Damodar Group plans expanding linen yarn production capacity
Shri Damodar Group, a Mumbai-based textile giant, is planning to expand its linen yarn production capacity at Amravati unit. This is to meet the growing demand for linen yarn in India, which is not produced sufficiently within the country and is hence, imported from China., Anuj Biyani, Chairman, Shri Damodar Group point out linen spinning unit at Amravati was started last year with an investment of Rs 90 crores and now they are looking at expanding the same product category in the coming year.
The parent company Shri Damodar Group, Damodar Industries had mentioned in its 2016-17 report that it is setting up an automated fancy linen yarn spinning unit at Amravati. The total cost of the project (including production enhancement plans) is estimated at Rs 140 crores.
The unit is expected to start commercial production by next year. The annual sale from this plant is expected to be around Rs 250 crore. Damodar Industries is well established in textile business with companies like Shri Damodar Yarn Manufacturing, Monopoly Yarns and Golden Fibers.
Hyosung leads with anti-odor spandex, plans factory in India
Hyosung’s leads the world textile industry with its spandex, polyester and nylon yarns. The company produces various differentiated polyester and nylon yarns from regular to high functional specialty yarns to create high value for customers. The last two years were excellent for Hyosung’s global spandex business. It increased capacity in China and Vietnam. Vietnam expansion was aimed at meeting the growing demand from Southeast Asia, including India.
Hyosung is the largest producer of spandex in the world with its brand ‘Creora’. It expects to reach 2,30,000 metric tons by the end of this year. Creora is being used on intimate wear, denim, knitwear, woven garments and swimwear. Creora has many classified products to meet various requirements. Hyosung has six regional offices in India and now it plans to invest in a spandex factory in the country.
The company launched anti-odor spandex and now is looking to penetrate the denim market since Creora spandex can add value on denim garment. In addition to regular spandex, Creora has various kinds of specialty yarns. To meet consumer need for perfect fit and comfort from four way stretch denim, Hyosung launched Creora Fit2, and some Indian denim mills testing this product.
Hugo Boss US sales up two per cent
During the second quarter, sales of German fashion brand Hugo Boss in the US rose two per cent; sales in China jumped 14 per cent. Hugo Boss is known for its smart men’s suits. After a string of profit warnings, Hugo Boss slashed prices in China to bring them closer to European and US levels, making efforts to appeal to younger customers, investing in its website and closing loss-making stores. The strategic realignment had its effect.
Online sales, which had fallen in the first quarter, rose nine per cent after the company took steps to speed up loading time of its website, improve its ranking on search engines and offer more lower-priced garments. Net profit jumped fivefold reflecting year-ago restructuring costs.
The spring/summer 2018 collections for its revamped core brands Boss and Hugo were well received at recent fashion shows, with particularly strong demand for its athleisure and casual wear. Hugo Boss confirmed its outlook for stable sales in 2017 and a low double-digit percentage increase in net income. It expects growth of sales and earnings in 2018 and for sales to outpace the market beginning in 2019.
A recovery in tourism in Europe and stronger Chinese consumption are expected to lead a rebound in the luxury sector this year.
German sustainability initiative comes apart
Three years after its creation, the Partnership for Sustainable Textiles is losing members. This is a German initiative aimed at improving global textile manufacturing – from production of raw materials to disposal. An alliance was formed where every member was to regularly present a list of measures it had decided upon itself. The main thrust of these measures were to improve working conditions in the countries where companies' garments are actually being produced.
Yet, disillusionment has set in. Some large companies do not want to uphold certain social and environmental standards and do not want to be told which guidelines they have to follow. The Partnership's steering committee, which represents members from various production sectors, had determined that members must present concrete plans listing their self-declared obligations, so-called roadmaps, by the end of March 2017. But some 40 companies and associations refused to go along with the plan. They presented no specific steps to establish controls, and thus were forced to leave the Partnership.
In early 2017, some 190 members, including clothing industry giants such as Adidas and Gerry Weber as well as a number of unions and NGOs, belonged to the Partnership. Now it has 148 members.
FDI in textiles sector doubled in 2016-17 to touch $618.95 million
Foreign direct investment in India’s textile sector more than doubled to $618.95 million during 2016-17 up from $230.13 million in the previous fiscal. During the first two months of the current fiscal, the sector received $21.41 million in foreign inflows. Textile exports during 2016-17 too went up to $36 billion from $23.9 billion in the previous financial year. In rupee terms textile and garments exports increased by 3.2 per cent in 2016-17.
It maybe recalled with the aim of enhancing investment, production and exports, a Rs 6,000 crores package was launched for the apparel and made-ups segments last year.
Meanwhile cotton production may rise 12 per cent during 2017-18. Export of raw cotton from India witnessed a significant increase in recent years along with decreased cotton imports into the nation. The country is now the second largest textile and clothing exporter in the world, contributing around five per cent to the global textile and clothing trade. The Indian textile industry is estimating cotton production at 380 million bales against 340 million bales produced last year.
During the last 16 years, the area under cotton production has doubled with about 10 million farmers producing cotton in India.
EU Commission amends Ecolabel criteria for textiles
The European Commission has published an amending decision that tweaks parts of the criteria for awarding the EU Ecolabel to textile products. The Commission set EU Ecolabel criteria for textiles in 2014. To be awarded the label, manufacturers must ensure that products and production recipes do not contain hazardous substances listed in the restricted substance list (RSL) at, or above, the specified concentration limits, or according to the specified restrictions.
The amending Decision further specifies to which textile fibres, and which intermediate textile products, the criteria apply. It also clarifies the exceptions applying when recycled fibres or organic cotton fibres are used.
And it prolongs the validity of the 2014 Decision to "maintain a stable set of criteria over a longer period of time". The criteria and their related assessment requirements will be valid for 78 months from the adoption of the amending Decision.
Embroidery segment dominates latest Gartex show
Gartex was held in New Delhi from July 29 to 31. This trade show on digital textile printing, embroidery and garment machinery recorded a significant number of business deals. Around 18,000 visitors attended the three day show. The embroidery segment virtually dominated with a display of multi-head embroidery machines ranging from 18 heads to 90 heads. This shows the inclination of the market towards large embroidery machines.
Technology companies like Mimaki India, Epson India, DCC Prints Vision, Negi Sign Systems, ColorJet India and Apsom Technologies presented latest digital printers for textiles, signage, home textiles etc.
Gartex 2017 had many innovative products and latest technologies on display. It featured suppliers and manufacturers of apparel fabrics, trimmings, embellishments, accessories and related products and services. By providing an apt platform for showcasing and launching an extensive product range to key decision makers, the show not only helped in generating sales leads but also enhanced the brands’ presence and visibility across stakeholders.
With increased footfalls and high quality customers, the show ultimately helped exhibitors in building a database of potential buyers and educating customers about new products and added services. It also served as an important gateway to enter new markets to tap global innovations.
Clarks builds UK unit
Clarks, the UK-based casual footwear brand, is building a manufacturing facility in the Britain. The facility will use state of the art technology at the forefront of shoemaking innovation. Initially, Clarks aims at building capacity to produce up to 3,00,000 pairs a year, using an innovative, unique volume production method applying robot-assisted technology to specific shoe constructions.
This cutting-edge technology will be combined with both specially trained and skilled employees, creating up to 80 technical and managerial jobs. Once the facility is operational, Clarks will be able to implement and support trans-seasonal collections, leading the way in a seasonless approach to its ranges. It will allow greater flexibility and innovation in the process of how Clarks designs and develops shoes.
Looking to the future the company plans to roll out similar production units to other locations across US, Europe and Asia, building a global network of regional supply chains that complements its current sourcing network to enable shorter lead times and a faster response to changing trends and consumer demand.
Clarks wants to bring shoe manufacturing back to the UK. Clarks has always led the way in shoe design and manufacture, having developed a significant proportion of modern shoe construction technologies. This new facility will help it continue that tradition of innovation.
Bangladesh top denim supplier to EU, US market sees a dip
Bangladesh has become the largest denim supplier to the European Union. The country secured a 21.18 per cent denim market share in the 28-nation bloc during January to June 2016. In contrast, Bangladesh’s denim shipments to the US have seen a dip for the last seven years. One reason is the US has increased denim imports from Mexico due to competitive prices and shorter lead times. Besides, American retailers get duty benefits for sourcing from Mexico. Bangladeshi garment imports are subjected to a 15.62 per cent duty upon entry to the US, while Mexico's wares get duty-free access. Moreover the US itself produces a lot of denim garments.
Another important reason for the slow growth of denim exports is that US retailers purchase low-cost denim products in bulk from China. Despite the slow growth in denim exports, Bangladesh still remains the third largest supplier in the US market.
Currently, Bangladesh has 30 denim mills. The collective production capacity of the mills is 435 million yards a year. In terms of denim sales, the US and the UK are two major markets of Bangladesh. Bangladeshi entrepreneurs supply denim products to major global retailers including Levi's, Diesel, G-Star RAW, H&M, Uniqlo, Tesco, Wrangler, s.Oliver, Hugo Boss, Walmart, and Gap.
Global athleisure market grows 42 per cent in last seven years
The performance sports apparel market is expected to grow at a CAGR of 4.3 per cent during 2015-20. The athleisure segment has seen a huge increase of 42 per cent over the last seven years and is predicted to grow another 30 per cent by 2020, especially in Asia and the US. In fact, US active wear apparel sales in 2016 were up 11 per cent from last year, far outperforming traditional apparel sectors.
From 2015-16, the Indian sportswear market grew 22 per cent, outpacing the segment’s global increase of seven per cent. By 2020, it is expected to grow at an additional 12 per cent CAGR. By 2018, Asia Pacific is expected to emerge the largest sports apparel market. While most international brands are already present in India, domestic start-up brands have made their mark.
Increased mass interest in active sports and outdoor leisure activities such as running, sailing, climbing, cycling, etc, has led to immense growth in consumption of textile materials needed for manufacturing active sports related goods and equipment. Meanwhile increasing disposable income and a surge in female participation in sports are major factors driving growth of world sports apparel market.
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Bangladesh textile sector draws strategy for responsible production
The textile industry in Bangladesh has established a basis for responsible garment manufacturing in the long term. For the first time businesses as a group will state which factories produce their clothing. They have also drawn up specific improvement plans to tackle poor working conditions, human rights and environmental and animal abuses. A further step is the appointment of an independent disputes committee with the power to issue binding rulings.
The entire initiative is the result of a collaboration that began a year ago under the terms of a garment and textile agreement. Partners in the agreement have worked out a structure for identifying risks and launching improvements. Businesses have submitted plans with targets for the years ahead. The real work will begin in the coming year. The agreement will remain in effect for a five-year period.
The agreement puts the focus on collective projects and cooperation, increasing the chance of success. It concentrates the agendas and efforts of different parties. More than 60 businesses have signed the agreement so far, representing about 80 different consumer clothing and textile brands. This multi-stakeholder approach is unique in the world and has attracted the attention of Germany, Denmark, the UK and other countries.
Vietnam’s domestic RMG companies not using FTA benefits
More than 50 per cent of Việtnam’s garment and textile producers are making full use of opportunities provided by FTAs but these are mainly FDI companies. Domestic garment and textile firms have, for the most part, missed out on the much-touted benefits of FTA that Việtnam has signed. Việtnam has signed about a dozen free trade agreements. Some of these are with India, Australia, New Zealand, South Korea, China, Japan, Chile and South Korea.
Garments and textiles are key export items for the country. If enterprises can take advantage of FTA opportunities, the country will be able to increase export revenues as well as expand markets. But to be able to enjoy preferential tariffs under FTAs, the products must meet the requirements under rules of origin. With weak materials supply and supporting industries, businesses in the garment and textile industries face a big challenge in complying with rules of origin.
Domestic garment and textile businesses have not taken much advantage of FTAs since they cannot meet rule of origin requirements. And one of the main reasons for this is that Vietnamese firms lack knowledge on this issue. In the first half of the year, Vietnam’s garment and textile exports increased by 11 per cent year-on-year.
US brand American Eagle Outfitters offers denim hijab
American Eagle Outfitters has come out with a denim hijab made with Tencel fibers. The hijab is a head covering that is traditional dress for many Muslim women. As Muslim women worldwide are increasingly demanding both performance and style from their garments, designers, manufacturers and retailers are responding.
In order to raise demand of fashion and function, denim over the years has benefited from fabric blends that help bring its indigo character to many varieties of clothing. Few have been as advantageous as Lenzing’s wood-based Tencel lyocell branded fibers, which help impart a softness and drape that isn’t always possible with other denim fabrics.
For decades, denim has crossed multi-cultural lines, long ago expanding from its original, limited utility as men’s work dungarees to also encompass apparel for all genders, ages and vocations. Designers borrow from other cultures when it comes to color, cut, fabric and technique. And textile makers add to the mix with manufacturing, spinning and weaving advancements that enhance performance, color and all manner of possibilities in design.
American Eagle Outfitters offers high quality, trendy clothing, accessories and personal care products for men and women under two brands: American Eagle Outfitters and Aerie. They targets men and women 15 to 25 years but provide high quality apparel that can appeal to all demographics.
Wazir Textile Index reflects stagnation in textile & apparel exports in FY17
"In order to assess the overall financial performance of Indian textile sector on a continuous basis, Wazir Advisors has developed the Wazir Textile Index (WTI). This index gives the collective performance of select top 10 listed textile companies (by sales) of 2015-16 as the base/benchmark, represented by the base Index number 100. The base is taken for each quarters and full financial year performance of the companies in 2015-16. "
In order to assess the overall financial performance of Indian textile sector on a continuous basis, Wazir Advisors has developed the Wazir Textile Index (WTI). This index gives the collective performance of select top 10 listed textile companies (by sales) of 2015-16 as the base/benchmark, represented by the base Index number 100. The base is taken for each quarters and full financial year performance of the companies in 2015-16. Financial performance of the textile industry will be benchmarked on this base number to assess quarterly (Q1), half yearly (H1), nine monthly (9M) and yearly performance (FY) for future years against the set benchmark. WTI includes the following three components: WTI Sales, WTI EBITDA, and WTI Cost.
Marginal improvement
As per latest WTI, India’s real GDP increased from Rs 114 lakh crore to Rs 122 lakh crore, in 2017, with a growth rate of 7.1 per cent. Textiles saw an IIP increase of 1 per cent from 156.4 to 158 while IIP for apparel dipped by 1 per cent from 192 to 189.6 in FY17 compared to FY16. With an increase of 1 per cent, WPI stood at 141.8 in FY17.
Stagnant exports
Textile and apparel exports in FY17 declined at the rate 0.2 per cent from previous year, to reach $36.6 bn. Apparel had majority share in exports valued at $17.4 bn. Exports of filament yarn, apparel and home textile categories registered a growth in FY17. Highest growth was observed in filament yarn exports which grew at 9 per cent from $1.01 bn to $1.11 bn in FY17. However, exports of fibre, spun yarn, fabric et al declined. Highest fall was registered by fibre, a decrease of 8 per cent from $2.7 to 2.5 bn in FY17. Exports of both yarn and fabric categories fell by 5 per cent each in FY17. The US and UAE stood as the largest export markets for India, with a cumulative share of 34 per cent, a 2 per cent rise over last year. Exports to UK and China & Hong Kong decreased 1 per cent in FY17 while exports to Bangladesh remained the same.
Increased imports
Clocking in $6 bn, textile and apparel imports in FY17 increased at 3.1 per cent from previous year. Growth was due to a significant increase in fibre imports by 41 per cent over FY16. However, imports of other major categories like yarn, home textiles & fabric declined at 26 per cent, 23 per cent and 8 per cent respectively. China continued to be India’s largest import partner, however, its share in total imports fell 6 per cent while Australia’s import share increased significantly from 3 to 7 per cent due to an unprecedented 845 per cent growth in cotton fibre imports. Imports from the US also increased at 3 per cent while imports from Vietnam remained the same.
Raw material price hike
On an average, raw cotton and viscose staple fibre prices increased 19 per cent and 7 per cent respectively while polyester staple fibre prices declined by 2 per cent in FY17. There was an increase in cotton yarn and polyester viscose blended yarn average prices growing at 5 per cent and 6 per cent respectively in FY17. However, polyester cotton blended yarn registered a decline of 7 per cent in FY17 compared to FY16.
Following this performance evaluation, it remains to be seen how the industry battles the GST demon
