Executive Secretary, Tirupur Exporters Association (TEA). About 99 per cent of India’s knitwear exports are from Triupur, which include T-shirts. There is no increase in exports in the above period due to slowing demand but the industry is awaiting orders and exports will pick up from August, Sakthivel says. The region’s total knitwear exports rose steadily from $5.56 bn in 2012-13 to $6.68 bn in 2013-14 to $7.62 bn in 2014-15 to $7.66 bn in 2015-16 and $8.27 bn in 2016-17. But the region lacks proper infrastructure facilities, particularly housing and R&D. The state government must address this issue, says Raja Shanmugam, President, TEA. India’s global share of exports is 3.86 per cent, of which Tirupur accounts for two per cent.
Meanwhile the duty draw back scheme will be continued till September. After that draw back rate will be pegged at 2 per cent. There will be no refund of excise and service tax now known as GST. The loss on this account is said to be around 5 per cent, according to exporters.
The price of Australian wool has bounced back after a 20-year lull. Wool farmers are benefiting from the best prices for their product in two decades. Prices are steady for fine wool and medium merino wool. One reason for the strong market is demand from China. Australia produced 3,41,000 tons of wool in the financial year ending June 2017, 75 per cent of which was exported to China.
The price of wool spiked 10 per cent in the first half of 2017 with strong demand and limited supply, prompting the ongoing strong market for the commodity. The shortfall in wool came as a result of low rainfall across Australia stunting wool growth.
Wool demand will continue to grow in the European Union and the US, the major international markets for imported woolen clothing. Demand for luxury woolen textiles is rising in major international markets especially China.
Prices are expected to peak next year before easing in real terms as wool production increases. And, by the end of 2021–22, prices are expected to still be relatively high, at around ten per cent above the 10-year average in real terms. Australia’s wool exports are forecast to rise by four per cent in 2017–18.
The global textile coatings market is expected to expand at a CAGR of 3.9 per cent between 2017 and 2025. Textile coatings are coatings that are used to coat various textiles, fabrics and yarns to protect them from heat, dust, soil, water, oil, grease etc. The coating shields the textiles and yarns from any sort of damage and helps keep them durable.
Rise in demand in protective clothing, building and construction, transport, medical, and industrial applications is driving the textile coatings market. Introduction of new innovative technologies or products is projected to open up new markets for textile coatings. Market players are striving to impart anti-bacterial and self-healing properties to textile coatings.
The Asia Pacific region held major share of the textile coatings market in 2016. The share of the product in the region is anticipated to rise at a faster CAGR between 2017 and 2025 due to the rising population, increasing demand for new housings, and the rising middle class income.
China holds a major share of the textile coatings market in Asia Pacific. The demand for textile coatings has been increasing in China and India, which is estimated to boost the market in the region. North America and Europe held share of a 28.6 per cent and 22.4 per cent respectively in 2016.
Madeira is a producer of top quality embroidery threads. The company has completed 10 years in India. It started by catering mainly to export companies, but then realized the need to tap domestic brands. Currently 80 per cent of the company’s business is from exporters while 20 per cent is from domestic brands. The target is to increase the local market share.
Progressing from introducing standard specialty products on a small scale to building the industry’s confidence in the product assortment, the company now is looking at ways of collaborating with machine makers so that both can benefit through the synergy of technology and innovative threads.
In future, Madeira is looking at technical applications like conductive threads. The company has seen consistent growth through innovation by looking to improve through knowledge sharing and introduction of new products. Madeira is looking not only to invent new threads but also suggest unique ways to use the threads in combination for different looks and effects. It tries to educate customers and make them understand the products and the different ways in which they can be used.
The company provides samples on what can be achieved with threads for its customers rather than giving shade cards. It participates in fashion exhibitions of Europe.
PVH’s net sales for Q2 increased six per cent compared to the same period last year. The corporation also saw its stock reach its highest level yet in 2017, jumping 3.5 per cent.
This was possible thanks to increased sales from Calvin Klein and Tommy Hilfiger. Sales for Calvin Klein increased eight per cent compared to the same period last year, while Tommy Hilfiger revenues grew four per cent.
While the Tommy Hilfiger brand saw strong sales in Europe and Asia with a nine per cent increase in international sales overall, its North American revenues fell two per cent. Calvin Klein’s sales also fell in North America by one per cent, mostly due to its deconsolidation in Mexico.
PVH has raised its full year earnings outlook based on its second quarter outperformance and an improvement in foreign currency rates. The strength of its brands will continue to drive its second half performance.
PVH will also devote more funds to its major brands after reviewing the second quarter results. In addition, in line with its projected full year sales increase, it is planning to invest an additional ten million dollars in marketing during the second half of this year.
Nigeria is planning textile and garment clusters, which would generate jobs and revive the textile industry in the country. Most of the sophisticated equipment to start the production hubs is being put together in China and Italy.
These will showcase the country’s professionalism in tailoring. Nigeria doesn’t have any tailoring that is mass produced. In Nigeria, textile manufacturing is a key local industry, supported by a chain of suppliers such as cotton growers and natural dye makers. However, traditional methods of dyeing fabrics are threatened by cheap imports from abroad.
Nigerians have a love of naturally dyed fabrics with many prints based on traditional motifs. In northern regions, it is common for cloth to be a single color, such as indigo. Dyers use dye-pits (two or three meters deep). The cloth is left in these for a day or two, before being rinsed and left to dry. Sometimes, indigo cloth is beaten and given an extra coating of indigo powder to give a deeper shade and a glossy shine or sheen. Nigeria's textile industry used to be the third largest in Africa.
Now the country spends about 100 billion naira annually on importing clothing materials. If half of this could be made locally, the drain of foreign exchange could be stopped. Jobs could be created. Buying home made goods can stimulate the domestic economy.
Mainetti is a benchmark in sustainability. Each hanger the company produces is from energy-efficient machines. The company’s plant at Chennai has achieved a closed loop water system, with zero discharge of water, and also attained the level of zero land filled plant. In its naturally illuminated and ventilated plant, efforts are undertaken to reduce Co2 emissions at the rate of three per cent to five per cent year-on-year.
This series of initiatives is also helping Mainetti in saving on various fronts. It has been able to establish savings of over 50 per cent by using state-of-the-art machines, highly efficient cooling systems, best in class LEDs and maximum utilization of natural resources such as daylight and cross ventilation. By the use of low flow fixtures, re-cycled water usage and waterless urinals, it has also ensured over 65 per cent water savings compared to conventional units.
Italy-based Mainetti is spread across the world. Good environmental practice has always been a prime consideration in Mainetti’s development, leading it to seek practical solutions to avoid the production of waste.
Improvement in the existing system and adoption of the latest technology are continuous practices for the company as it reduces power consumption by moving from conventional systems to electrical systems or battery-operated systems.
Khadi sales grew 24 per cent in 2016-17. In 2015-16, total khadi sales stood at Rs 42,000 crores while the figure was a little over Rs 33,000 crores in 2014-15. The Khadi and Village Industries Commission (KVIC) is working towards opening khadi stores in Dubai, Paris and London. The Indian community abroad may be encouraged and given incentives to open and run khadi outlets and shops. Khadi will be exhibited at embassies and consulate offices with information on how they are produced.
India has a network of around 7,050 khadi outlets. Sale outlets under the Khadi and Village Industries Corporation will be granted a financial assistance of Rs 25 lakhs per unit in urban areas and Rs 20 lakhs in rural areas for renovation and modernization.
Corporates like Arvind are getting into khadi. Arvind will acquire khadi from KVIC and sell designer khadi products like denim with the khadi mark. Similarly, Raymond, Allen Solly, and Aditya Birla Fashion and Retail have also started promoting khadi. The involvement of corporates is expected to help artisans boost their income and provide more employment opportunities as demand increases. There is a collaboration with the National Institute of Fashion Technology, which will provide design development and training at different khadi institutions.
Karl Mayer is a world leader in production of warp knitting and warp preparation machines. Over the last five years, Karl Mayer has invested extensively in improving competitiveness of its high-tech locations in Germany, Italy and Japan. Progressive solutions have enabled the company to grow. The company is working on sustainability and efficient use of resources.
All products from Karl Mayer are of highest quality and the result of ultra-modern production processes in application. In 2014, Karl Mayer started a comprehensive investment program with the objective to strengthen the company’s production section in order to face challenges of the future. The answer was a comprehensive reorganization of the processes, modernization of the buildings and investments in a state-of-the-art machine equipment.
The warp preparation business unit consists of Prosize sizing machine and the Multi-Matic. The Prosize features a novel, well-thought out process guiding, thus ensuring the highest efficiency in weaving and the smallest possible sizing liquor volume. In this way, it makes a significant contribution to the concept of sustainability. The Multi-Matic has high flexibility during sampling and short-warp production.
When it comes to manufacture of composite materials made from glass fibers, for example, the multiaxial warp knitting machine Cop Max and the fiber spreading unit UD 700 are technical solutions of highest perfection.
US textile industry has lost a formidable leader, as 66 years old Robert H Chapman III, Chairman, CEO and treasurer of fabric maker Inman Mills. Chapman passed away suddenly. The fourth generation of the family to run the 116-year-old company, joined Inman Mills as a management trainee in 1976. He moved up to plant manager, director, assistant vice president and vice president before becoming president and treasurer in 1991. In 2003, he was named chairman, CEO and treasurer.
He served in many leadership roles in the textile industry, including chairman of the National Council of Textile Organizations in 2016-17. During his career, he also served on the boards of more than 30 entities. Chapman was a strong voice and a longtime textile industry leader whose contributions to the industry and Spartanburg County were innumerable
Rob Chapman was a fearless and tireless advocate for manufacturing in South Carolina, working diligently to ensure that this state maintained a pro-manufacturing business environment. He was a recipient of the Roger Milliken Defender of Manufacturing Award.
A true Southern gentleman, he was passionate about manufacturing, fearless in his advocacy for manufacturing associates and dedicated to his industry and his community.
He is a graduate in economics and has completed programs from various textile and management institutes.
Inman Mills was founded in 1901. The company’s specialty is high-quality greige or unfinished fabrics and yarns sold for home furnishings, apparel and technical uses.
