Around the World BANGLADESH INDIA CHINA
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1 BANGLADESH Bangla government and exporters prepare for GSP plus' The Bangladesh government and the readymade garment exporters need to start necessary groundwork for availing the GSP plus benefit in the EU market as the country would lose generalised system of preferences in the market once it achieves middle-income country status. Bangladesh garment industry needs a move from GSP to GSP plus and it is essential that we start the groundwork now, the visiting European Parliament member said after a meeting with the Bangladesh Garment Manufacturers and Exporters Association at the BGMEA. EU Ambassador Pierre Mayaudon, BGMEA President Md Atiqul Islam, Vice- President SM Mannan Koci and former Vice-President Siddiqur Rahman were present, among others, in the meeting. Sajjad, also the Chair of European Parliament for Trade and Monitoring Group for South Asia, called for implementing all the conditions of the Sustainability Compact and said that the Compact was designed in such a way that would improve the safety standards of the garment industry in Bangladesh. Mayaudon said the EU would provide vocational training to the Bangladeshi workers for skill development. The BGMEA President requested the visiting member of the European Parliament to pay more attention to the price issue to build a secured global market where workplace and jobs would be safer and sustainable. Bangladesh to double garment exports Bangladesh is doubling down on the business, despite the repercussions. Already the world s second largest exporter of clothing by some estimates, Bangladesh intends to double its apparel exports to $50 billion by The country s commerce minister, Tofail Ahmed, announced the plan last week, including the creation of a garment village in the southeastern port city of Chittagong a major export hub to help the country hit its goal. That village follows on one already under construction in the city of Bausia, being funded by a state-owned Chinese firm. The Bausia village is expected to house more than 200 factories and contribute up to $5 billion in export value. The US, which is the largest importer of garments from Bangladesh,is supporting the target of doubling exports and the Chittagong plan. Marcia Bernicat, the US ambassador believes that it is an ambitious but achievable goal. The US jointly with two Bangladeshi banks shall offer a $22 million credit guarantee on borrowings to improve safety standards in Bangladeshi garment factories. According to Marcia Bernicat, a lot of progress has been made over the past two years as Bangladesh has registered more than 250 new unions, created a public online database of inspected factories, and trained over 100 new labour inspectors. Besides, more than 2,000 factories have been inspected for electrical, fire and structural conditions by the Bangladesh government, the Alliance and the Accord. CHINA Textile producers setting up shop in southern US Textile production in China becomes increasingly unprofitable due to rising wages and other mounting costs, some mainland producers are beginning to set up facilities in the southern United States. As rising costs shift some types of manufacturing out of China, the US has begun to receive more attention: North and South Carolina are now home to at least 20 Chinese manufacturers, including China's Keer and Sun Fiber, which set up a polyester fiber plant in Richburg, South Carolina last year. Chinese textile mills are now hiring in places where cotton was king. Textile production in China is becoming increasingly unprofitable after years of rising wages, higher energy bills and mounting logistical costs, as well as new government quotas on the import of cotton. At the same time, manufacturing costs in the United States are becoming more competitive. In Lancaster County, where Indian Land is located, Keer has found residents desperate for work, even at depressed wages, as well as access to cheap and abundant land and energy and heavily subsidized cotton. INDIA Textile machinery sector equipped to meet demand The Indian textile machinery industry is fully equipped to meet the growing demand for spinning machinery in India, said Mr C Kamatchisundaram, Vice President - Voltas Textile Machinery Division. He said that India depends on imports from Europe and China for fulfilling the need of weaving, knitting, processing & finishing industry. The demand for the spinning machinery in India is mainly to create green field and brown field projects and the Indian spinning industry adds 2.5 million spindles to 3.5 million spindles every year, with demand varying depending upon the market conditions. The Indian spinning industry did quite well last year, mainly due to the significant growth of 25% in yarn exports. Hence, it is obvious to expect that the industry would look for new investments in the current year and the trend is expected to continue in the next couple of years. 14 PAKISTAN TEXTILE JOURNAL - September 2015
2 SIMA demands level playing field for textile industry Chairman of The Southern India Mills' Association (SIMA) T Rajkumar, has appealed to Prime Minister to announce slew of policy initiatives to create a level playing field for the textile industry which employs over 110 million people to compete in the global environment and achieve the envisaged growth rate. He said that the industry could achieve over Rs 3 lakhs crore investments during the last 15 years and it has potential to attract Rs 2 lakhs crores in the next five years, if the right policies were in place. He stated that taking advantage of the surplus cotton, spinning capacity, fabric production capacity could be converted into a significant amount of foreign exchange which could greatly help the government to overcome the balance of payment issue. He said external factors are curtailing the growth cotton based textile industry which is facing yet another long drawn recession for the last 15 months. Spinning and power loom are the worst affected. Though various state governments have announced attractive textile policies and aggressively marketing for attracting investments, these policies have become a major threat for the existing capacities to compete with the new capacities being created. He claimed that in the absence of a level playing field due to higher rates of duties for Indian textile products in various major international markets, higher raw material cost, high cost of funding and high transaction cost, the industry is not in a position to achieve its potential growth rate. Rajkumar pointed out that under these circumstances, it is very essential for the central government to come out with a policy initiative to strengthen the competitiveness of the Indian textile industry. INDONESIA Government raises import tariff Indonesia has raised import tariffs on more than a thousand items covering many consumer goods such as clothes, food and cars to arrest an economic slowdown and falling retail sales. Economists have warned it would fuel inflation and noted firms faced bigger problems than foreign competition. For clothes, the new import tariffs were raised mostly to between 15% and 25%. T-shirts, used clothes and corsets, will be levied duty between 22.5% and 35%. In the textile industry, significant production costs caused by higher energy costs and labor wages hinder competition with cheaper imports. Textile manufacturers have felt the major impact of higher costs and weak demand.
3 NIGERIA CBN to provide cheap funding to revive textile industry The Central Bank of Nigeria (CBN) has promised to provide cheap funding of single digit under the Real Sector Support Facility (RSSF) aimed at reviving the Cotton Textile and Garment (CTG) industry. Nigerian textile industry, once with over 150 vibrant textile mills operating at close to full production capacities and employing over 1 million people, is now dominated by imports from Asia. The industry is said to be suffering from huge capital flights as a result of the huge importation of textile products. India alone is estimated to export textile products worth over $140 million into Nigeria, while imports from China, Indonesia and Taiwan are likely to be even much higher. The Nigerial textile industry is in a dire straits as 95% of textile products were imported. About 150 containers of textile materials were smuggled into the country every night on daily basis, even when the country had the capacity to produce 1.5 billion metric tonnes of cotton textiles. There is a grave concern that the industry which created over 18 million direct or indirect employments with over 150 vibrant mills in the past now have less than 20 textile companies that have managed to stay afloat. RUSSIA Russian textile companies demand ban on imported clothing The Association of Textile Companies of Russia has written to Russian President Vladimir Putin asking him to also order the destruction of all imported clothes from certain foreign countries, in particular, textiles imported from Europe and the United States. Many analysts, however, say they have trouble seeing the government follow through on the proposal. We think that it doesn t make sense to buy manufactured textile products from the European Union countries and support these countries economy, while they are introducing negative policies against us, says Shakhmal Ildarov, president of the Association of Textile Companies of Russia. He adds that Russia s annual textile market incomes are at approximately USD $31 billion, and more than USD $9 billion of it is the part of foreign imported textiles. Ildarov proposes that Russia should not only stop importing foreign textiles, but should announce these products as contraband, and seize them from the stores and publicly destroy them, just as Russia did with the foreign cheese and meats. Ildarov says that some European countries, such as Spain, do the same towards contraband. We have been supporting Europe and its textile industry for far too long. Meanwhile, our own textile industry has suffered. In the past 14 years the share of the textile industry in the GDP has dropped by 30 times, from 12% of the GDP to 4%. If we limit the import of textile products to the maximum, not only we will support local Russian textile, but also we will prompt European companies to start cooperating with Russian textile companies, Ildarov says. TURKEY Turkish textile maker plans an expansion of 40 million USD in Ethiopia MNS Manufacturing Plc, a Turkish textile maker in Ethiopia, is quadrupling production with an investment of 40 million USD, with test production expected to begin November MNS has spent USD 19 million so far and the expansion will provide another 450 jobs The company started the expansion because of a mismatch among the different production levels, including, spinning, weaving, dyeing and garment. When the expansion is completed, all these areas will have the same levels of production. Currently, MNS uses cotton yarn as its input, but with the installation of spinning machines, it will begin producing its own yarn. The company now produces 4.5tn of towels a day, although the installed capacity is eight tonnes. The expansion will increase the capacity to 16tn. Its towels are mostly exported to markets in Western Europe, Turkey, Middle East, Norway and US. So far 42 containers of machines have arrived from different destinations, including ITEMA, PICANOL, STAUBLI, and RABATEX brands from Italy, Belgium, France and India, respectively. Other machines for garment making are also being shipped now, said Tesfahun Sanna, project manager of MNS. MNS is among the relocated Turkish companies with the assistance of Ayka Addis, the icebreaker to enter into the textile sector in Ethiopia after relocating its factory from Turkey in MNS started out in Ethiopia with an investment of 64 million USD in PAKISTAN TEXTILE JOURNAL - September 2015
4 There are now more than 150 companies employing 50,000 people. MNS has 750 permanent employees and is planning to add 450 more for the expansion. So far Turkish companies have invested three billion dollars. Turkish textile industry hopes to recoup losses from Russian crisis Despite a major drop in the Russian business that is integral to Turkey's textile industry, the sector is hopeful that it will make up for its losses in the coming season, according to statements from industry leaders. In the past year and a half we have experienced a serious Russian-based crisis. We have confronted the economic difficulties that have arisen from this crisis, and in the last few months they have been diminished. Russia is bouncing back, and in the upcoming season we anticipate, at the very least, the compensation of a large portion of our losses, said Laleli Industrialists and Businessmen's Association (LASİAD) Chairman Giyasettin Eyyüpkoca, speaking at an iftar dinner arranged by the association late last month. The Laleli quarter of İstanbul is known as a hub of the country's textile sector, as hundreds of shops sell clothing products at the retail and wholesale level to mainly Russian buyers. The area has a decades-long history of customers from Russia and from other former Soviet states purchasing textile products to sell in their home countries. The chairman of the Istanbul Textile and Raw Materials Exporters' Union (IHIB) Ismail Gülle, shared similar sentiments. We are noticing improvements relating to Russia. Our biggest exporting problem is when prices fall as sales increase. In the second half of this year we believe that this situation will improve. It's not easy: In around one year we've gone through three elections. God willing, a new government will be formed, and with that new government, we can move forward with new projects prioritizing growth in exports, employment and industry, Gülle said. According to figures from the Turkish Exporters Assembly (TIM) from earlier this year, exports bound for Russia declined 43 percent between January and April, compared to the same period in The biggest factor contributing to the major drop stemmed from losses in the ready-made clothing sector, according to exporters. USA Smart textile market to reach $1.59 billion by 2020 The global smart textile/fabric market is expected to be valued at US$ 1.59 billion by 2020, growing at a CAGR of 24.1% from 2013 to The market is expected to be fuelled by growing penetration of smartphones and other smart or high-tech devices including ipods. Majority of new laptops and smartphones are equipped with Bluetooth Low Energy (BLE) technology which enables the connection of sensor-based devices to the Internet through mobile phones. Growth in end-use industries of smart textiles is expected to favourably impact the smart textile market in the coming years. Protection & military is expected to be a prominent end-use segment, and register high growth throughout the forecast period. Sports & fitness and medical are also expected to emerge as fast growing application sectors. 17
5 Consumers have been focusing on fashionable products that go a step further from traditional functions of fabric. Growth in the fashion and entertainment industry is expected to propel overall smart fabric market growth. Additionally, demand from the sports and fitness sector has been increasing on account of growing awareness pertaining to the benefits of a healthy lifestyle. The smart textile market comprises a large number of players. New product development and innovations is constantly carried on by companies such as Ohmatex ApS, Clothing+, Adidas, Weartech, Fibretronic Limited, and Peratech Ltd. Textile testing, inspection and certification market expected to reach $7.22 billion by 2020 The textile testing, inspection, and certification (TIC) market is expected to reach $7.22 million by 2020, growing at a rate of 4.6% between 2015 and 2020, according to a leading research agency. Textile Testing Market players such as SGS Group (Switzerland), Intertek Group plc (UK), and TUV SUD (Germany) have been focusing on geographical expansion to broaden their portfolio and geographical presence. For Instance in February 2015, the SGS Group opened a new soft lines testing laboratory in Tianjin (China). The new lab offers testing services for various types of textiles, apparel, and leather products. According to the report, increasing export of textiles from developing regions and growth of the technical textile market are some of the factors driving the testing, inspection, and certification (TIC) market. The global testing, inspection, and certification (TIC) market has been segmented into North America, Europe, APAC, and ROW. Europe was the leading region in terms of the market share in 2014, due to the presence of prominent market players such as SGS Group (Switzerland), Bureau Veritas Group (Belgium), Intertek Group PLC (UK), TUV Rheinland Group (Germany), and others. VIETNAM The EU-Vietnam enter into Free Trade Agreement (EVFTA) On August 4th 2015, Vietnam and the Delegation of the European Union (EU) unveiled an agreement on the EU- Vietnam Free Trade Agreement (EVFTA) negotiations. Ministry of Industry and Trade provides brief insights on the features in EVFTA. Vietnam and the EU officially declared to launch negotiations on the EVFTA on June 26th, After 3 years of negotiations, with 14 official negotiation rounds and many mid-term negotiations between ministers, heads of delegations and technical groups, Vietnam and the EU have reached the final agreements on all basic points of the EVFTA. For Vietnamese exporters, after the EVFTA is signed and take effects, roughly 85.6% tax lines currently applied to Vietnamese products will be immediately eliminated, accounts for 70.3% of Vietnamese export to the EU. Seven years after the agreement takes effect, the EU will eliminate 99.2% of tariff lines for Viet Nam, equivalent to 99.7% of Vietnamese export turnover with the remainder of export turnover enjoying zero-duty tariff rate quotas. EU agreed to eliminate duties on garment, textile, footwear and agricultural products (excluding cannedtuna over a 7-year period. Germany and Vietnam move closer to establish Joint Chamber of Commerce Germany and Vietnam are pushing to establish a Joint Chamber of Commerce (JCC) has affirmed both nations desire to further trade relations and foreign investment opportunities. According to Vietnam Chamber of Commerce Industry President Dr Vu Tien Loc, both Germany and Vietnam are hopeful that a German Vietnam JCC will create a formal platform to cultivate diplomatic communication, stimulate trade missions, and create an environment for increased long term investment of German industries in Vietnam. Germany is most important European Union trade partner by trade value of Vietnam, making up 28% of the trade between Vietnam and the EU. The existing profitability of German investment in Vietnam, coupled with the recent push for a Germany-Vietnam joint chamber of commerce, is good news for German companies looking to enter the Vietnamese market. Vietnam s textile industry in itself has been particularly profitable for the nation, accounting for 15% of the total GDP and 18 % of all exports in The US$20 billion textile industry has depended upon Germany more than any other European nation to provide the machinery to Vietnam. 18 PAKISTAN TEXTILE JOURNAL - September 2015
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