INTERNATIONAL
NATIONAL
Ministry of Textiles announced the launch of 02 Quality Control Orders (QCOs) for 31 items consisting of 19 Geo Textiles and 12 Protective Textiles in the Phase-I, following due process of notification of Technical Regulations. These QCOs mark the first technical regulation from India for the Technical Textiles industry informed the Joint Secretary, Shri Rajeev Saxena in a press conference here today. The Centre is of the opinion that it is necessary so to do in the public interest to increase the standard and quality of Geo Textiles and Protective Textiles, for the protection of the environment, human health, and animal & plant life & health. Geo-textiles are used for infrastructure projects and environmental applications while Protective Textiles are used to protect human life from hazardous and adverse working conditions. QCOs will strive to provide best value to the users and end consumers, thereby fostering Indian product quality that is comparable to global standards. Out of the 31 items, 19 items belong to the Geo Textiles category, including Laminated High Density Polyethylene (HDPE) Woven Geomembrane for Waterproof lining, PVC Geomembranes, Needle punched non-woven geobags, Polypropylene Multifilament woven geobags, Jute Geotextiles, Open Weave Coir Bhoovastra Geotextiles used in sub-grade separation in pavement structures, Geotextiles used in Subsurface Drainage Application, Geotextiles used in Sub-grade Stabilization in pavement structures, High Density Polyethylene (HDPE) Geomembranes for lining, Geotextiles used as protection (or cushioning) materials, Geotextiles for permanent erosion control in hard armor systems, Geogrids for flexible pavements, Polymeric strip/geostrip used as soil reinforcement in retaining structures, Geogrids used in reinforced soil retaining structures, Reinforced HDPE membrane for effluents and chemical resistance lining, and Geocells. The remaining 12 items are of Protective Textiles, including Curtains and Drapes, Upholstered composites used for non-domestic furniture, Protective clothing for firefighters, Protective gloves for firefighters, Protective clothing for industrial workers exposed to heat, Clothing made of limited flame spread materials and material assemblies affording protection against heat and flame, High visibility Warning Clothes, Protective Clothing for use in welding and allied processes, Tactical 3 point sling, Pouch for ammunition and grenades made of disruptive pattern nylon-66, Bullet resistant jackets, and Water-proof multipurpose rain poncho. These two Geo Textiles and Protective Textiles QCOs shall come into force immediately after 180 days from the date of its publication in the Official Gazette. The conformity assessment requirements specified in these QCOs are equally applicable to domestic manufacturers as well as foreign manufacturers who intend to export their products to India. Ministry of Textiles is planning to issue 02 more QCOs for 28 items in Phase-II, including 22 items of Agro Textiles and 06 items of Medical Textiles. In Phase-III, 30+ more Technical Textiles items may be considered for QCO issuance. QCOs will ensure the standard and quality of Technical Textiles and encourage the growth of this industry in India in producing quality products at competitive pricing.
Source: PIB
The conversation around conserving the environment and natural resources is gradually gaining momentum globally. It’s time we incorporate eco-friendly products in our lifestyle that are locally sourced and sustainable in order to do our bit towards being earth-friendly and mindful in our consumption patterns. India’s manufacturing sector contributes about 15% of the overall GDP, exemplifying its support towards the country’s economic growth. Hence, manufacturers must embrace sustainability as an integral part of their business decision-making and develop strategies which address profitability and sustainability holistically. By designing products with sustainability in mind, manufacturers can do their bit by implementing various means, which implies using environment friendly materials, comprehensive ESG policies focusing on waste reduction in the overall manufacturing process, and stress upon reusing and reducing resources. For example, excessive packaging leads to waste and pollution, thus, manufacturers should aim to switch to environment friendly materials in packaging. Biodegradable or eco-friendlier options such as paper and plant-based alternatives, bamboo, or reusable cloth bags can act as a substitute. For instance, the textile industry uses a good amount of water to produce clothes. A single t-shirt manufacturing process requires more water that an individual can consume for years. The industry needs water for cotton farming, dyeing, and chemical treatments that impacts global ecosystems. So, by switching to organic clothes, we can reduce the water intake in textile industries. One should invest and engage with brands that provide sustainable options: sustainable fashion brands or sustainable clothing brands that care for and support the welfare of the community and the environment. Whether it is fashion, lifestyle, or food there are numerous ways one can be mindful of the environment and yet enjoy a high-quality product. Another focal point in adopting sustainability in manufacturing is winning the consumers trust and confidence, especially the new-age customers. Not just in India but globally, too, consumers have voiced their opinion about purchasing products that are cruelty-free and eco-friendly. The shift in consumer behaviour towards eco-consciousness has incentivised companies to reduce their environmental impact and improve their overall sustainability profile. Nowadays, consumers prefer reading about ingredients before making any purchase decision. Brands that have entered the market in the last few years and focus on being sustainable, natural, and preservative-free have gained consumer confidence effectively. Subsequently, many brands have come forward to minimise their carbon footprints and adopt eco-friendly ways. For instance, in the conscious fashion space, the emphasis is on deploying organic cotton, recycled fabrics, and linings, and reducing water dependency. It’s time for us to alter our daily habits and quietly contemplate the future and why we need to be inclusive and fully oriented to support the environment and support sustainable manufacturing in business. Our actions today will impact our future making it pertinent to re-think, re-invent, and reposition our strategies to leave a broader impact on environmental sustainability. As informed and conscious consumers, our choices can make a big difference that can have a long-lasting effect on us. Opting for sustainable and eco-friendly brands is one such way to embark on the journey of mindful living. Hence, choose consciously, and live mindfully.
Source: Times of India
Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution, and Textiles, Shri Piyush Goyal said that France and India have truly been friends, partners and vibrant democracies working for global good during his address at the India-France Business Summit in Paris, France today. He said that H. E. Emmanuel Macron, President of the French Republic and Prime Minister Shri Narendra Modi have strengthened the strategic partnership between the two countries which has completed 25 years now. The Minister said that both the leaders have taken India-France ties to the next level with expanded engagement in trade, technology, tourism and investment. He noted that the friendship between the leaders and the people of both the countries is a force multiplier for global good. The Minister said that India and France are concerned for stable global economic order and both believe in consensus and cooperation both at regional and global level. He said that the business leaders from both countries and the Indian community in France have further strengthened this bond of friendship and trust between India and France through their relentless efforts to grow the trade and economic partnership. He appreciated that the industry leaders from various areas of manufacturing and services sector from India attended the Business Summit. The Minister said that the industry leaders from India will share their experiences of working and growing in an economy which is growing rapidly, expanding both in the domestic and international sphere. The Minister said that India’s potential over the next 25 years has been termed as the Amrit Kaal or the golden era of India by the Prime Minister Shri Narendra Modi. He said that there is a huge delta of opportunities which has never been seen in global economic history in India now. He cited the example of India’s demographic dividend with significant managerial and technological skills and immense talentpool. The Minister said that the basic needs of Indian citizens have been taken care of in the last 9 years and that has led to an empowered nation brimming with aspirations. He said that seamless digital connectivity has aided this process and now India offers a huge opportunity to businesses around the world. He said that India offers Scale, Speed and Skills to the world. The Minister said that India is rapidly expanding its international engagement and the goods and services exports over the last 2 years have grown significantly. He said the increase in exports is expected to continue on its high growth trajectory. He also said that India has an infrastructure pipeline to strengthen logistics in the country. He said that India is attracting investment and technology in the defence sector from around the world as indigenous manufacturing is being promoted. He said that innovation and technology are driving growth in India with sustainability at the core. He said that the green economy is emerging as a massive thrust area for technology and investments. The Minister noted that in addition to this the government is also focussing on gender parity and gender equality in India. The Minister said that India and France will continue their dialogue at an accelerated pace with trade and investment expanding manifold to further aid the development journey. He quoted the Prime Minister Shri Narendra Modi and said that “When you associate with India’s growth journey, India gives you the guarantee of growth…”
Source: PIB
Asking businesses to look at diversifying their supply chains beyond China, finance minister Nirmala Sitharaman on Tuesday said Covid-induced disruptions in the global supply chain indeed justified such a strategy. India would be the best bet for global firms in this endeavour, given its young population and skill sets. She also stressed the need for the World Trade Organisation (WTO) to be more open about issues, while reiterating that India would continue to use the bilateral free trade agreements (FTAs) route to bolster its trade. “We need value chains come to India and produce in India, not just for India, but to export from India. We have come up with a production-linked incentive schemes, in 13 areas, which are priority, sunrise sectors, where India didn’t produce at all earlier,” Sitharaman said at the Peterson Institute for International Economics Washington DC on the sidelines of the World Bank-IMF spring meetings. Besides meeting domestic demand, India hopes to have production of many of these large bulk manufactured goods and export them. “But, at the same time, we need to get your raw materials and intermediaries which otherwise we do not have. So, it’s not as if we’re going to be so blindfolded that (we think) we’ll just take a decision and it’ll have no impact whatsoever outside,” she said. “However, I don’t think India’s alone is doing this, particularly after the global view of China post the pandemic, after also this changing perspective of what indeed is globalisation, how far globalisation, to what extent globalisation? So, when all these questions are happening and being discussed all over the world, India cannot be in isolation,” Sitharaman said. The minister said she would still think there would be a lot of investment interest and manufacturing interest going back to China or restoring Nirmala Sitharaman World Trade Organisation themselves in China after removal of Covid restrictions. Besides India, other countries like Vietnam and Indonesia are also pitching for to be part of global value chains for companies diversifying their manufacturing base. On the WTO, Sitharaman said it needs to give more space to the countries which have something different to say. “WTO should be more open about issues. WTO has to be progressive and fair to all members. It has to give voice to all and not just hear but also heed,” she said. Also Read: India will use G20 narrative to push its digital transformation story to world, says Amitabh Kant India’s initiative to pursue FTAs with countries is working out well, she said in response to a question. “We have just concluded one with Australia. We’ve concluded earlier, one with the UAE and Mauritius…So, we shall proceed in that route,” she said. “Also with the United Kingdom, the European Union and Canada (talks) are happening now as we speak, the negotiations are going on.” Responding to questions about Muslim population in India, Sitharaman said: “India has the second-largest Muslim population in the world, and the population is only growing in numbers. If there is a perception, or if there’s in reality, their lives are difficult or made difficult with the support of the state, which is what is implied in most of these write-ups, I would ask, will this happen in India in the sense, will the Muslim population be growing than what it was in 1947?” Speaking about India’s G20 presidency, she said India aims to develop a common framework for all countries to deal with risks associated with cryptocurrencies. “Cryptocurrencies are a very important part of the discussion under the #G20India presidency, given so many collapses and shocks in cryptocurrencies. We seek to develop a common framework for all countries to deal with this matter,” she said.
Source: Financial Express
The last decade has seen several changes in the world trade composition with China being a key player. India in this backdrop, though lagging in gaining a greater share, has made great strides both in terms of trade upgradation and diversity in exporting partners. India’s exports have moved away from just textiles and gems and jewelry to higher end exports like engineering goods and organic chemicals. Imports, though still oil dependent, have been captured increasingly by engineering goods, edible oil, chemicals, etc. What can drive the structural shift in India’s exports as exports are the prime safety net to cushion India against possible commodity led trade deficits in future? India’s share in world exports has stagnated at < 2% in the last decade. In contrast, China having after doubled to 10% in 2010, has further captured 15% share by 2020 becoming the dominant player in the global arena. Can India replicate China? While it is not easy to replicate China model of scale and size, there is a potential to improve our share. What structural factors could drive this move? Government policy support is the first enabler.
Export Promotion: Ongoing PLI in 13 sectors viz. electronics, automobiles, pharma, food processing, speciality steel, textiles (man-made fibres) along with other schemes which are like ‘One District One Product’, monitoring the state competitiveness using an Export Preparedness Index provide the focus for import substitution and export promotion.
Trade agreements. India already has 12 FTA/RTA with nations with the recently concluded one with Australia and ongoing with UK. Notably, the merchandise exports to countries/regions with India’s trade agreements have grown 21% in five years ending FY21 (source: Export Preparedness Index document).
India’s infrastructure upgrade likes National Logistics Policy could give the much-needed impetus in making Indian exports globally competitive by reducing logistics cost and improving efficiency of export processes
Assisted by the opportunity to capture the shift in global supply chains: Opportunities provided by geo-politics and/or environment compliance, reducing labour arbitrage of China provide some low hanging fruit favouring the shift in supply chains away from Europe and China. China and EU account for one-third of global trade. A 2% share of combined (China+ EU) is a potential worth, one-third of India’s current trade.
Lessening labor arbitrage of China: Average wage growth in China over the last two decades is ~14% versus average inflation ~2.5%. In contrast US wages has risen by 3.3%. From a labor cost perspective, China is now around 3x times cheaper vs US against being 14x cheaper in 2006. In contrast India is noted as ‘Holding Steadily’ due to a rapid productivity growth and a depreciating currency, which have helped control costs.
Environment/Compliance arbitrage, having a restrictive impact on export led industries like iron and steel, chemicals and related (plastics) in China. India’s CO2 emissions (over 2019) are estimated around one-fourth of China making India more promising for companies to comply with their environmental, safety, and health standards.
Fall out of geo-politics: The fall-out of geo-politics is likely to be increase energy costs for Europe which then decreases the relative price competitiveness of the region. Europe accounts for ~35% of world’s trade. China also accounts for 15% of the world’s export.
Trade settlement in INR – A prospect which reduce the dependency on external capital funding, the success of which again hinges on growth in exports: The Rupee trade settlement mechanism, set up by the RBI in July-22, has the potential to make strikes in promoting Indian exports by increasing global interest in the Rupee with the use of special vostro accounts. 18 countries are participating in this which includes Germany, Russia, Guyana, Israel, Kenya, Malaysia, Mauritius, Myanmar, New Zealand, Singapore, United Kingdom among others.
Fundamental strength of our export basket: While near term outlook, while clouded by global pressures, there are some bright spots from industrial machinery, electronics and food which have risen between 10-25%, amidst an overall flat growth. Furthermore, auto and auto components also show promise led by structural shift. There are also prospects of rebound from iron-ore, cereal exports in the near term. Pharma, agro chemicals being recession proof could also benefit from PLI and supply chain shifts. Overall, despite global headwinds India’s export basket is not entirely discretionary. The growing interest of nations to diversify supply chains away from China & Europe, puts India at a bright spot. Climate and environmental, cost considerations are also posing India as a tough competitor. Moreover, leveraging these opportunities, many domestic and structural developments like the PLI scheme and the government’s initiatives in bolstering India’s infrastructure and logistical competitiveness, is giving Indian exports the required edge in global trade. The future of Indian exports looks bright and promising! India’s export ship is ready to sail.
Source: Times of India
Commerce and industry minister Piyush Goyal on Tuesday said there are huge opportunities for French investors in India in areas such as manufacturing and infrastructure. “Huge delta of opportunities are there in India,” Goyal said while addressing the India France Business Summit in Paris. The minister had earlier said that France is India’s preferred partner in defence, economy and investments. Goyal said that India is attracting investment and technology in the defence sector from around the world as indigenous manufacturing is being promoted. “Exports of goods and services are growing by over 50% and we hope to continue this growth trajectory. We hope to see our exports of goods and services to triple from $765 billion to $2 trillion by 2030,” Goyal said. He also said that the Indian economy is expected to reach about $35 trillion in the next 25 years from the current level of about $3.5 trillion.
Source: Economic times
Top officials of the Textiles Committee, Government of India, stressed on Monday that obtaining a Geographical Indication (GI) tag for a product may not be sufficient to ensure better prices or a protected market for it. They emphasised the importance of strong post-GI registration activities in this regard. On the sidelines of a workshop on ‘IPR protection of unique products through GI and post-GI initiatives’ organised by the committee and the National Bank for Agriculture and Rural Development (NABARD), Tapan Kumar Rout, director (market research), and S. P. Verma, secretary, told The Hindu that obtaining the registration forms was only the first step. “The post-GI initiatives are more important. You need to register producers as authorised users, train them to use GI as an instrument for marketing the product, build the brand and logo,” Rout said. Verma used the example of Balaramapuram sarees and high-quality cotton fabrics, which obtained GI registration in 2009 but were unable to capitalise on the protection as a result of subpar post-registration actions. He added that as a result, inexpensive imitations started to appear in cities like Surat. Although the goods had a GI tag, no producer has registered themselves as authorised users. The weavers, weavers’ societies, or the relevant State institutions ought to have made it easier after obtaining the registration so they could gain from the product’s widespread acclaim. “Now, with the help of NABARD, one company has taken up this task,” Verma added. According to Mr. Verma, creating a narrative for the product to better connect with the consumer and product difference are both essential for positioning the items. The Committee has so far assisted 63 items in obtaining GI registration, and another 40 products are waiting in line to receive the GI tag. As part of a nationwide initiative to promote, safeguard, and realise the full potential of traditional and ethnic craft and products, it has signed an agreement with the NABARD to secure the registration for 30 products from seven States. Officials from the committee encouraged Kerala’s government to find and list more products for GI registration.
Source: Apparel Resources
INTERNATIONAL
Negotiations for a possible FTA between China and Sri Lanka were launched in 2014 in the presence of Chinese President Xi Jinping and former Sri Lankan President Mahinda Rajapaksa when both sides continued to have several rounds of talks, Daily Mirror reported. China had “awarded” Sri Lanka with a delayed response to its request for debt restructuring and now appears to pressure Sri Lanka into signing a Free Trade Agreement (FTA) under the guise of helping to restructure debt repayments. The 5th round of China-Sri Lanka FTA negotiation was held in Colombo on Tuesday where the two sides exchanged views on issues concerning trade in goods, trade in service, investment, economic and technical cooperation, rule of origin, customs procedures and trade facilitation, technical barriers to trade (TBT), sanitary and phytosanitary measures (SPS) and trade remedy. According to experts, the disadvantage for Sri Lanka is that China’s FTAs restrict the use of para-tariffs, such as the import levy used by Sri Lanka, Daily Mirror reported. For a country like Sri Lanka, whose exports are limited to a few products, an agreement that reduces barriers to trade on thousands of other products but excludes these key exportable products from the world and from China will fail to facilitate Sri Lanka’s export growth. Since the end of the Sri Lankan civil war in 2009, China has extended numerous loans to Sri Lanka for various infrastructure projects, including a port, an airport, highways, and other significant projects. However, concerns have been raised about the nature of China’s financial assistance and the motivations behind its debt restructuring efforts. Critics argue that China’s financial assistance is part of a broader strategy to extend its economic and political influence in the region, with Sri Lanka serving as a key location for China’s ambitious Belt and Road Initiative (BRI), Daily Mirror reported. Critics argue that the deal would be heavily skewed in favour of China, leading to a flood of cheap Chinese goods into Sri Lanka and undermining the country’s domestic industries. Sri Lanka occupies a strategic location in the Indian Ocean, making it an essential part of China’s ambitious Belt and Road Initiative, which seeks to expand China’s economic and political influence in the region. The Chinese push for the FTA has faced opposition from critics suggesting that the deal would not be in the country’s best interests, Daily Mirror reported. Furthermore, Sri Lanka is facing growing concerns about its growing economic dependence on China. Experts suggest that the country risks falling into a debt trap that could threaten its economic sovereignty. To address these concerns, Sri Lanka plans to diversify its economic ties, exploring new opportunities for economic partnerships with other countries in the region. The Sri Lankan government is also seeking renegotiation of its debt agreements with China, with some suggesting that the country wants to reduce its dependence on Chinese loans. One of the potential disadvantages of signing the FTA with China is the risk of job losses. Sri Lanka’s labour-intensive industries, such as textiles and apparel, could face increased competition from cheaper Chinese imports, leading to potential job losses in these sectors. This could be especially problematic for Sri Lanka, which is already facing high unemployment rates and a struggling economy, Daily Mirror reported. Another potential disadvantage of signing an FTA with China is the risk of regulatory standards. As part of the FTA negotiations, Sri Lanka would require harmonizing its regulatory regime with China, potentially leading to a “race to the bottom” in terms of labour standards, environmental protection, and intellectual property rights. Finally, signing an FTA with China could lead to a loss of policy autonomy for Sri Lanka. Sri Lanka might require abiding by certain rules and regulations set forth in the FTA, potentially limiting its ability to pursue certain policies in areas such as trade, labour standards, and the environment. However, China’s efforts to push for the FTA continue and experts suggest that the country might be using its financial leverage to coerce Sri Lanka into signing the deal. The situation in Sri Lanka highlights the risks associated with excessive reliance on foreign loans and the importance of balancing economic development with strategic interests. China’s debt restructuring efforts in Sri Lanka and its push for the FTA have raised concerns about the country’s growing economic and political influence in the region. While Sri Lanka is seeking to reduce its dependence on China and diversify its economic ties, it remains to be seen whether the country will be successful in achieving these goals. The situation in Sri Lanka underscores the importance of balancing economic development with strategic interests and the risks associated with excessive dependence on foreign loans, Daily Mirror reported.
Source: The print.in
In the last 25-30 years, Japan has seen the rise of regional competitors who have replicated Japanese monozukuri processes, but at a cheaper cost, thus pushing Japanese firms out of mass production markets. Despite this, we still see Japanese firms maintaining their leadership in fields such as textiles and clothing. How have Japanese companies been able to maintain their leadership despite this stiff price competition? Our company evolved together with Toray, which is expanding its business globally, and we have fulfilled the role of commissioner, providing textiles for them mainly. Toray has been elevating their requests for advanced materials, and it has become a theme of our business; the idea of how to cater to and meet their needs by providing the textiles that meet their requirements. As a result, it has brought us an element of global competitiveness. Society has been changing with more of a vision toward SDGs, so therefore our products have become more competitive in that sense. The requirement for textiles has changed over the years, and at first, it was thought for fashion purposes. Nowadays, there is much more of an emphasis on comfortability and lightweight materials. These sensitivities have been converted into scientific values, and as a weaving company, Marui Orimono’s mission is to convert these values into reality. We have focused on R&D in order to realize this goal, and these continuous efforts are in order to attain functionality. I think this ethos does not only apply to Marui Orimono, but many other Japanese companies too. The power of R&D has allowed Japanese companies to compete in the global market strongly There are many major companies well-known globally like Toray, but in fact, over 90% of the companies in the industry are SMEs. In the textile industry, the SMEs have modeled themselves on the Japanese automotive industry and have structured themselves into tiers. What this means is that each tier is able to provide specific expertise to the market and in our case, we take the advanced materials developed by Toray and use that technology so that we may realize our vision in real-life textiles and clothes. Before, the industry as a whole was focused on either fashion or commodities, but functionality is clearly where the attention is going nowadays. The characteristics of the Japanese people have been reflected in the functionalities of the materials themselves. I feel that conventional Japanese people, as a characteristic, have been accumulating quality, so adding functionality on top of this is adding even greater value in the international market. The last 20-30 years have been tough for some Japanese firms, but even through the struggle, the Japanese have found ways to advance the technology and products of the nation even further. With that under consideration, you can see that Japanese companies will continue to compete on a global scale.
In the 1990s and early 2000s, fast fashion reached a peak, with retailers like H&M and Zara taking off. These brands looked to recreate design elements of high-end fashion houses but at a faster rate and a cheaper cost. Today the fast fashion industry has been valued at about USD 91 billion, however, it does also lead to large amounts of waste. More than 10,000 items from fast fashion go into landfills every 5 minutes. As a firm that produces high-quality textiles, what is your take on the fast fashion industry, and how do you believe it can be more sustainable? With fast fashion, you can purchase fashionable apparel at a low price and that is what consumers have been demanding. Now I feel the trend has been changing, and now apparel that is only reasonably priced is no longer good enough. It is becoming more of a requirement that apparel is long-lasting, and I think that it is a clear fact that the textile industry itself is aware that apparel and textiles are not exactly environmentally friendly. We are trying to convert our business to one that is much more sustainable. I think this is not limited only to us, and we believe that the industry as a whole is trying to convert to one that is sustainable.
Your business can be divided into three main business divisions. Which one are you currently focusing on, and which do you believe has the most potential for future growth? Honestly, we are focused on all three of our business ventures. Eight years ago, we entered the IT business and I think that pretty soon this will become one of our main pillars, however, we evenly distribute our focus on all three of our divisions. There are new possibilities and opportunities in each. Domestically, we do not see a lot of big growth potential here in Japan, so what we are focusing on is producing more high-end and high-functionality products in order to add value and create products that are applicable to other fields besides clothing. Additionally, we are trying to open new sales channels overseas, and we are attempting to widen our outlook. In terms of industrial materials, we have been accumulating experience in factory management as well as textile production. We want to take our products to new fields such as industrial use and that may not always be in the form of textiles. In fact, it could be a non-woven or knitted type of material that can be used for industrial purposes. One of the strengths of Japanese manufacturing is the power of production sites, also known as the Gemba, which translates to the site where value is created. It is important to conduct hitozukuri as well as the introduction of automation and IoT. In order to add value, however, the strength and the power of the engineers and the people onsite are crucial. I strongly believe that the core foundation of Marui Orimono is a more bottom-up structure where each individual working at a factory works together to find issues and solve them together. It is not the case of one leader giving instructions, but rather each person has their own motivation and is highly aware of each job on a production site, which in turn allows us to utilize the fullest potential of our human resource strength. For 30 years, Japan was crowned the number one nation on the planet for innovation and manufacturing, but nowadays that position has been lost. The reason Japan was able to hold that position for such a long period comes down to the power of the people and the structure of the manufacturing. With monozukuri for the Future, it is important to incorporate IoT and at the same time, add value by producing smaller lots with a wide range of products. JIT is also important in providing material where it is needed when it is needed. With an emphasis on traditional Japanese monozukuri is important and then on top of that, we need to add value and a new perspective. To achieve this, it is essential to have engineers who connect management and development staff with the production site.Here at Marui Orimono, it is important for us to strengthen our group structure and create a new business model so that we can produce advanced and functional materials that cater to the needs of our society. On the other hand, in Japan, the strength of Gemba has been interpreted wrongly, which has actually hindered the introduction of DX in the factories. Japan has been doing well in terms of automation, however, in terms of the introduction of digital means, Japan is lagging behind the rest of the world. Marui Orimono was able to recognize this and was able to introduce digital means at an early stage. Marui Orimono has expertise in process automation. Moreover by implementing visualization, software, automation, and AI inspection in the process, we have been able to strengthen our company further by essentially combining hardware and software. However, having said that, in order to utilize the power of Gemba this tool is essential. By combining the power of Gemba we would need a flexible system in order to attain our goal of rationalization.
Source: The world folio
The province of Zhejiang has long been a leader in textiles and clothes-making. This brings with it environmental problems, including waste, air and water pollution, and carbon emissions. Research has found that textiles and footwear production account for 10% of global emissions. Reductions are therefore essential across the industry, but financing them has not always been straightforward. Only a few years ago, when one textiles firm in the Zhejiang city of Huzhou sought to upgrade its technology and practices to recover wastewater and improve energy efficiency, it found that being part of a carbon-intensive industry meant it couldn’t access green financing. That made it harder to fund the changes. Things have changed, however, with the arrival of transition finance – an umbrella term for a range of instruments that support “brown”, emissions-intensive businesses to decarbonise their activities. In January 2022, the Huzhou city government published a catalogue of project types eligible for transition finance, with the textile industry featured. The firm in question successfully applied for a 200 million yuan (US$29 million) “transition finance loan” to reconfigure its workshops, update old equipment and put new management systems in place. The changes are expected to avoid over 600 tonnes of carbon emissions annually, according to the company’s estimates. This is just one example of what is happening in China. In such “brown” sectors, the launch of innovative financial products such as sustainability-linked bonds is helping to cover needs that green finance may overlook. The two approaches are rolling out in parallel. But transition finance in China is just getting started, and classification of suitable projects, funding mechanisms and reporting rules are all needed.
Hitting the spots green finance can ’t reach In 2019, the concept of transition finance began to be promoted by the OECD (Organisation for Economic Cooperation and Development), as a means to provide funding for decarbonisation at various levels in support of the UN Sustainable Development Goals. Soon after, providers were similarly expanding their focus from purely “green” sectors to sustainable development as a whole. In June of that year, for example, French insurance giant AXA stated its intention to launch its first transition finance instruments to support the greening of carbon-intensive industries. Financial product innovations followed: transition bonds, transition loans and transition funds, as well as sustainability-linked bonds and loans that link financing costs to environmental performance – simply put, if environmental performance isn’t up to scratch, financing costs go up. In September 2019, Enel Finance International, part of the Italian energy multinational Enel Group, issued the world’s first sustainability-linked bonds. Growth has been rapid since then: as of November 2022, the market in transition and sustainability-linked bonds was worth US$201.7 billion. China has for several years pushed green finance to help to reach its goal of peaking carbon emissions by 2030. It was one of the first countries to set up a systematic green finance policy framework: in 2016, the People’s Bank of China and various ministries published guidance on the creation of a green finance system, setting out this top-level framework. Sectoral specifications soon followed. But green finance’s coverage is nowhere near enough to meet the country’s climate goals. According to China’s 2022 report on progress towards its nationally determined contribution to the Paris Agreement, the industries supported by green finance in 2021 were worth a total of 8 trillion yuan (US$1.16 trillion) – only 7% of overall GDP. Figures from the National Bureau of Statistics, meanwhile, show that carbon-intensive secondary industries (including manufacturing, electricity generation and heating) were worth 40% of GDP. Those industries will need huge amounts of funding for their transition to low-carbon pathways. But while green industries can now access green finance, institutions have been cutting “brown” industries off from sources of funding. Some carbon-intensive industries, such as electricity generation, petrochemicals, chemicals, building materials and steel, could transition by shifting to newer technologies and equipment, but they do not meet the requirements for green financing and so these potential emissions cuts go unrealised. Changing this access to finance will be essential if China is to meet its climate targets. According to a 2021 report from the International Energy Agency (IEA), China’s main sources of carbon emissions are the electricity sector (48%) and industry (36%) – and the potential for emissions reductions here cannot be underestimated. Replacement technologies in heavy industry alone could help China avoid emissions equivalent to almost 15% of the world’s remaining carbon budget compatible with a 50% chance of keeping global warming to 1.5C, the IEA reports.
China’s experiments China has made some progress on transition finance, with efforts to connect it with green finance and attract more private capital to fund the transition. The People’s Bank of China started researching transition finance in 2021 and has made initial decisions on the basic principles to be applied. It is considering transition finance standards for four sectors: steelmaking, coal power, buildings and building materials, and agriculture. Also in 2021, both the Bank of China and the China Construction Bank published statements on their management of transition bonds and on transition bond frameworks. These defined transition bonds and applicable projects, conditions for eligibility and examples. Local governments have also been active – as seen earlier in Huzhou. The city’s 2022 catalogue of transition finance includes eligible projects and its reporting framework covered energy, industry, buildings and agriculture; it can be referred to by market actors to help identify transition projects in the city. China is also actively engaging in international cooperation on transition finance. In 2022, the People’s Bank of China, as joint chair of the G20 Sustainable Finance Working Group, led the creation of the G20 Transition Finance Framework. This provided highlevel principles for member states developing transition finance, covering identification of transitional activities and investments, reporting, financial instruments, policy measures and a just transition, to help them set specific policies and rules. Some textile, energy and steel firms have started using transition finance instruments. For example, in May 2021 the Liuzhou Steel Group issued 200 million yuan (US$29 million) in sustainability-linked bonds to raise funds for transition initiatives. In a midterm assessment, a third-party body agreed the firm had met its sustainability requirements. Also in May 2021, the China Huaneng Group, a state-owned electricity firm, successfully completed a trial issue of sustainability-linked bonds. The company planned to use the proceeds to develop new energy projects, create a green circular industrial chain, increase its proportion of new energy, reduce coal consumption in the provision of power and heat, and also roll out carbon capture and storage to slash emissions from existing generators. According to our analysis at the International Institute of Green Finance at the Central University of Finance and Economics in Beijing, China had issued 86 billion yuan (US$12.5 billion) in sustainability-linked bonds as of the end of 2022, and 30 billion yuan (US$4.4 billion) in transition bonds.
Standards urgently needed Although China has carried out some work on policies and market practices, significant challenges remain when it comes to definitions, financial mechanisms and reporting on transition finance. One big problem with standards for transition finance the world over is that specific transition roadmaps, measures and parameters need to be identified for each industry, alongside classification of the industries themselves. As part of that process, in 2020 the International Capital Market Association (ICMA) published its Climate Transition Finance Handbook, offering principles for reporting and guidance on issuance of transition finance products, but without specifying actual transition activities. Japan used that handbook to produce its own Basic Guidelines on Climate Transition Finance, refining and extending the ICMA’s work, and providing transition roadmaps for carbonintensive industries. The European Union, meanwhile, absorbed transition finance into its existing sustainable finance framework, setting up the EU Taxonomy and defining “transition activities” as those with major economic impacts and large emissionsreduction potential. But unlike Japan and the EU, China has not yet specified industrial transition roadmaps, nor is there an authoritative taxonomy of transition activities. This makes it difficult for market actors to identify potential transition opportunities, and so financial and policy instruments are not matched up with suitable projects.
Beware greenwashing Vigilance over the risk of “greenwashing” – in this instance, when investors or companies get cheap transition finance but fail to use it for green projects – is also needed. The companies receiving funding have more discretion over how transition finance is spent than with green finance, and the associated transition finance policies are still being developed, meaning a lack of oversight. There are risks that transition finance gets used for non-transition activities. A global analysis by Bloomberg examined 100 sustainability-linked bonds, worth a total of over US$70 billion, and found that most were tied to “weak, irrelevant or even already achieved” climate targets. If green finance can’t drive companies to set more challenging targets, overlooks actual climate performance and fails to track use of funds, then some transition finance will help fund non-transition activities. In the future, China needs to first make progress on setting standards and, as soon as possible, provide reliable transition roadmaps or taxonomies of transition activities, as well as related environmental performance indicators. This will provide a basis for financial institutions to make decisions on transition finance and help market actors make decisions on investments in transition finance instruments. It will also, to an extent, prevent the risk of greenwashing and ensure that money goes to support lowcarbon transitions in carbon-intensive industries.
Source: China Dialogue
The EU currently imports over $4 billion worth of textiles and garments from Vietnam each year, and from now until 2050, new rules will be implemented with a focus on environmentalfriendly products. This development was confirmed by Le Tien Truong, the Chairman of the Vietnam National Textile and Garment Group (Vinatex). The Hanoi Textile & Garment Joint Stock Corporation (Hanosimex) and the Hansae group of the Republic of Korea have become the first firms in Vietnam’s textile and garment industry to Getting M Exclusive Privacy – make a groundbreaking move in this direction. They have formed a complete supply chain, from yarn-making, weaving, and dyeing to sewing, with a particular emphasis on producing recycled products. This move is indicative of Vietnam’s commitment to developing its textile and garment industry sustainably. The country has made strides in improving its environmental performance in recent years, with an increasing number of companies pursuing eco-friendly production practices. As the global demand for sustainable products grows, Vietnam’s textile and garment firms are taking the lead in adapting to the changing market trends and ensuring their products meet the expectations of their EU partners.
Source: Textile today
