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China’s exports of uncombed or uncarded polyester staple fiber in June were 18 per cent over 2016 and 6.5 per cent higher month on month. Huahong, Huaxicun and Sanfangxiang are among top three leading exporters, each with an export volume of 50 to 60 kilo tons in the first half of 2017. Huahong, in particular, has been the number one exporter in recent years though it was surpassed by Sanfangxiang some months of last year. Huaxicun has seen a continuous hike in exports. With a capacity of 310 kilo tons a year of virgin polyester staple fiber, the proportion of the company’s export volume to production is a third, the highest among the first class plants. Export volume of Sanfangxiang was relatively unstable, yet her total exports have secured her as one of the top three exporters.
Xianglu and Jinlun are in the second class, each exporting 20 to 30 kilo tons of virgin polyester staple fiber. Jinlun has enjoyed rapid growth in exports in recent years. Its production may outrival Xianglu in the coming days. The third class consists mostly of virgin polyester staple fiber producers, each of whom exports less than 15 kilo tons of virgin PSF. They mainly target the domestic market.
China will prepare an additional batch of 4,10,000 tons of cotton for its daily state auctions, lending weight to expectations that state sales would be extended to ease tight supplies. Chinese cotton futures fell more than two per cent by the end of Monday trading.
All cotton sold in state reserve auctions must first be reclassed to assess its quality after a period in storage before being put up for sale. That's a sign that they will extend sales by another month. The world is about to be inundated with cotton as farmers take advantage of high prices to produce more and China floods the market with excess supply from its strategic inventory.
Global output will climb 6.9 per cent in the season that starts August 1, helping push stockpiles outside of China to a record. American farmers, the biggest exporters, are forecast to have their biggest harvest in a decade, and crop increases are expected in Australia and top grower India.
Growers planted more acres after cotton futures jumped 12 per cent last year, when most other crops were mired in slumps. At the same, there are no signs that China’s sales of its state inventories are slowing down.
Zimbabwe’s cotton output will be lower than expected this year. The country was expecting a yield of at least 1,00 000 ton of the commodity but the actual output could be between 70, 000 and 75,000 tons. Above normal rains received during the 2016-17 season made chemicals less effective, exposing the cotton crop to pests, particularly bollworms. Some cotton farmers diverted large portions of inputs such as fertilisers to production of food crops such as maize given that the country was coming out of a drought season.
In some areas, where cotton was planted late, the crop is now under threat from livestock such as cattle and goats because some villagers have stopped tending to their animals. Production will suffer from moisture related downgrades. Abuse of cotton inputs remained rife as farmers diverted cotton inputs to other or more lucrative crops, such as tobacco. Coming from a drought year, many farmers only took seed so that they could have access to fertilisers, which they used in maize production.
Excessive rains in some areas destroyed the crop and also made pest control difficult. Yield per unit area was significantly affected. Cotton buyers from Mozambique also took advantage of prevailing cash shortages in the country. They offered cash to growers while local firms were largely paying using mobile platforms.
As per World Trade Organisation (WTO) rules the Centre has decided to phase out direct subsidies scheme facilities for textile exporters by December 2018. WTO rules do not permit least developed and developing countries to give benefits to its exporters when a sector achieves 3.25 per cent share in global exports.
In the case of textile industry in India, it had crossed the above mentioned threshold in 2010 itself. At present, India has 5 per cent share in global textile and garment trade. The WTO rules state subsidy offered to that particular sector has to be weaned off within eight years.
If any objection is filed by members for the delay in fitting into WTO ruling within the said deadline, the country which fails to comply with norms are provided more time to introduce required changes in the rules.
India has also been facing pressure from the US to introduce new norms under its textile policy. The US claims all forms of export subsidies offered for the sector should have been abolished by 2015 as India had reached “export competitiveness” in textile and clothing no later than 2007. However, exporters need not be worried as the commerce ministry is mulling rolling out other policies considering the WTO rules such as ones for quality upgradation and subsidising capital expenditure.
The government has also assured these changes will be take effect gradually so popular schemes like Interest Subvention or Merchandise Export from India Scheme will not be removed immediately. Moreover, policies and schemes equivalent to the ones being phased out will be put in place.
The Vietnamese textile industry has attracted more than $750 million FDI in the first six months of this year. In early 2017, Chinese investors invested $220 million in the Billion Vietnam polyester synthetic fiber plant. However, other capital flows consist mostly of capital expansion investments in existing projects.
The Far Eastern Group from Taiwan increased its investment capital by $485.8 million in its polyester and synthetic fiber production project, Far Eastern Polytex. The project was green lighted in June 2015, with a registered investment capital of $274 million, and the capital increase will push the total registered investment to approximately $760 million dollars. This capital increase of nearly $500 million makes Far Eastern Polytex one of the largest projects to be certified in 2017.
As one of the largest textile exporters in Asia, Vietnam’s total value of garment and textile exports has increased in the last decade. In 2017, the industry is expected to grow by seven per cent. In recent years, thanks to competitive labor costs and preferential policies, Vietnam has become the ideal destination for investors in the textile industry.
The amount of FDI in textile and apparel industry in the last decade has helped Vietnam become one of the five largest textile and apparel exporters in the world.
Bangladesh’s apparel makers are against the tenure extensions of Accord and Alliance. They do not want Accord and Alliance to stay in the country after 2018. They have however, expressed gratitude to the two western retailers’ platforms for extending support to resolve problems and improve workplace safety in the country’s readymade garment sector.
Their tenure will expire in mid-2018. More than 15 brands and retailers including H&M, C&A, Loblaw, Primark, Inditex and PVH and two global rights groups - UNI Global Union and IndustriAll Global Union - on June 29 signed an agreement in Paris to extend Accord's tenure for three more years till 2021.
The agreement puts greater emphasis on the rights of workers to organise and join a union, recognising that workers' empowerment is fundamental to assuring workplace safety, and also presents the possibility of Accord expanding to sectors other than the readymade garment industry.
Meanwhile Bangladesh’s apparel makers have demanded cash incentives, a separate exchange rate of dollar for exports, a reduction in bank interest rates and gas prices and other infrastructural costs to help the sector be price competitive. They want the sector’s image to be refurbished through effective public relations activities.
Raymond UCO Denim expects continued growth as the denim market in India continues slow-paced expansion. Started in 1996, the company is still producing denim and looking to expand its reach. The company launched a three year “2020 strategy” in which they aim for double digit CAGR in their topline. Arvind Mathur, CEO of Raymond UCO Denim says FY 2016’s fabric capacity expansion project has now stabilised and “turnover of Indian operations is expected to grow at a healthy CAGR” over the next three years.
The current weaving capacity of all company’s factories is over 50 million metres and the main focus is on multi count yarn fashion denims. Fabric manufacturing facilities are located in Maharashtra and Romania and cover yarn spinning, weaving, dyeing, and finishing.
Raymond UCO is now looking to grow certain product categories and penetrate deeper into markets they have a foothold in after expanding its fabric production Using the light asset model, growth is planned through continuation of collaborations with denim brands and pioneering new styles according to customer demand. Mathur stated that the denim market in India is growing at a rate of between ten and 15 per cent.
On future direction of denim in India, Mathur gives top five predictions on denim fabric preference trends for the coming seasons will be primarily driven by comfort and performance. Stretch as a product category will grow. Bi-stretch, soft super stretch, sustainable and performance denims will be in the limelight. The knit look will continue to dominate the domestic market.
The United States is the world’s most attractive consumer market. It offers unmatched diversity, a thriving culture of innovation, and the most productive workforce. Companies of all sizes – from start-ups to multinationals – can find ideas, resources, and market to succeed and grow. The United States attracts innovative and industrious manufacturers from a wide variety of industries around the world.
FDI in US manufacturing is growing at an average annual rate of nearly nine per cent, one of the fastest growth rates in the country. There are many reasons global manufacturers choose the United States. Made in America represents high-quality, reliability and service to increasingly demanding global consumers. Proximity to customers in the world’s largest market, access to raw materials, and independent, low-cost energy sources help US manufacturers minimize supply chain risks and reduce costs. A thriving innovation ecosystem encourages game-changing product and process innovation.
US workers are among the most productive in the world – a key reason why more than 2.4 million US jobs in manufacturing are supported by FDI. For many, manufacturing in America is not only key to making it in America but also to their global success.
When global companies choose the United States, they’re tapping into a vast consumer market. Additionally, they are able to utilize one of the most competitive export platforms in the world.
Kitex Garments’ standalone revenue for Q1 registered a 9.1 per cent year on year increase. Ebitda margin stood at 27.7 per cent. Ebitda for the quarter rose by 6.3 per cent year on year with a corresponding margin contraction of 72 basis points. This margin contraction was led by an increase in other expenses and cost of materials by 36 per cent year on year and 26 per cent year on year. PAT for the quarter fell by 15.2 per cent year on year.
Cochin-based Kitex exports cotton garments, especially infant wear, to the US and Europe. The company has two segments: garments and fabrics. In fiscal 2016-’17 the garment segment contributed 84 per cent to sales and fabrics 16 per cent.
Kitex, is in the process of upgrading its facilities to expand capacity. It is a vertical set-up with knitting and processing of fabrics while finished garments are done in-house. The facility covers an area of 1,80,768 sq. ft.
The factory is equipped with latest sewing machines that ensures stain-free, quality sewing. The state-of-the-art spectrophotometer ensures electronic color reading and transmission. The plant produces knitted fabrics of exceptional quality.
Egypt’s Ministry of Trade and Industry has signed a cooperation protocol with United Nations Industrial Development Organization (UNIDO) and the Italian Development Cooperation. The ministry says the two-year $1.72 million project aims to increase the added value of Egypt’s long and extra-long staple cotton, improve the performance of cotton farmers and producers, and maximize the role of institutions supporting cotton production.
The development comes as Africa gets renewed attention as a textile and apparel sourcing region after years of what the industry saw as untapped potential and the 2015 renewal of AGOA, the African Growth & Opportunity Act U.S. trade preference program for 10 years.
According the Commerce Department’s Office of Textiles & Apparel Egyptian cotton is prized for its premium extra-long staple fibre, production and exports have been on the decline. Textile and apparel imports into the US from Egypt were worth $363.38 million for the first five months of the year. The project will be implemented over two years and will include building the capacity of 400 cotton farmers and 15 private companies in the textile business, improving the skills of 300 workers and offering training programs for 300 technical students.
This month, the US Agency for International Development East Africa Trade and Investment Hub signed a grant with Kenya to create 2,000 full-time jobs and provide more than 100,000 hours in skills development for young workers in the apparel industry. According to USAID the signing of the grant also marked the kick-off of East Africa Cotton, Textile and Apparel Workforce Development Initiative, a partnership between the Hub and the American Apparel & Footwear Association to ensure U.S. brands and retailers goods are manufactured in accordance with “best business practices and operations” in East Africa.
