International cotton prices have hit a 10-year high. Indian cotton prices too have been following in the footsteps of its global peers and has reached a record high. To understand how the rising cotton prices are impacting the apparel sector, CNBC-TV18 spoke to Sivaramkrishnan Ganapathi, managing director, Gokaldas Exports, and V Balaji, chief financial officer, SP Apparels. International cotton prices have hit a 10-year high. Following in the footsteps of its global peers, Indian cotton prices have also reached a record high. To understand how the rising cotton prices are impacting the apparel sector, CNBC-TV18 spoke to Sivaramkrishnan Ganapathi, managing director, Gokaldas Exports, and V Balaji, chief financial officer, SP Apparels. First up, Ganapathi shared that fabric prices are higher by 15 percent as compared to last year. He said that the company passes 50 percent of the cost inflation to its customers. "Sharply rising cotton price would effectively result in higher yarn price and consequently, a higher fabric price. Fabric prices are rolling at about 10 to 15 percent higher than what it used to be last year, which really substantially increases the raw material price for us as a manufacturer of apparel," he said. "Hence, it increases the price at which we sell to the customers. We have mutually arranged a tripartite between us, the customer and the fabric supplier. We pass through about 50 percent of what we do, but the for the rest there is some pressure. Some of it, we will have to absorb through better productivity or through falling rupee, etc. But yes, indeed, there is a pressure which comes across because of the rise in cotton prices on our margins," he mentioned. On demand, he said that that some softness is likely in the short to medium term. He said, "We also foresee European slowdown. Despite sanctions on Russia, I think the impact on the Western European economy is also going to be high with higher gas prices, oil prices, etc. So, overall, there will be a bit of a softness and demand." "I foresee this to be more of a short to medium-term issue rather than long-term. The long-term prognosis for the textile industry and apparel industry is excellent because of the secular movement of supplies. But in the short to medium-term, there may be some demand hiccup, which we will have to contend with," he explained. To offset the softness in demand, the company plans to diversify its customer base, Ganapathi shared. "So, as manufacturers, we will try to diversify our customer base as much as possible to offset it (demand softness), but there will be some demand challenges, I can see that in the horizon; we will have to deal with that," he said. Balaji of SP Apparels, however, said that demand isn’t soft for the company. In fact, he expects 20-25 percent growth in revenues in FY23. Balaji said, “The demand is not that weak as such. What we see is that the demand is good, because the textile of late is being looked at, because of the diversification that is coming from China. The demand is good, but for SP Apparels, we are guiding for revenue growth of 20-25 percent next year.”
Source: CNBCTV18
As the fiscal 2021-22 draws to a close, it is clear that robust corporate profits, driven partly by external demand for goods and services, alone can’t produce a broad-based economic rebound. Aggregate demand continues to be weak and the changed geopolitical situation have added to the uncertainties. Public expenditure can’t continue to hold the fort for long, given the fiscal constraints. Private consumption, which rose by a decent 7% in Q3, has since been under pressure as consumer sentiment remained subdued in the fourth quarter amid the Omicron onslaught and uncertainties around the spill-over effect of the Russia-Ukraine conflict. There is no visible turnaround in private investments yet after a sharp slowdown in the growth of fixed investments in the third quarter to just 2%. As oil prices remain elevated, retail inflation will likely breach the RBI’s threshold (2-6%) for a third straight month through March, likely making it incumbent on the central bank to reconsider its accommodative monetary policy stance.
Source: Financial Express
The state has highlighted that its revenues are yet to recover and a huge revenue shortfall could be expected in the absence of the compensation. The Tamil Nadu government on Thursday urged the Centre to extend the period of goods and services tax (GST) compensation by at least two years beyond June 2022. The state has highlighted that its revenues are yet to recover and a huge revenue shortfall could be expected in the absence of the compensation. Tamil Nadu chief minister MK Stalin met Prime Minister Narendra Modi in Delhi and handed over a memorandum detailing issues, including GST compensation to the states. In the last five years, there has been a gap between the actual GST revenues realised by the state and the revenue guaranteed. This trend was visible even before the pandemic and the gap has widened after the pandemic, Stalin pointed out. This year, considering the Covid situation, the Centre continues funding of GST compensation by its open market debt arrangement to meet out shortfall in GST compensation cess collection. Accordingly, out of total compensation of Rs 21,781 crore was receivable by the state in 2021-22, but up to February 2022, the state has received a loan amount of Rs 8,095 crore. The balance compensation of Rs 13,505 crore was pending as on February 28, 2022, in the form of GST arrears to Tamil Nadu. “We urge that this amount may be released at the earliest,” Stalin said. Through the enactment of the GST (Compensation to the States) Act, 2017, the states have been assured a revenue growth of 14% in GST with reference to the revenue collections made in the year 2015-16 and any shortfall thereon will be met using GST compensation cess collected by the Centre. It may be pointed out that for FY 2020-21, the states were informed that the cess collections in the compensation cess fund were expected to be adversely impacted due to the economic impact of Covid-19. Accordingly, the states were given two borrowing options in lieu of GST compensation for FY 2020-2021. As per option-1, Tamil Nadu had received a loan amount of Rs 6, 241 crore and grant amount of Rs 5,161 crore during FY21. The Centre has released previous year arrears of Rs 7,235.8 crore in FY22, including a Rs 539-crore arrear amount for 2018-19, the chief minister said. On the issue of sharing proceeds of cess and surcharge with the states, the Tamil Nadu government has pointed out that the levy of cesses and surcharges must be reversed immediately, and all such cesses and surcharges must be merged with the basic rate of tax so that the states receive their legitimate share of the revenue. It is the serious concern of the state that the size of the divisible pool of taxes is steadily shrinking as the government of India is increasingly resorting to levy of cesses and surcharges which are not shareable with the states. The 14th Finance Commission in its report has observed that the cesses are meant to be fully utilised for the purposes for which they are levied. The Comptroller and Auditor General of India has also drawn the attention to the lack of transparency and incomplete reporting in accounts on the utilisation of amounts collected under cesses. Similarly, surcharges are meant to be levied only for short periods and pointed out the states concern on the levy of cesses and surcharges.
Source: Financial Express
The allocation of Rs 1,635 crore in the State budget for 2022-23 will boost the development of world-class infrastructure and incentivise the industries, MSME and start-ups in Odisha, said Bhupendra Singh Poonia, Managing Director, Industrial Promotion and Investment Corporation of Odisha (IPICOL) on Thursday. Speaking to ANI, Poonia said, “The increase of 37 per cent by the state government in this budget shows its commitment to provide quality infrastructure to industries to both large and MSMEs with the focus to MSME industries because they help in employment generation. In that respect, we have good incentives under our MSME policy, as well as under our Industrial Promotion Resolution (IPR). Apart from incentives, we are committed to investing in quality infrastructure, so grounding of projects can be done easily in time.” The Managing Director informed that “Despite the COVID-19 pandemic, Odisha has received investment intentions of around Rs 4.5 lakh crores since January 2021. 250 plus projects from different sectors have been started in the state in the last 4 years,” he said. “There are some Major sectors receiving investments like Aluminum, Steel, Metal downstream, Chemicals, Plastics, Tourism, Textiles and Apparel, Food Processing, IT&ESDM, Power and Renewable Energy etc,” Poonia added. As per Poonia, some of the major investments received by the state in the last one year include a New integrated steel plant by Arcelor Mittal Nippon Steel, a New Integrated steel plant and a cement plant by Jindal Steel Odisha Limited, an Expansion of existing integrated steel plant by Bhushan Power and Steel Ltd, Expansion of existing steel plant by Tata Steel Limited, New Alumina Refinery, New Aluminium Smelter and a Captive Power Plant by Coal India Limited, Expansion of existing Integrated Steel Plant by Rungta Mines Limited (RML), New Alumina Refinery unit by Hindalco Industries Ltd. “Ancillary and metal downstream along with textiles and apparel, food processing including seafood processing, chemicals, and petrochemicals, IT/ITeS/ESDM and Tourism have also been identified as focus sector,” he said. Stating that IPOCOL has taken several measures to boost investments and interests in the state, Poonia said, “Odisha is a financially stable state and all facilitation provided by IPICOL is one of the best in the country. Ease of doing business along with skilled manpower is attracting the Industries.” “Odisha has a good network of highways, Railways and Ports, so in the eastern seaboard, we have very good infrastructure. Similarly, we have the Biju Expressway from Rourkela to Nabarangpur. It will connect all western districts and will open up that area. There has been a huge investment and is still increasing in the irrigation, so it provides opportunities for agro-based industries and food processing industries,” he added. Poonia further said that the investment is picking up pace due to the rise in economic activities because of the declining COVID-19 cases. “Our GSDP growth rate is around 10.1 per cent is more than that national average. The industries contribute around 30.1 per cent to our GSDP so that growth is 14.5 per cent. There was a contraction due to COVID in 2020-21 but as economic activities are picking up, we are receiving huge investment, so that’s why rebound is very good in the state of Odisha,” he said.
Source: The Print
However, the production level of crude oil, refinery products and fertiliser are still lower than the pre-Covid level (February 2020). Production of other core segments are also just above the pre-Covid level. Infrastructure industries grew by 5.8% on year in February, largely benefiting from a low base as the core sector output had contracted 3.3% a year ago. Except crude oil and fertiliser production, all other core sector segments — coal, natural gas, refinery products, steel, cement and electricity — registered a positive annual growth in February. However, the production level of crude oil, refinery products and fertiliser are still lower than the preCovid level (February 2020). Production of other core segments are also just above the pre-Covid level. “This shows that there is still a long way to go so far as the revival of core sector output is concerned and going forward, the disruption to the global supply chain may further impinge on the availability of key raw materials like natural gas, coal, etc, in the domestic market due to the Russia-Ukraine conflict,” said DK Pant, India Rating chief economist. The growth rate of the eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — stood at 11% in April-February of this fiscal, against a decline of 8.1% during the same period last fiscal. According to the data, the production of coal rose by 6.6%, natural gas by 12.5%, refinery products by 8.8% and cement by 5% in February.
Source: Financial Express
National Institute of Fashion Technology (NIFT), Bhubaneswar, organised a three-day training programme on natural dyes for handloom weavers at Weavers’ Service Centre here on Thursday. The programme was being organised as a part of a project where NIFT, Bhubaneswar, State Agency for Development of Handloom Clusters (SADHAC), director textiles, the Odisha government and the Central Silk Board are jointly involved. Weaver Service Centre (WSC) is providing technical support in executing the programme. Weavers from various handloom clusters of the state like Nuapatna, Maniabandha, Gopalpur, Atta and Bhagamunda participated in the programme that aims to help the craftsmen in understanding the application of natural dyes on handloom. Natural-dyed handloom products, known as eco-friendly products, have a huge demand both in the domestic and international markets. Weavers can create a niche market for themselves after acquiring the training lessons, said an organiser. The training programme was jointly inaugurated by NIFT, Bhubaneswar, director Shovan Krishna Sahu, member secretary of the SADHAC, Indramani Kandi, and deputy director of WSC, Vikash Shroff. The training was provided by technical superintendent (processing) at WSC, Navneet Singh Shekhawat.
Source: Times of India
TV Narendran, CEO and managing director, Tata Steel, echoes the sentiment. “We expect the Indian steel demand to continue to improve as the third wave of Covid is tapering off and the increased allocation to infrastructure spending in the Union Budget starts to take effect,” he said. The Russia-Ukraine conflict has dampened the spirits of India Inc which was hoping that by May or June inflation would cool down reviving consumption which would lead to a jump in private capex. However, industry veterans FE spoke to still shared optimism that with the pandemic waning, the new fiscal year would finally bid adieu to any kind of disruption of business activity. Though the Ukraine crisis has led to rising commodity prices which is affecting margins of several companies across sectors, and also dampening demand, industry captains see some new opportunities emerging. “The biggest positive I see is that Covid would not cause any more business disruption which the industry has suffered for the last two years,” RC Bhargava, chairman Maruti Suzuki India said. “Even if there’s another outbreak, the government now knows how to control the situation, what to close and what not to close,” he added. Bhargava did underline concerns, especially for his industry – automobile – which is plagued by chip crisis, but said, “things can’t get worse, they will only get better”. However, he added that the industry should be prepared for a new set of challenge in the form of inflation and shortages, a fallout of Ukraine crisis, which would continue for few months. TV Narendran, CEO and managing director, Tata Steel, echoes the sentiment. “We expect the Indian steel demand to continue to improve as the third wave of Covid is tapering off and the increased allocation to infrastructure spending in the Union Budget starts to take effect,” he said. Narendran said that the ongoing Russia-Ukraine conflict is impacting the supply-demand dynamics as well as the overall global economy. “Since the outbreak of the conflict, there has been a sharp rise in input costs as well as steel prices in major global markets. Coking coal prices are expected to remain at much higher than what we saw last year which will add pressure on margins inspite of the increasing steel prices,” he said. Sanjiv Mehta, chairman and managing director, Hindustan Unilever (HUL), while highlighting the fact that high inflation has impacted consumption and market volumes, said, “Today the situation is much better. Corporates have de-leveraged, the banks have been able to enhance their capital, so it’s a good environment where once the demand kickstarts, I see no businessmen wanting to miss the sale opportunity. And I don’t think even the risk appetite of Indian business has gone down”. JSW Steel joint managing director and group chief financial officer Seshagiri Rao echoes the concerns raised by Narendran when he says, “The raw material costs have surged post Russia invasion in Ukraine. There is a big impact on cost. Iron ore and coking coal prices have gone up. Prices of base metals like zinc, aluminum have also increased, as of ferro alloys and refractories. The overall cost increase is very large whose impact can come in FY23, especially in the first quarter”. However, Rao still retains his optimism. “But my view is, raw material prices will come down and I don’t expect steel prices to go up or pass on the cost due to supply cuts or demand disruption,” he said. R Shankar Raman, chief financial officer, L&T said that inflation and supply chain constraints would be the twin worries for India Inc in manufacturing and project businesses. “Talent management could be a significant preoccupation for the services sector. Shifting geo-political equations will also cast its shadow on the Indian businesses. Maximising opportunities while countering the challenges will mark out the winners,” he said. On the positive side, Narendran has an interesting take. He said that Russia and Ukraine put together export around 45 million tonnes in a year and a large part of it went to Europe. “The disruptions and ensuing supply gap will lead to export opportunities for the Indian steelmakers. We continue to be watchful of the situation and have contingency plans in place to ensure our customers and stakeholders remain unaffected,” he said. Bhargava said that the government’s focus on growth and infrastructure spending is a step in the right direction but the slowdown in privatisation of public sector units is disappointing.
Source: Financial Express
The Indian Railways hopes to improve the livelihood of local manufacturers with this project The Indian Railways intends to provide stalls at Howrah station for the sale and promotion of handloom 'taant' saris and other handloom textile products sourced from local manufacturers to improve their skills and livelihood. In a written reply to a question in the Lok Sabha, on Wednesday, Railway minister Ashwini Vaishnaw said that this is being done under the ‘One Station, One Product’ concept that aims to encourage indigenous and specialised products and crafts of India by providing display and sale outlets on railway stations across the country. From the Eastern Railway zone, only the Howrah station from West Bengal has been chosen for this initiative. The minister further noted the products would be specific to that place and could include artefacts made by indigenous tribes, handlooms by local weavers, handicrafts like worldfamous wood carving, chikankari and zari-zardozi work on clothes, or spices tea, coffee and other processed/semi-processed food items/products indigenously grown in the area. "A pilot project was launched on March 25, 2022, in each railway zone. One product indigenous to the respective locality/region has been identified and it is envisaged to allot space on the station for sale of the product," he said. Some of the other stations identified for this purpose include Bihar's Patna junction where Madhubani paintings and related products will be showcased, Visakhapatnam in Andhra Pradesh where locally made wooden toys called Etikoppaka will be displayed and sold, and Odisha's Balasore has been chosen for promoting coconut mat products.
Source: Telegraph India
The NCLT Mumbai Bench has on March 23, 2022 pronounced the order sanctioning the scheme with the appointed date of the scheme as April 1, 2021," Raymond said in a regulatory filing on Thursday. The National Company Law Tribunal (NCLT) has approved the scheme of transfer of Raymond Apparel Ltd business to Raymond Ltd. In September 2021, board of Raymond had approved demerging the B2C business, including apparels, of Raymond Apparel Ltd (RAL), on a going concern basis to merge with the company itself. "The NCLT Mumbai Bench has on March 23, 2022 pronounced the order sanctioning the scheme with the appointed date of the scheme as April 1, 2021," Raymond said in a regulatory filing on Thursday. However, it also said it is yet to receive the certified true copy of the NCLT order. Raymond in a filing on September 27, 2021 said with a focus to fast- track the recovery post pandemic, Raymond will consolidate its B2C business by transfer of apparel business into Raymond Ltd. This brings all major apparel brands including Park Avenue , Colorplus, Parx into Raymond Ltd.
Source: The Print
Another 7% considered sensitive will get more time, while 3% will be allowed to be placed on an exclusion list. Forty-two of the zone's 54 member states have ratified the AfCFTA deal and Mene said in the interview that he expects that number to rise to 50 by the end of the year. Tariffs and customs procedures for Africa's new free trade area are set to be published next month, with essential rules of origin to follow in another six to nine months, the head of the bloc's secretariat said on Thursday. Rules of origin have been agreed for almost 90% of items, with textiles, sugar, edible oils and the automotive sector sticking points, Wamkele Mene, Secretary General of the African Continental Free Trade Area Secretariat (AfCFTA), said. "They're complicated because they relate to a country's industrialisation strategy," Mene said in an interview in London. African countries began officially trading under AfCFTA at the start of 2021, after delays caused by the coronavirus pandemic. Backers say it will boost intra-African trade and the World Bank estimates it could lift tens of millions out of poverty by 2035. Experts, however, viewed the launch as largely symoblic and have said full implementation of the deal will likely take years. AfCFTA officials had previously said the tariff reduction schedules and rules of origin would be finalised last year. Mene acknowledged that integrating trade on the continent would take time. "It took Europe 72 years to get to this point," he told an audience of businesspeople on Thursday at a talk in London arranged by business group Invest Africa and accountancy PwC. Under the agreement establishing the AfCFTA, members must phase out 90% of tariff lines over the next five to 10 years. Another 7% considered sensitive will get more time, while 3% will be allowed to be placed on an exclusion list. Forty-two of the zone's 54 member states have ratified the AfCFTA deal and Mene said in the interview that he expects that number to rise to 50 by the end of the year. Members of the appeal body of AfCFTA's dispute resolution mechanism would be announced in June, Mene said.
Source: DevDiscourse
Vice Minister Basanta presented investment opportunities in Venezuela in activities related to forestry production, textiles, plastics, glass, and metalworking. On Thursday, Vice Minister of Industrial Development Cesar Basanta reported that Venezuela evaluated different areas of cooperation and industry with Indonesia and Lebanon, with the aim of finalizing a list of products with potential for export and trade. During a meeting with the person in charge of Indonesian Commercial Affairs Aris Munandar Kusumah, the Bolivarian diplomat presented the characteristics of different sectors of the Venezuelan industry and agreed on technical tables to establish a "concrete agenda" of work. For his part, the Indonesian official provided information about potential products that Indonesia could export to Venezuela, "a procedure that will be consolidated in the coming technical roundtables that seek to satisfy the needs of both nations." Basanta also met with the Lebanese ambassador to Venezuela, Elias Lebbos, with whom he agreed that he would send him the portfolio of companies from the Caribbean country, after reviewing the commercial proposals of Venezuelan entrepreneurs "that allow investment in national territory in a safe way." The tweet reads, "Along with Industrial Development Deputy Minister Cesar Basanta, we expanded the operations of the national train integration project and the planning for industrial and scientific-technological development." The Lebanese diplomat presented the portfolio of articles that his country considers it can export to Venezuela, among which are food and pharmaceutical products. In both meetings, Basanta presented investment opportunities in Venezuela in activities related to forestry production, textiles, plastics, glass, and metalworking. The meetings, both with the Indonesian official and with the Lebanese ambassador, concluded with the agreement to continue working "hand in hand" to promote possible investments "that are favorable to the interests of the Caribbean nation and that make it possible to strengthen the cost structures of affiliated companies.
Source: Telesurenglish
The E.U. says consumption of textiles represents the fourth-highest negative impact on the environment and climate change. The European Commission unveiled on March 30 a proposal to boost the sustainability of consumer products such as smartphones, clothing and furniture. The plan reflects the E.U. executive's efforts to advance the bloc's so-called "circular economy" and promote consumer goods that are more sustainable, longer-lasting and easier to repair and recycle. "We want sustainable products to become the norm on the European market," said E.U. commissioner responsible for the environment, Frans Timmermans, announcing the proposal in a press conference. Under the plan, goods sold in the E.U. would be developed on a sustainability scale that demonstrates the products' environmental impact, their durability and how easy they are to be repaired. It mirrors the bloc's current efficiency rating system for electrical appliances, which uses an A to G label to help consumers choose less energy-intensive products. Going after 'fast fashion' In particular, the E.U. executive branch has its sights on sustainability in textiles, which it sees as an industry worthy of scrutiny. The proposal would introduce labeling on clothes, telling consumers how easily recyclable and environmentally friendly they are. "The consumption of textiles, most of which are imported, now accounts on average for the fourth-highest negative impact on the environment and on climate change and thirdhighest for water and land use from a global life cycle perspective," the Commission's proposal document read. Clothing comprises 81 per cent of E.U. textile consumption. The E.U. Commission said trends of using garments for shorter periods before throwing them away was contributing to "unsustainable patterns of overproduction and overconsumption." The trend, which is known as "fast fashion" has been "enticing consumers to keep on buying clothing of inferior quality and lower price, produced rapidly in response to the latest trends," the Commission said. "It's time to end the model of 'take, make, break, and throw away' that is so harmful to our planet, our health and our economy," Timmermans added. Construction sector also targeted Aside from clothing and smartphones, the Commission is also going after the construction business. It highlighted that buildings alone accounted for around 50 per cent of resource extraction and consumption and more than 30 per cent of the E.U.'s total waste generated per year. "In addition, buildings are responsible for 40 per cent of E.U.'s energy consumption and 36 per cent of energy-related greenhouse gas emissions," the statement read. "New product requirements will ensure that the design and manufacture of construction products is based on state of the art to make these more durable, repairable, recyclable, easier to re-manufacture," it added. All 27 E.U. members and the European Parliament are expected to scrutinize the proposal, prior to it becoming law. The plans would likely face resistance and lobbying from industries that have been promoting products with shorter lifespans.
Source: Frontline
Prime Minister Sheikh Hasina sought more investment from Saudi Arabia when the latter’s ambassador to Bangladesh Mohammed Essa Yousef Essa Alduhailan mer her recently. Hasina said Saudi investors can choose land in the special economic zones. The envoy said many Saudi firms are keen to invest in Bangladesh's energy sector, particularly renewable energy. Hasina assured the envoy of Bangladesh’s support to Saudi Arabia’s candidature for the International Expo-2030, following a request by the latter, according to Bangla media reports. The prime minister’s principal secretary Ahmad Kaikaus was present during the meeting.
Source: Fibre2 Fashion
Authorities in the southern Vietnamese province of Binh Duong recently met Yeh Ming Yuh, director general of Taiwanese concern Polytex Far Eastern Vietnam, to discuss how to help the later resolve issues facing its expansion project at the Bau Bang Industrial Park. Yeh sought help in legal formalities for building a workers’ dormitory and paperwork for a 10-MW solar power plant. Vice chairman of the Binh Duong People’s Committee Nguyen Van Danh requested concerned departments to help the company promptly deal with the issues and provide it with the best possible conditions to complete required procedures for the project to start, according to a news agency. In 2015, Far Eastern Group, a multi-industry corporation from Taiwan, invested $274 million to develop a fibre manufacturing and spinning facility at the Bau Bang Industrial Park, which started operation at the end of 2016. The company has been busy preparing for the start of the third phase of the facility’s expansion.
Source: Fibre2 Fashion
