FW
"The EU, which is Sri Lanka's biggest export destination, absorbing 36 per cent of total shipments, reinstated the country into the GSP Plus program in mid-May, removing import tariffs on more than 6,000 products, including clothing. Sri Lanka was dropped from GSP Plus in 2010 for human rights violations but remained in the less-favourable GSP program, under which its exports were taxed at 9.6 per cent. That had had an impact. Total apparel exports fell from $4.7 billion in 2014 to $4.6 billion in 2015 and 2016, according to the Joint Apparel Association Forum, an industry body."
The EU, which is Sri Lanka's biggest export destination, absorbing 36 per cent of total shipments, reinstated the country into the GSP Plus program in mid-May, removing import tariffs on more than 6,000 products, including clothing. Sri Lanka was dropped from GSP Plus in 2010 for human rights violations but remained in the less-favourable GSP program, under which its exports were taxed at 9.6 per cent. That had had an impact. Total apparel exports fell from $4.7 billion in 2014 to $4.6 billion in 2015 and 2016, according to the Joint Apparel Association Forum, an industry body. Exports to the EU in 2014 stood at $2.1 billion, but dropped to $1.9 billion in 2015 and 2016.
The slump has continued in 2017, with apparel exports falling another 5.8 per cent in the first five months, compared with the same period in 2016. But JAAF adviser KJ Weerasinghe says they can now receive at least an additional $400 million worth of orders from the EU initially, which will increase further, after regaining GSP Plus. Retailers, says it would not be possible to meet the government's target of doubling exports by 2020, although 2022 could be a possibility. Analysts say that Sri Lanka needs to do more to catch up with countries like Bangladesh, which is now the world's second-largest clothing exporter after China. Bangladesh accounts for 6.4 per cent of global clothing exports, compared with Sri Lanka's 1.2 per cent.
Upgradation is the key
Sri Lanka has fallen behind in terms of value chain creation. Bangladesh, for example, has set up spinning mills and knitting mills, which allow manufacturers to cut production costs and improve efficiency. This also puts Bangladesh in a good position to sell large volumes of cheaper apparel such as knitwear, woven shirts, sweaters and sweatshirts. Amit Gugnani, analyst, Technopak Advisors, points out Sri Lanka must adopt a similar approach to developing value chain capabilities. In complete integration, it becomes relatively easier to look at cost engineering across the value chain. The government should set up textile industrial clusters in the country's north and east by providing investment incentives, as part of the value chain creation.
Another aspect of making production cheaper is to concentrate on remote and backward regions. Wages in Sri Lanka are typically higher than in Bangladesh and Vietnam, making the country better suited to producing high-end garments such as swimwear, trousers and underwear, including lingerie for top brands such as Victoria's Secret.
As per World Bank's ‘Stitches to Riches’ report, the minimum monthly wage in Sri Lanka is $120, compared with $70 in Bangladesh. Sri Lankan labour laws also limit factory workers to 57.5 hours per week, with fixed weekly holidays. This compares with Bangladesh's working limit of 60 hours and Vietnam's 64 hours.
Controlling costs
It's important for Sri Lanka to look at providing lower minimum wages in backward and remote regions where the cost of living is comparatively lower. The industrial clusters in these regions can focus on basic products with minimal value addition and large volumes, Gugnani fee;s. To cut production costs further, JAAF has requested exemptions from Sri Lanka's 2 per cent nation-building tax and a 7.5 per cent port and airport development tax on the importation of machinery for the sector.
As per Anushka Wijesinha, Chief Economist, Ceylon Chamber of Commerce the country must also focus on becoming an easier place to do business. For a more sustainable and sustained increase it needs to focus on competitiveness and factors that hold exporters back – like standards, bureaucratic and procedural delays. The government must help exporters test products to meet international standards. He urged the government to remove archaic laws such as the need to obtain permits for each shipment. Sri Lanka is ranked 110th among 190 economies in terms of the ease of doing business in 2016, slipping one place, according to the latest World Bank annual ratings.
Experts say Sri Lanka should explore the idea of exporting more and must look at consolidating its position, and not only focus on higher-end and value-added garments.
Lineapelle New York 2017 was held from July 18 to 19, 2017. This is a leather goods trade show. It confirmed the interest of US buyers in Italian materials, despite the unpredictable market situation, with retail channel especially on edge. The number of exhibitors rose 20 per cent compared to previous edition with nearly 120 exhibitors and some 1,300 buyers attending.
The focus was on trends for 2018-19 winter season, which will be characterised by an unconventional color palette and the use of basic yet high-quality materials. The two-day event saw the participation of exclusive European and international makers of leather, textiles and synthetics, components and hardware for shoes, handbags and leather goods, leatherwear, upholstery and car interiors.
The high quality and variety of cutting edge collections make it a must-see event for producers and designers of luxury and contemporary items. Lineapelle New York is held twice a year. Summer and winter collections are presented in February and July respectively. The next edition, which brings together international manufacturers of leather, fabrics and synthetic materials, will be held in Italy, October 4 to 6, while the next New York edition is scheduled for January 31 to February 1, 2018.
Pakistan Industrial and Traders Associations Front (PIAF) has welcomed the continuation of GSP Plus status to Pakistan in UK beyond Brexit. The British High Commissioner to Pakistan, Richard Crowder has confirmed UK wants to maintain and strengthen access to UK markets for developing countries after leaving the EU. For Pakistan, which benefits from zero tariffs on two-thirds of all products export to the UK, says PIAF Chairman Irfan Iqbal Sheikh.
PIAF feels the assurance is heartening as there were apprehensions in the market that Pakistan and some of the other developing countries could lose GSP Plus status in the British market post-Brexit. It is reassuring that such apprehensions have been removed and Brexit would not make any difference on present trade relations between the UK and Pakistan.
However, Sheikh said exporters have failed to get new export order which will further decline exports in coming months, as their genuine demands were not met by the government. The PIAF chairman alleged FBR officials are treating exporters and tax-payers as thieves and arbitrarily debiting amounts directly from the banks accounts of exporters. He added that trade deficit has touched $30 billion; markets due to decrease in exports while, on the other hand, competitor Bangladesh's textile exports alone have touched $28 billion mark and they have set their target of $35 billion in next five years.
Presently, Pakistan has the highest-ever cost of doing business/manufacturing as compared to eight competing countries in the region. He stated that duty-free access was of critical importance for Pakistan but government will have to implement its commitments to provide incentives to the exporters.
Jeanologia is keen to guide technological reformation of Indonesia’s textile industry. The Spanish company, specialising in development of sustainable technology for garment finishing, revealed its latest developments recently.
Currently, Indonesia generates 2 per cent of global jeans and wants to harness innovation and technology to use throughout its textile industry to attract big fashion brands and become competitive with other Asian countries. As per the company while to finish a denim garment, an average 70 liters of water is required, with the new technique the amount is reduced to a single glass.
For Fernando Pérez-Narbon, area manager at Jeanologia, achieving sustainable production is possible through innovation and technology. In the automotive sector, the company has been able to reduce fuel consumption and carbon dioxide emissions thanks to innovation and the same is happening in the textile sector: with technology, it is reducing water consumption and pollution, she added.
Currently the Spanish company has clients in five continents and the export of its machines and services represents 90 per cent of its turnover. The company has an international presence in 50 countries.
GTE (Garment Technology Expo) is having its maiden show in Gujarat, August 18 to 20, 2017.
Gujarat is popularly termed as the textile state of India and Ahmedabad is the hub of the garment and made-up fabrication of the western region. Gujarat is a one-point sourcing hub for all kinds of textiles, with one of the largest concentrations of textiles in India.
The show will showcase the ever growing and dynamic and vibrant industry of Gujarat. GTE initiated in 2001 and has already conducted successfully 24 editions across the nation.
The fair will have exhibits like sewing machines, knitting machines, embroidery machines, digital textile printing and fabric and accessories.
The biggest industry show in the subcontinent, GTE is patronized by trade professionals who include manufacturers, exporters, institutions and other volume consumers.
Besides owners, CEOs, MDs and production heads who visit to see, compare and negotiate deals for new machinery, designers, technical supervisors, shop floor managers visit to update themselves on new technologies, materials, the latest product launches and new innovations at GTE.
GTE showcases the latest machines and processes. Nearly 85 per cent of the participants from the initial editions of GTE continue to be steadfast. New innovations, product launches, product upgrades, live demonstrations, new materials etc. are the cornerstone of each successive show.
Garment workers in Myanmar are struggling to cover everyday living costs while factory owners enjoy the surge in demand from global fashion brands. The minimum wage barely covers the cost of food. Ten years in the garment industry, workers live in dorms and can’t afford a place of their own.
Most garment workers report working up to 11 hours a day, six days a week. There are horror stories like workers choosing not to drink too much water so they don’t have to use the bathroom as they will miss out on bonuses. Workers face bad working conditions and health. There is an overwhelming number of workers who don’t know their rights. A report from Burma’s Women Union, published some months ago, revealed workers from nine factories that supply H&M, Marks and Spencer and C&A who face a cycle of poverty and debt.
Garment manufacturers are moving from Bangladesh and China to take advantage of cheaper labor in Myanmar. Many business 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.
The biggest issue that workers report is companies’ blatantly ignoring labor laws. This has resulted in a rise of workers’ protests, which is starting to see results. Still many fear losing their job for raising their voice. That is why NGOs like international women’s organisation The Circle is calling for fashion brands to acknowledge the right to a living wage as a fundamental human right. They are calling for a global pact among brands taking responsibility to pay workers a fair wage in the factories they use.
The Turkish ready-to-wear industry is entering the US market. A 4,000 sq ft showroom is opening in the heart of New York’s garment district where 10 different Turkish brands and showrooms will be organized at the center, targeting American fashion and ready-to-wear companies. Brands and manufacturers will exhibit their products from street fashion and maternity clothing to women’s knitwear and denim.
The US is the biggest ready- to-wear importer in the world. Turkish fashion and design products that give East- West synthesis an important place in its designs is expected to have a stronger space in the American fashion market where concepts such as diversity, inclusiveness are on the rise.
Exporting ready-to-wear clothing is better for Turkey financially compared to exporting just cotton. Turkey’s apparel and textile industry has been a powerful engine for Turkey’s economy, roughly ten per cent of the entire GDP, and now the country is looking to expand that success by expanding exports to as many countries as possible.
Turkey is among select few countries that mandates all its textile manufacturers comply with internationally accepted environmental standards. As an example, unlike many Far East and Asian countries, Turkey bans the use of carcinogenic dyes. This results in more environmentally safe products.
Most US fashion manufacturers and retailers prefer to source from China.
Some 91 per cent of them source from China.
Vietnam is the second go-to sourcing spot.
Bangladesh has been a popular sourcing destination because of its low-cost labor, but there are compliance issues with that country’s factories. So only 32 per cent of US fashion industry executives expect to increase their sourcing there.
While duty-free imports are critical for keeping costs down, most of the 19 free-trade agreements the United States has with other countries are underutilized. Only the North American Free Trade Agreement is used by a significant proportion of US manufacturers.
What is worrying US business is the tariff their country is threatening to impose on imports from major US trading partners. American manufacturers are opposed to the US border adjustment tax that would tax imports and subsidize exports.
Second on their list of concerns is competition from e-commerce sites that are cutting into bricks-and-mortar store sales. Some 57 per cent of them are worried about the growth of companies such as Amazon and new entrants to online sales. They feel bricks-and-mortar stores are still an important source for shoppers.
Only 71 per cent of US fashion industry executives feel optimistic about the future, down from 92.3 per cent surveyed last year.
A space station in the US will provide up to a million dollars in funding to scientists and researchers who can come up ways to make cotton farming more effective and sustainable. The space station is Center for the Advancement of Science in Space (CASIS). In other words an orbiting laboratory is assisting in better farming practices. Some of the ways in which the station could help in the effort include using the station's high-altitude vantage point, which could provide the agricultural community with unique perspectives on sustainable crop production and water use. Or scientists could use the microgravity environment on the station to study how cotton crops respond to different environments and conditions.
CASIS is encouraging researchers to submit proposals in areas of fluid dynamics, fluid flow, cotton and plant germination. The world produces more than 25 million tons of cotton a year, To produce just a kilogram of cotton requires between 10,000 to 20,000 liters of water.
While the economic and personal benefits of cotton are well-understood, the environmental impacts of cotton production are significant. The intensive use of agricultural chemicals in cotton farming and production can have severe health impacts on workers and the surrounding ecosystems.
Manhattan Beachwear has a partnership with F1 Generation by which the latter will represent Manhattan Beachwear's brand portfolio in all 23 major EU territories. Manhattan Beachwear, founded in 1946, is an American swimwear and beach accessories company. It designs, manufactures, and markets under license for Kenneth Cole, Kenneth Cole Reaction, Lucky Brand, Lauren Ralph Lauren, Polo Ralph Lauren, Chaps, Trina Turk, Nanette Lepore, Sperry Top-Sider and Hobie.
In addition, Manhattan Beachwear also designs, manufactures and markets proprietary brands La Blanca, 24th & Ocean, Maxine of Hollywood, The Bikini Lab, Green Dragon and Pink Lotus. Manhattan Beachwear's swimwear is sold throughout the US, Canada, Mexico, Australia, and the UK. The company also operates a subsidiary in Portugal, which supplies swimwear to the European market.
F1 Generation, based in Germany, distributes more than 30 brands with a special concentration in swimwear and intimate apparel. Besides offices in Cologne, the company has subsidiaries in the UK and Spain. F1 maintains accounts in all key department stores, online retailers and better specialty stores throughout Europe. With a keen sense for new trends and popular labels F1-Generation is the perfect partner for the distribution of Manhattan Beachwear's premier proprietary and licensed brands in the European market.
