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Textile engineering industry, which contains of more than 2,800 units has shown a steady increase in the last five years.
According to R. Rajendran, president of Textile Machinery Manufacturers’ Association, all the spinning machinery manufacturers have a base in India and China now and these countries have slowly becoming a manufacturing hub for textile machinery.
S. Chakraborty, advisor of Textile Machinery Manufacturers’ Association, stated that the exports increased from Rs 1,523 crore in FY12 to Rs 2,466 crore in FY15.
Talking about the present scope for exports Rajendran commented that India is a major manufacturer of spinning and processing machinery and over here a huge amount of looms, knitting and garmenting machinery are imported by the textile industry.
Textile machinery like tools, accessories, garmenting, machinery and autoconersimports were Rs 7,643 crore in 2011-2012 and Rs 10,305 crore in 2015-2016.
This economic slowdown had affected investments by the domestic textile industry, investments continue in select pockets. Some States have come out with State-specific textile policies. Industries that focus on value addition, expansion, modernisation and replacements are driving investments in the domestic market. A lot of emphasis is given to the development of machinery for weaving and processing sector by the Union Government. It has supported loom development projects on public-private partnership mode and also cleared a project to set up a common engineering facility centre. As per Chakraborty, huge affection in investments are due to reduction in allocation of funds for Technology Upgradation Fund Scheme and backlog in payment of subsidies in the past.
Manmade fiber and synthetic yarn would have an inverted duty structure problem as they would be levied Goods and Services Tax (GST) at 18 per cent. The industry feels keeping the rates of key inputs at a higher level will affect the competitiveness of small and medium synthetic textile manufacturers.
The opinion is that India is already suffering a huge competitive disadvantage in the global textile market as the manmade fiber based textile products are attracting higher rates of import duty. Keeping the GST rates at this level would cripple the hundreds of small and medium synthetic textile manufacturers.
These manufacturers say the rates of manmade fiber products should be brought down to 12 per cent.
There is apprehension that the high rates announced for manmade fabrics and yarns, dyeing and printing units, embroidery items at 18 per cent can lead to an increase in input costs and can adversely affect the entire textile value chain.
The GST of five per cent on fabrics is thought to be quite favorable for the industry.
Mills in southern India say textile jobs should be exempt from service tax as this would benefit the predominantly decentralized and medium and small scale power loom, knitting, processing and garmenting sectors.
Muhammad Amjad Khawaja vice chairman Pakistan Hosiery Manufacturers and Exporters Association (North Zone) in a press conference stated that the textile sector has been forced to come on the road as the government has failed to fulfil its commitments and resolve the issues confronted by this sector.
According to Amjad Khawaja textile export is main stay of the national economy. Its share in total export is around 60 per cent but unluckily it is facing a steep decline only due to the ill-conceived policies of the government and there should be immediate release of Rs 180 billion with a withdrawal of Gas Infrastructure Development and Fuel Surcharge. He also added that along with leading textile exporters had repeated meetings with concerned government sectors and apprised them of the issues faced by the textile exporters.
He strongly criticized the step-motherly treatment with this foreign exchange earning sector of the country and cautioned that they are now not ready to take their begging bowl to anyone. This had led them to take a decision on coming to road along with their workers if government failed to fulfil its commitments. The protest will take place immediately after ramzan.
He wishes to have a real assurance from the government side because for a longer period government as yet not given any assurance to release funds under textile package in addition to the payment of refund claims.
Further he stated that they are ready to negotiate and resolve the issues provided if the government shows a positive attitude. Rizwan Ashraf - FCCI says that already issued RPOs were cancelled last month which is an indicative of the non-seriousness of the They also want that federal budget and government must approve the relief on the foreign exchange earning sector of textile.
The water footprint of synthetic fibers is way lower than that of cotton, wool or viscose products.
Some companies in the manmade fiber industry are fully committed to the constant monitoring and control of water resource consumption in their various processes, as well as bringing to the market yarn dyed by the solution dyeing process, which requires less water and energy compared to traditional yarn dyeing or piece dyeing.
In solution dyeing, the color is added upstream in the extrusion phase, and is thus incorporated into the polymer matrix. In this way, the environmental sustainability of the products offered to customers is enhanced during production. This production chain can really be made sustainable through cooperation among all the players involved.
Solution dyed yarns have a lower environmental impact than traditional yarn dyed yarns. Solution dyed yarns offer a number of further advantages, which include color and additives incorporated into the fiber, high light color fastness, high color consistency, and lower oligomer release.
Together with some of their customers in the polyester fiber area, these companies have projects in progress that reflect their determination to be an environmentally aware player in the production value chain: solution-dyed yarns manufactured from recycled polymer combining technical and environmental performance.
Amir Fayyaz Sheikh Chairman All Pakistan Textile Mills Association (APTMA), at the time of the press conference stated that textile industry contributed 60 per cent in total exports of the country, which was considered backbone of the economy.
He welcomed Rs 180 billion “Export enhancement package” stating that this package would give huge relief to the textile sector for improving the exports in the sector.
According to him availability of energy at regionally competitive price was important and that budget for the 2017-18, Rs 4 billion will be allocated for “Export enhancement package”.
The Chairman APTMA stressed for the implementation of this package which also gave relaxation on the import of textile machinery for the modernization and enhance the capacity of the sector. The package would strengthen the country’s economy by increasing the country’s exports and that the that energy is the important element of cost of production particularly for spinning, weaving and processing industry, says Amir and he wishes to compete with regional competitors including India, Bangladesh and Vietnam for improving the country’s exports.The Chairman APTMA urged for proving ease of doing business in the country.
CMAI’s Apparel Index for Q3 (Oct-Dec FY 2017-18) gives out positive signals about the market as there is a clear growth recovery at 2.71 points, which is much higher than the same quarter previous year Q3 (Oct-Dec FY 2016-17) with overall Index Value at 1.4 points, market had registered the lowest growth, in the quarter that faced the implementation of demonitisation.
Giant Brands remain resilient
One year post-demonization and a few months after GST’s implementation, despite the push and pulls, Giant Brands have remained resilient and buoyant. In Q3, they maintained their lead with an index value of 11.25 points, growing multiple times compared to other brand groups. Large Brands on the other grew at 5.56 points; Mid Brands clocked in 3.69 points growth; while Small Brands grew least at 1.3 points. Compared to previous quarters, Giant Brands are growing much faster than others, as their rate of growth in the previous quarter was 8.72 points. Large Brands growth rate was 6.65; and 1.25 points for Mid and 0.29 for Small Brands respectively.
Indeed, all brand groups across the board have recorded higher growth this quarter. Except, Large Brands (growth dropped this quarter to 5.56 from 6.65 earlier). Surprisingly, Large Brands grew 7.23 points in the same quarter previous year. A closer look at Large Brands’ performance during Q3 and Q2 of FY 2017-18, reflects in both these quarters, Sales Turnover growth is same but Sell Through grew better in previous quarter compared to this quarter; Inventory Holding too increased this quarter compared to previous quarter impacting negatively. Giant Brand’s remarkable growth improvement is on account of better Sales Turnover growth compared to previous quarter and better Sell Through growth.
Q3 Apparel Index once again indicates Giant Brands have outdone Large, Mid and Small Brands. Being more organized and networked with organized retail through MBOs, EBOs and Large Format Stores Giant and Large Brands managed their business and sales turnover better. Moreover, they increased sales turnovers significantly at 8.0 points and 4.4 points respectively.
Inside Story: Sales Turnover rise and so do fresh Investments
In Q3, Sales Turnover reflected an Index growth of 1.52. Nearly, 49 per cent brands or almost half reported an increase this quarter. However, it seems, the festive season didn’t bring much cheer to all brands, as many reported a dip in sales turnover. And a significant 30 per cent reported a loss this quarter. Incidentally, maximum number of respondents who reported a loss in sales turnover were in the Mid Brands bracket. In fact, no Giant Brands indicated a loss in turnover in Q3.
Explaining the dip in sales turnover, Narendra Shah, Proprietor, Vogartino says “The dip in sales turnover is partly due to us changing location and majorly due to the pattern of business followed by corporate brands. End of season sale hit not only us as a brand but also MBO’s, small industries and manufacturers. Big corporate brands gave away goods at throwaway prices which has had a great impact on our business hence, the dip in sales turnover.” Nearly 45 per cent brands indicated an improvement in Sell Through. But for the other 44 per cent, Sell Through remained the same “The increase in sell through is connected, if sales turnover increases automatically sell through will increase as sales have been managed well,” explains Sameer Patel, Proprietor, Deal Jeans.
Almost 46 per cent respondents across all brand groups said their Inventory Holding went up this quarter. Patel opines, “Inventory holding increased as fashion is fast changing and the inventory is managed and controlled well at our end.” The higher value in Inventory Holding indicates a negative impact. The increase in inventory could be a carryover of inventory from previous quarters and less than expected sales during the festive season. Rajesh Giani, Proprietor, Toffy House points out, “Last quarter was for winter wear, hence, demand was good and stocks were stored for winter. We had some previous stocks and with late production of fresh stocks, we were able to meet demand. This is why inventory holding went up.”
Fresh Investments went up by 1.30 points overall with nearly 59 per cent respondents reporting a rise in investments. As Seema Mehta, Proprietor, Exile explains, “The reason behind an increase in investment is a government scheme which helped us with a bank loan to enhance business. We opted for it and infused money to increase our investments.” Agrees Ketan, Owner, Goof who goes on to explain “We increased our investments by opting for a bank loan to widen our horizons.”
As for outlook for the next quarter around 48 per cent brands say it is ‘Average’, while 38 per cent believe the outlook is ‘Good’. Generally, Q4 of the financial year, is seen as quarter that has EOSS in January and only a small period of fresh and growth in sales that is second half of March when exams are over and holidays start and summer season picks up. Looking for fresh goods, post first quarter of GST, consumers too are expected to return to stores. GST and new processes would be settled especially by last quarter of this financial year and this could augur well for growth in Q1 of FY 2018-19.
CMAl's Apparel Index
CMAl's Apparel Index aims to set a benchmark for the entire domestic apparel industry and helps brands in taking informed business decisions. For investors, industry players, stakeholders and policymakers the index is a useful tool offering concrete and credible information, and is an excellent source for assessing the performance of the industry. The Index is analysed on assessing the performance on four parameters: Sales Turnover, Sell Through (percentage of fresh stocks sold), number of days of Inventory Holding and Investments (signifying future confidence) in brand development and brand building. The Apparel Index research is conducted by DFU Publications.
Apparel imports by the US decreased 1.71 per cent during January to April 2017 as against the corresponding period last year.
China, Vietnam, Bangladesh, Indonesia and India were the top five apparel exporters in value terms to the US during the review period. Honduras, one of the major apparel exporters to the US – has now come down to the seventh spot.
However, among all top five exporters, only Vietnam grew in values as the country saw a rise in exports by 8.16 per cent during the first four months of the year. China, Bangladesh, Indonesia and India were down by 3.45 per cent, 6.30 per cent, 2.99 per cent and 3.27 per cent respectively.
China is the largest source of US apparel imports. Vietnam is in the second place followed by Bangladesh. All nine out of ten top apparel exporting nations of the world experienced negative growth in shipment to the US in 2016. Only Vietnam's apparel exports increased 0.30 per cent year-on-year in 2016.
Bangladesh’s readymade garment exports to the United States fell by six per cent in the first three months of the current calendar year. Bangladesh now faces an export duty of 15.62 per cent under America's most favored nations' category.
Garment items account for 95 per cent of the goods exported from Bangladesh to the US market.
James Brett is chief executive officer of apparel retailer J Crew. Brett has had more than 25 years of retail experience. He most recently served as president of specialty home furnishing company West Elm, a unit of Williams-Sonoma.
Sales at J Crew, whose ballet flats and cashmere cardigans were once a staple of middle-class US wardrobes, have been declining, as it struggles to keep abreast of changing tastes and faces fierce competition from cheaper online retailers.
J Crew has been an institution since 1983. It is renowned for its fresh, luxurious take on everyday staples.
America’s favorite basics store is known for its lace jogging pants, skirts, tank tops, tees, dresses, fine Italian cashmere sweaters, sequin and lace-detailed skirts and playful jewelry.
Following a six per cent sales slump in 2016, the company is investing in retuning J Crew’s identity as an affordable and accessible brand for everybody — not just the fashion-forward crowd.
J Crew is now trying to compete without marking everything down by 40 per cent every other week. It has created an analytics team to research and optimize the cost of each item. It also plans to switch up its supply chain beyond China so that clothing will arrive in stores faster.
Being the 11th largest producer and 6th largest exporter of cotton, EU is the largest market for textiles in the world and the important trade and research institutions in the world of cotton are headquartered in the EU. The membership of the EU in the ICAC is of premeditated significance as there are 150 million people involved in cotton production, marketing and processing each season. The European Union itself, and many individual countries and companies within the EU, are significant providers of cotton-specific development assistance in recipient countries.
On May 16, the Council of the European Union approved the accession of the EU to the ICAC on May 18, 2017. H.E. A formal Instrument of Accession to Minister (Trade) Ali Tahir of the Embassy of Pakistan and ranking member of the ICAC Standing Committee on May 24, 2017 was presented. The membership of the EU today at its 549th Meeting was confirmed by the Standing Committee confirmed the European Commissioner for International Cooperation and Development, NevenMimica, commented on this that Cotton is important both to the EU's economy also the EU's accession to the International Cotton Advisory Committee is significant step. As a member, the committee will work for a sustainable and inclusive cotton sector.
Started in 1939, ICAC is one of the oldest organizations within the architecture of intergovernmental bodies. It is the International Commodity Body representing cotton and cotton textiles. The mission of the ICAC is to assist governments in fostering a healthy world cotton economy. The role of the ICAC is to raise awareness of emerging issues, provide information relevant to the solving of problems and to foster cooperation in the achievement of common objectives. By bringing together producing, consuming and trading countries and all segments of the cotton industry and serving as an objective statistical observer, the ICAC serves a unique role as a substance for an overall positive change.
Ministry of Textiles plans to draft guidelines of National Textiles Policy which will be further forwarded to the union cabinet for approval next month.
Pushpa Subramanyam, secretary of Textiles Ministry says that the Centre is awaiting a formal request from the Telangana Government also the draft is almost ready.
She further added that after the Textiles India-2017, the document will be deepened with the more inputs from the event and it will be approved by the cabinet in July 2017. The policy aims to achieve $300 billion of textile exports by 2024-25 and create an additional 35 million jobs.The event is expected to be inaugurated by the Prime Minister Narendra Modi and attended by several union ministers and chief ministers of various states.
On the proposed Textile Park in Warangal, Pushpa Subramanyam mentioned that there is no dearth of funds for the project and there is 7 per cent growth in the textile and garment exports from India between July 2016 and April 2017 and in 2016 the total exports stood at $40 billion however, the Ministry is targeting $45 billion in 2017.
The officials are further waiting for the proposal from the state government to soon sanction it In a bid to boost textile industry
