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For the end consumersif the central government implements 12 per cent GST on fabrics made of MMF and 18 per cent on branded textiles, the cheapest sari sold at Rs 200 will become costlier by Rs 95. About 40 percent of the production of saris and dress material is done targeting mainly the poor and lower middle class consumers and major part of the production of saris and dress material is supplied throughout the country.
If the central government implements 12 percent GST on fabrics made of MMF and 18 percent on branded textiles, the cheapest sari sold at Rs 200 will become costlier by Rs 95 for the end consumers.
At present, the MMF centre in the city manufactures around four crore metres of fabric per day on more than 6.5 lakh powerlooms. There are around 165 textile markets housing over 65,000 wholesale textile shops, having daily turnover exceeding Rs 120 crore.
Industry experts says that an average of one kilogram of yarn can manufacture three saris of 5.50 metres each, which are sold not less than 200 per sari. The higher range of saris cost more than Rs 1,000 and beyond, which generally has value addition in the form of embroidery, etc.
At present, the cenvat, excise duty at 12.50 percent and 5 percent and VAT put together on one kilogram of yarn comes to around Rs 16.31 and tax forgone on dyes and chemicals comes to around Rs 7.42. However, the total tax on fabric and yarn comes at Rs 23.73 per kg.
The government shall get maximum revenue in the new GST regime than the present level of revenue incase if the government fixes uniform GST of 5 percent on the entire textile value chain then the GST revenue on one kilogram of fabric and saris would be Rs 30. Thus,.
The wholesale sari valued at Rs 200 will attract GST of Rs 95 and it will be passed to the end consumer, making the cheapest sari costlier only if the GST slab of 12 percent on fabrics and 18 percent on branded textile is fixed.
By 2025 Marks & Spencer hopes to support 1000 communities and help ten million people live happier, healthier lives. The ten communities the British multinational retailer is currently in discussions with are in the UK.
M&S will work with local councils and charity partners to support communities to deliver positive, measurable change. It will initially be piloted in ten communities over the next two years, when the retailer will try out a range of actions designed to tackle the issues that matter most to communities – such as unemployment, skill shortages, loneliness, poverty, and mental health and wellbeing. Successful initiatives will be rolled out to a further 100 locations by 2023 and learnings will be shared with 1,000 locations by 2025.
Marks & Spencer has been at the forefront of social change for 133 years and is determined to play a leading role in the years ahead by taking positive action to enable customers and communities to live happier, healthier lifestyles. Another of Marks & Spencer’s aims is to be a zero waste business.
Marks & Spencer has 268 franchise stores in 34 markets and an established joint venture in Greece as well as India. It also trades online in 21 markets reaching customers through its fully localised owned and operated websites via established marketplaces.
India wants textile and garment exports to reach 45 billion dollars in 2017-18.The country is faceing falling demand in major markets such as the US, EU and China, and stiff competition from countries like Vietnam and Bangladesh.
A support package will be unveiled for the knitwear sector, which is grappling with enormous financial stress due to lack of automation, leading to much lower productivity than in countries like China.
Road shows have been held in six countries including the UK, US, China, Russia, South Korea and the UAE to attract investors. Events have been planned to showcase India as a global sourcing hub and provide a platform to connect and collaborate with global manufacturers, investors and buyers in the textile sector.
Funds to the tune of over Rs 1900 crores have been given to the apparel industry under the rebate of state levies to boost exports from the sector.
Under the Pradhan Mantri Paridhan Rozgar Protsahan Yojana, over 1.4 lakh workers have registered themselves for provident fund.
Around Rs 3000 crores have been approved as additional investment in the apparel segment, which will generate more employment in the entire sector.
A Rs 6,006 crore special package for the textile and apparel sector aims to create one crore jobs in three years.
On 19 May 2017 the European Union re-granted Generalized Scheme of Preferences Plus (GSP+) for Sri Lanka. As compared to before EU GSP+ status will now help Sri Lanka’s economy develop and create more and better jobs for its people.
On the other hand, Bangladeshi apparel makers now would face another competition from Sri Lankan companies and the value added market segment will definitely feel a pressure now. Due to GSP+ in Sri Lanka the company is always cross checking price with Sri Lanka.
The EU introduced GSP+ with the aim of providing more extensive market access than the standard GSP scheme, giving beneficiary countries duty free access to EU markets for over 7200 products. Sri Lanka will be benefitted from the full removal of tariffs on Sri Lankan imports into the EU on 66 per cent of tariff lines covering a wide array of products including textiles, small machinery, and fisheries.
GSP-Plus concessions were initially granted to Sri Lanka in 2005, after the Tsunami. However, in 2010, the EU withdrew Sri Lanka’s preferential access under GSP-Plus to the European market due to the government’s failures in adhering to human rights standards set under the provisions of the scheme.
Contrastingly, during the 2010-15 period, Sri Lankan exports to the EU grew by a mere 1.02 per cent compared to previous years. The most direct impact was tariffs being reinstated on Sri Lankan imports to the EU, making them uncompetitive compared to similar imports from other developing economies.Compared to the larger firms. The impact was severe on medium sized apparel producers, because they did not possess the technical and financial resources to adequately diversify their export portfolio.As a result a significant volume of both domestic and foreign investment relocated to these countries looking for preferential access to the EU market.
The EU is Sri Lanka’s second-largest trading partner after India but its main export destination, absorbing 31 per cent of Sri Lankan exports in 2015. At present under the new trade concessions granted under the GSP+ for Sri Lanka would undoubtedly result in boosting the economic prosperity of the country.
Bangladesh’s clothing exports to the US declined by around six per cent during the first quarter of the current calendar year. At the same time, US imports of clothing from the rest of the world declined by around two per cent. Garment items account for 95 per cent of the goods exported from Bangladesh to the US market.
Among the top ten exporters of clothing to the US, exports from Vietnam registered a robust 7.21 per cent growth. Export from Mexico, Nicaragua and El Salvador also registered moderate growth. On the other hand, exports from China, India, Indonesia, Honduras and Cambodia declined along with those from Bangladesh.
China is the largest source of US apparel imports. Vietnam is in the second place followed by Bangladesh.
There is a change in the attitude of US consumers, who now prefer spending more on electronic gadgets compared to clothes. The US election has also impacted retail sales negatively. Global apparel exports to the US declined 6.44 per cent year-on-year in 2016.
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.
"Clariant and Huntsman Corporation have merged together to form a company called Huntsman Clariant. On a pro forma 2016 basis, the combination of both companies will create a leading global specialty chemical company with sales of approximately 13.2 billion dollars, an adjusted EBITDA of 2.3 billion dollars and a combined enterprise value of approximately 20 billion dollars."
Clariant and Huntsman Corporation have merged together to form a company called Huntsman Clariant. On a pro forma 2016 basis, the combination of both companies will create a leading global specialty chemical company with sales of approximately 13.2 billion dollars, an adjusted EBITDA of 2.3 billion dollars and a combined enterprise value of approximately 20 billion dollars.
The combined entity will benefit from each other’s strengths. It will have a significantly improved growth profile in highly attractive end markets and geographies. Huntsman Clariant will leverage shared knowledge in sustainability and boast a much stronger joint innovation platform. This will enable the development of new products in order to deliver superior returns and drive shareholder value.
Clariant and Huntsman are joining forces to gain a much broader global reach, create more sustained innovation power and achieve new growth opportunities.
The combined company is incorporated in Switzerland and will be governed by a board of directors with equal representation from Clariant and Huntsman .The new company will accelerate value creation for shareholders through a more robust combination of technology, products and talent. The combined company expects to realize more than 3.5 billion dollars of value creation from approximately 400 million dollars in annual cost synergies.
The full synergy run-rate will be achieved within two years of closing. These synergies will be realized by reducing operational costs and improving procurement. The targeted synergies represent roughly three per cent of the total combined 2016 revenue. There will also be additional cash-tax savings.
The expectation is of enhanced returns from the improved growth profile in highly attractive end markets and key geographies such as the United States and China. The merger presents opportunities for stronger joint innovation platforms and shared knowledge in sustainability. What the merged entity looks forward to is a stronger balance sheet and cash flow generation. The plan is to continue Clariant’s attractive dividend policy.
The transaction is targeted to close by year end 2017.
"All Pakistan Textile Mills Association (APTMA) has deeply disapproved the proposed Federal Budget 2017-18. It says, the government is not serious about implementing the Rs 180 billion Prime Minister's export led growth package as till now only Rs 1 billion has been released by the State Bank of Pakistan. The government has allocated only Rs 4 billion next year, which shows lack of seriousness in increasing exports."
All Pakistan Textile Mills Association (APTMA) has deeply disapproved the proposed Federal Budget 2017-18. It says, the government is not serious about implementing the Rs 180 billion Prime Minister's export led growth package as till now only Rs 1 billion has been released by the State Bank of Pakistan. The government has allocated only Rs 4 billion next year, which shows lack of seriousness in increasing exports. Chairman APTMA, Aamir Fayyaz, said this while addressing a press conference along with senior APTMA leaders Gohar Ejaz and Ali Pervez Malik.
Fayyaz said due to wrong government policies, the country’s merchandise trade deficit has reached $31 billion -- the highest in the history of Pakistan. The country’s exports, which was to the tune of $25 billion in 2013, has come down to $20 billion in 2017. The cost of doing business has increased despite considerable decrease in oil prices, in the international market the price of electricity has doubled. He said they were getting electricity at Rs 6.76 Kwh where as in 2017 electricity stands at Rs 11.30 Kwh.
He said the government has imposed duty on import of cotton in order to please cotton farmers. The government is bridging the deficit in trade gap by borrowing from local and international banks. The finance minister Ishaq Dar in his budget speech said export was on the decline due to international financial crunch, which was totally wrong.
Exports affected
Zahid Mazhar, Senior Vice Chairman, APTMA urged the government to present a federal Budget, which supports export oriented industries including textiles. The budget can be a game changer for the economy if it encourages exports, industry and employment. The government must avoid imposing additional taxes on the industry and removal of incentives would prove to be the last nail in the coffin of the ailing manufacturing and export sectors.
Zahid Mazhar, Senior Vice Chairman, APTMA urged the government to present a federal Budget, which supports export oriented industries including textiles. The budget can be a game changer for the economy if it encourages exports, industry and employment. The government must avoid imposing additional taxes on the industry and removal of incentives would prove to be the last nail in the coffin of the ailing manufacturing and export sectors.
Mazhar says, this is going to be the last opportunity to reverse the downfall of industry, exports and balance of payment. During the first 10 months of the current financial, trade deficit has already jumped to $26.555 billion from $18.951 billion of the corresponding period of the last Financial Year i.e. an increase of 40.12 per cent and if this trend will continue trade deficit for the current financial year would reach to a record level of $30 billion. Textile exports for the same period have reduced to $10.296 billion i.e. about 1 per cent lesser than the corresponding period of the last year. As against this, the textile Industry is running below capacity, although it has a potential to increase the exports of the country to $ 30 billion
Mazhar further demanded the government to ensure availability of raw materials by allowing duty/tax free import of cotton and polyester staple fibre. The country has already suffered huge losses due to failure of cotton crop for two consecutive years. It is therefore imperative to continue with the policy of import of cotton without duty and sales tax rather it will be suicidal to re-impose custom duty and sales tax on import of cotton.
Subsidies needed
He requested the government to ensure Zero Rating of all inputs in true spirit including packaging materials, spare parts and fuel and energy. Payment of all pending refunds of sales tax, which is more than Rs 200 billion resulting in creation of severe liquidity problem to the industry, duty drawbacks and incentive schemes claims should also be made without any delay. He also demanded to reduce the Turn Over Tax to 0.25 per cent from existing 1 percent. He further demanded proper allocation of funds against the Prime Minister’s export led growth package announced in the January this year, which envisaged payments of Rs 10 billion per month, whereas only Rs 2 billion has been released so far during the last four months, he added. He further demanded the government advise commercial banks to provide long term loans and working capital to the textile industry at competitive rates.
The Pakistan textile industry, contributes 60 per cent to exports, is capable to control the trade deficit, increase employment and achieve export target of 10 per cent of the GDP provided policies are made to support it instead of discouraging it.
"At present Asia’s yarn and fibre market is going through a period of substantial change, The leading trade platform in the region will more than double in size this October, expecting its exhibition space to expand by 115 per cent as more companies recognize its effectiveness to mirror the latest industry trends as well as attract a truly global audience: last year’s autumn edition drew trade buyers from 77 countries and regions. Around 400 companies, up from 319 last year, are predicted to exhibit this edition."
At present Asia’s yarn and fibre market is going through a period of substantial change, The leading trade platform in the region will more than double in size this October, expecting its exhibition space to expand by 115 per cent as more companies recognize its effectiveness to mirror the latest industry trends as well as attract a truly global audience: last year’s autumn edition drew trade buyers from 77 countries and regions. Around 400 companies, up from 319 last year, are predicted to exhibit this edition.
Wendy Wen, Senior General Manager of MesseFrankfurt commented that the Yarn Expo fairs have further solidified their status as amongst the best business platforms in the yarn and fibre industry in recent years they are also looking for a strong demand for chemical fibres from emerging countries in Asia at present, as well as a lot of innovation happening with fancy yarns which is attracting buyers from the likes of Indonesia, India and Korea.
With the fair’s leading reputation, a number of suppliers from Asia, Europe and elsewhere will showcase their latest collections of yarn and fibre products this October. Being one of the highlights of the show, the India Pavilion is comprised of some of India’s biggest names. Given the currently large market share of Indian yarns in China, Indian exhibitors value the show a great deal.The Birla Planet Pavilion, has gained in popularity in the previous autumn and spring editions. With three years of market experience in China, Birla Group has gained a solid reputation in the country by introducing their eco products. At present Uzbek cotton accounts for over 80 per cent of the total cotton consumption in Hebei province of Northern China.
Matching the current market trends, domestic exhibitors will feature in six highlighted display zones, are more to be demonstrated. Given the fact that more buyers from Asian countries are sourcing innovative products at the fair, the Fancy Yarn Zone in particular has grown in popularity. This edition it will feature around 50 companies showcasing their latest collections of fancy yarns, doubling in size compared to last year.Yarn Expo Autumn 2017, three other textile trade fairs are held concurrently from 11 – 13 October in the same venue.
"Autumn/Winter is important as it encompasses the festive season. For this season, people select festive wear, bright colours, great lustre, texture and cuts. On living upto the expectations of consumers, Manohar Samuel, President (Marketing), Birla Cellulose, the Pulp and Fibre Business, says that these are the demands for the festive season as much as the functional requirement of keeping the consumer warm and being comfortable also about quicker drying and easy to maintain an autumn/winter scenario. These are the aspects where consumer feedback shows our challenges."
Autumn/Winter is important as it encompasses the festive season. For this season, people select festive wear, bright colours, great lustre, texture and cuts. On living upto the expectations of consumers, Manohar Samuel, President (Marketing), Birla Cellulose, the Pulp and Fibre Business, says that these are the demands for the festive season as much as the functional requirement of keeping the consumer warm and being comfortable also about quicker drying and easy to maintain an autumn/winter scenario. These are the aspects where consumer feedback shows our challenges. “We have worked with the brands to augment most of our products and fabrics taking in their feedback. The Liva Accredited Partner Forum Members have also contributed in the innovation of these products in blends and weaves,” adds Samuel.
Talking about the Liva outlook, Samuel feels that Autumn/Winter 2017 for LIVA is going to be interesting because we have come out with a collection, which encompasses a lot of blends. This collection is in line with the global trends. Blends with polyester, nylon, acrylic, wool and linen are seen in our latest collection. Discussing about the influencing factors, he elaborates that the factors that influence the market are what consumers want and what they see as available. Because today at the click of a button they glance through global brands online and they would like to have products like those.“Our fabrics for the autumn/winter collection this time are heavier,” says Samuel.
Challenging scenarios?
According to Samuel, Liva has not been impacted much by the fluctuation in cotton prices because their cotton blends are fewer. But most of the impact is from the consumers and the brands being able to reach out to the different segments of the consumers who would be using these products. “In terms of imports, we have our man made cellulose fibres being imported into the country and in terms of export, the manmade cellulose based yarns and garments which are exported from India. The ‘Make in India’ concept has made us look at such products that are being imported, the reasons for their import and we have partnered with some of the customers here to get this right. For example, in India, we have partnered with a few trouser manufacturers for making the fabric and a similar version available in India,” avers Samuel. In garment export, manmade cellulose garments have done well because the LAPF (LIVA Accredited Partner Forum)has focussed on innovation, product quality and service based on the LIVA Standards. This is increased and is around 27 per cent CEGR when compared to competing fibre. Going ahead, the company would like to make the entire product system sustainable as well as the business.
Policy recommendations
To be globally competitive, we need to be part of trade blocks, which is something the ministry would be contemplating upon because it has to do with not only textiles and clothing but also other products and merchandise from India, feels Samuel. But most of the growth has happened in the clothing exports with countries who have been part of trade blocks, which can help the industry to become more competitive. The next option is about fibre neutrality because in India, man-made fibres have cascading duties, making it expensive and there is a skew towards cotton in terms of fibre share. The global market share is drastically different to India market share in term of man-made fibres.
World cotton production is forecast to increase seven per cent in the crop year that starts from August 2017. The higher 2017/18 cotton production projection is the result of favorable prices that are encouraging a rebound in area.
India, China, and the US are forecast to account for a combined 62 per cent of global cotton production in 2017-18.
Global cotton consumption is forecast to increase by two per cent as world economic growth recovers in 2017 and 2018.
After decreasing by three per cent in 2016-17, India’s consumption is forecast to recover due to competitive prices for its cotton yarn products, expanding capacity and the resolution of the consequences of demonetisation.
China’s mill use of cotton is forecast to increase by one per cent, accounting for 30 per cent of world cotton consumption. Mill use in Pakistan may grow by one per cent due to new incentives for textile exports while Bangladesh may witness a five per cent rise.
With over supply in major countries, cotton prices may remain subdued. Prices may also be tempered as China reduces its inventories by dumping cotton stock in world markets. Meanwhile, stocks in India, Brazil, the US and Pakistan are expected to rise in 2017-18 with larger crops forecast.
