MARKET WATCH 19TH FEB 2021

NATIONAL

INTERNATIONAL

Much Room For Higher Indian Apparel Exports To Mexico

The bilateral trade between India and Mexico is rising and there is huge potential for growth of Indian apparel exports to Mexico, said country's ambassador to Mexico Manpreet Vohra.

Speaking at 'India-Mexico Synergies in Apparel and Textiles' virtual meeting, organised by Apparel Export Promotion Council (AEPC) and Embassy of India, Mexico City, Mexico, on Tuesday evening, Vohra said the bilateral trade has grown 46 per cent to about USD 10 billion since 2014.

"Mexico is now India's largest trading partner in Latin America and the second-largest in entire America after the USA and having overtaken Canada and Brazil. Our trade is also fairly well balanced with only about USD 1 billion in India's favour," Vohra said.

The Ambassador said one of the most important products in the bilateral trade basket is garments and textiles, and for which India is among Mexico's top suppliers. In 2019, Mexico imported USD 381 million worth of textiles and clothing items from the country.

"However, there is much more room for growth borne out by the fact that in 2019 Mexico imported over USD 10.7 billion worth of garments and textiles from all over the world. Even 2020 data shows from January to November that despite the pandemic Mexico has still imported USD 7.9 billion of these items.

India, therefore, can surely increase its share in the import matrix of Mexico," the envoy said.

India is one of the leading manufacturers and exporters of high quality and competitively priced garments and textiles, he said and added that the size of the country's domestic market alone is USD 100 billion.

"Both the domestic market size and India's share in global apparel trade, currently 5 per cent, are likely to triple by 2024-25," he added.

AEPC Chairman A Sakthivel said, "At the start of the coronavirus pandemic in India in March, the production of medical textiles in the country was zero. Within 30 days with the help of Minister of Textiles Smriti Zubin Irani and our exporters, the production of medical textiles began. And, by June India became the world's second-largest manufacturer of medical textiles."

Sudhir Sekhri, Chairman (Export Promotion), AEPC, said, "Of the 10 top apparel products that are being exported from India to Mexico only one item is a MMF fabric, all other items are cotton fabrics. This is where the gap is and where we see growth."

Source: The Business World

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India's inflation target band up for review - finance minister

India's inflation target band of 2%-6% is up for review as the five-year term for the current monetary policy framework draws to a close, Finance Minister Nirmala Sitharaman said on Thursday.

The band, on the basis of which monetary policy is decided by a six-member committee headed by the central bank governor, was established in 2016.

“Monetary policy committee’s term is coming to an end. Inflation targeting will also have to be reviewed. We shall do that,“ Sitharaman said.

Since coming to power in 2014, Prime Minister Narendra Modi's government has been able to tame inflation to the given range in the framework. Before the monetary policy framework came into existence India's inflation was high and volatile driven by fuel and food prices.

But during the coronavirus pandemic inflation rose significantly while the economy crashed, creating major challenges for the Modi government that was formulating policies to provide relief to its 1.4 billion population.

Inflation in Asia's third largest economy returned toward the Reserve Bank of India's (RBI) 2%-6% inflation target range in December after remaining stubbornly above the central bank's comfort range for eight consecutive months.

Source: The Economic Times

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Surat's textile hub weaves a revival story amid Covid-19

When the lockdown was lifted last year, Rasikbhai Kotadiya, who runs a powerloom unit in the Kim-Pipodara industrial area on the outskirts of Surat, was left with only four workers out of the 48 that he used to employ to run his 128 looms. Though the economy had been unlocked, his textile unit, and that of thousands of others, struggled to resume operations.

By the last week of May, nearly 700,000 of Surat’s 1.2-1.5 million migrant workers, left high and dry with no pay during the lockdown, had returned home. In Laskana, another textile weaving hub in Surat, the powerlooms were all but silent, with only 2,000 of the total 55,000 looms churning out grey cloth at a snail’s pace.

But the problem was not only one of a crippling shortage of labour.  Faced with mounting losses, owners of textile units were paying the few remaining workers a fraction of their pre-Covid-19 salary of ₹15,000-18,000 a month.

That was then. Today, Gujarat’s textile hub is witnessing a spectacular rebound. The nearly ₹70,000 crore synthetic textile industry of Surat, which had come to a standstill during and in the immediate aftermath of the lockdown, is humming once again.

Kotadiya, for instance, has not only added more machines at his unit, but has also increased his manpower to 60 from the 48 that he had before the pandemic. “Business was crawling for a few months.

However, after Diwali there has been no looking back,” says Kotadiya, whose unit is one of the few in Surat that has water jet jacquard machines that roll out designer colour fabrics.

“I thought my life was over when the lockdown happened and I had to return home to Ganjam in Odisha.

The revival here has not only helped me get jobs for my brothers, but it has also repay my father’s debts,” says Behera, who got a salary hike and has managed to treble his family income.

Industry sources estimate that 400,000-500,000 migrant workers are employed in Surat’s textile weaving units, 300,000-400,000 in the textile processing units and another 200,000 are employed by textile traders at the wholesale markets. There are around 450 textile processing units and over 600,000 weaving and knitting powerlooms in Surat.

Unit owners like Mayur Chevli or DM Textiles on the Udhna-Magdalla Road powerloom cluster estimate that they suffered losses of anywhere between four and six months of business last year.

“However, with the revival in the retail market post Diwali, unit owners like us were desperate to get as much business as possible. So we began wooing workers  back with higher salaries,” says Chevli, who has also expanded his business.

In normal times, textile workers in Surat are relatively better off than their peers in other industries since they earn on a piece rate basis. This means that for every metre of grey cloth or fabric that they churn out, they get paid between ₹2 and ₹5, which amounts to an average monthly salary of ₹15,000 to ₹20,000.

Since last Diwali, though, their average salaries have shot up to ₹20000-₹25000, says Kotadiya.

What has also worked in Surat’s favour is that unlike other textile clusters in the country, the industry here manufactures synthetic fabric, garments, saris and caters to the lower and middle income groups. It is this segment that has made a comeback in the retail market since the festive season.

However, it is only the yarn makers who have gained the most, with synthetic yarn prices being increased from ₹90-₹95 per kg to ₹130-₹135 per kg – a whopping 45 per cent rise over last year. The subsequent units in the textile value chain have not been able to increase prices as much, thereby losing out on the profit they could have earned otherwise. Since Diwali, fabric prices have risen by only 10-15 per cent.

Source: The Business Standard

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India to be among fastest-growing emerging markets in FY22: S&P

India is likely to be among the fastest-growing emerging markets this year, Standard & Poor’s predicted, even as the US rating company said new variants of the Covid-19 virus could lead to a much larger second wave and pose a risk to economic recovery.

The steep contraction in the current financial year will be followed by a bounce back to 10% growth in FY22, putting India among the fastest-growing economies in 2021, said Andrew Wood, S&P director of sovereign and international public finance ratings.

“We see the Indian economy growing at 6% over the medium term, may be slightly higher, and that compares very well to emerging markets all around,” he said at a webinar on S&P’s India 2021 Outlook on Wednesday.

A much larger second wave that could emanate from the new strains of the Covid-19 virus would be a major risk to India’s economy, based on the significant impact similar events have had on the recovery paths of other countries, Wood said.

“We are also watching India’s vaccination campaign very closely to see how well India can mitigate the lurking risks associated with the pandemic as well as new, more transmissible and potentially resistant strains of the SARS-cOv-2 virus,” Wood said.

S&P expects India to vaccinate a significant portion of its population only by the end of 20222, against about 9 million currently, which represents less than 1% of the population.

Wood  counted the Serum Institute of India, the world’s largest producer of vaccines, as an ace up the country’s sleeve because “it’s not going to have to rely upon foreign manufactured shots, which is a major asset and differentiates India from economies around the world.

This would be a critical component of sustaining India’s economic recovery over the medium terms as keeping up growth rates would be tricky, he said.

Fiscal deficit

Wood said S&P will be closely watching India’s medium-term growth with regard to the country’s sovereign rating, currently at BBB – with a stable outlook.

“Higher growth rates over the next few years are going to be critical to maintain and finance the government’s higher fiscal deficits and debt stock,” he said.

S&P has pegged India’s combined Centre and state fiscal deficit at 14.5% of GDP – which is expected to drop to 11.6% in FY22 and further to below 10% in FY23.

“This is gradual and relatively slow fiscal consolidation, given how high that fiscal deficit is,” Wood said, adding that S&P would be more concerned over the country’s finances if the deficit remained in double-digits over the medium term.

Source: The Economic Times

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Tirupur industrialists to train 7,000 workers

The Tirupur Exporters and Manufacturers’ Association (TEAMA) has put in place an action plan to train a workforce of 7,000 for the 36 factories to come up in the proposed textile park at Vedaranyam in Nagapattinam district.

More skill training centres have been planned to be started to create a huge workforce before the Veda Textile Park at Ayyakaranpulam takes shape. The park, comprising 34 readymade garment and two knitwear units, is to be constructed at ₹ 96.86 crore. The Centre will offer a subsidy of ₹37.8 crore and the State government ₹23.62 crore.

The Union Textiles Ministry is expected to accord its formal sanction of its share of the total project cost during this week.

The project envisages 24 % contribution by the State Government and the rest by the Special Purpose Vehicle formed by the 36 entrepreneurs, N. Murali, Vice-President of TEAMA, said. The wet-processing will be carried out at Tirupur and rest of the process till manufacture of the end product will take place in Vedaranyam, he said.

Formation of such clusters has been necessitated by shortage of labour in Tirupur. After a large segment of the north Indian workforce in Tirupur migrated to their respective States during the COVID 19 lockdown, a number of units were facing the problem of scaled-down production and productivity issues.

Abundance of work force in places such as Vedaraynam will enable the Tirupur industries to stand up to the competition from Bangladesh and Vietnam in the export market, he said.

A major hub of knitwear exports in India, Tirupur accounts for contributing 45% of exports, of which, more than 90% are cotton based garments.

The competitive advantage of Bangladesh textile sector is only marginal and acceleration of production and productivity through such clusters formed under SITP will stand the Tirupur hub in good stead to emerge stronger, he said.

Source: The Hindu Business Line

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Manufacturing for the world - A bold Budget adds to the momentum

Beset by problems of low productivity and the availability of cheaper import substitutes, the manufacturing sector's share in India's GDP has remained range bound for the past 20 years.

Though India has moved up in the World Trade Organisation's rankings of leading exporters in world merchandise trade, its share in global exports has been hovering around 1.5 per cent mark since 2010. Despite this apparent stagnancy, the years following the launch of Make in India 1.0 have seen some notable developments.

The program, whose core objective has been to bolster manufacturing capabilities by promoting exports, has been a vital reason behind the commendable growth in India's electronics manufacturing sector over the past five years.

Notably, the launch of the Phased Manufacturing Program (PMP) for the electronics industry has led to the growth in exports of telecom handsets from USD 0.3 billion in FY15 to USD 3.8 billion in FY20. However, the lack of a convincing rationale for the selection of sectors under the aegis of Make in India, absence of significant changes to import duties and inadequate production-linked incentives have resulted in the limited success of the program.

The Atmanirbhar Bharat Abhiyan, estimated at 15 per cent of the GDP as of November 2020, is an opportunity to kickstart Make in India 2.0. The program addresses some of the inadequacies of its predecessor and focuses on incentivising investment through fiscal incentives, while developing select manufacturing ecosystems by curbing imports.

Given the progression from a 'one-size-fits-all' approach for 25 sectors under Make in India 1.0 to a clear focus on select sectors under Make in India 2.0, the latter, if executed as intended, could be the impetus India needs to develop a competitive manufacturing ecosystem.

Seizing the opportunity

The growing emphasis on supply chain realignment by companies globally and the critical need for India to reduce its import dependence on a single market, are the key triggers behind the launch of 'Atmanirbhar Bharat Abhiyan'.

Supply chain re-alignment at a global scale

The government, having introduced several significant reforms last year, realised it was an opportune time to attract companies for whom supply-chain relocation has become a top priority in the wake of COVID-19. Firms from countries including the U.S., Japan and South Korea, have already expressed interest in shifting their production facilities to India. The government's investment-driven policy measures along with corporate tax cuts are likely to further underpin India's attractiveness as a manufacturing hub.

From raw materials to critical components, the pandemic exposed the reliance of the country's key sectors on a few markets for fulfilling their sourcing requirements. While global supply chains were swiftly dismantled as one country after another went into lockdown, efforts toward bolstering domestic manufacturing gained momentum.

With the introduction of the USD26 billion Production Linked Incentive scheme, the government has undertaken important measures to further reduce India's import  dependency.

A bold budget adds to the momentum

Coming in the backdrop of an extremely turbulent 2020, Budget 2021 was a growth-oriented budget that displayed the government's clear intent of building safe infrastructure and shoring up the economy battered by the pandemic.

For the manufacturing sector, there were several announcements that should bolster India's manufacturing capabilities over the medium term including the introduction of PMP for solar cells/panels, setting up of mega textile parks and rationalization of customs duty.

Investments in Research & Development (R&D) is another area that will play a pivotal role in aiding the growth of the manufacturing sector. Allocation of USD 6.9 billion to the National Research Foundation for five years is likely to strengthen the country's research ecosystem. Lastly, the expansion of NIP, further development of Dedicated Freight Corridor and increased CAPEX for railways are likely to improve connectivity, bring down logistics cost and boost domestic supply chains.

While 'Make in India 1.0' laid the foundation, 'Make in India 2.0' is likely to hasten the manufacturing transition

While Make in India 1.0 was instrumental in furthering the evolution of manufacturing in India, Make in India 2.0 is expected to increase its momentum.

However, India is not the only country stepping up its capabilities in domestic manufacturing to attract global investors. The country competes with equally lucrative manufacturing destinations in the region, some of which fare better than India on important parameters such as land and labour laws.

For instance, India's complex land acquisition laws have hit investor confidence in the past. While the formation of a land bank of 4.8 lakh hectare is a step in the right direction, more such reforms would be needed to improve the attractiveness of the manufacturing sector. R&D is another area in which India has been lagging developing economies. India's R&D spend, at 0.6 percent of GDP, is one of the lowest among emerging markets.

While the pandemic has spurred interest in India's domestic manufacturing ecosystem, the journey has just begun. Providing easier access to land, boosting R&D and legal infrastructure, and further investment in re-skilling efforts are just a few of the prerequisites for India to achieve its goal of becoming a global manufacturing hub.

Source: The Economic Times

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Madhya Pradesh: Grasim Industries wins Golden Peacock Global Award for sustainability 2020

Birla Cellulose, part of Grasim Industries Limited, a flagship company of the Aditya Birla Group, has been named as the winner of the prestigious Golden Peacock Global Award for Sustainability 2020, in the Textile and Apparel sector, for its global leadership, achievements, and continuous improvements in sustainability in the global textile industry.

Golden Peacock Awards, instituted by the Institute of Directors (IOD) in 1991, are recognised worldwide as the hallmark of Corporate Excellence. It celebrates the achievements and performance of well-performing organisations annually.

The credibility of these awards lies in the transparency, depth, and impartiality of the assessment process and helps companies accelerate their performance levels and beat the competition.

Justice MN Venkatachaliah, former Chief Justice of India and former chairman, National Human Rights Commission of India, and National Commission for Constitution of India Reforms, was the chairman of the Golden Peacock Awards Jury.

The award applications are assessed at three levels by independent assessors and finally by a grand jury.

On the occasion, Dilip Gaur – managing director, Grasim Industries and Business Director, Birla Cellulose, Aditya Birla Group said, “The Golden Peacock Global Award for sustainability is a testament to our vision of leadership in building sustainable businesses capable of consistently delivering best-in-class environmental performance, underpinned by responsible stewardship philosophy.

Source: The Free Press Journal

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India recorded $1422 mn FDI inflow from UK in 2019-20: Grant Thornton report

The FDI inflow from the UK to India has increased from $898 million in 2015- 16 to $1,422 million in 2019-20, according to Grant Thornton Bharat’s Britain Meets India report released on Wednesday.

The report prepared in collaboration with the Confederation of Indian Industry (CII) and with the support of the UK’s Department of International Trade observes the latest trends on the UK investments in India.

“Our research identified 572 UK companies in India with a combined turnover of around Rs 3,390 billion, tax payment of around Rs 173 billion and they have employed 416,121 people directly. This reflects the important contribution made by the UK companies to the Indian economy as a key ally in India’s growth story,” said Pallavi Joshi Bakhru, Partner and India-UK Corridor Leader at Grant Thornton Bharat LLP.

The report has predicted the India-UK bilateral relations to touch a new high in the post-Covid world. The UK companies have mainly focused on industrial and business services sectors. Maharashtra has come out as the top investment destination for UK companies, followed by Haryana, Delhi, Tamil Nadu, Telangana and Karnataka.

Source: The Economic Times

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Companies in India likely to give 7.3 per cent average increment this year: Survey

Companies in India are expected to dole out an average increment of 7.3 per cent to employees this year amid faster-than-expected economic recovery and revival in business and consumer confidence, according to a survey.

The first phase of the 2021 Workforce and Increment Trends Survey by Deloitte Touche Tohmatsu India LLP (DTTILLP) also said the average increment this year will be higher than 4.4 per cent seen in 2020 but lower than 8.6 per cent given by companies in 2019.

As many as 92 per cent companies that participated in the survey plan to give an increment in 2021 compared to only 60 per cent last year.

The survey, launched in December 2020 as a B2B India-specific survey, covered around 400 organisations spread across seven sectors and 25 sub-sectors.

“Average increment for companies in India is expected to go up to 7.3 per cent from 4.4 per cent in 2020. This 7.3 per cent projected increment is lower than the 8.6 per cent average increment in 2019.

“The increase in increment budgets is in line with the faster-than-expected economic recovery, revival in business and consumer confidence, and early signs of improving corporate profitability,” it said.

As per the findings, 20 per cent companies plan to give a double-digit increment this year compared to only 12 per cent in 2020. Out of the 60 per cent companies that gave an increment in 2020, a third of them did that through off-cycle increments.

Among the companies that did not give an increment in 2020, “only about 30 per cent plan to compensate employees for the previous year through higher increments and/or bonuses,” it added.

The survey further said the life sciences and information technology (IT) sectors are expected to give the highest increments whereas the manufacturing and services sectors continue to offer relatively lower salary increases.

“Life sciences is the only sector that will be able to match its 2019 increment levels. For others, average increment in 2021 is expected to be lower than 2019.

“Only digital and e-commerce companies are expected to offer double-digit average increments in 2021. Increments are likely to be the lowest in hospitality, real estate, infrastructure, and renewable energy companies,” it added.

Anandorup Ghose, partner at DTTILLP, said COVID-19 has made year-on-year analysis tricky as 2020 has been an anomaly, making 2019 a better year for comparison.

Average India 2021 increment of 7.3 per cent is still considerably lower than 8.6 per cent in 2019. While business activity is rebounding quickly, organisations are managing compensation budgets responsibly considering their affordability and sustainability of fixed cost increases, Ghose noted.

According to him, post March 2020, most companies decided either not to offer increments or defer them until they get more clarity and around 25 per cent companies even extended a pay cut to their senior management.

“… at an all-India level, voluntary attrition reduced from 14.4 per cent in 2019 to 12.1 per cent in 2020, involuntary attrition (layoffs, restructuring, etc.) increased from 3.1 per cent in 2019 to about 4 per cent in 2020. Involuntary attrition increased the most in the IT and services sectors, whereas voluntary attrition reduced across sectors,” it added.

Among priorities for 2021, most organisations identified greater adoption of technology in HR, employee wellness, and continued investment in learning and development as the top three focus areas.

Source: The Financial Express

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Homeworkers face some of the worst conditions in global textile and apparel supply chains

The Homeworkers Worldwide (HWW) non-profit organisation working for homeworkers has published a study which says that there are 5 million homeworkers working in textile and apparel supply chains in India alone, with 3.5 million of them in the value chains of global brands.

The homeworkers face some of the worst conditions in global textile and apparel supply chains, yet remain invisible to many of the brands whose products they help to produce.

The report is part of the Hidden Homeworkers initiative, a four-year programme led by the Traidcraft Exchange charity, alongside HWW, Indian workers’ rights NGO Cividep and the HomeNet South Asia network, which is co-funded by the European Union (EU).

The greatest barrier to transparency is the cycle of denial and concealment which keeps homeworking hidden. Getting brands to recognise that there may be homeworking in their chains, and to include homeworkers in their implementation rather than excluding them is the first step in breaking the cycle.

The study identifies several areas where existing tools could be updated to encompass innovations and advances in practice, and areas where new tools could be helpful.

The report also highlights that a small but growing number of leading fashion and footwear brands, four of which contributed to this study, have significantly improved both transparency and working conditions for homeworkers within their chains.

Source: Apparel Online

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INTERNATIONAL

SAC releases progress report on completion of first decade

The Sustainable Apparel Coalition (SAC), an association representing apparel, footwear, and textile industry in sustainability, has released a report detailing organisation’s first decade of progress, culminating in its signature achievement, the completion of the Higg Index, a suite of tools for the standardised measurement of value chain sustainability.

In addition to illustrating the impact of the Higg Index, the report lays out the framework for the SAC’s ambitious new mission to transform business for exponential impact.  

Developed over the last decade by the SAC, the Higg Index enables companies to proactively measure and manage issues like environmental stewardship, working conditions, and supplier relations. The five tools within the Higg Index continue to evolve to align with emerging scientific data and an ever-growing understanding of sustainability issues.

“Over the past 10 years, we have worked collaboratively across the industry to develop and launch the Higg Index, providing cutting-edge, standardised sustainability tools for our industry,” Amina Razvi, SAC executive director, said in a press release.

“As we look ahead to our next decade of action, the Higg Index will be central to the SAC’s mission of transforming businesses for exponential impact providing the building blocks necessary to help us make smarter and more informed decisions about the products we make, how we make them, and how we partner together to reduce impact on people and the planet.

With scientists predicting that we only have 10 years until the effects of climate change are irreversible, we feel a sense of urgency and responsibility to continue moving our industry forward,” Razvi said.

The SAC’s new strategic plan is built around four pillars: collective action, integrated tools, transparency, and sustainability leadership. This plan is bold, ambitious and flexible, acknowledging that new and emerging insights and issues across the industry will require the organisation to be agile in how it prioritises its work and focuses its attention on continual progress towards its goals.

“As the SAC prepares to embark upon a new decade of transformative action, the organisation and its more than 250 members are committed to a bold, new mission to transform business for exponential impact through ground-breaking tools, collaborative partnerships, and trusted leadership for industry sustainability,” Sean Cady, SAC board chair and VF Corporation global vice president for sustainability, responsibility and trade, said in the release.

“The SAC has spent ten years developing the Higg Index for the industry, and now we’re ready to put the tools to use,” Jeremy Lardeau, the SAC’s vice president of the Higg Index, said. “The insights provided by the Higg Index will empower the industry to accelerate and deepen the adoption of climate solutions, worker protections, and more sustainable products at scale.”

Source: Fibre2Fashion News

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Egypt develops state-run textile firms at $1.3bln

The Egyptian Ministry of Public Business Sector is implementing a plan worth more than EGP 21 billion to upgrade its affiliated companies in the field of cotton, spinning, and weaving, according to a February 15th statement.

The state plan aims to fourfold increase the production capacity on an annual basis.

The ministry aims to merge nine cotton firms into one entity, as well as 22 spinning, weaving, and dyeing companies into nine enterprises.

n addition, the government will set up three main integrated centers for the textile industry, besides allocating three more facilities to train and prepare the workers.

The ministry has secured a bridging loan worth EGP 1.5 billion to pay for importing machinery from Germany, Italy, France, Japan, and Switzerland.

The government, meanwhile, established 50 centers in four governorates last year to collect and receive the cultivated cotton of season 2020/2021 from local farmers.

Source: Zawya News

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Australia convenes roundtable to tackle discarded clothing

Australia is planning to tackle 800,000 tonnes of clothing and textiles discarded by its citizens every year, and recently announced a $350,000 investment in the Australasian Circular Textile Association (ACTA). Minister for environment Susan Ley said the government will host a national roundtable on the issue, bringing together representatives of retail, fashion, charity, production, research and waste management to curb the dumping of textiles.

“We all have to wear clothes but we are buying them at such a rate that we don’t know what to do with them when they are too old, too worn, or simply out of fashion,” Ley said.

“According to the ACTA, parents who have just been purchasing school uniforms and trades getting ready for the year ahead will contribute 12,000 tonnes of branded uniforms alone to landfill in the next 12 months,” she was quoted as saying by Australian media reports.

Kmart was the first retailer to put its hand up in support of the roundtable, along with the Australian Fashion Council.

The ACTA’s new initiative, Circular Threads, will investigate new technologies that will be used to separate and repurpose fabrics from used clothes, and create remanufacturing opportunities.

ACTA founder and CEO Camille Reed said the problem required a long-term solution, and for efforts to go even further to create a circular model.

“We need an industry led approach to find the ways we can break down clothing elements and re-use individual components and the fabrics themselves,” Reed said.

“There are some key technologies around the corner in terms of breaking down cotton and polyester blends and we need to be in a position to make the most of those opportunities,” she added.

Source: Fibre2Fashion News

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Vietnam earns 2.6 billion USD from garment exports in January

Vietnam raked in 2.6 billion USD from exports of textiles and garments in January 2021, up 3.3 percent year-on-year, according to the Ministry of Industry and Trade.

The ministry said in January 2021, the textile production index and the apparel production index increased by 16.6 percent and 9.9 percent, respectively, over the same period in 2020. The production of fabrics was estimated at 92.4 million sq.m, up 20.4 percent.

According to Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), the COVID-19 pandemic will continue to affect the sector until 2022.

If COVID-19 vaccines are available in the first and second quarter of 2021, the pandemic is expected to be controlled by the end of 2023. Then, the textile and garment market could see recovery, Giang said.

He said textile and garment businesses must change production and business models as the pandemic has made global purchasing power for apparel products, including many traditional export garment products of Vietnam, fall by 70-80 percent.

This is a big challenge for the Vietnamese textile and garment industry. Businesses need to learn about changes in domestic and global markets to find solutions in production and business this year, according to Giang.

He said the domestic textile and garment industry needs to build production chains, especially with countries in blocs that have signed trade agreements with Vietnam and ASEAN.

The textile and garment industry also needs to have a sustainable development strategy, including changes in production and business models according to the needs of brands and global consumers. They should pay attention to standards, certificates of origin and certification of environmental assurance, energy saving, renewable energy and product safety.

To implement a sustainable development plan for the textile and garment industry, VITAS proposes the Ministry of Industry and Trade and the Government to issue the textile and garment development strategy in the 2030-2040 period. That would create favourable conditions to call investment to industrial zones to produce material that faces a supply shortage.

The Ministry of Industry and Trade said that the textile and garment industry has great development opportunities from the recently signed free trade agreements, especially the potential of increasing exports to major markets.

Of which, the Regional Comprehensive Economic Partnership (RCEP) signed in November 2020 is expected to create opportunities for Vietnam's textile and apparel products and also to replace some other export markets. Because the pandemic is not controlled and that has a great impact on the major export markets of Vietnamese textile and garment products such as Europe.

RCEP is a positive factor for production and business activities of Vietnam's textile and garment industry in 2021 and beyond.

Le Tien Truong, Chairman of the Vietnam National Textile and Garment Group (Vinatex), said in addition to the efforts of garment makers, the government should consider lowering borrowing costs so that they can meet new requirements as well as invest in producing materials to meet rules of origin contained in new free trade agreements.

He also suggested the government introduce specific policies to support the garment sector’s development and direct the relevant agencies to reduce logistics costs and other tax burdens.

At the same time, the Ministry of Industry and Trade should continue helping enterprises take full advantage of free trade agreements by issuing guidelines on rules of origin and opening a portal for enterprises to examine the benefits of such pacts.

Vietnam aims to export 39 billion USD worth of garment products this year, according to national textile and garment group Vinatex.

Last year, Vietnam’s garment export revenue was estimated at 35 billion USD due to the impact of the pandemic, as well as US-China trade tensions, protectionism and Brexit.

Source: Vietnam+ News

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Itochu & Aquafil to expand circular nylon production

Japanese dealer in nylon raw materials, Itochu, and Aquafil, producer of Nylon 6, have announced a partnership to promote and expand the businesses of circular nylon production. They will work in the recovery of nylon waste to the development, production, and sale of Econyl nylon products inspired by their common commitment for a sustainable future.

The global achievement of carbon neutrality is urgently necessary, and the improvement of the recycling rate of petrochemical products is recognised as one of the most important challenges.

Nylon is used for textiles and plastic materials made through petrochemistry in a range of fields such as fashion, carpeting, fishing, food packaging, and automobiles. However, many products use nylon blended with other materials in a compound form, making it a difficult material to be recycled, according to Itochu.

In 2011, Aquafil created its Econyl Regeneration System that turns recovered nylon waste such as fishing nets, carpets and post-industrial waste back to caprolactam (CPL), a crude raw material. Through its proprietary chemical recycling technology, Aquafil eliminates impurities completely, to achieve regenerated nylon product having the same features of the virgin quality materials, Itochu said.

Econyl nylon is made completely from waste, which enables up to 90 per cent CO2 reduction compared to conventional nylon made from petroleum.

Focusing on the fashion and carpeting industries, Econyl nylon has been adopted as an environmentally friendly material by more than 2,000 brands around the world. In the fashion industry, it has drawn attention and received strong support from major fashion brands including Burberry, Gucci, and Prada, Itochu said in a media statement.

Itochu is a dealer of CPL and nylon chips, the raw materials of nylon. The utilisation of Itochu’s nylon value chain corresponded the direction of Aquafil’s Econyl business, resulting in the purpose of this partnership.

Moving forward, Itochu will leverage on its group’s diverse network and expand sales for applications in fashion, carpeting, automobiles, and packaging materials. Moreover, Itochu plans to enforce Aquafil’s nylon waste recovery scheme using its existing sales chain and will also implement the partnership from the perspective of the stable supply of raw materials to Aquafil.

Through its collaboration from the recovery of waste to the sale of Aquafil’s products, Itochu aims to expand the businesses of nylon circularity, Itochu said in a press release.

Itochu has established that the contribution to SDGs and reinforced measures to achieve them is a basic policy in its next medium-term management plan. Through the further expansion of the circular nylon recycling businesses, Itochu and Aquafil will contribute to the advancement of a sustainable recycling-oriented society.

Source: Fibre2Fashion News

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US companies reducing exposure to Chinese textile firms amid concerns over forced labour: Report

US companies are reducing their exposure to China’s textile and clothing suppliers with Washington remaining committed to combating forced labour issues, South China Morning Post reported citing trade data and an industry expert.

Last year, China’s share in the US apparel market fell to a decade-low of 23 per cent when measured by value, according to data from the Office of Textiles and Apparel under the US Department of Commerce.

In contrast, the combined market share of China’s competitors in Asia, including Vietnam, Bangladesh, Indonesia, India and Cambodia, rose to a new high of more than 42 per cent in 2020, up 7 percentage points from a year earlier.

The SCMP reported that the impact of coronavirus pandemic on the economy and the tariff imposed by the United States on Chinese goods since 2018 have played a major role in China’s shrinking shipments of clothing and textiles to the US last year.

While China’s total textile and apparel exports to the US dropped by more than 30 per cent last year from a year earlier by value, its shipments of cotton related items to the US dropped by nearly 40 per cent, according to the US government data.

Specifically, only 15 per cent of US cotton apparel came from China last year, down from 22 per cent in 2019, while imports of cotton textiles from China dropped by 4 percentage points to 27 per cent last year

“We shall not underestimate the impact of non-economic factors on China’s prospect as an apparel-sourcing destination in 2021. Notably, the reported forced labour issue related to Xinjiang, China, and a series of actions taken by the US government have significantly affected US cotton apparel imports from China,” said Sheng Lu, an associate professor of fashion and apparel studies at the University of Delaware.

“The new Biden administration has expressed its commitment to improving human rights and labour standards in international trade. It is likely that more draconian trade-restrictive measures or even economic sanctions will further change US fashion companies’ calculation about the costs and benefits of sourcing apparel from China in 2021 and beyond,” Sheng added.

Earlier last month, the US government issued an order to detain cotton and tomato products produced in Xinjiang at US ports of entry over forced labour concerns. The order applies to all products made in part or entirely from Xinjiang’s cotton and tomatoes, including textiles and apparel.

Over the past few years, China has faced mounting criticism, including from the European Union and the United States over the alleged use of Uyghurs and other ethnic minority groups in forced labour camps, mainly in the Xinjiang region.

Beijing, however, has denied the claims, stating that it runs vocational training centres to combat religious extremism and terrorism, according to SCMP.

The International Labour Organization (ILO) has identified eight fundamental conventions covering areas considered to be basic principles and rights at work, like forced labour, collective bargaining and the right to form trade unions.

Though China, a member of the ILO has already ratified four of the less controversial conventions–on equal remuneration, discrimination, minimum age and child labour–it has not agreed to ratify two conventions on granting workers’ freedom of association and protect their right to organise.

Tragedy at Morocco's garment unit attracts industry attention

Heavy rains flooded a garment factory on February 8 in the northern Moroccan city of Tangier, killing at least 28 workers due to a short circuit. The sweatshop ran in the basement of a residential villa. The tragedy is a wake-up call for Morocco to pay attention to such factories and strengthen its legal and monitoring system to prevent such disasters in future.

To meet growing global demand, numerous factories in Morocco, notably in Casablanca and Tangier, rely on unregulated shadow factories to enhance production and meet deadlines. Factories subcontract to units illegally to better compete with cheaper Chinese and Turkish products.

Such secret factories are primarily located in residential areas and up to 40 people, many of them minors, work in these units, according to Moroccan media reports. Low wages, unsafe work conditions and long hours are typical of such illegal units.

“They say these are illegal factories, but in reality everyone knows that they exist and they are well-known companies. We call them clandestine factories because they do not respect the most minimal security conditions or labour rights," Aboubakr Elkhamilchi, founding member of the Moroccan grassroots organisation Attawassoul, told Ara newspaper.

The tragedy once again highlights the dismal working conditions in a global industry employing mostly women, where precarious labour relations, lack of transparency and impunity continue to be endemic, said the Clean Clothes Campaign.

“The tragedy shows the need for concerted efforts in the industry to improve factory safety and healthy workplace conditions,” it said.

According to the Moroccan employers' association (AMITH), of the 1,000 million garments that are manufactured in the country each year, 600 million are produced in factories sub-contracted by foreign firms.

The primary destinations for Moroccan clothing exports are Spain, France, the United Kingdom, Ireland and Portugal.

Source: Fibre2Fashion News

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4 apparel associations from 3 more countries join STAR Net

Four more apparel manufacturing associations in Turkey, Indonesia and Morocco recently joined the Sustainable Textile of the Asian Region (STAR) Network, a platform of readymade garment manufacturers in Asia. The network was started by nine trade bodies from Bangladesh, China, Cambodia, Myanmar, Vietnam and Pakistan, seeking better purchasing practices in industry.

The four major industry associations, the Indonesian Textile Association (API), the Turkish Clothing Manufacturers Association (TCMA), the Istanbul Ready-Made Garments Exporters’ Association (IHKIB) and the Moroccan Association of Textile & Clothing Industries (AMITH) joined the initiative on ‘manufacturers payment and delivery terms’, according to a press release by the STAR Network.

The initiative, started by the STAR Network, supported by GIZ FABRIC, the International Apparel Federation (IAF) and the Better Buying Institute, presented its plans at the OECD Forum on Due Diligence in the Garment and Footwear Sector on February 3.

This marked a joint global effort, led by manufacturers, to establish a common position on payment and delivery conditions in the industry. Suppliers participating in this effort represent roughly two-thirds of the global market share of global apparel and footwear factory exports.

Source: Fibre2Fashion News

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Brassieres import of USA nosedives in 2020 by 14.30%; negative in 3rd consecutive year

Brassieres import of USA tumbled in third consecutive year in 2020 by 14.30 per cent to US $ 1.93 billion, according to OTEXA.

The last time when the import values saw a rise was in 2017 when it was up by 3.43 per cent on Y-o-Y basis. It has been nose-diving since then as it experienced a fall of 13.48 per cent in 2018 over 2017, 2.60 per cent in 2018 over 2019.

As far as major apparel manufacturing countries in brassieres are concerned, China, Sri Lanka, Indonesia tumbled in their respective shipment to USA in 2020, while Vietnam, Thailand, Bangladesh, Cambodia and Colombia increased their respective brassieres exports to USA during 2020.

Have a look at all 13 countries rank-wise which shipped brassieres to USA in 2020:

Y-o-Y % Change in Value-wise Brassieres Exports to USA from all 13 Countries:

(Comparison between 2019 and 2020)

(Values in US $ million)

Countries

2019

2020

% Change

World

2,257.77

1,935.05

(-) 14.29

China

847.09

634.41

(-) 25.11

Vietnam

319.78

359.43

12.40

Sri Lanka

239.69

198.95

(-) 17

Indonesia

168.75

136.63

(-) 19.03

Thailand

105.39

125.18

18.77

Bangladesh

88.88

115.76

30.24

Honduras

83.21

66.56

(-) 20

El Salvador

81.54

57.72

(-) 29.21

Cambodia

31.80

41.83

31.55

Colombia

32.15

37.71

17.31

India

70.84

33.64

(-) 52.51

Dominic Republic

70.77

27.33

(-) 61.38

Nicaragua

16.54

11.48

(-) 30.54

Source: Apparel Online

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Dollar snaps two-day winning streak, bitcoin hovers near record highs

The dollar lost ground on Thursday, ending its first two-day winning streak in two weeks as disappointing labor market data tempered expectations for a speedy economic recovery from the global health crisis.

"Right around 2 am this morning the dollar got sold across the board," said Erik Bregar, head of FX strategy at Exchange Bank of Canada in Toronto. "(That was) a precursor to the further weakness we're seeing today."

Bitcoin eased off its record high of $52,640 reached overnight. The cryptocurrency has surged roughly 78% so far this year as institutional interest ramps up, but some analysts warn that the rally might be unsustainable.

"Is (bitcoin) an asset class that the world should take more seriously? Perhaps," Bregar added. "The bigger the institutional investment involved, the more interested I'll get."

An unexpected increase in weekly jobless claims dampened enthusiasm over otherwise upbeat data this week, the day after minutes from the U.S. Federal Reserve's most recent monetary policy meeting showed the central bank was determined to continue supporting the economic recovery.

The dollar slightly pared its losses against a basket of world currencies on the news.

"Today, jobless claims came in higher than expected that put a little bit of support back under the dollar," Bregar added. "And tomorrow, the market is going to forget about it and focus on something else."

The dollar index was off 0.24% at 90.680 after two days of consecutive gains.

The euro gained 0.30% to $1.2077 after sliding 0.5% overnight, the most in two weeks.

The yen gained some ground against the greenback and was last almost flat at 105.800, but still below its 200-day moving average.

Sterling advanced 0.63% against the dollar and was last at 1.395, and hit a high against the euro of 86.525 pence. The pound is the best-performing G10 currency against the dollar this year.[GBP/]

Source: The Business Standard

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