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India will soon have a simplified textile policy. The new policy is aimed at increasing production and productivity of the textile sector, generating more employment, bringing down the cost of production, penetrating into newer markets, and introducing more value added products and focusing both on exports and domestic markets.
There may be some relaxation in labor laws such as allowing women to work at night. Some kind of tax incentives may be provided to weavers to make the sector attractive. This also includes tax holidays and interest subvention.
Most incentives or subsidies given now are production related. Those related to processing and skilling would be continued. Exports from India are expected to become unviable after 2017 as India is a signatory to WTO guidelines. There will be a review of subsidies and concessions. Some will be continued and some will be phased out. There may be production-related sops.
The Textile Upgradation Fund scheme has been revised. The growth of Indian textile sector has been hampered by factors such as high cost of production, sudden spurt in interest rates on working capital and an increase in labor wages. The industry has sought modifications in contract laws.
The biotech industry in India has opposed the notification fixing the maximum sale price of BT cotton seeds. It says the move violates the principle of free market economics and would discourage research.
BT cotton seed price has been fixed at Rs 800 per packet of 450 gram, including the trait value of Rs 49 per packet. The industry feels an atmosphere for promotion of innovation would have given the farmer new technologies for generating higher income and that slashing trait fees does not support innovation in the long term. The decision, it says, runs counter to the Make in India initiative and would be detrimental in the long run as companies would reconsider their investments in seed based R& D in the country due to the current uncertain environment. There would be no opportunity for companies to bring new products to the market.
The sharpest cut is on royalty or trait fees. They were reduced by 74 per cent. The latest prices will come into effect from the next kharif crop season, sowing for which begins in June. While the move will benefit nearly eight million cotton farmers in India, it raises concerns about the country’s intellectual property rights regime.
Inditex, the owner of the Zara chain, has reported strong sales growth for the first five weeks of the new financial year. But it plans to slow down its rapid pace of store openings.
Inditex will focus store openings on flagship sites in prime locations. It will aim for 6 to 8 per cent growth in new sales space in the coming years, below the previous guidance of 8 to 10 per cent.
Sales of items such as broderie anglaise blouses and floral lace dresses from fashion label Zara’s spring collection helped push sales across Inditex’s stable of brands up 15 per cent, at constant exchange rates, in the first five weeks of the financial year that started in February.
Inditex, the world's biggest clothing retailer, opened 330 stores in 56 markets in 2015, with a new Zara shop in Hawaii becoming the group's 7000th store worldwide. Its brands include upmarket label Massimo Dutti and teen fashion chain Bershka. It expanded online sales to Hong Kong, Taiwan, Macao and Australia during the year and may complete its online presence in all European Union markets in April.
Inditex’s net profit came in at 2.88 billion euros for the financial year which stretches from February to January, boosted by the relative weakness of the euro against a basket of around 60 currencies.
https://www.inditex.com/
China's exports witnessed their heaviest fall in nearly seven years in February diving more than a quarter as feeble global trades offset the weaker Yuan and raised pressure on Beijing to ramp up domestic demand as a driver of expansion. While promising reforms and higher spending to boost the world's number two economy, the below-forecast reading is the latest data raised fears of a ‘hard landing’ in China and comes days after Beijing cut its growth target for this year.
Last month, customs figures showed exports sank 25.4 per cent on-year to $126.1 billion, sharper than the 14.5 per cent economists predicted and the worst performance since May 2009 at the height of the global financial crisis. China is the world's biggest trader in goods and a key driver of international growth but its firms have been battered by weak demand from major markets as the global economy stutters. In turn, its slowing expansion has sent commodities prices plunging, battering producer economies such as Australia.
China’s imports fell for the 16th consecutive month, plunging 13.8 per cent to $93.6 billion. Analysts at ANZ Research cited ‘weakening global trade’ and ‘sluggish domestic demand’ as factors driving the ‘disappointing’ export and import results.
Textile Exchange has the released the second set of 13 new documents within the full suite of Material Snapshots, produced in 2015 with financial support from VF Corporation and in collaboration with Brown and Wilmanns Environmental, LLC.
The new snapshots offer a deeper dive into the life cycle issues of 27 fibers and materials, covering both ‘preferred’ and ‘conventional’ options. Each snapshot combines available LCA data and information with detailed literature reviews to provide a reliable and comprehensive, yet succinct, analysis. Included in each snapshot is an overview of: unit process descriptions, process inputs and outputs, performance and processing attributes, potential social and ethical concerns, availability, certification and pricing details, suggested questions to ask when sourcing the material, and system diagrams.
Designed for more technical users such as materials, sourcing, and sustainability professionals, the new snapshots are not aimed at users looking for a more summary view of a fiber or material; for that, Textile Exchange offers a set of 33 Material Summaries, produced in 2013/14 with support from VF Corporation (previously also referred to as ‘Material Snapshots’).
Founded in 2002, Textile Exchange is a global nonprofit organisation that works closely with all sectors of the textile supply chain to find the best ways to minimise and even reverse the negative impacts on people, air, water, animals, and soil created by the $1.7 trillion industry.
Foreign investors and retailers are exploring investment opportunities in Tanzania. There is a significant potential for a flourishing textile and garment industry in the country, thanks to the country's cotton production capacity. Tanzania boasts of bumper cotton harvests, with expertise and infrastructure to sustain the spinning, weaving and manufacturing elements of the value chain. The country can therefore be a base for vertically integrated textile and garment operations.
The country has formed a fund whose objective is to stimulate the textile and apparel industry. With expertise in technology, management and marketing, the unit is designed to facilitate supplier relationships, build training capabilities and coordinate friendly policies for investors.
It is working closely to improve the regulatory environment, incentives for investors, the quality of inputs and upgrading of the industry. It will help new investors locate empty factory space in identified regions and link investors to joint ventures.
Because of Tanzania’s categorisation as a less developed country, its cotton, textile and apparel products enjoy unparalleled access to almost all of the world’s most important markets. While there has been variability in production levels in recent years due to price instability and weather fluctuations, there has been progress in introducing contract farming in some of the growing regions, which is already leading to higher and more stable yields as well as higher quality cotton.
The Nigerian textile industry is under performing due to the influx of cheaper fabrics from China and India.
There are about 30 textile mills running in the country but only at an average of 40 per cent of installed capacity. In order to encourage domestic production, a ban was imposed on textile imports in 2010. However, this led to increased smuggling. It’s estimated that smuggled imported textiles account for over 85 per cent of fabrics sold locally. Nigeria spent some $130 million on textile imports in the third quarter of 2015.
For most manufacturers the high cost of financing is a major roadblock. Annual interest rates on their loans are close to 30 per cent whereas in China rates of less than six per cent are sometimes available. About six years ago a textile and garment intervention fund was set up. However the impact of the fund was modest since beneficiaries tended to refinance their existing loans and spend very little on capital investments.
Policies geared towards boosting textile and garment industries are being developed in Nigeria. An intervention fund will be established that will offer loans at a single digit interest rate.
Leading textile player T.T. celebrated the completion of 25 years of public listing recently at the Bombay Stock Exchange.
During the occasion, the company’s management announced their plans to launch a premium innerwear brand in the near future as part of their new strategy to move towards the fashion side of the fiber to fashion spectrum. This move will help enhance margins and build the brand equity of the company. The company has enhanced their knitwear range to become a garment company from an innerwear company.
Dr R C Jain, Chairman and Founder of T. T Group explained the journey of the company and its evolution as a fiber to fashion company as it spread its wings not only across India but also across 65 countries. Brand T. T., under which all products are sold, has become a well known brand with registrations in India and many other nations. He paid special emphasis on the principles of the company and its employees who have been the two important pillars on which the Company laid its foundation and grew.
Sanjay Jain, managing director laid down the vision and roadmap of the Company with clarity and crispness. Incidentally, T. T. Group has to its credit many firsts in the industry, one of which is that it was the first garment company to get listed on a stock exchange in 1990.
"With an annual harvest of around 13 million bales, Pakistan is the fourth largest producer of cotton, producing about 10 per cent of the total global production of cotton. Pakistan’s textiles industry consists of 11.3 million spindles, 03 million rotors, 350,000 power looms and some 18,000 knitting machines. It has 700,000 industrial and domestic stitching machines."
Pakistan’s textile tycoons are partly responsible for the sorry state of affairs in its cotton sector for despite availing subsidies in billions, they have neither been able to improve the quality of their products nor bring the sector in conformity with the modern day requirements. Despite being the fourth largest producer of cotton in the world, Pakistan has been performing poorly in cotton trade. Cotton consumption is likely to decline by 12 per cent this year. By consuming 2.2 million tons of cotton, Pakistan would be exporting around $13 billion of cotton products whereas with the same quantity of combined cotton production Bangladesh and Vietnam would generate exports of $54 billion, reveals a recent cotton update by the International Cotton Advisory Committee.
Pakistan’s consumption of cotton will be equal to the combined Despite quality yarn Pakistan performs poorly in cotton exportsconsumption of the silver fiber in Bangladesh and Vietnam where it is likely to register an increase of 22 per cent and 13 per cent respectively. Responsible for 80 per cent exports and employing 40 per cent of industrial workforce, Bangladesh’s garment sector specialises in low-end clothing and is the main industry of the impoverished nation, which has emerged as the world’s second largest producer of apparel.
Value addition holds the key
Value addition in Bangladesh and Vietnam, two non-cotton producing countries is over four times higher than Pakistan. However, both the countries are among the low value-added textile exporting countries, while China, Turkey, Sri Lanka and Tunisia add much more value to their textiles.
With an annual harvest of around 13 million bales, Pakistan is the fourth largest producer of cotton, producing about 10 per cent of the total global production of cotton. Pakistan’s textiles industry consists of 11.3 million spindles, 03 million rotors, 350,000 power looms and some 18,000 knitting machines. It has 700,000 industrial and domestic stitching machines. In addition, it has a strong fiber base of 13 million bales of cotton and 600,000 tons of manmade, including polyester fiber. There are 21 filament yarn units having capacity of 100,000 tons. The filament and yarn industry is supported by PTA plant which has 500,000 tons capacity. Unlike many competitors which have only primary base or the finished base, Pakistan’s textile industry has a complete value chain which is rare in the world.
Until 2006, Pakistan was one of the most efficient producers of yarn around the world because it possessed better technology than India, China or Bangladesh. But, Pakistan’s textile industry halted its upgrade, and its technology is now older than all the three regional countries. Consequently, the last 18 months have been a nightmare for the energy intensive spinning and weaving industry of Pakistan due to high power tariff and energy shortages. Despite the recent power tariff reduction of Rs3 per unit, the spinning industry is reportedly still facing problems. Around 110 spinning units are still closed down.
Cotton’s role in Pakistan’s economy
Cotton and its value added products chain contribute about 57 per cent to Pakistan’s annual export income. Besides, cotton provides livelihood to 1.5 million farming families and jobs to about 40 per cent of the country’s labour force. In view of its contribution, cotton is often called the life-blood of Pakistan’s economy.
Considering this, the government in 2004 created a Ministry of Textiles to deal with this sector exclusively. Since then there has been a lot of rhetoric about shifting the textile sector from commodity to specialty, value addition, skills and vocational training programmes, establishing textile cities, model garment factories, modern textile laboratories, textile research institutes and special economic zones to facilitate export specific textile industries. However, the export of Pakistan’s textiles, despite subsidies and concessions to the textile industry has continued to decline in the country’s overall exports.
Largely due to high cost of doing business, global recession and subsidies given by the competing countries to their industry, Pakistan’s textile sector has remained stagnant over the last decade. Taking stock of the situation, the government announced the Second Textile Policy 2014-19 on February 15, 2015. This policy aims at making textile sector more competitive, robust, goal-oriented and sustainable. The policy envisages to double textile exports from $13 billion to $26 billion per annum in the next five years. Converting more primary raw materials into value-added product, increased productivity and quality will be the prime focus of this policy.
Pakistan’s textile exports have reduced by 14 per cent over the last six months, despite the second Textile Policy. If this trend is allowed to prevail, it could lead to a reduction of $3.5 billion in exports by the year’s end. Earlier cotton crop failure in Punjab had resulted in $1.5 billion loss to farmers.
According to a new report from the Waste & Resources Action Programme (WRAP), demand from overseas reuse and recycling market for used textiles from the UK has dropped significantly. The report said that the market for used textiles (clothing and non-clothing excluding carpets and mattresses) has experienced an apparent turning point. The last few years saw substantial growth in exports, accompanied by large price rises and reports of an influx of new entrants into the market.
However, market conditions were said to have now changed, with demand from overseas markets stalling in 2014, and now falling. WRAP also found that prices and revenues from exports have been falling since 2013/14.
According to WRAP the textiles and clothing industry is the 5th largest contributor to the UK’s carbon footprint and that simply extending the life of clothes by an extra nine months of active use would reduce the carbon, water and waste impacts by around 20-30 per cent. It was also claimed that providing 1 ton of clothing for direct reuse e.g. donate to a charity shop or sale through eBay can result in a net GHG saving of 11 tons of CO2 equivalent.
WRAP’s Textiles Market Situation Report, looked at the market past and present and summarises key trends and highlights opportunities for creating new sustainable end markets in the UK and abroad.
