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Pakistan and Indonesia have agreed on concession for 20 different items during bilateral negotiations under the Preferential Trade Agreement (PTA). Both sides discussed 20 tariff lines and Indonesia has agreed to give concessions on major exports from Pakistan including rice, textile, ethanol, kinnow and mangoes. The Indonesia-Pakistan Preferential Trade Agreement was signed in February 2012.
Concession on 20 tariff lines was a major success for Pakistan and now Pakistan’s kinnow exports to Indonesia will increase from 18 to 35 million tons and mangoes' exports will increase to ten million tons in a year. Before the PTA, Indonesia granted only two months for exports of Pakistan’s kinnows and mangoes but now after renegotiation, Pakistan can export these fruits to Indonesia for the whole year and any time limit has been removed.
Through these steps, Pakistani agricultural products will gain greater market access in Indonesia. The activation of PTA followed the signing of a Mutual Recognition Agreement on plant quarantine and sanitary and Phytosanitary measures between Indonesia and Pakistan. Pakistan and Indonesia have a current annual trade volume of $170 million, which is expected to increase after renegotiations on PTA between the two countries. Pakistan wants the same concessions from Indonesia which it is getting from other countries like China, India, Sri Lanka and Asean.
Nandan Denim’s topline, gross profit, and ebitda rose significantly during the quarter ended June 2017. However, an uptick in average realisation per meter was offset by higher cotton procurement costs and a rise in operating expenses, thereby impacting the company’s margins. Conclusion of the capex resulted in higher depreciation and finance costs, too, eventually taking a toll on the final profit margin.
The company is likely to reduce its debt by Rs 60 crores every year from its regular cash flows. The capacity utilisation rate at the company’s denim manufacturing facility is expected to scale up from 85 per cent in the recently-concluded quarter to 90 per cent by fiscal ’18-end, thus supporting higher volume-driven sales growth in the long run.
Headwinds such as the Gujarat floods and the pink bollworm attack on cotton fields in the state may lead to higher raw material prices. But the company has 47 to 60 days of cotton inventory and is reasonably confident of adequate supplies as the pan-India cotton acreage improves substantially. In the near future, raw material cost fluctuations are unlikely to affect the company’s operating margins considerably.
From a year-on-year perspective, Nandan has completed capacity expansions at the denim fabric, shirting fabric, and yarn manufacturing units.
Myanmar’s garment industry is seen as synonymous with low wages, long working hours and sub-standard working conditions. But it is difficult to negotiate higher wages when factories are being squeezed by their multinational brand customers. So, unions must look beyond minimum wages and push for a new wage fixing mechanism that takes account of the way that brands contract with suppliers and the prices they pay.
To achieve a living wage there is a need for higher wages to be set across the entire industry in order to prevent individual factories and brands from negotiating lower prices based on lower wages. The minimum wage right now does not take into account other wage-related factors like working hours, skills training and productivity. There is a need for a system that lifts standards across the market and enables workers to enforce their own agreements.
In addition the country should ease entry restrictions for foreign firms, undertake active investment promotion in garments through complementary reforms in finance and trade policy, expand training to tackle the shortage of high-level skilled manpower, and engage with buying firms, especially global retail or apparel corporations.
Many owners view the minimum wage – which is the second lowest in the region after Bangladesh – as a maximum price rather than a floor price. They prefer paying the minimum wage rather than a living wage.
Interfiliere Shanghai will be held in China on October 10 and 11, 2017. It will highlight the techniques and expertise of printing lingerie, beachwear and sportswear. The event offers a China-based view of textiles and textile accessories for the lingerie and swimwear industry.
The show will see participation from fabrics, accessories, laces, OEM/ODM, embroideries, machineries and textile design sectors, while analysing consumer expectations and anticipating the constantly changing market driven by innovation and performance.
Interfiliere Shanghai will feature trend forums that will focus on lingerie, swimwear and sports/athleisure. The trade event will present the spring/summer 2019 trends, showcasing a selection of innovations, fabrics samples, accessories and colors. It will give a live prototype presentation to inspire visitors and promote new industry codes with original combinations of fabrics and exceptional techniques. The event will also hold various seminars and conferences. The fair will accelerate networking opportunities, which will expand and strengthen network with the industry professionals. Visitors can inform themselves about the latest trends and products and find new business partners.
Six special Interfeel awards will be given to exhibitors from various sectors including lace, embroidery, accessories, sustainable, shapeletic and engeniring oui-tech (bonding, molding). The Interfeel awards will be given by a selection of worldwide recognised professionals of the intimates, swimwear and sportswear industry.
Inditex has acquired a 100 per cent stake in main Spanish supplier Indiput, where it held a 51 per cent interest since 1997. Indiput, a long-standing supplier of Inditex, has benefited from the group’s support and from the impact which the corporation has had on local textile-related businesses.
Inditex has been following a strategy of integrating its partners on the product manufacturing side. Altogether Inditex collaborates with 7,500 suppliers in Spain. About 59 per cent of its product sourcing comes from the Mediterranean region (Spain, Portugal, Turkey and Morocco), and it works with suppliers and manufacturers from 53 different countries.
Inditex saw net profit jump ten per cent last year. Inditex is the world’s largest fashion retailer by sales and seeks to have full integration of the brick-and-mortar stores and online businesses.
Among the brands run by Inditex are Pull & Bear, Bershka, and Zara. For all of 2016, Inditex reported a rise in sales at all of its eight brands. Zara alone was responsible for 66 per cent of total sales. Inditex plans to open between 450 and 500 new stores in 2017 while absorbing 150 to 200 smaller ones. In 2016, it opened a net 279 stores, bringing its total to nearly 7300.
A new wave of digital disruption is impending from e-commerce companies like Asos and Amazon. At one time retailers like Zara and H&M disrupted the fashion industry with lightning-fast speed of production, trend-led merchandise and a sizeable physical footprint. But they have been slow to catch up with e-commerce. This is surprising given that their target audience, millennials, are most digitally savvy consumers.
As online players ate into its bottom line, Zara finally catapulted into e-commerce in 2010. Zara’s initial hesitance in selling online stemmed from fears the cost of delivery and returns would weigh heavily on profits and cannibalise existing stores.
H&M is rethinking its approach to how stores will better support its omnichannel model and make for a seamless, smooth and inspiring shopping experience. H&M is rolling out app features like scan and buy allowing customers to scan products in-store that are not available in their size and have it delivered to their home.
On the other hand an online seller like Asos has a higher level of new merchandise on its website, with the ability to alter prices as demand varies. Over half of its sales from its 15 million customers come from mobile devices. The retailer has invested heavily in app functions like visual search, a tool that enables shoppers to search its 85,000 plus products by uploading a photo on its mobile app. The online retailer expects sales growth of 30 to 35 per cent in 2017.
Germany-based Bayer plans to take over US seeds group Monsanto. The deal would create the world’s largest integrated pesticides and seeds company but would limit the number of competitors selling herbicides and seeds in Europe. There are concerns the proposed acquisition could reduce competition in a number of different markets resulting in higher prices, lower quality, less choice and less innovation.
A merger would also reduce competition in the market for the genetic traits behind herbicide tolerance, which are typically licensed out to third-party seed companies. In addition, the deal might slow the race to develop new products, such as wheat seeds and herbicides against weeds that have grown resistant to existing products.
There are apprehensions competitors access to distributors and farmers could become more difficult if Bayer and Monsanto were to bundle or tie their sales of pesticide products and seeds, notably with the advent of digital agriculture. Bayer has a plan to create combined offerings of seeds and pesticides with the help of new digital farming tools, which include sensors, software and precision machines.
The proposed tie-up has also hit a raw nerve with some activists who fear such a combination would hurt farmers, consumers and the environment.
Bangladesh’s export earnings in July soared 26.54 per cent, marking a strong rebound after lackluster performance in the fiscal year that concluded in June. The surge was led by garments shipments which soared 17.08 per cent year-on-year in July. Still, the sector’s export earnings fell short of the monthly target by five per cent.
Since the congestion at Chittagong port has been eased and goods were delivered in July, export earnings reflected a sharp rise. In the just-concluded 2016-17 fiscal year, Bangladesh’s export earnings from the apparel industry saw only a 0.20 per cent rise, the lowest growth figure for 15 years for the key foreign currency earner. However, Bangladesh’s overall export earnings stood at $34.83 billion in the last fiscal year, which is 1.68 per cent higher than the $34.25 billion a year ago. Bangladesh is targeting earning $50 billion from readymade garment exports by 2021.
The readymade garment sector is a vital industrial sector of Bangladesh which is immensely contributing to the country’s export earnings, employment generation and value addition. Efforts are being made to ensure a safe, sound, green, environment-friendly and a vibrant garment sector. Out of 10 eco-friendly factories of the world, seven are located in Bangladesh.
Apparel Tech-Up seminar will be held in Bangladesh on August 26, 2017 organised by ThreadSol. Leading garment manufacturers, technocrats and top technology providers will explore a range of pivotal subjects that can be set to impact the future of garment manufacturing all over the world.
The discussions will be primarily around ideas by which the garment industry can find its footing in a landscape of constant change, driven by technologies like Artificial Intelligence and Big Data. The discussions will also include issues of material costs and flexibility with respect to the garment industry, along with practical approaches for designing and building intelligent enterprises to handle the enormous garment industry of Bangladesh.
Garment factories in Asia have made impressive progress in increasing their industries’ productivity. Under this scenario, concepts like Artificial Intelligence and Big Data can provide an extra edge to the firms over their competitors. Also, to keep material and labor costs low, technology can play a vital role in automating the processes wherever possible.
ThreadSol was established in 2012 and now has offices in Delhi, Bangalore, Jakarta, Colombo, Istanbul, Ho Chi Minh City and Dhaka. It serves more than 120 customers in 15 geographies. ThreadSol solutions – intelloCut and intelloBuy – are currently used by manufacturers in India, Sri Lanka, Bangladesh, Pakistan, Vietnam, Thailand, Indonesia, Turkey, Philippines and China.
Bangladesh textile and apparel companies will launch their own factory inspection and remediation initiative similar to the Bangladesh Accord on Fire and Safety and the Alliance for Worker Safety. A new local-based organization, Shonman, is being set up to oversee worker safety in the Bangladesh garment and textile industry.
Accord recently announced a three-year extension of its tenure in Bangladesh, which has been opposed by garment makers in the country. They say it is unfair for foreign retailers and brands to impose unilateral decisions on worker safety on a sovereign country.
New factories registering after December this year would have to pay for their inspections based upon the square footage of their facility. Arbitrations will be governed by the country's laws and administered by the Bangladesh International Arbitration Centre. Thorough, credible safety inspections of new factories and routine monitoring of old ones shall be carried out by skilled personnel selected by and acting under the direction of the implementation board. From 2021, Shonman would become fully self-financing.
Accord is a legally binding platform formed in May 2013 after the Rana Plaza building collapse with a five-year tenure for building inspection and remediation. Its tenure expires in June next year.
