The Lenzing Group, world’s pioneer in wood-based specialty fibers, hosted a conclave in New Delhi. The conclave was aimed at connecting the supply chain partners with new generation of fibers and products for the textile industry through knowledge-sharing and rich discussion platform. A key focus at the event was the challenge faced by the industry due to cotton supply and costs. The discussions focused on the scope of end applications made using cotton – Lenzing fiber blends that provide comprehensive benefits throughout the supply chain and to end consumers.

India is among the key markets for the Lenzing Group and the conclave represents its journey of 80 plus years of fiber innovations and a path to the future of textiles and fashion. The conclave came to a successful conclusion with the dissemination of new ideas and an expanded network of partners interested in taking it to market. The participants shared a commitment to implement sustainable and value-driven production throughout the supply chain, all the way to the end consumer. These concepts centered on meeting the market's present fiber needs and solving the challenges related to cost, supply, and economic insecurity. The participants saw the value of better performing and sustainable products meeting the current market needs.

Myammar’s reputation as an ideal sourcing destination has been under scanner since the country’s military coup in 2021. Despite the apparel sector being Myanmar’s largest employers, accounting for 30 per cent of total exports in 2021, it faced substantial job losses and uncertainties due to the coup, indicates UNComtrade 2022.

Nevertheless, fashion companies’ continue to source from Myanmar due to its changing business environment and need to diversify away from China. From January-May 2022, Myanmar’s apparel exports to the EU and the US remained largely stable while those to Japan increased back to level before the military coup, shows UNComtrade data.

Supplementary sourcing base

However, Myanmar’s share in leading apparel import markets US, EU and Japan remain below 5 per cent as most fashion brands and retailers treat Myanmar as a supplementary sourcing base as part of their overall sourcing diversification strategy. On its part, Myanmar is diversifying exports to other countries post the military coup. In 2021, it increased exports to other Association of Southeast Asian Nations (ASEAN) members from 0.3 per cent in 2020 and 2.7 per cent in 2019. Its imports of textile raw materials from Asia also increased to 97.3 per cent, including 72 per cent from China.

Exports determined by trade sanctions

Myanmar’s apparel exports in 2022 were also determined by trade-related sanctions imposed by importing countries. The most significant sanctions were imposed by the US including suspension of 2013 Trade and Investment Framework Agreement and issuance of the Business Advisory for Burma in January 2022. These have made US fashion brands and retailers cautious about sourcing from Myanmar post the coup. The 2021 USFIA industry Benchmarking Study released in July shows, only about 9.4 per cent of respondents reported sourcing from Myanmar, much lower than 19 per cent in 2020 before the military coup.

In contrast, the EU continues to source from Myanmar as it enjoys duty-free benefits under the Everything But Arms (EBA) program. Similarly, Myanmar’s exports to Japan are also quality for duty-free benefits under the Generalized System of Preferences for Least Developed Countries.

Low-cost sourcing base for specialized products

Fashion companies also consider Myanmar a low-cost sourcing destination for specialized categories, particularly outwear. This encourages brands like Zara, H&M, Adidias, etc, to continue sourcing outerwear from Myanmar. The low-price of outwear ‘Made in Myanmar’ also attracts brands to source from there as against China and Vietnam. Myanmar remains a reasonable souring destination for certain types of orders and an ideal destination to diversify away from China.

However, despite these positives, Myanmar’s outlook as an apparel sourcing base remains uncertain due to the recent political turmoil. A few labor unions are calling for a suspension of Myanmar’s EBA eligibility. If implemented, this would cause Myanmar’s apparel exports to suffer substantially. Companies are therefore, urging brands and retailers to make a responsible exit from Myanmar and ensure transparency of operations.

To increase the quality of apparels and boost value addition, Bangladesh denim fabric and apparel manufacturers are opting for more advanced technologies. This is helping manufacturers reduce production costs by at least 30 per cent and lead the global high value denim market.

Technologies aid eco-friendly denims

World’s first LEED platinum-certified denim manufacturer Envoy Textiles has set up a state-of-the-art laboratory to manufacture sustainable products at lower costs. Set up in collaboration with Spanish company Jeanologia, the eco-efficient lab facility will cost Envoy Textiles €270,000 (some Tk2.62 crore) for every 12 months. The lab will be first of its kind at commercial level across the world, says Kutubuddin Ahmed, Chairman, Envoy Textiles.

Adoption of such technologies are helping manufacturers produce eco-friendly denims by using sophisticated washes and curbing water and chemical use. Pacific Jeans another denim manufacturer is also using latest technologies. This helps the company get all technology samples from the world’s most renowned denim technology providers, notes Mohammad Tanvir, Managing Director.

Meeting consumer demand

The only Bangladeshi denim exporter to work with Dutch Fashion brand G-Star Raw for the last 10 years, Genesis Denim adopted sophisticated technologies to meet consumers’ demand in terms of styles, washes and chemical usages. Today, the manufacturer supplies one million jeans worth about $20 million, to the company every year, points out Shafur Rahman, Regional Operations Manager. In return, G-Star RAW pays them up to $35 for a pair for denim pants, while low value denim exporters get $6 on an average, explains Munir Ahmed, Managing Director.

Strong backward linkage help retain position

Strong backward linkage has helped Bangladesh become a global leader in denim manufacturing. The country has maintained its position in the global market despite the ongoing economic recession. As the economic situation in the country improves, more buyers are expected to place new orders as the county offers denims at lucrative price and shorter lead time, points out Kutubuddin Ahmed, Chairman, Envoy Textiles.

Prolonged lead times prevent value addition

Bangladesh denim manufacturers also have an opportunity to add more value to their denim by exploring new quality washes. However, exporters are yet to tap this potential due to long lead times, says Sharif Zarif, Managing Director, Annata Apparels. Also, to produce high-value jeans, these manufacturers need to import fabrics from Turkey, China and Pakistan, he adds.

The restrictions imposed to curb the spread of COVID led to a marked decline in sportswear sales in Western Europe in 2020. However, the sector rebounded in 2021 and is expected to continue growing over the forecast period. As per a Euromonitor report, growth in the sector is being supported by the development of digital capabilities, increasing emphasis on sustainability and growing focus on health and wellness.

Expanding reach of sportswear

Sportswear brands such as adidas and Nike have started offering new athleisure styles that can be worn all day. The pandemic helped expand the reach of sportswear amongst adult consumers who earlier prioritized convenience over appearance. The category is being increasingly penetrated by general apparel brands as against earlier sportswear specialist.

adidas has launched innovative solutions to reduce and erode plastic waste. It has also ventured into several partnerships through its Three Loop Strategy. The brand has pledged to make all products virgin polyester free by 2024 besides reducing the company’s carbon footprint by 30 per cent by 2030, and acheiving climate neutrality by 2050.

High e-commerce penetration boosts market growth

High e-commerce penetration is boosting the sportswear market in Germany. The pandemic significantly boosted sales in 2020 with digital fashion platforms such as Zalando contributing hugely to this growth. Future e-commerce growth is likely to be supported by traditional brick-and-mortar players

Growth to slow down from 2023-2026

While annual growth will remain elevated in 2022, it is likely to slow down to around 1-2 per cent a year from 2023 until 2026. Consumers will continue to focus on health and well-being besides participating in various sporting activities. This will boost demand for sportswear and footwear.