EVFTA to give a big boost to Vietnam’s exports to the EU
"If everything goes well, Vietnam and the EU are set to agree to and ratify a wide-ranging free trade pact, known as the EU-Vietnam Free Trade Agreement, or EVFTA, by early 2018. The agreement was first envisaged in 2012 and once enacted, it is expected to accelerate trade between Vietnam and individual EU states. According to recent developments, the timeframe could be delayed, due to a ruling that each EU member state must individually agree to the deal. Vietnamese Prime Minister Nguyen Xuan Phuc’s recent visit to Germany was aimed to expedite the deal’s enactment."
If everything goes well, Vietnam and the EU are set to agree to and ratify a wide-ranging free trade pact, known as the EU-Vietnam Free Trade Agreement, or EVFTA, by early 2018. The agreement was first envisaged in 2012 and once enacted, it is expected to accelerate trade between Vietnam and individual EU states. According to recent developments, the timeframe could be delayed, due to a ruling that each EU member state must individually agree to the deal. Vietnamese Prime Minister Nguyen Xuan Phuc’s recent visit to Germany was aimed to expedite the deal’s enactment.
For Vietnam EVFTA could work well
Germany is Vietnam’s largest European trading partner; the Netherlands is its second. It is estimated that Germany receives more than 20 per cent of all Vietnamese exports to Europe, with bilateral trade worth almost $9 billion last year. The Netherlands, meanwhile, is the largest European investor in Vietnam with $7.7 billion in total committed capital. Trade between the two nations was worth $6.7 billion in 2016.
For Vietnam, EVFTA is the next best thing after Trans-Pacific Partnership (TPP), a monumental free-trade agreement between 12 Pacific Rim nations, including Vietnam, that US President Donald Trump withdrew from on his first day in office, effectively killing the deal. Vietnam was set to be one of the pact’s biggest beneficiaries. After America, Europe is Vietnam’s largest export market, which readily purchases Vietnamese-made electrical equipment, footwear and garments. In 2006, trade between the EU and Vietnam was worth a paltry $10 billion. A decade later, it has grown to $48 billion.
Experts say, uniformity of goods and stability in supply chains will need to be maintained. Agricultural firms, for example, will have to adapt to the EU’s strict ‘rules on origins’ requirements. Electrical manufacturers, meanwhile, will have to deal with the stringent copyright laws that the EVFTA enforces.
With the hope that EVFTA will boost foreign investment from Europe, the Vietnamese government is set to make the business climate friendlier for foreign companies. Vietnam jumped nine places in the World Bank’s latest ease of doing business ranking. In Europe, Phuc repeatedly spoke about the Paris climate accord, a major anti-climate change initiative signed last year, and asked European partners to help in Vietnam’s push for renewable energy.
Vietnam believes European investors can use the country as a springboard for expanding into the rest of the region. Speaking in the Netherlands, Phuc said EVFTA will allow the EU and the Association of Southeast Asian Nations (Asean) to ‘forge a deep and comprehensive economic connection’. The EU does not currently have a free trade agreement with any Southeast Asian country. While the EU-Singapore Free Trade Agreement (ESFTA) was agreed in 2014, analysts believe it will be ratified later than EVFTA. For the EU, EVFTA is a first step towards a possible free trade agreement with Asean.
Unlike TPP, the EVFTA does not come with any requirements for more political liberalism. Under the TPP, the Vietnamese government would need to allow independent trade unions to operate, an opening that no doubt made the authoritarian regime nervous. EVFTA mandates that EU companies must able to bid for public procurement tenders under the ‘same conditions’ as Vietnamese companies. Some hope this will force the government to curb rampant corruption in state contracts, as well as speed the privatisation of Vietnam’s many cash-hemorrhaging state-owned enterprises.
EU’s apparel imports down two per cent in first four months of 2017
From January to April 2017 EU’s apparel imports dipped 2.88 per cent. China’s quantity-wise apparel exports to the EU dropped by 3.31 per cent. Vietnam, Bangladesh and India too saw a drop in quantity-wise exports by 0.78 per cent, 1.76 per cent and 2.06 per cent respectively.
Weak euro and the fall of the sterling were the main reasons behind the decline. Falling demand is another reason. Retail stores are rapidly closing in Europe and renowned clothing brands are cutting their apparel quantities. The increase in unit prices has also impacted EU imports negatively. There was also a rise in unit value realization, which indicated that the EU is importing apparel by paying more value to the exporting countries.
This change in retail landscape and consumer behavior is shifting demand from in-store shopping to online purchasing, making the EU a tech-driven market. The EU is the second largest apparel importer in the world. In the second half of 2017 how the EU’s apparel sector fares would depend on global economic conditions as well as trade policies across the world. The transition from retail store to digital shopping might take some time to really build up and in the meantime demand for imports may rise or remain steady.
Cambodia wants GSP for footwear exports
Cambodia wants preferential trade terms for its footwear exports from the United States. Preference systems let developing countries export certain goods to donor countries at reduced tariff levels. Cambodian footwear, textiles and garments are excluded from the US GSP. Cambodia’s footwear and garment industry exports under the US’ most favored nation program are taxed by the US, which wants to protect its local industries.
The US offers GSP to poor countries since 1974 but garment and footwear products have never been included. The US is now going to consider granting GSP on footwear and so Cambodia wants to be included under that benefit even though GSP doesn’t reduce the tax to zero. But for that to happen Cambodia has to show improved working conditions with high levels of labor and social compliance and high minimum wages.
If Cambodia does succeed, it would be important for Cambodia’s economic development as there would be more investments resulting in the creation of jobs. It would be good news for Cambodia if the US grants GSP to the footwear industry which currently exports a lot to the EU and the US under the most favored nation scheme. Last year, the US granted GSP to Cambodia for export of travel goods such as luggage, backpacks, handbags and wallets.
Circular knitting gets a boost with Mayer machines for shoe uppers
Circular knitting machine manufacturer Mayer offers several machines that are suitable for making of shoe uppers. The OVJA 1.6 ET 3 WT is one such. It is very versatile in terms of the patterns it can produce, especially because it can transfer stitches on every third system. Its three-way technology ensures maximum design and flexibility by means of individual needle selection. It makes a wide range of structures. Using a conversion kit the OVJA can also be quickly used as a full jacquard machine to produce multi-coloured shoe designs.
The newcomer to the range, specially designed for use in the shoe upper sector, is the OVJA 1.6 EE – 3WT/2WT. It uses three-way technology in the cylinder and two-way technology in the rib dial, thereby ensuring maximum pattern variety. This combination makes it an optimal footwear machine that is especially suitable for the production of multi-coloured designs along with microstructure elements.
The conventional means of manufacturing shoe upper material for sport shoes has until now been either flat knitting or warp knitting. Circular knitting has the edge over both of these in terms of productivity and variety of patterns. Mayer, based in Germany, manufactures the entire range of machines required for making modern textiles like fabrics for home textiles, sportswear, nightwear and swimwear, seat covers, underwear and technical uses.
INDA to host RISE conference in September
A Research, Innovation and Science for Engineered Fabrics (RISE) conference will be held in the US, September 12 to 14, 2017. The conference, slated to take place at Sheraton Raleigh Hotel, Raleigh, NC and is being organized by INDA (Association of the Nonwoven Fabrics Industry).
Around 25 industry leaders will present a dialogue on the theme ‘This Changes Everything’. RISE, now in its seventh edition, continues to connect new and emerging technologies with near-term commercial applications to solve immediate real-world industry needs.
The program will explore the future of manufacturing, moisture management, nonwoven structures, inventing the future, advanced materials performance, wet-laid nonwovens, technology and money, advanced biomaterials, advanced machinery, industry updates in nonwoven market changes, and government affairs.
The Association of the Nonwoven Fabrics Industry serves hundreds of member companies in the nonwovens/engineered fabrics industry in global commerce. Since 1968, INDA events have helped members connect, learn, innovate, and develop their businesses. INDA educational courses, market data, test methods, consultancy, and issue advocacy help members succeed by providing them the information they need to better plan and execute their business strategies.
The RISE conference embraces INDA’s mission to stimulate and recognize innovation. Like-minded, forward-thinking technology professionals will look forward to the moment when the potential impact of a new approach to a material science challenge is revealed. For technology scouts and new product innovators, this is an event not to be missed.
VF Corp’s Q2 revenue up two per cent
VF Corp’s second quarter revenue from continuing operations increased two per cent. Outdoor and Action Sports revenue increased four per cent; Imagewear revenue 11 per cent; international revenue four per cent; direct-to-consumer revenue 13 per cent; and digital revenue 34 per cent. Vans brand revenue increased eight per cent; North Face revenue increased five per cent and Timberland revenue increased two per cent. But Wrangler and Lee revenue decreased two and seven per cent. Also, revenue in China increased 13 per cent, followed by the APAC region, which increased seven per cent and the Americas (non-US) segment that increased five per cent.
For the six months ended June 2017, total revenues and net sales were flat, international revenue increased three per cent and only Vans and North Face posted increases in revenue at seven per cent and six per cent.
Gross margin in the quarter improved 80 basis points to 49.7 per cent, operating income was down 14 per cent and earnings per share was down 11 per cent. Based on the strength of first half of 2017, and its expectations for the second half, the corporation is making growth-focused investments in its largest brands and platforms to generate additional value for shareholders both in the near and long term.
US to host Denim Days New York in September
Denim Days will be held in the US, September 29 to October 1. This is an offshoot of the festival in Amsterdam that has catered to denim obsessives—makers, wearers, designers, buyers, lovers and geeks—for the past three years. Brands, designers and denim mills will present interactive displays and workshops and in-store events. There will be a vintage denim market, parties and panels — all geared to grant consumers access to their denim heroes and heritage brands. A one-day street festival will have food, live entertainment and more.
Like Amsterdam’s Denim Days, New York’s turn is an incredible platform to show the value of Tencel branded Lyocell fibers in denim. Visitors can hear some of the world’s denim masters including the godfather of denim, Adriano Goldschmied; Diesel USA CEO Stefano Rosso; Scott Morrison, Founder of 3×1, Paper Denim Cloth and Earnest Sewn; Stefan Siegel, Founder and CEO of Not Just a Label; and Sanjeev Bahl, Founder and owner of garment factory and laundry of the future Saitex. Denim Days is an event where people can learn all about jeans and talk to the artisans and brand people.
Textile Corporation of America invests in Tennessee, generates employment
Textile Corporation of America is a leading textile manufacturer. It utilizes state-of-the-art plants and machinery to produce quality industrial and institutional textile products including apparel, bedding, health care, hospitality, and kitchen linens.
The leadership team of Textile Corporation of America has an unparalleled experience in manufacturing textiles around the world for the past four decades and an unwavering commitment to restoring America’s historic place as a global manufacturing center.
Textile Corporation of America has a commitment to create 1,000 jobs in Bledsoe, Tennessee, a Tier IV distressed county. It will have an incredible impact on the community and the surrounding area. Textile Corporation of America will invest approximately $27 million, representing the largest private investment in Bledsoe’s history. Tennessee’s central location and established workforce make it a prime location for companies like Textile Corporation of America to set up manufacturing operations. Millions of dollars of investment and the creation of a thousand jobs are expected to transform the region.
US fashion retailers positive about business ahead
There are issues facing the US fashion industry. Only 36 per cent of executives expect to increase sourcing from Vietnam, compared to 56 per cent last year; this is likely due to the US’ withdrawal from the Trans-Pacific Partnership. Among all sourcing destinations examined this year, Bangladesh is considered the most competitive in terms of price—but also the riskiest in terms of trade compliance.
Free trade agreements remain underutilised; only the North American Free Trade Agreement (NAFTA) is utilised by more than 50 per cent companies. Ethical sourcing and sustainability are given more weight in sourcing decisions. The proposal for a border adjustment tax is unanimously opposed.
Fashion Industry Benchmarking did a survey of 34 executives from leading fashion and apparel brands, retailers, importers, and wholesalers. The survey shows, majority of retail executives are optimistic about the five-year outlook for the fashion industry, however, the percentage has fallen from 92.3 per cent in 2016 to 71 per cent in 2017. The survey asked respondents about the business outlook, sourcing practices, utilisation of free trade agreements and preference programs, and views on trade policy. Executives are more concerned about trade protectionism, market competition from e-commerce, and supply chain risk than they are about costs.
US cotton exports touches 50 years record
Exports of US cotton are at the second highest level in 50 years. Exports of raw cotton through mid-May were 65 per cent higher. Vietnam is the top buyer of US cotton. This position was held by China until it began to sell off large cotton reserves some years ago. But as stocks shrink, China is expected to regain its top buyer status. The other top buyers of US cotton are Turkey, Indonesia, Mexico, India, Pakistan, Korea, Bangladesh, and Thailand.
US cotton had a huge year in India and Pakistan. US exports to India were at the largest level in 17 years. Much of it was extra-long staple Supima cotton. New cotton varieties and genetics combined with grower management tools have provided higher yields and improved fiber quality.
The US hopes to export 20 million cotton bales by 2020. It will drive export growth of US cotton through fiber, yarn, or value-added cotton products. US cotton is marketed as premium cotton, as higher quality fiber than other cotton grown worldwide. However, the industry continues to deal with low fiber prices and other issues that threaten the future. There are significant lint differences between lowest- and highest-yielding varieties.
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Technology cuts denim shrinkage at DNA
Denim North America (DNA) has collaborated with Poole to introduce a product line called FYnesse Denim. This incorporates FYnesse yarn, developed and produced by a division of Poole. This is the latest innovation in superior performance stretch with exceptional low growth and groundbreaking reduced shrinkage. The new technology cuts shrinkage virtually in half compared to traditional stretch denims with similar elasticity. The result is greater fabric utilization and increased garment to garment sizing consistency. Best of all, its unique attributes combine consistent shape retention with an amazing soft and smooth hand.
FYnesse is the latest and most advanced innovation in air-covering technology, taking engineered polyester and introducing spandex at the point of maximum dynamic bulk. The result is a superior performance stretch yarn with the unique capability to retain exceptional power, resilience, and bulk all while concealing spandex deep into the yarn.
FYnesse eliminates sagging and bagging while also keeping the consumer cooler with faster drying and moisture wicking technology inherent in the process. Opening offerings are in lightweight indigo and black women’s products with heavier weights for men available soon.
Denim North America is a division of DNA Textile Group This is the second collaboration between DNA and Poole.
Sri Lanka wants stronger ties with Bangladesh
Sri Lanka and Bangladesh are looking to strengthening their bilateral ties. Their bilateral trade is valued at $142 million and has the potential to be boosted. Even though goods are traded at a significant level, emphasis will be given to increase the trade volume and further diversify the product range benefitting both countries.
Sri Lanka imports from Bangladesh pharmaceutical products, electrical machinery and equipment, edible vegetables and roots, apparel and clothing accessories, iron and steel, textile fibers, chemicals, sacks and bags, toilet and facial tissues, cellular phones and bicycle parts. Sri Lanka exports to Bangladesh textiles and textile articles, enzymes, chemicals, minerals, plastics, rubber products, paper products and tea.
Bangladesh is also a country that exports apparel to the global market but has not been able to secure GSP Plus that Sri Lanka currently enjoys. Hence, Sri Lanka is able to export apparel to the European market at cheaper rates than Bangladesh can. On the other hand the cheap labor in Bangladesh is the main attraction for apparel investors. Labor in Sri Lanka is no longer cheap. The apparel industry has been suffering from lack of sufficient labor.
Bangladesh’s gross domestic product growth accelerated to 7.1 per cent in 2016 from 6.6 per cent in 2015. Sri Lanka’s economic growth in 2016 was at 4.4 per cent, lower than 4.8 per cent in 2015.
Indian Texpreneurs Federation consortium to purchase cotton
The Indian Texpreneurs Federation, with a total membership of 35 spinning mills, has formed a consortium to purchase quality cotton from ginners of Maharashtra and Telangana with zero trash and low level contamination. Even one per cent savings by way of good quality, better pricing, timely purchase is expected to help the spinning sector reduce its cost of manufacturing.
The consortium, which requires 11 lakh bales per year, has purchased two lakh bales this year. It’s planning to buy four lakh bales during this cotton season, starting October, since raw material cost was the major factor in spinning mills’ manufacturing cost, ranging from 60 per cent to 70 per cent.
The consortium helps ginners reach the top performing mills on a single platform and get a guarantee on professional transactions and timely payments and honoring contracts. It has been able to partner with more than 50 ginners in Telangana and Maharashtra. This season Telangana is expected to produce 70 lakh bales of cotton and Maharashtra 100 lakh bales. Indian Texpreneurs Federation is an association of the Indian textile industry. Members represent the entire technical textile value chain from raw materials to finished goods producers, machinery manufacturers, consultants, centers of excellence and R&D institutes.
Bureaucrat regrets launching GM cotton
Former cabinet secretary TSR Subramanian regrets having allowed Genetically Modified (GM) cotton in the country over two decades ago. He says he is responsible for the suicides of thousands of cotton farmers. He introduced GM cotton in India in the 1990s. Most European countries and Japan don't allow GM crops.
Genetically engineered cotton is currently grown on 25 million hectares around the world, mostly in India, China, Pakistan and the US. Other countries growing significantly smaller amounts of GM cotton are South Africa, Burkina Faso, Sudan, Brazil, Argentina, Paraguay, Columbia, Mexico, Costa Rica, Burma, Australia, and Egypt.
GM cotton is engineered with one of two traits. One makes it resistant to glyphosate-based herbicides such as Monsanto’s Roundup, while the other stimulates the plant to produce a toxin that kills the bollworm, one of the crop’s primary pests.
Cotton is an important cash crop in India. It is grown on 12 million hectares, making India the second largest producer of cotton in the world, behind China. Insect-resistant Bt cotton is the only GM crop currently grown in India. It was introduced in India by Monsanto in 2002, under the trade name Bollgard, in a joint venture with the Indian seed company Mahyco.
