INTERNATIONAL
NATIONAL
Indian textile company Welspun India Ltd., reported a surge in the net profit for the first quarter revenue with Rs. 162.73 crore. Operational revenue rose 11.6 per cent accounting for Rs. 2,184.05 crore in the duration of the current quarter as compared to Rs. 1,957.25 crore in the previous year. The revenue collection from the Home Textiles segment rounded to Rs. 2,037.60 crore, and the flooring business added Rs. 225.09 crore showing a growth of 33 per cent in the Q1 of FY 2023-24. BK Goenka Chairman of Welspun Group commented, “In Q1 FY ’24 with sequentially higher margins, continuing the trend since last few quarters, delivering highest EBITDA margin in last seven quarters. It is also heartening to see the Flooring business post its highest revenues during the quarter.”
Source: Apparel Resources
Revenue of the Indian viscose spun yarn (VSY) industry is set to grow 10%-12 % to an alltime high of more than $2.5 billion in 2023-2024 on account of continuing strong demand, according to Crisil Ratings. An analysis of viscose spun yarn companies by Crisil indicates that even as yarn prices decline, the overall profitability is likely to improve 200-300 basis points. The removal of anti-dumping duty on imports of viscose staple fibre (VSF) also helped steady VSY prices, it said. Himank Sharma, director of Crisil Ratings, said in a press release that viscose spinners’ volume is expected to grow 15% on-year this fiscal, supported by sustained domestic demand and a revival in export demand during the second half. Overall, segmental growth will be in low double digits.” Executive Director of Pallava Textiles, Durai Palanisamy, told The Hindu that while the domestic demand for viscose yarn is decent the export demand is poor. Though the anti-dumping duty on viscose fibre has been removed, the government has introduced Quality Control Order. The government is selective in approving the BIS licences of overseas producers, especially from Indonesia, Thailand, and China. So, instead of viscose fibre, a lot of viscose yarn is getting imported, putting pressure on price of domestic yarn. “The spinners are finding it really difficult to manage competition from imports,” he said.
Source: The Hindu
Fashinza has opened a cutting-edge design lab in Gurugram, aimed at enhancing its product development and research capabilities. The sprawling design lab spans 3,000 square feet and boasts state-of-the-art technology and machinery, enabling the swift development of innovative products in under a week. In a statement, Pawan Gupta, the CEO of Fashinza, expressed his enthusiasm for the launch of their advanced product development and research facility. Equipped with the latest technological innovations, this new unit reflects their dedication to innovation and excellence. Gupta emphasised that the facility would enable them to explore groundbreaking textile solutions, refine their craftsmanship, and establish new industry standards for quality and performance. Emphasising the critical role of technology and research, Gupta stated, “The backbone of this facility lies in Technology and R&D, and we are enthusiastic about harnessing their potential to optimize the global fashion supply chain sustainably and efficiently.” Presently, the design lab generates 1500 new designs per month and sets its sights on producing more than 20,000 new designs within its inaugural year. Established in 2020, Fashinza is a technology-driven apparel manufacturing platform that operates from design to delivery. Catering to fashion brands, retailers, and manufacturers, it harnesses the power of AI to predict upcoming trends and designs.
Source: Apparel Resources
The age-old mechanism of placing exporters who fail to bring in foreign exchange in time on the 'caution list' may be examined. An internal working group of the Reserve Bank ofIndia (RBI) has recommended rationalisation of the caution-listing process, two persons told ET. The going gets tougher for exporters who find themselves on such a list as local banks, processing the trade documents, typically insisting on either arranging advance payment from overseas buyers or an irrevocable letter of credit from the latter's bank. If the RBI accepts the recommendations, industry circles are hoping that there may be a carve-out for cases up to a certain threshold level of exports, or where exporters are faced with genuine hurdles in obtaining payment - for instance, an overseas buyer facing liquidation or bankruptcy. "A shipping bill may remain open on account of a variety of genuine reasons. For instance, there may be short remittances due to the deduction of bank charges or post-shipment discounts offered by the exporter, or reconciliation errors in exports made under long-term contracts. Besides, there could be automatic deductions by foreign online marketplaces towards warehousing charges, service fees, commissions, ad fees, etc. After recommendation by the authorised dealer bank for caution-listing, RBI should grant an opportunity of hearing to the exporter before inclusion in the caution-list," said Harshal Bhuta, Partner, PR Bhuta & Co, a CA firm. For such mismatches, exporters end up receiving notices from the Enforcement Directorate. A rationalisation of caution-listing would exclude some of these cases and save exporters from dealing with the ED. Last year, there were cases where the Directorate had asked companies to submit a string of information on businesses and key persons as well as old data - including local and offshore bank accounts, identities of directors, and former directors as well as their nature of association with the company along with residential addresses. Exporters have to realise earnings within nine months from the date of export. After this, they may get extensions from the bank for up to three years with each extension not exceeding six months. An exporter is caution-listed by RBI based on the recommendations of the bank which looks into the exporter's track record and possible run-ins with investigative agencies. The system of automatic caution listing based on the information in the export data processing and monitoring system (EDPMS) was discontinued by RBI in October 2020 to give relief to exporters hit by the pandemic. Earlier exporters were automatically caution-listed if any shipping bill against them remained outstanding for more than two years in the EDPMS platform and no extension was granted. "The ED has been verifying many pending cases of parties which have received (or remitted) part of the money for export (or import) of goods but did not complete the actual shipments. These exporters and importers follow up with the respective authorised dealer to knock off the bill of lading with advance funds received and bill entry with advance money remitted. Many times a single transaction is outstanding on both sides. The department checks whether all documents have been properly submitted," said Rajesh Shah, partner, Jatyantilal Thakkar and Company. ED springs into action as pending receivables or payables create a suspicion of possible money laundering. Some of the companies, which received the recent notices, face the hardship of compiling details of all exports and imports since their inception: date of remittance (from the overseas buyer), name of the remitter (or the identity of the overseas buyer), currency of payment, amount in foreign currency, the equivalent in rupees, date of export, shipping bill number, whether export-related documents were submitted to the bank, and the balance amount in case of partial shipment of export.
Source: Economic times
While the world is grappling with finding finance for energy transition towards low carbon pathway, European Commission has announced a Carbon Border Adjustment Mechanism (CBAM) as a part of its Green Deal (or Fit for package 55). EU’s CBAM, is an internationally binding unilateral environmental measure with two-fold objectives — one, to achieve 55 per cent net reduction in greenhouse gas emission by 2030; two, to ensure equalization of carbon price between imported goods vis-à-vis domestic goods thereby limiting global carbon leakage and encouraging partner nations to adopt ‘green’ technology. Despite several internationally coordinated efforts to build resilience against climate change (the Paris Agreement, Glasgow Climate Pact), the EU seems to portray itself as a global ‘boss’ by holding a ‘stick’ (CBAM certificate prices) to achieve the ‘carrot’ — the desirable outcome of other nations to reduce their carbon footprints.
Fact-Check CBAM has been designed initially to cover five industries — iron and steel, aluminum, cement, fertiliser, electricity, and hydrogen generation. However, EU’s policy document seems to suggest that the mechanism will be expanded to cover 50 per cent of the sectors under the Emission Trading Scheme (ETS). The initial transition phase begins on October 1, 2023, wherein the importers need to declare the emission embedded in their goods, which will be verified by third-party auditing. Accordingly, importers need to purchase CBAM certificates and the price of these certificates will be based on the EU’s existing carbon prices. The exporting countries with stringent emission regulations will be subject to a rebate, equivalent to the difference between their domestic carbon price and the EU’s carbon price under the ETS. This discriminatory provision across partner countries (discrimination among foreign goods) challenges the Most-Favored- Nations (MFN) principle of WTO, the basic tenet on which the world trade is now governed. The implementation phase of CBAM begins from 2026, accompanied by gradual phasing out of free ETS allowances across the EU’s domestic producers. Per the press release of European Commission’s dated June 20, 2023, 75 per cent of the estimated CBAM revenue will be allocated to EU budget. Thus, the lofty idea behind CBAM boils down to another tax to fill-up the gap in EU’s budget! Should India worry? Per the Ministry of Commerce and Industry data, India’s total export value to the EU stands at $98 billion in FY2022-23. India’s total export of CBAM goods — iron and steel ($5,083.7 million), aluminium ($2,679.7 million), fertiliser ($0.64 million), and cement ($0.04million) account for 8 per cent of India’s total export to the EU in FY2022-23. Over the last five years, India’s export of CBAM goods to the EU has increased by 84 per cent — from $4.2 billion in 2018-19 to $7.8 billion in 2022-23. Will the imposition of CBAM impact India’s export significantly? This would of course depend on carbon intensities of India’s CBAM products vis-à-vis her competitors. If India’s carbon footprints on these products are lower than her competitors, it would have no effect on her exports at this point of time. However, as all nations are attempting to reduce their carbon footprint on all products including CBAM products, in future, the CBAM tax will benefit nations that move faster towards lowering their carbon footprints. Clearly, to understand the impact of CBAM on India, we need to use a global trade model like GTAP (Global Trade Analysis Project) model with relevant products and competing countries/region built into it. However, as the standard GTAP database clubs CBAM sectors with others, we created a GTAP database with separate CBAM sectors and our competing nations using supplementary information to understand the impact of CBAM on India’s exports. According to our modelling results India’s export of fertiliser, cement, and aluminium and iron and steel will decline by 0.07 per cent, 0.62 per cent, 0.004 per cent and 0.06 per cent respectively. The numbers are also small in absolute terms. Currently, India has vehemently opposed EU’s CBAM. India sees the proposed levy as discriminatory and a trade barrier, and questions its legality. The government has every right to file a complaint to the WTO against the EU’s unilateral decision. Negligible impact As our findings indicates, the impact on India’s export on these four products will be negligible. However, the danger is that if the EU’s move goes unchallenged, there is every possibility that they will expand the product list in the coming years. At least, their official position seems to suggest so. While trying to achieve the ‘carrot’, the CBAM can actually induce a distortionary effect in the global trade pattern by altering the global competitiveness of the least developed and developing countries vis-à-vis the developed countries. Following the commitment of the industrialised countries to reduce GHG emissions under the Kyoto Protocol of 1997, most of the developed countries already have welldefined mechanisms (carbon pricing, emission cap, etc.) to control GHG emissions within their economies. This can give them elbow room to claim a rebate on the price of the CBAM certificates as opposed to the developing or least developed countries without the domestic carbon pricing mechanism. Moreover, the industrialised nations also enjoy first-mover advantage in the use of less-carbon intensive technologies in their production process. Also export value of CBAM products has declined for developed countries vis-a-vis developing countries. Apart from the trade-distortion effect, another major concern of the CBAM mechanism relates to financing of the transition towards the adaptation of less carbon-intensive production techniques, especially in the least developed and emerging economies. Since EU is spearheading the ambitious global climate objectives, it is time to remind EU of its commitment of contributing $100 billion per year to support developing economies to finance their climate action. Will it not be fair to inject the CBAM revenues back to developing countries? Or, is it a camouflaged trade-barrier, to widen the North-South inequality? As of now, EU has apparently no plan to recycle the CBAM revenue to developing countries. The writers are with NCAER, New Delhi. Views expressed are personal.
Source: The Hindu business line
The Ministry of Micro, Small and Medium Enterprises (MSME) is implementing MSME Champions Scheme in order to enhance competitiveness of MSMEs to make them competitive in foreign markets. MSME Sustainable (ZED) Certification Scheme a components under MSME Champions Scheme provides financial support for technology up-gradation for moving towards zero effect solution/pollution control measures/cleaner technology. The Ministry of Micro, Small and Medium Enterprises (MSME) has taken several initiatives to promote innovation and entrepreneurship in MSMEs. These inter-alia include MSME Innovative Scheme, Entrepreneurship and Skill Development Programme (ESDP) and Prime Minister`s Employment Generation Programme (PMEGP) to generate more employment through self employment or entrepreneurship of MSMEs in the country. This information was given by Minister of State for Micro Small and Medium Enterprises, Shri Bhanu Pratap Singh Verma in a written reply to the Lok Sabha today.
Source: PIB
The union government will help states in simplification, rationalisation or decriminalisation of provisions to promote ease of doing business and living in the country, Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Rajesh Kumar Singh said at a press briefing on Thursday. Singh was speaking after the Parliament passed a bill which seeks to promote ease of business by decriminalising minor offences through amendments in 183 provisions of 42 Acts. "We will do this in the future as well...We intend to follow with an inter-ministerial working group which will look at other provisions where further simplification, rationalisation or decriminalisation is possible and we are intending to do the same exercise at the state level by providing guidance to the states as well," he told reporters here. He said that there will be many more rounds of this exercise with the overall objective of promoting ease of doing business and ease of living. The Jan Vishwas (Amendment of Provisions) Bill, 2023 was passed by Rajya Sabha by a voice vote on August 2. Lok Sabha cleared the legislation on July 27.The bill converts several fines to penalties, meaning that court prosecution is not necessary to administer punishments. It also removes imprisonment as a punishment for many offences. All offences under the Post Office Act of 1898 are being removed. A working group has been formed to take the initiative forward. The group comprises representatives from industry associations, business chambers, legal professionals, legal experts and officials of seven ministries. Besides, it has representatives of the National Housing Bank (NHB), the National Bank of Agriculture and Rural Development (NABARD) and the Central Pollution Control Board. The bill seeks to amend 183 provisions of 42 Acts administered by 19 ministries to reduce the compliance burden on individuals and businesses. Under the bill, both imprisonment and/or fine are proposed to be removed in some provisions; imprisonment is proposed to be removed and fine retained in a few provisions; and imprisonment is proposed to be removed and fine enhanced in certain provisions.
Source: Live mint
S&P Global expects India’s GDP to grow 6.7% annually from FY24 to FY31, catapulting it from $3.4 trillion during the current fiscal to $6.7 trillion in FY31, the rating agency said in a report on Thursday.However, India will face macro challenges in the upcoming decade to turn traditionally uneven growth into a high and stable trend. In its latest report titled ‘Look Forward: India’s Moment’, volume 3, S&P Global said that India’s short-term economic growth will be driven by a 678.6 million strong labour force, though getting more women to enter the workforce will be pivotal for future growth, as only 22% women participated in the workforce as of 2022. India has an immense opportunity to increase its share of global manufacturing exports, in line with the government’s aim to raise manufacturing to 25% of GDP by 2025 from the current levels of 17.7%, it said.With domestic energy demand set to double by 2050, India will prepare for an energy future that aims to strike a balance between increasing energy access and reliability, while securing affordable supplies and diversifying its fuel mix, the report said, adding that S&P Global expects India’s total energy demand to double by 2050. Currently, though India is the third largest consumer of energy globally, its per capita energy consumption remains just one tenth that of the US. “India and the rest of the world are joined at the hip in the journey to reach net-zero emissions...Developing countries will be watching closely as India continues its growth trajectory while trying to reduce the carbon intensity of its economy and ultimately bend its total GHG emission curve," said Atul Arya, chief energy strategist, S&P Global Commodity Insights.S&P expects oil imports to exceed 90% of the country’s demand, and natural gas imports to surpass 60% of the country’s demand by 2030. Opportunities for India include the potential to boost output from Indian oil and gas fields using secondary and tertiary recovery technologies, acquisition of international oil and gas assets, accelerating deployment of renewables to meet growing electricity demands, development of the country’s hydrogen mission, which aims to produce 5 million metric tons of fuel annually by 2030. “India will have to strike a balance to increase energy access and reliability while delivering affordable energy supplies and diversifying its fuel mix to reduce the overall carbon intensity of its energy system," said Gauri Jauhar, executive director, energy transitions and clean technology consulting at S&P Global Commodity Insights.According to S&P, measures India could take to reduce emissions include phasing out aging and inefficient coal plants, improving newer plants to meet more stringent emission standards, establishing domestic clean energy supply chain to support deployment of renewables, greater decarbonisation of the transport sector, energy efficiency aimed at industry, buildings and transport. To meet its net zero target by 2070, India will have to increase energy financing, build capacity, improve systematic efficiency, increase investor confidence, align policies among multiple stakeholders, including government, private sector and the public, accelerate market orientation reforms, and improve alignment between Centre and state governments to accelerate decision making, the report added. Meanwhile, the report stated that mobility in India, despite having massive potential, will be challenged by infrastructural hurdles, especially in the cities.“Urban centres are India’s growth engines. However, due to the massive influx of cars in cities, hyperlocal commuting challenges like congestion and pollution are detrimental to the India growth story," the report said. “This will make personal mobility far more important than individual car ownership, spurring demand for public transport and new and innovative shared mobility solutions," it added.
Source: Live mint
While India’s energy transition over the next decade will largely influence global emission targets, the path towards net zero may not be straightforward for India, S&P Global said in its latest Look Forward report on Thursday. “How India meets its growing energy demand and changes its primary energy mix over the coming decade will substantially influence global energy markets and help determine if, and when, global emissions targets are reached,” it said.Already the third largest consumer of energy globally, India’s per capita energy consumption remains just one tenth that of the US. S&P Global Commodity Insights expects India’s total energy demand to double by 2050. “The longer-term path towards India’s goal of net-zero by 2070 may not be straightforward, but there are several technology, policy and finance levers that India’s policymakers and companies can utilise,” the report said.India’s efforts to meet its growing energy needs while lowering emissions will be closely watched as a model for other emerging economies. “India and the rest of the world are joined at the hip in the journey to reach net-zero emissions,” S&P Global chief energy strategist Atul Arya said. Part of the equation to securing reliable, affordable and sustainable energy supplies to meet India’s growing energy demand will be reducing dependency on energy imports, the report said. Oil imports are expected to exceed 90% of the country’s demand by 2030 and natural gas imports are likely to surpass 60% of demand that same year, the research and analytics firm said. “India will have to strike a balance to increase energy access and reliability while delivering affordable energy supplies and diversifying its fuel mix to reduce the overall carbon intensity of its energy system,” said S&P Global executive director (energy transitions) Gauri Jauhar said.
Source: Financial Express
SGS, the world’s leading testing, inspection and certification company, has been accredited by the International Organic Accreditation Service (IOAS) to extend its Textile Exchange product certification services to India. The scope of the certification scheme, which SGS has delivered across Spain since 2021, includes Content Claim Standard (CCS) and Recycled Claim Standard (RCS) for textile, leather, plastic, paper and metal product categories. The scope also includes the Organic Content Standard (OCS); Responsible Down Standard (RDS) and RAF (covering Responsible Wool Standard RWS, Responsible Mohair Standard RMS and Responsible Alpaca Standard RAS) to the textile industry for any stage of the supply chain after the farm. SGS will provide the full spectrum of Textile Exchange certification services to manufacturers, traders, recyclers and brands from its strategically located offices in Ahmedabad, Bangalore, Chennai, Gurgaon, Kolkata, Ludhiana, Mumbai and Tirupur. Shailesh Sharma, Director- Connectivity & Products, Softlines at SGS commented, “We are delighted to have gained IOAS accreditation to expand our global textile and footwear certification services to give us maximum local presence across India. We are now even better placed to provide organisations across the region with the tools and expertise to achieve their sustainable sourcing goals and demonstrate the precise recycled and organic content of their products.” Textile Exchange is a global non-profit organisation that works closely with all sectors of the textile supply chain. It identifies and shares best practices regarding farming, materials, processing, traceability, and product end-of-life to create positive impacts on water, soil, air, animals and the human population created around the world by the textile industry. IOAS is a non-profit organisation dedicated to the integrity of ecolabel claims in the field of organic and sustainable agriculture, environmental management, social justice and fair trade. IOAS works internationally to assess the competence of organisations providing certification to ‘sustainability’ standards.
Source: Apparel Resources
Cabinet secretary Rajiv Gauba on Thursday reviewed the progress of the production-linked incentive scheme (PLI) for sectors that are “generally doing very well” like pharma and electronics, a senior official said. Another such review is expected for the remaining sectors, the official said.The scheme was announced in 2021 for 14 sectors such as telecommunication, white goods, textiles, manufacturing of medical devices, automobiles, speciality steel, food products, high-efficiency solar PV modules, advanced chemistry cell battery, drones and pharma with an outlay of Rs 1.97 lakh crore. “Today we covered sectors that are generally doing very well like pharma, electronics and mobile manufacturing, and white goods. Others which have not fully taken off are coming up later,” the official said. “They are doing well but they can do better. We are in the process of consulting whether any minor tweaking is required. Once we complete the process, we will be in a position,” the official added when asked about the details of the review meeting. PLI schemes for sectors which are not picking up well include high-efficiency solar PV modules, advanced chemistry cell (ACC) batteries, textile products and speciality steel. The Department for Promotion of Industry and Internal Trade (DPIIT) held a workshop with concerned PLI stake-holders in June to get feedback. “Some of those suggestions after taking the feedback we will convert into policy decisions,” the official said. Stakeholders have flagged issues like timely processing of claims; visa-related matters where vendors require some expertise from Chinese professionals; delay in getting environmental clarences in some states. “Those kinds of things we are trying to sort out. These issues are there in almost all the PLI sectors,” the official said, adding “there are issues of environmental clearances, in same cases visa issues for Chinese, particularly when their components are getting manufactured here”. The meeting assumed significance as the government disbursed only Rs 2,900 crore till March 2023 out of Rs 3,400 crore claims received under the scheme. On this, the official said that low disbursements are not an issue, as the scheme is ensuring investments, employment generation, exports and healthy tax collections. “Disbursement is not a criteria in the general sense to assess whether the scheme is doing good or not. Disbursements doesn’t really bother us so much because many of the schemes we are talking about are in the gestation stage,” the official said. Concerned ministries are taking up issues related to their sectors and the DPIIT is playing a coordinating role.“If it doesn’t get resolved it can escalate to Cabinet Secretary to the DPIIT or minister level,” the official added. The purpose of the schemes is to attract investments in key sectors and cutting-edge technology; ensure efficiency and bring economies of size and scale in the manufacturing sector and make Indian companies and manufacturers globally competitive. These schemes for all 14 sectors have been notified by the concerned ministries/ departments after due approval. These schemes are in various stages of implementation. Out of the 733 applications selected under various PLI schemes, 176 MSMEs are among the PLI beneficiaries in sectors such as bulk drugs, medical devices, pharma, telecom, white goods, food processing, textiles and drones.
Source: Financial express
INTERNATIONAL
India’s eastern neighbour Bangladesh is exploring to join Regional Comprehensive Economic Partnership (RCEP) , eyeing to be part of the trade bloc in the Indo-Pacific region. The Bangladesh Ministry of Commerce (MoC) is expected to send by September a formal proposal to the depository and temporary secretariat of the world's largest trade bloc at the ASEAN headquarters for the country's membership, Financial Express of Bangladesh reported quoting local sources. The decision to join the forum emerged from a workshop on the issue in Dhaka this Tuesday. Participants in the workshop expressed their opinion in favour of signing a free-trade agreement (FTA) with the RCEP members with an eye to facing post-graduation challenges. They viewed that the commercial and strategic importance of Bangladesh will get a boost in regional and international environment if Bangladesh joins the bloc. A study conducted last year by Bangladesh Trade and Tariff Commission (BTTC) showed Bangladesh's trade with RCEP- member countries mostly concentrated on trade in goods. Bangladesh's export may grow 17 per cent and gross domestic product (GDP) 0.26 per cent if a free-trade agreement is signed with the bloc members, it mentioned. Bangladesh enjoys preferential market access to many of the RCEP countries, either through preferential trade agreement (PTA) or through GSP facilities.
Source: Economic times
INDA and EDANA, the trade associations representing nonwovens and related industries, joined forces to implement and support the industry’s first Quality and Audit Program (QAP) in the United States. This joint effort will increase the reach of, and support for, the program in the North American absorbent hygiene products and wet wipes industries. Much like the harmonization of test methods years ago, this joint program has the potential to reduce complexity for both suppliers and converters of AHP and wipes. This program grew from the inefficiency of facing multiple audits from converter supplier audit programs, often assessing similar requirements, but according to differing standards. The program went through a rigorous testing and piloting phase before being rolled out in the summer of 2022. Initially only available in Europe, the program is expanding its reach to cover Asia and the Americas. “INDA is pleased to partner with EDANA to promote this program for the benefit and efficiency of the industry,” said Tony Fragnito, INDA President. “With this partnership, we believe QAP will become the global quality standard in the hygiene industry, thus ensuring that consumer products across the industry are of the highest quality.” “Answering the needs of many of our members and based on the first results since its implementation in Europe just over a year ago, we are strongly convinced that QAP is a meaningful step forward for the industry. While it will still require a kind of paradigm shift, we are sure that more and more industry players from across the world will adopt the program,” said Murat Dogru, EDANA’s General Manager. “I look forward to partnering with INDA to bring QAP to the North American market.” More information is available on the EDANA website where converters and suppliers can register to take part. The program is based on a harmonized quality and hygiene standard, which facilitates an objective third-party audit. Organizations can also register to follow a training course to familiarize themselves with the standard. For further information on the QAP project, please contact either INDA’s Director of Education and Technical Affairs, Matt O’Sickey at mosicky@inda.org, or EDANA’s Director of Scientific and Technical Affairs, Marines Lagemaat at Marines.
Source: Textile world
The business performance of the Lenzing Group, a leading global supplier of specialty fibers for the textile and nonwoven industries, largely reflected the subdued market trends in the first half of 2023. After the market environment deteriorated significantly in the second half of 2022, signs of recovery were evident during the first and second quarters of 2023 in terms of both raw material and energy costs as well as demand. Textile fibers recorded improving demand, and business with nonwoven fibers and with dissolving wood pulp proved to be very stable. Revenue in the reporting period decreased by 3.4 percent year-on-year to EUR 1.25 bn. This reduction was primarily due to lower fiber revenues, while pulp revenues were up. In addition to the current market environment, the earnings trend was particularly influenced by positive one-off effects from the valuation of biological assets and inventories. As a consequence, earnings before interest, tax, depreciation and amortization (EBITDA) in the first half of 2023 decreased by 27.7 percent year-on-year to EUR 136.5 mn. The net result amounted to minus EUR 65.8 mn (compared with EUR 72.3 mn in the first half of 2022) and earnings per share amounted to minus EUR 3.92 mn (compared with EUR 2.36 mn in the first half of 2022). As far as business trends in the second quarter are concerned, the Lenzing Group recorded a recovery compared to the first quarter of 2023. Revenue increased by 0.6 percent compared to the previous quarter to EUR 627.1 mn. EBITDA amounted to EUR 106.8 mn (compared with EUR 29.7 mn), while the net result for the period amounted to minus EUR 0.8 mn (compared with minus EUR 64.9 mn in the first quarter of 2023). “Lenzing is on a recovery track, as a comparison with the previous quarter in particular shows, even though the current market environment continues to weigh on consumer sentiment and thereby on the order situation in many industries. We proactively implemented optimization measures on the cost and liquidity side as well as on the sales side at an early stage, which are having an increasingly positive impact,” notes Stephan Sielaff, Lenzing Group CEO. “Overall, we remain cautiously optimistic, although visibility remains limited, especially in the textile segment. In the medium and long term, we continue to expect strong growth in demand for sustainable products from Lenzing. The capital increase, which was implemented swiftly and successfully, provides Lenzing with financial flexibility and strength, and will form a solid basis for our strategic growth.” Nico Reiner, CFO of the Lenzing Group, adds: “We have significantly strengthened our balance sheet and liquidity position not only through the successful capital increase but also through the extension of credit terms. Timing played a crucial role in these steps. Instead of speculating about the future, we resolutely seized the opportunity to strengthen the company and prepare for the many tasks ahead.”
Effective measures launched Lenzing launched a reorganization and cost-cutting program in the third quarter of 2022 and is fully on track with its implementation. More than EUR 70 mn in annual cost savings are targeted once the program has been fully implemented. In addition, measures were initiated to bolster free cash flow, further steps were taken to reduce working capital, and currency and energy price hedging were restructured. At the same time, Lenzing launched a program in the reporting period to strengthen sales activities and to improve revenue. In order to meet market requirements at the highest level, Lenzing continues to invest in the development of premium products in accordance with its “Better Growth” corporate strategy and services and consistently places customer needs at the center of its work. Lenzing also successfully implemented a capital increase with subscription rights for existing shareholders during the reporting period. The gross issue proceeds of approximately EUR 400 mn will be deployed to strengthen the balance sheet and liquidity position, to create additional flexibility in relation to the financing strategy and to support the Better Growth strategy. The effects of the capital increase will not be reflected in Lenzing Group’s cash flow and balance sheet figures until the third quarter.
“Better Growth” further advanced In the first half of 2023, the implementation of the “Better Growth” corporate strategy was also driven forward. This strategy is mainly aimed at better serving structurally strong demand growth for specialty fibers of the TENCELTM, LENZINGTM ECOVEROTM and VEOCELTM brands. In line with its strategy, Lenzing will pursue a profitable growth path following the successful implementation of its key projects, sharpen its focus on sustainable and high-quality premium fibers for textiles and nonwovens and, in parallel, continue to push ahead with the transition to a circular economy model. Since 2021, Lenzing has invested more than EUR 200 mn in production sites in China and in Indonesia in order to convert existing capacities for generic viscose into capacities for environmentally responsible specialty fibers. In Nanjing (China), the conversion of a production line to TENCELTM modal fibers was successfully completed in the reporting period. As part of the investments at the site in Purwakarta (Indonesia), Lenzing is creating additional capacity for LENZINGTM ECOVEROTM fibers. The conversion work is proceeding according to plan, and the site is expected to be converted into a pure specialty viscose supplier before the end of this year. Lenzing has proactively developed and promoted innovations in recycling for several years (such as the REFIBRATM and Eco Cycle technologies) in order to provide solutions to the global textile waste problem. Since 2021, Lenzing has been working with Swedish pulp producer Södra to jointly develop new processes for recycling used textiles on an industrial scale. In the reporting period, the project1 was supported by an EU grant of EUR 10 mn under the LIFE 2022 program.2
Outlook The war in Ukraine and the more restrictive monetary policy pursued by many central banks in order to combat inflation are expected to continue to influence global economic activity. The IMF warns that risks remain elevated overall and forecasts growth of 3 percent for both 2023 and 2024. The currency environment is expected to remain volatile in the regions of relevance to Lenzing. This market environment continues to weigh on the consumer climate and on sentiment in the industries relevant to Lenzing. Recently, however, the outlook brightened somewhat according to a global survey by the ITMF.3 In the trend-setting market for cotton, signs are emerging of a further buildup of stocks in the current 2022/23 crop season. Initial forecasts also see a further buildup of stocks in 2023/24, albeit to a lesser extent.
Source: Textile world
British fashion retailer Next raised its guidance for annual profit by 10 million pounds ($12.7 million) to 845 million pounds on Thursday, after full price sales and the end-of-season summer sale came in ahead of weeks after its last upgrade and shows shoppers continue to defy tough economic conditions. A year of high inflation and consecutive interest rate rises in Britain have squeezed household incomes, but high street spending has held up, and Next said it sees annual full-price sales 1.8% higher than in its 2022-23 financial year. Value-retailer Primark and Sports Direct-owner Frasers Group have both in recent weeks issued positive updates.
Source: The Retail.economictimes.indiatimes.com
During the first five months of 2023, USA apparel imports witnessed a significant decline in volumes as well as in values. The data was recently released by OTEXA. Both in terms of volume (9.59 billion SME) and value (US $ 31.52 billion), imports experienced substantial drops, declining by 30.48 per cent and 22.92 per cent respectively. This Jan.-May ’23 period marked the second most negative phase for US apparel buyers in terms of value-wise imports, trailing closely behind the corresponding period in 2020 when the decline was slightly higher, at over 27 per cent. What is even more concerning is the decline in apparel volumes during the review period of 2023, compared to the same period in 2020 when the drop was recorded at 26.54 per cent. However, the import values showed some positive trend in May ’23 as the apparel imports valued US $ 6.40 billion as compared to US $ 5.65 billion in the previous month. Stay connected to know more insights on country-wise apparel exportsto the USA in Jan.-May ’23 period!
Source: Apparel Resources
