Home textiles export sees 6% decline

Around-the-World-BANGLADESH BANGLADESH RMG sector suffers $20 million loss The readymade garment (RMG) sector in Bangladesh has suffered a loss of US$ 20 million in the month of December 2013, due to shipment delay, cancellation of orders, extra-burden of air freight, price discounts, and losses due to vandalism, according to a survey report. The survey of more than 38 exportoriented garment factories was conducted by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). They found that US$ 5.35 million worth of orders were cancelled while the companies had to dole out an additional US$ 1.56 million for air shipment of their goods. The garment units surveyed had to pay an additional amount of US$ 1.87 million for failing to ship their products on time, the survey found. In addition, vandalism cost US$ 2.8 million to exporters while the delay in shipments cost another US$ 9.21 million during the period. The garment sector contributes about 80% of Bangladesh s foreign exchange earnings, and it is a vital sector for the economy of the South Asian nation. The Bangladesh clothing sector exports goods worth US$ 22 billion annually, and employs about f4.0 million people. Government to provide cash benefits to apparel makers Apparel manufacturers of Bangladesh will get 5% cash incentives from the government against their export proceeds if sent through an electronic system known as telegraphic transfer (TT), in order to help them recover the losses caused by political unrest. According to a Circular issued by Bangladesh Bank (BB), Apparel manufacturers of woven apparel, knitwear and terry towels are eligible to avail the benefits from the government, after fulfilling conditions set by BB. The government would also be cutting export tax by a half and increase cash incentives by one percentage point for garment exporters, which will cost the government around 30 billion Bangladeshi Takas. The move was taken by the government after three garment and knitwear makers and textile associations called on the Finance Minister in early December 2013, and placed a demand to support them to offset the extra cost following the recent hike in garment workers wages. As of now, clothing made from yarn is the only sector in Bangladesh that receives cash incentives for processing export proceeds through TT. Home textiles export sees 6% decline Inadequate supply of gas and power to Bangladesh industrial units severely hampered production and compelled them to spend more to generate energy by alternative means. The Country s home textile exports have seen a 6% decline in the first half of the current fiscal year due to political unrest and inadequate supply of gas in the dyeing factories. It also fell 9% short of the period s target of $388.2 million. The home textile export target was set at $831 million for the whole fiscal year. In July-December period of the FY2013-14, home textiles fetched $350.20 million, which is 6.30% lower compared to $375 million for the same period of previous fiscal. Home textile sector bears the brunt of political unrest, which caused the down trend in exports, said Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) first Vice President Mohammad Hatem. He said uninterrupted electricity and adequate gas supply is mostly needed in the dyeing units, but we lack it. Resultantly, production has been hampered as well as the export volume. Increase in the prices of cotton, yarn and other raw materials acted as a catalyst to the declining trend of exports. Due political unrest cast negative impact on production, which is another reason for the down trend in export earnings? GSP facilities to Pakistan by the European Union is a challenge for Bangladesh as they are stronger than us in terms of design and availability of raw materials, said Salam, who is also the President of Bangladesh Exporters Association (EAB). The knitwear and woven garments, the two largest export earners, posted 19.5% and 20% growth to over $5.9 billion and nearly $6billion respectively. Garment exports to new markets increase in FY 13 The exports of readymade garments from Bangladesh to 11 non-traditional markets soared by 28.75% year-on-year. Bangladesh s apparel exports to the 11 countries; Brazil, Russia, India, China, South Africa, Turkey, Chile, Mexico, Australia, Japan and South Korea increased to US$ 2.97 billion during the fiscal year ending June 30, 2013, compared to exports of US$ 2.3 billion made during the previous fiscal. Of the total clothing exports to these 11 countries, knitwear exports grew by 30.66% year-on-year to US$ 1.49 billion, while woven product exports rose by 26.89% year-on-year to US$ 1.48 billion. Among the non-traditional markets, Bangladesh s garment exports to Russia registered the highest growth, followed by Chile, South Korea, Australia, and Japan. 16

CHINA Shandong Ruyi takes major stake in fabric mill in UK Chinese fashion and textiles major Shandong Ruyi Technology Group has acquired a majority stake in UK luxury fabric mill Taylor & Lodge. Through a joint venture deal with the West Yorkshire firm's owner Bulmer & Lumb Group (BLG), a new company has been formed which will be 80% owned by Shandong Ruyi and 20% by BLG. The new company, Taylor & Lodge (Huddersfield) Ltd, will combine the manufacturing and design skills of Taylor & Lodge with the "world-class textile technology, marketing and financial power of Shandong Ruyi," the firms say. Plans include growing the Taylor & Lodge business in international markets by upgrading its equipment and expanding its marketing. The company, which was founded in 1883, has built its reputation as a manufacturer of luxury British worsted cloths. It employs around 65 people on the site at Huddersfield, and supplies fabrics for both the UK and international markets. Among its more recent commissions, it produced the cashmere and mohair fabric for a suit worn by James Bond actor Daniel Craig in the film Quantum of Solace. And it supplied two lengths of luxurious worsted as a wedding gift for the Duke and Duchess of Cambridge. The deal is the latest in a number of recent ventures for Shandong Ruyi, which is one of China's top textile and clothing enterprises, with total assets of CNY5.5bn (US$906m) and nearly 20,000 employees. Its vertical supply chain extends from sheep to high-end suits, and includes include cotton textiles, printing and dyeing, knitting and jeans. In 2012 the company led a consortium that bought Cubbie Group, Australia's largest cotton producer. In December it acquired a majority stake in Masood Textile Mills, one of the few vertically integrated textile and apparel makers in Pakistan - and agreed to invest US$2bn to establish the Punjab Apparel Park near Lahore, and set up woven and knitted garment factories in the park. And in March last year it bought a stake in Harris Tweed maker The Carloway Mill. EGYPT Country plans to increase its cotton growth over coming year The Ministry of Agriculture and Land Reclamation of Egypt has announced that this year it is planning to allocate 367,566 feddans for cotton cultivation. 17

Around the World The cotton-cultivated area last agricultural season was 367,566 feddans; however, the cotton was grown in only 250,000 feddans out of 350,000 feddans projected. In a statement, the Ministry said that the projected area was announced in an official report issued by the General Administration for Pest Control. The Report was then proposed to the Minister of Agriculture and Land Reclamation Farid Abo Hadid. Cotton ginned in the last season recorded 2,190 metric quintiles compared to 318,900 in the earlier season, which constitutes a 94% decline. The reduction in ginned cotton has been justified with a shortage in cotton-cultivated area, which reduced exports and consumption. INDIA Mixed bag for Indian textile industry in 2013 The year 2013 turned out to be a mixed bag for the domestic Indian textile industry as rupee depreciation helped make country s exports competitive, while rising input costs and high finance costs weighed upon margins. Indian apparel exports picked up in 2013 as compared to negative growth in the last two years; thanks to the economic recovery in US and EU markets, which account for over 80% of the textile and clothing exports from the country and the rupee depreciation of over 11%. India s textile exports are expected to register 15% growth in current year as against a 5% drop in the previous year. Indian exports also became competitive as China and Bangladesh struggled with their own set of problems. While China is dealing with higher labour costs and rising Yuan, the Bangladeshi textile industry struggles due to protests by labourers demanding higher wages. Other big players are Raymond, Arvind, Gokaldas Exports and Vardhman. Textiles have also registered strong growth in their exports during the year. Alok Industries aims to raise export revenue by around 80% to Rs 6,000 crore over the next two years. However, there was a little dampener for the industry in the form of cotton and yarn prices, which increased during the year amid surge in exports to countries like Bangladesh, Korea and China. Technical textiles poised for 20% growth India may be a major player in traditional textile, but technical textile as a segment is growing fast due to rising demand for specialized fabrics from various sectors of the economy. Technical textile is a growing segment and the government has projected 20% year on year growth in the 12th five year plan, thus expect this segment to grow to $36 billion in 2016-17, said Shashi Singh, Executive Director, Indian Technical Textile Association. She said all forms of technical textile such as medical textile, agro textile, geo textile and protective clothing to name a few, are finding greater application and many new players are entering into this business where margins are high. Some of the major Indian players include Reliance Industries and SRF Industries, Garware Wall Ropes and Welspun India World over, the share of technical textile in all forms of textiles is 65%, whereas its share is 10% to 15% in India. This indicates the massive growth potential in this segment, which is purely based on technology and innovation. Currently, India imports high-end technical textiles and depends on imported machinery to produce valueadded technical fabrics in India. Currently, India exports over U$1 billion worth technical textiles and this figure is set to grow. Several projects are also coming up in joint ventures with foreign players who are transferring technical know-how. Gujarat and Tamil Nadu are some of the emerging destinations. Textiles surge, regain No. 3 slot in the US market India has returned to the list of top three apparel and textile exporters to the key US market, after being pushed out of the top five last year. Riding on the competitive advantage of a weak rupee and improving signs of a pick-up in the US economy, India's textile and apparel exports to the American market was pegged at $3.73 billion during the first seven months of 2013, right after China and Vietnam, according to the US Department of Commerce's Office of Textiles and Apparel (OTEXA). Among the top 10 textile and apparel suppliers to the US, India's growth in export value during this period at 4% was higher than the 3% growth in overall imports into the US and was also third when the top 10 are stacked up in terms of growth rate, after Vietnam's 13.5% and Bangladesh's 9%. Of the total textile and apparel exports of $3.73 billion, apparel accounted for the bigger chunk - over $2 billion - as against the value of nonapparel exports (or home textiles) at $1.73 billion. PERU Cotton acreage to rise in 2013-14 season The Northwestern coastal Peruvian region of Piura would be planting cotton on more than 4,000 hectares of land during the upcoming cotton campaign, especially in the Lower Piura territory of the region. 18

Unlike the previous season where cotton was planted only on 1,000 hectares of land in the region, the aim of the government is to cultivate cotton on more than 4,000 hectares of land. The regional government of Piura has been promoting cultivation of cotton in the region, in order to restore the status of the region as one of the biggest cotton producers in the country. TURKEY Country to be global brand in organic cotton production Turkey is gaining more and more awareness regarding organic cotton production, and would soon become a global brand in the production of organic cotton, said the Turkish Nazilli Cotton Research Station s manager Sadettin Ozturk. He said Turkey possesses favourable conditions for organic cotton farming and currently, the country is the largest producer of organic cotton in the world. Organic cotton farming is conducted without the use of chemical inputs, and each stage of the production process is carried out through a controlled and certified agricultural method. Mr. Ozturk said that since 1990s, Turkey has been gradually transcending into a stage of producing organic cotton and slowly the country has become synonymous with organic cotton. Conventional cotton production has a lot of disadvantages, whereas, organic cotton production can translate into several advantages, especially for small cotton growers in the country. Established in 1934, the Nazilli Cotton Research Station under the Ministry of Food, Agriculture and Livestock, known earlier as the Cotton Breeding Station, the institution s key objective is to develop projects and conduct research for the production of high-quality, disease and pest resistant cotton varieties. 19

Around the World TAJIKISTAN 2013 cotton output falls 3.6% short of target In 2013, Tajikistan is estimated to have produced 392,000 tonnes of cotton, about 3.6% lower than the target set for the year. In 2013, cotton was cultivated on 191,333 hectares of land, which was 8,133 hectares or 4% lower than the area under cotton cultivation in 2012, according to the Ministry of Agriculture. The area under cotton decreased mainly because of the government s directive to increase areas under fruits, vegetables and fodder crops. Other reasons for the decline in cotton production were the fall in international cotton prices, shortage of water during the harvest period, and lack of proper access to preferential loans for farming units. Non-earmarking of funds for development of the cotton subsector in the country s Budget also affected cotton growing in Tajikistan during the year. In 2014, cotton is expected to be grown on 200,000 hectares of land, but the Tajikistan government is not going to set any production target, as has been done in the previous years. As cotton sector is not subsidized by the government, farmers will make their choice depending on international prices of cotton and other crops. In Tajikistan, cotton contributes about 60% to the country s total agricultural output. It is grown on 45% of irrigated arable land and acts as a source of livelihood for about 75% of the rural population. Cotton has always been among the leading export items for Tajikistan and cotton and cotton products accounted for 18.6% share in the country s exports in 2012, earning US$ 244.8 million. Over 40% of Tajik cotton is exported to Turkey, followed by Russia with about 23%China with 13% and Kazakhstan with 6.5%. USA US Textile industry on the path of revival Decades after many people thought the US textile industry was dead, the industry generated $US54 billion in shipments in 2012 and employed about 233,000 people. Business is on the upswing as Southern states, in particular, encourage textile companies with tax breaks, reliable utilities, modern ports and airports, and a dependable, trained and non-union workforce. In 2013, companies in Brazil, Canada, China, Dubai, Great Britain, India, Israel, Japan, Korea, Mexico and Switzerland, as well as in the US, announced plans to open or expand textile plants in Georgia, Louisiana, North Carolina, South Carolina, Tennessee and Virginia. The workers produce yarn, thread and fabric for apparel, furnishings, home products and industrial use. Examples include Huggies and Pampers nappies and Pledge furniture wipes, according to David Rousse, president of the Association of the Nonwoven Fabrics Industry. "Textiles manufacturing - yarn, fabric, woven and nonwovens - is still here and growing," said A Blanton Godfrey, dean of the College of Textiles at North Carolina State University. "We're selling cotton yarn cheaper than the Chinese." The textile manufacturing in the US dropped in the 1990s and 2000s as cheaper labour drew jobs overseas. Automation and increased productivity of textile mills also cost jobs. More than 200,000 textile manufacturing jobs have been lost to automation in the last decade. Textiles, mostly cotton, once dominated the economy of the South. Employment peaked in June 1948 with 1.3 million jobs. In just one state, North Carolina, 40 per cent of its jobs were in textile and apparel manufacturing in 1940. By 2013, just 1.1 per cent of that state's jobs were in textiles. About 650 textile plants closed between 1997 and 2009, draining thousands of jobs and depressing communities. But rising wages in China and other countries, combined with higher transportation costs and tariffs, have prompted foreign and domestic companies to consider American manufacturing sites. Also, with more consumers looking for the "Made in the USA" label, some companies are turning to American goods. Wal-Mart, for example, pledged last year to buy $US50 billion over a decade in American-made products, among them towels and washcloths. More than a third of all textile jobs were in Georgia and North Carolina in 2012, and that's where many of the jobs are being created. The new plants are nothing like the dusty, noisy mills of the past. These highly automated plants require far fewer - but more tech-savvy - workers who earn higher pay than their forebears. The average textile wage in the US in 2012 was $US37,900 ($A42,453), compared with $US60,496 for all manufacturing jobs. In North Carolina, the average textile wage was $US33,219, up from $US28,216 in 2002. 20

VIETNAM Second biggest garment exporter to USA The United States, the biggest importer of Vietnamese garment and textile products, accounting for about 50% of the industry's export turnover, is among 11 members joining the negotiations. Currently, Vietnamese garment and textile exports to the US market are taxed from 17.3% to 32%, which will be reduced to zero when the TPP agreement is enacted. Vietnam's garment and textile exports to the United States are expected to increase from the current 7 % to 12%, earning some US $30 billion a year by 2025. By then, the US market will account for 55% of Vietnam's total exports of garments and textiles, over the current share of about 50%. Vietnam is the second biggest garment exporter to the United States with a market share of 8%, after China. Vietnamese garment firms expect that TPP negotiators would agree that Vietnam, along with Malaysia and Mexico, could import raw materials from non-tpp member countries and still receive duty- free access. The 11 countries that have joined the TPP negotiation include Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. Textile exports to show strong growth in 2014 Vietnam Textile and Apparel Association (VITAS') Deputy Chairman, Le Tien Truong, said that an improving global economy will be favourable for Vietnam, in general, and the local textile and garment industry, in particular, because the county will be able to boost its level of exports to the international markets. VITAS expects the export value of the textile and apparel industry to show strong growth this year. The exports of textile and apparel by value could rise 12% in 2014 from the previous year. Truong said that 2013 was a successful year for Vietnam's textile and garment industry as exports rose to US$20 billion. That represents a year-on-year increase of 18.6% to $17.9 billion for textile and garment exports and a 15.7% surge to $2.1 billion for fibre products. The Vietnam Textile and Garment Group had reported a gain of 11.2% from 2012's figure to $2.91 billion in 2013. Garment exports went up 13% to the US and Japan each, while they expanded 30% to $1.3 billion to South Korea. The industry boasted a trade surplus of $5.12 billion last year, with imports of raw materials estimated at $14.88 billion. Local demand for textiles and apparel also increased 12%. The industry also has a strong potential to export products to the EU market. Every year, the EU spends around $250 billion to import the staple, while Vietnam's exports to the EU were estimated at about $2.4-$2.5 billion last year. 21