The official target of textile export worth $45 billion seems difficult to achieve as China which usually accounts for over 70 per cent of India’s cotton and 40 per cent of yarn supplies, has cut down purchase. This despite the fact that the country’s overall textile and garment exports including those of jute, coir and handicrafts likely to increase by 4-5 per cent reaching $41 billion this fiscal compared with $39.3 billion a year ago mainly on higher shipments of garments.

As per sources, exports of raw cotton, including waste, and cotton yarn in the April- December period 2014 plunged by 36 per cent and 12 per cent, respectively, from a year before. Exports of textile products increased only 2.2 per cent between April and December from a year earlier. Lack of adequate focus and proper planning on boosting exports have also taken a toll despite the recognition of the textile sector’s role in the ‘Make in India’ concept and jobs creation. The government is yet to come up with the textile vision document even eight months after the report was first submitted to the textile ministry.

Textile and garment exports excluding jute, coir and handicrafts touched $25.72 billion during the April-December period, up 4.7 per cent from a year ago. Handicraft exports hit $3.9 billion in the last fiscal, recording growth of 18 per cent year-on-year. Experts expect the growth to be as much as 5-7 per cent in the outward supplies of these items in the current fiscal. Jute and coir exports, although not so significant in the overall basket, are expected to grow 10-15 per cent.

As per DK Nair, Secretary General of the Confederation of Indian Textile Industry (CITI), speculations are rife that the Chinese government has stipulated that on the purchase of every bale of cotton from overseas, a mill there has to buy four bales from domestic sources, which has dragged down imports. It has also been offloading cotton from its reserves. Moreover, the Chinese economy is also going through a slowdown, affecting demand.

Chairman of the Apparel Export Promotion Council (AEPC), Virender Uppal, points out garment exports witnessed 13.4 per cent growth during April-February 2014-15 to $15.26 billion from a year earlier that means export growth slowed since January after recording a 16 per cent increase until December this fiscal. But as per the index of industrial production data, the textile segment witnessed growth of just 2.1 per cent from April to January this year from a year before. 

The International Apparel Federation (IAF) has signed a MoU with the Hong Kong General Chamber of Textiles (HKGCOT). The aim is to exchange knowledge on innovation, apparel markets and international business opportunities.

The MoU will give the IAF an important connection in the vibrant fashion industry of Hong Kong. It helps to further the IAF’s aim to build bridges across continents by attracting fashion entrepreneurs from Hong Kong to IAF’s international conventions and vice versa, to bring information and connections from across the world to Hong Kong.

The collaboration with IAF is a step further in Hong Kong’s goal to globalise local designer brands and to create opportunities for young promising designers to get international exposure. Last year HKGCOT signed an MoU with IAF member American Apparel and Footwear Association. In collaborating, HKGCOT can strengthen its knowledge on overseas markets by using IAF’s network which reaches over 50 countries and the biggest apparel markets.

Hong Kong is a hub for the international fashion industry, especially in the areas of design, sourcing and education. Large fashion shows and exhibitions are held regularly in Hong Kong each year which attract businesses around the world. The mission of the IAF is to develop business contacts which foster dialogue and knowledge exchange between individuals active in the world apparel value chain.

iafnet.eu/

For the next year Vardhaman Textiles expects profits to be within the range of 18 to 22 per cent. Last year was an abnormally profitable year for the company. The EBITDA margin (earnings before interest, taxes, depreciation, and amortization) was 25.7.

The group has about Rs 700 crores of repayment coming up, so the first objective is to clear those repayments. It’s also open to a good acquisition opportunity. The first of its capex plans has been announced. About Rs 600 crores is going into its fabric business which will increase its capacity by about 45 million meters over the next three years.

The last two quarters were a little tough because of sliding cotton prices, which was due to the new cotton crop coming in. That process has stopped and now onwards cotton prices are at normal levels. The latest book value of the company is Rs 447.48 per share. The net debt-equity of Vardhaman Textiles on a consolidated basis would be in the range of 0.5-0.7.

Since every year good quality cotton stops becoming available May onwards, the company does cotton procurement up to next April. Vardhaman Acrylics is sitting on a lot of cash and is examining opportunities for diversification.

www.vardhman.com/

Textiles should be kept in the lowest tax slab when goods and services tax (GST) comes into effect, say OP Lohia, chairman of Indo Rama Synthetics (IRISL), and vice-chairman and managing director of Filatex India Madhu Bhageria. They point out that the industry is going through a tough phase and needs a boost. Both, Lohia and Bhageria, recently met minister of state for textile Santosh Kumar Gangwar, who was briefed about the demands. It was stressed that the minister should ensure this industry is kept in the lowest slab of tax rates in the GST regime. The government plans to bring GST, which clubs all indirect taxes into one, from next year onwards.

Man-made fibre industry was hoping for a reduction in excise duty to 6 per cent down from 12.36 per cent. Rather, the rates were increased to 12.50 per cent instead. There was no allocation for the technical upgradation fund (TUF), though it was demanded by all textile industry associations, apart from lobbies like FICCI and CITI, the minister was told. It was mentioned that the budget did not have any major announcement for the sector despite the fact that it was going through a tough phase.

Lohia suggested focus on export of textile garments so that the entire value chain in the industry is benefited. He said MMF sector needs major attention from government. If enough focus is not given at this time, other countries like Vietnam, Bangladesh, Indonesia and Pakistan can overtake India. It was stressed that government should take steps to boost production capabilities of this industry.