FW
Production of cotton in the US is anticipated to rise 15 per cent from 2015-16, based on 9.6 million planted acres as indicated in Prospective Plantings, combined with below-average abandonment, due to relatively favorable moisture, and average yields. A projected cotton crop of 14.8 million bales in 2016-17 in the US is expected to boost next season’s ending stocks, well above the beginning level. Domestic mill use is projected to be stable at 3.6 million bales, while exports are expected to rise to 10.5 million, on higher available supplies and more marketable qualities. Ending stocks are projected at 4.7 million bales, or one-third of total use. The preliminary range for the marketing year average price received by producers is 47.0 to 67.0 cents per pound.
During 2015-16, US cotton production increased marginally. Export forecast is reduced to 9.0 million bales, reflecting lower-than-anticipated export sales to date, with ending stocks raised accordingly. As per 2016-17 global cotton projections, a decline in stocks of more than 6.0 million bales is expected, as consumption exceeds production for the second consecutive season. Global production is expected to rise 5 per cent, despite marginally lower area, as yields recover from weather and pest pressures that affected crops in 2015-16. Production is forecast to rise mainly in Pakistan, United States, India, and Turkey, partially offset by a 1.3-million-bale reduction in China. Global consumption is projected to rise 1.6 per cent, as prices overall remain low and mills in China gain access to domestic cotton at more competitive prices.
Exporters in Tirupur say the proposal to fix the minimum wage for contract workers at Rs 10,000 will hurt the industry. Tirupur is the biggest knitwear hub in India and exports knitwear garments to more than 100 countries. In 2015-16, it recorded Rs 23,050 crores in exports as against Rs 21,000 crores achieved in 2014-5 and is currently providing employment to six lakh workers directly, out of which 70 per cent are women.
At the all-India level, the share of Tirupur has gone up from Rs 12,500 crores in 2011-12 to Rs 23,050 crores in 2015-16 i.e. from 19.1 per cent to 20.72 per cent. However, the sector is facing a tough proposition in the global market due to lower competitiveness in certain areas such as bank interest, infrastructure, transaction cost, and power cost including labor wages.
Competitors have forged ahead. Vietnam has already signed an FTA with EU, which will come into effect from 2017 and is one of the member countries of the Trans Pacific Partnership agreement. Likewise, being a least developed country, Bangladesh enjoys a duty free status in the EU and Canada.
India too has the potential to enhance exports to the EU. The EU accounts for a chunk of the total exports from India. Of the total exports of $17 billion, the EU accounts for $6.29 billion.
India is hopeful of signing the free trade agreement with the EU soon. This is expected to give an impetus to exports from the country. Talks have been broken for a while but now dialogues with the European Union have been revived. India is also taking steps to get the FTA with the United States ratified at the earliest.
Apparel exporters from clusters like Tirupur want FTAs with EU and the US as most of their exports are to these two regions. The country is encouraging garment exporters to explore new markets in South America and the Middle East, among other regions. Similarly, product diversification is being promoted so that apparel exporters can penetrate niche markets across the globe.
However, India’s share of apparels made of manmade fibers continues to remain low, even as 60 per cent of the shelf space in global markets is getting occupied with garments made of manmade fibers. Perhaps the use of manmade fibers is low due to the tax structure. So there has been a suggestion to reduce excise duty on manmade fibers from 12 per cent to 6 per cent.
Dalena White has been appointed the new secretary general of International Wool Textile Organisation (IWTO). She has had experience in marketing, retail and fashion and has worked as a designer and pattern maker in design studios. She knows about wool and the wool industry. She has curated exhibitions such as Design Indaba and Wool Week South Africa.
White has served as marketing consultant for Cape Wools, promoting merino wool among retailers and designers, building brand awareness and educating consumers among the unique properties of wool. She has served on the board of Sweet-Orr and Lybro, a leader in the protective clothing business, as merchandise director for men’s, women’s and children’s denim and cotton garments.
With a membership comprising 60 per cent of total wool production worldwide, encompassing the wool pipeline from sheep to shop, the IWTO represents the interests of the wool textile trade at the global level. It facilitates industry strategy and ensures standards in manufacturing and sustainability. IWTO fosters connection between members and all stakeholders through mutual support of opportunities for wool.
White was chosen through a competitive selection process from a strong set of international candidates. She will take up her role on May 17, 2016, at which time the current secretary general will step down.
Macy's same-store sales fell steeper-than-expected at 5.6 per cent in the first quarter while net sales declined 7.4 per cent. The retailer slashed its full-year forecast. The dismal forecast from the retailer pushed its shares down nearly 14 per cent to a more than four-year low.
Macy’s forecast cut reflects increased pessimism on the consumer's willingness to shop for apparel and accessories over the balance of the year. Apparel sales were also hurt by unseasonably cool weather in late March and early April, when retailers usually launch spring collections.
Macy's, profits have been shrinking for more than a year, and now it wants to intensify cost cutting and monetize unproductive real estate. About 40 per cent of Macy’s merchandise is exclusive, while the rest is available at competitors and at lower prices.
Macy's is working to boost sales by rolling out more of its backstage off-price stores and launching exclusive product ranges, including a clothing and accessories line in partnership with singers Elton John and Lady Gaga.
The intent is to bring the shopper into the store, have a product that's emotionally exciting to the consumer, a differentiated product that’s not available elsewhere.
Macy’s stock has lost 44 per cent of its value in the past 12 months.
India’s blended spun yarn export value was up 4.8 per cent year on year in March 2016 while volumes rose 10.6 per cent as compared to the same month last year. Polyester Cotton (PC) yarns were exported to 51 countries in March, of which Egypt and Bangladesh were the largest importers of PC yarn from India followed by Morocco. A total of 6.7 million kg of PC yarn was exported from India during the month.
Honduras, Spain, Sri Lanka and Germany were the fastest growing markets for PC yarns while Peru significantly reduced its imports of PC yarns from India. Oman and Panama were among the nine countries that did not import any PC yarns from India during March. Finland, United Arab Emirates and Djibouti were the major destinations among the 10 new markets found in March.
In March, PV yarns were exported to 37 countries from India with volumes at 5.4 million kg. Turkey continued to be largest importer of PV yarns from India followed by Pakistan with a total volume at 3.5 million kg. Honduras and Djibouti were the new major markets for PV yarn while 13 countries did not import any PV yarn during the month, including the major ones like China, Uganda and Brazil.
Sutlej Textiles and Industries a leading manufacturer and exporter of value added dyed yarns (synthetic and cotton mélange) with a presence in home textiles is creating new capacities in its Rajasthan textile mills for producing value added products and expansion of home textiles is progressing as per schedule. Once completed, these will enable the company to enhance its domestic as well as global footprint.
The company’s Board of Directors of the company has recommended the highest ever dividend in the history of the company at Rs 13 per equity share for the year ended March 2016.
Sutlej due to its strategy of focusing on operational efficiency, organic and inorganic growth through capacity expansion both in spinning and home textiles has reported increased revenues and profits during the year. Revenue is at Rs 558 crores. EBITDA is at Rs 77 crores. Net profit is at Rs 49 crores.
Financial year 2016 has been a challenging year due to the global economic slowdown and the stressed rural economy in the country. In spite of challenging headwinds for the sector with margins under pressure, Sutlej will continue to concentrate on enhancing its scale of operations which will ensure consistent performance coupled with growth.
"In FY 2013-14, India’s domestic textile machinery and engineering sector made a remarkable comeback two years ago, riding high on new project investments under the TUF Scheme and special textile policies of textile-leading states such as Gujarat, Maharashtra and Rajasthan. It clocked a growth rate of 20 per cent over the last fiscal, touching a turnover of Rs 67.8bn. However, for FY 2014-15, the production value of mainstream textile machinery, accessories, spares and consumables improved only by 3 per cent to a turnover level of Rs 69.6bn."
Dependence on borrowed technology, lack of continuous and sustained R&D initiatives have kept India’s domestic textile machinery far behind.
In FY 2013-14, India’s domestic textile machinery and engineering sector made a remarkable comeback two years ago, riding high on new project investments under the TUF Scheme and special textile policies of textile-leading states such as Gujarat, Maharashtra and Rajasthan. It clocked a growth rate of 20per cent over the last fiscal, touching a turnover of Rs 67.8bn. However, for FY 2014-15, the production value of mainstream textile machinery, accessories, spares and consumables improved only by 3 per cent to a turnover level of Rs 69.6bn. The industry has since struggled to sustain momentum, and is on a flat growth path despite the continuation of capex-inducing concessional subsidy based schemes such as TUFS.
Weak demand
According to Textile Machinery Manufacturers Association (TMMA), the lacklustre performance after FY 2014 was mainly down to the hit taken by the overall synthetic filament yarn industry, which accounts for 10 per cent of all textile machinery output, and has thus severely impacted the growth of the sector. In addition, the synthetic and man-made fiber (MMF) sector is plagued with overcapacity situations – despite the favourable trend in raw material prices, which have continuously fallen due to global declining crude oil prices. In line with the trend, this excess capacity situation in the MMF sector, owing mainly to the slowdown in demand of synthetic textiles, has impacted investments and thus take-off for the textile machinery, despite availability of concessional schemes to boost capex via new projects. The scenario is not likely to change in the near future due to continued weak demand for textiles.
Considering this flat scenario, the only ray of hope is the successful run enjoyed by cotton and spun yarn spinning mill machinery. This has been solely due to the capability of the spinning machinery segment to meet demand, both in terms of quality and quantity required by the mills. No doubt, the favourable and special textile policies of states such as Gujarat and Maharashtra, for cotton spinning mills, have played a pivotal role in mobilising new investment in cotton/yarn mill projects, and thus the yarn spinning machinery segment. As a result, the domestic production of cotton/yarn spinning machinery became the strongest link in the machinery value chain, accounting for almost 50 per cent of textile machinery production.
Meanwhile, other machinery segments like weaving, knitting, nonwovens and fabric processing, continue to languish in the shadow of the most successful yarn spinning segment. For the technology and machinery deployed in these segments, the majority of domestic demand is met through imports of such machinery from the EU, South Korea, Taiwan, Japan, China and Turkey as well as, to a smaller extent, the USA. Over the last two decades, imports of low-cost textile machinery from China have grown at a fast pace. Overall, and in the present day, almost 63 per cent, or two thirds, of all textile machinery demand is met via imports even though the overall production capacity of the domestic textile machinery sector is around Rs 110bn. The capacity utilisation has stagnated at a poor 60 per cent over the past few years.
Ray of hope
Under the new national textile policy, the industry segments of weaving and garmenting truly have the potential to be a ‘saviour’ of the domestic textile machinery industry. With growth in India’s GDP (the second highest in the world) and with the highest young population, the domestic apparel and retail segment will be the key driver of consumption of all textiles, and fabrics, in years to come. It would require upgrading weaving and processing units by replacing older, obsolete powerlooms by the new shuttleless looms of the type airjet, rapier, waterjet and high-speed knitting machines etc. However, it is imperative for the domestic textile machinery industry to upgrade its technology and capabilities to production modern high-speed shuttleless looms and restrict their imports.
Lack of R&D initiatives
Overall demand for textile machinery by the Indian textile industry is increasing at a CAGR of 12-15 per cent over the past years due to concession schemes for new project investments. But, more than 60 per cent of potential demand is met through imported machinery, thus by passing the indigenous textile machinery manufacturers and inflicting upon them high cost in terms of a lower capacity utilisation factor. The root cause for non-growth of the domestic textile machinery sector has been the lack of investment and expertise put into the R&D activities over the past decades, except for a handful of such manufacturers who ventured to forge technology collaboration and upgraded their machinery products in time.
Lakshmi Machine Works (LMW) in South India is one shining example, which not only outdone others, but also became a global player to compete with textile machinery leaders such as Rieter, Saurer and Trutzchler, as well as Chinese companies. In the final analysis, it is the dependence on borrowed technology – and a lack of continuous and sustained R&D initiatives – that have kept India’s domestic textile machinery far behind except, perhaps, for yarn spinning, despite good, available demand. It is not too late to save the sector from the same happening to machinery for technical textiles and nonwovens where, again, suppliers from the EU and China are dominating.
To impart a push and thrust to the future growth of the textile machinery sector, the TMMA is organising ITME India 2016 in December 2016 to showcase the strengths of the Indian industry.
Initial and Tersus Solutions have partnered to deliver a unique water-free laundry program, the first of its kind in the European industrial laundry market. The patented, closed-loop Tersus barrier system cleans high value corporate work wear and personal protective equipment using liquid carbon dioxide instead of water. The cleaning service will extend the life of rental work wear and increase worker health and safety, while taking an important step toward a more resource-responsible circular economy for textiles in Europe.
Regulators in Europe and the United States are increasingly concerned about worker safety resulting from contaminants encountered during hazardous work assignments, including fire fighting. Without appropriate and timely cleaning, workers are at risk of secondary exposure to contaminants via their work wear.
Water-based cleaning has dominated textile manufacturing and maintenance for centuries despite some of its limitations for maintaining work wear. The fibers of high-value work wear degrade via aggressive mechanical action, harsh chemistry, and high temperatures associated with traditional cleaning and drying.
Tersus introduces a specialty solution that produces unparalleled cleanliness and decontamination for high-value work wear. Distinct from water, Tersus uses no heat and gentler mechanical action to reduce garment degradation, and ensure worker health. The water-free cleaning solution can guarantee fiber integrity, color fastness, and technical functionality while reducing the environmental impact of laundry.
Italdenim believes in sustainability, recycling and waste minimization.It has created the online recycled denim fabric made by regenerating production waste of cotton yarn, traced to fiber, yarn and dyed again.
In a normal cotton dyeing process, the first and the last 500 meters of a dyeing batch - dyed in the startup and shutdown of the machine - are normally discarded because the optimal color occurs when the machine is operating at full capacity.
Italdenim, based in Italy, thought instead of regenerating this yarn it would create a proposal that meets the needs of the most discerning customers to ecology and respect for the environment.
Recycled Denim consists of 100 per cent cotton fabrics (60 per cent recycled and 40 per cent new) and fabrics combining cotton with polyester fibers. These are obtained from the recycling of post-consumer plastic bottles collected in North Italy, a double recycling therefore that benefits the environment.
The full control of the entire recycling process, which starts from the yarn and not from the fabric, allows the company to certify that its regenerated denim is composed exclusively of cotton, or cotton and polyester, without the addition of other unidentified fibers, as often happens in the process of recycling materials.
