FW
The Turkish textile and ready-made clothing sectors are set to make up for their losses, since bilateral political relations were strained with Russia, by opening up to Iranian and African markets. With signals of financial weakening in Russia, as importers did not purchase enough goods in the beginning of the new season, Turkish textile exporters have planned road shows in Iran, Ghana, Nigeria, Morocco, Tunisia and Algeria in March.
According to Giyasettin Eyüpkoca, President, Laleli Industrialists' and Businessmen's Association (LASİAD), economic recession is being experienced not only in Russia but also in other countries such as Italy, France and the United Kingdom. He stressed that road shows bring more advantages than fairs to the ready-made clothing sector. Eyüpkoca added that Pure London and Magic Show fashion events, which were recently held in the UK and the United States, respectively, were not efficient enough.
Said Hikmet Eraslan, Dosso Dossi Holding Chairman, the sector has failed to increase its turnover despite reducing prices by 30 percent in the Laleli and Osmanbey shopping areas, which are popular shopping spots for Russian tourists in Istanbul. He underscored how essential it is to find alternative markets.
China’s sportswear market will surpass luxury goods market by 2020. It see double digit growth each year compared with the luxury market's single digit growth in the same period. The sports sector contributes 0.67 per cent of China’s total gross domestic product compared with 2.2 per cent in the European Union and 3.5 per cent in the United States.
Extreme sports apparel and expensive active wear are in vogue ahead of the 2022 Winter Olympics in China. The market is also forecast to grow with the country’s decision to relax its one-child policy after 36 years, and companies from the US and Canada are lining up to cash in. Some Chinese come to weddings in active wear. A growing fitness craze saw 134 marathon and road-running races held across the country last year up 160 per cent from 2014. It’s estimated that by 2025, more than 9,00,000 stadiums and gyms will have been built across the country.
China’s slowest economic growth in 25 years has forced China's elite to change their spending habits. Some of the money once spent on French wine and Italian leather now appears to be flowing into high-end heart-rate monitors and running shoes.
Cotton farmers in Pakistan are in distress and want a bailout package. They say if this is not provided on time they will switch to other crops, and this will reduce the area under cotton cultivation by 20 per cent and bring down production. The main reason behind the cotton collapse has been due to substandard imported seeds. These came under pest attacks. There was no spray available to kill the pink bollworm, which destroyed 60 per cent of the crop.
Reduced cotton prices at home and on the international market have proved to be another disincentive for the millions of farmers depending on cotton crop as they continue to pay heavy input prices. Persistent rains this season, restricted the use of pesticides resulting in a sharp fall in output.
Cotton is the mainstay of Pakistan’s economy. A shortage of cotton is expected to hit the textile sector which in turn will be forced to import cotton by drawing on forex reserves. Textile and cotton exports help Pakistan earn $12 billion a year and provide jobs to a huge section of the population.
Pakistan is the fourth largest producer of cotton in the world and has the third largest spinning capacity in Asia (after China and India) with thousands of ginning and spinning units producing textile products from cotton.
Ludhian is hosting GMMSA from Feb 19 to 22, 2016. This brings garment machinery manufacturers and suppliers under one roof and gives them a platform to showcase their products to brands and garment makers. The objective of this expo is to provide latest technology and knowhow to the garment manufacturing industry and help it compete in the domestic as well as in the global market.
Over 400 leading brands of the world have showcased their machinery collection. There are knitting machines that do not require external cooling and a UPS. They will find a place in the market as they reduce electricity consumption. There are dyeing and washing machines that are eco friendly and use water saving technology. There are machines that save yarn and reduce waste and come with the new cutter and gripper technology aimed at achieving this end.
There are machines with an eye catching look and carrying value added features enhancing productivity as well as quality of the end product significantly. Top names in knitting, dyeing, finishing, and processing have marked their presence with their production and quality control teams.
On the first day more than 5,000 people visited the expo.
www.gmmsaexpo.com/home.php
Indonesia may join the Trans Pacific Partnership in the coming years. The country’s textile industry is ready for the partnership as it is already structured from its upstream to downstream. Indonesia feels the TPP could more than double its textile exports in a decade as the US is one of its major markets.
However, the yarn-forward clause in TPP is making them wary. This provision in the TPP will cut tariffs only for garment products made using materials sourced from member countries. In other words, textile and apparel products made using TPP members’ yarns and fabrics will qualify for zero-tariff in trade among the member countries.
However, Indonesia still imports a total of $8.6 billion in the form of fiber, yarn, fabric, garments, tapestry and other textile products, with a big chunk estimated to come from China, which is not a TPP member. Vietnam, which is one of the TPP signatories, has raised concerns about the yarn-forward rule of origin as it still imports some types of fabric from China.
The TPP currently has 12 signatory countries, namely Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the US.
UK’s Langholm-based clothing retailer Edinburgh Woollen Mill, is facing charges for labeling scarves as “100 per cent cashmere” while being allegedly mixed with other material. The retailer, which has 265 high-street stores, is embroiled in a trial with growing concerns that cashmere is being blended with sheep's and yak's wool and synthetic products. The company outsources its cashmere, but insists it is subject to "robust independent testing" by experts in order to ensure its authenticness.
In fact, fake or mixed cashmere has been the bane of fashion industry for quite some time. Luxury cashmere jumpers may not be what they seem with evidence of fraud and fake. Cheap alternative materials - even rat fur, in one case - are being woven into garments. Some mills label scarves as 100 per cent cashmere while they are actually a mix of cashmere and other materials.
Two years ago a million items of cashmere clothing seized from Chinese-run firms in Italy were found to be a mixture of acrylic, viscose and fur from rats and other animals. Global cashmere production is about 7.5 million kg. However, sales of products carrying the name are much higher. There are not enough cashmere goats in the world to produce the amount of cashmere that is on sale.
The more basic cheats use acrylic or polyester in the blend. A lot of the blends will have 50 per cent or 60 per cent cashmere and 50 per cent or 40 per cent modified sheep or yak wool. Much of the cashmere that is on sale and sold as 100 per cent cashmere has a percentage of modified wool. Cashmere factories in China use a wool stretching machine, which can be used to make finer wool fibers. These are then blended with cashmere, which is sold as 100 per cent cashmere.
Pashmina shawl weaving, an ancient cottage industry of Kashmir, provides livelihood to thousands of families from both urban and rural areas. While women do the basic processing of dusting, combing and spinning, men weave the yarn into elegant shawls which are in high demand at the national and international level.
Presently there are around 20,000 weavers involved in shawl making. But power looms are souring the picture. When a hand spun pashmina shawl costs around Rs 10,000 in the market, the one blended with silk or other fibers and made on a power loom is priced between Rs 3000 to Rs 3500. A weaver normally earns about Rs 800 to Rs 1000 from handloom and weaves up to six shawls a month. However hundreds of the shawls can be woven in a month with power looms.
The introduction of power looms has affected thousands of pashmina artisans. They are now either shifting to other jobs or are compelled to work for lower wages. Over three lakh women have been hit. To help women, the backbone of the Kashmiri pashmina industry, a foot driven spinning wheel has been introduced for them.
Normally, a woman spins 2.5 grams to three grams of pashum a day but this spindle enables her to spin up to 10 grams a day. Though the spinning wheel costs Rs 5000, it is being provided to women for Rs 1000.
Hosiery workers in Tamil Nadu have got a pay hike.
In addition to the minimum rates of basic wages fixed, employees will also have to be paid dearness allowance. Dearness allowance is linked to the average Chennai city consumer price index number for the year 2000, which is 475 points, with base year being 1982 and is equal to 100 points. For every rise of one point over and above 475 points, an increase of Rs 3.80 per month shall be paid as dearness allowance.
DA shall be calculated on April 1 of every year on the basis of the average of the indices for the preceding twelve months, namely, from January to December. Tirupur, a city of six lakh people in Tamil Nadu, produces 90 per cent of India’s hosiery and exports hosiery and cotton garments worth Rs 12,000 crores a year. The factories employ thousands of women. The overwhelming majority of all economic activity in Tirupur centers on the garment trade.
Over the last three years or so, Tirupur’s exporters have had to face four main challenges: the recession in the US, volatility in the price of cotton yarn, environmental restrictions on dyeing units, and the euro crisis. Half of Tirupur’s exports go to Europe.
"Today, the availability of cotton and synthetic staple fibers is not a problem. In 2013-14 season, for the third time in a row, the main production countries supplied more raw material than what was processed by spinning mills. In the case of cotton, in particular, 87 per cent of annual consumption is held in storage throughout the world. As an agricultural product fibers are not subject to the rules of the World Trade Organisation (WTO), there are regional differences in fiber prices."
The choice of location for setting up a spinning mill depends on a number of decisive factors. An entrepreneur must reckon with different costs for energy depending on the location. Wages and their growth influence the decision about where an investment is successful. With textile industry on upward growth curve, investment opportunities are high, a spinning mill entrepreneur must be aware of the major factors that could affect business, and the risks and opportunities of his investment. An ITMF (International Textile Manufacturers Federation) report analyses that raw material and energy have a dominant influence on yarn costs. Other factors important for long-term success are: yarn manufacturing costs, the availability of trained personnel and market access.
Availability of raw materials
Today, the availability of cotton and synthetic staple fibers is not a problem. In 2013-14 season, for the third time in a row, the main production countries supplied more raw material than what was processed by spinning mills. In the case of cotton, in particular, 87 per cent of annual consumption is held in storage throughout the world. As an agricultural product fibers are not subject to the rules of the World Trade Organisation (WTO), there are regional differences in fiber prices.
In India, raw materials are cheaper than the other countries. Prices fluctuate less than on the international market, making planning easier. The price of raw material is the crucial factor for manufacturing yarn. As the prices of synthetic fibers usually follow cotton, this supports an investment in India.
Energy costs
Studies show the great importance of energy consumption in relation to yarn manufacturing costs in spinning. A global look at average costs reveals that the price of energy has increased in some countries, at times significantly. Energy consumption depends on the spinning technology, age, condition and producer of the spinning machine, raw material and yarn count. Energy costs depend on consumption and local prices. A precise comparison on the basis of the planned product range is worthwhile in any case.
Availability of workforce In typical producing countries wages play a subordinate role in yarn production. Rather, the decisive issue is the availability of well-trained personnel. Automated spinning machines not only solve this problem, they also increase efficiency and yarn quality at the same time. Automation of the spinning mill is the solution for the non availability of trained work force.
Market accessibility In a global environment, the costs between manufacturer and customer are often underestimated - transportation, exchange rates and the hedging thereof as well as customs duties etc. Investment decision must take into account the cost of entire textile value chain. Growing domestic markets are attractive because exchange rate risks and customs duties do not apply and transport costs are low. Growing markets such as China and India are attractive for this reason. Good relations in mutual trade, which allow simplified, duty-free imports, influence decision regarding location.
Sustainable manufacturing costs
Competition will close, if yarn manufacturing costs alone are higher, excluding the raw material. The spinner who can offer lowest manufacturing costs with good, consistent quality establishes the most sustainable position in this competitive global marketplace.
"With the amendment of labour laws, women workforce will be able to work during night shift. As per existing norms, women are allowed to work only in the day. With the textiles sector being the second-largest employment provider with over 50 per cent coming in from women segment in rural India, it is important to facilitate women workforce adequate policy support to work during the night shift."
India’s new National Textile Policy is close to finalisation and expected by end of April, 2016 during the Budget session. The new policy is expected to accommodate a series of reforms to make India a truly manufacturing hub for textiles. The idea is for Indian textiles players to take maximum advantage of China’s slowdown in textiles sector.
Labour law amendments
With the amendment of labour laws, women workforce will be able to work during night shift. As per existing norms, women are allowed to work only in the day. With the textiles sector being the second-largest employment provider with over 50 per cent coming in from women segment in rural India, it is important to facilitate women workforce adequate policy support to work during the night shift. The government has also laid specific focus on reducing transportation cost, as a result of which the cotton seed transport cost has come down by almost 25 to 40 per cent.
Initiatives galore
According to Santosh Kumar Gangwar, Minister of State for textiles, the ministry has given approval to 24 new textile parks which will create employment for an additional 4,50,000 people. In addition, the textile ministry has also written to the ministry of finance to lower interest rates to 7 per cent on working capital to which works out to 10.5 per cent. A sudden spurt in interest rates from 3.5 per cent to 10.5 per cent has resulted into many manufacturing units closing down and others facing huge squeeze in their profit margins.
The government is looking into special incentives for manufacturing units being set up in the Northeastern states including Bihar, Jharkhand and West Bengal where cost of production would work out to lower than existing places like Maharashtra and Gujarat. Labour is cheap there. So, the pressure of high cost of production would certainly ease to certain extent, according to industry analysts. The government has focused on skilling of youth in various sectors. Through this, around 625,000 of skilled manpower have been given employment in textiles sector in the last 18 months.
Reaping from Chinese slowdown
According to Gangwar, the slowdown in Chinese economy has rendered cost of textile production in China high. So, Chinese textiles manufacturers have lost their competitive advantage in the last few months. This has offered an opportunity for Indian players to grab market share in the developed world especially the European Union and United States, which cumulatively consists of around 60 per cent of the global export market. This is the right time to increase our market share in exports, he opined.
Moreover, to cope with regional trade block agreements such as Trans Pacific Partnership (TPP) the government is working towards Foreign Trade agreement (FTA) with European Union and holding comprehensive discussions on the Regional Comprehensive Economic Partnership (RCEP). The government is in the process of reviewing existing trade agreements such as Indo-ASEAN FTA and Indo-Korea Comprehensive Economic Partnership Agreement (CEPA).
Apart from that the government would also facilitate exports schemes to promote textiles exports. In India, textile manufacturers are currently enjoying various exports incentives schemes including MEIS and duty drawbacks. The minster is confident that the, inclusive and participatory vision of the government would give long term benefits.
