INTERNATIONAL
NATIONAL
Textile mills in Tamil Nadu are yet to see revival of orders though the festival season is just a few weeks away. Small-scale spinners say the orders have not improved much. However, cotton prices are increasing. Mills that have captive renewable energy are operating the units. But, even these units are not able to break even, they say. The textile mills are facing slowdown in orders for almost six months now due to higher cotton prices, slowdown in orders in the export and domestic markets, and high production costs. The State government has asked for supply of 40s count yarn directly from the mills for the free uniform and saree schemes. But, the mills are reluctant to supply as the cotton prices are increasing, they added. According to Jayabal, president of the Recycle Textile Federation, orders declined 29% for the mills and just 10% of these orders have come back. In the last four-five years, the total spindles have also increased. “There are no orders for the existing capacities. The governments are trying to attract more investments. But, there are no orders. They should focus on sustaining the existing units,” he said. The electricity tariff was high in Tamil Nadu compared to other States and this made revival difficult for the textile mills. The smaller mills that came under the LT CT tariff slab were paying more compared to the bigger mills, he claimed. The MSME textile mills in Tamil Nadu went on strike last month demanding supportive measures and called off the strike after a meeting with the Tamil Nadu ministers. “There is respite from the slowdown though the State government assured us supportive measures,” he said.
Source: The Hindu
Government and exporters have to take urgent steps like devising mechanisms for monitoring emissions data, and providing incentives for the adoption of greener technologies to deal with the European Union's carbon tax as it would impact exports of sectors like metals, a report said. Suggesting a nine-step action plan, the report by Global Trade Research Initiative (GTRI) said that Indian firms have less than 40 days to prepare for the CBAM (carbon border adjustment mechanism) transition. The CBAM or carbon tax (a kind of import duty) will come into effect from January 1, 2026, but from October 1 this year, domestic companies from seven carbon-intensive sectors, including steel, cement, fertiliser, aluminium and hydrocarbon products, will have to share data with regard to carbon emissions with the EU. "The CBAM tax will start from January 2026, but there are penalties on not reporting, negligent reporting or mis-reporting of data from October 1, 2023, onwards," GTRI co-founder Ajay Srivastava said. He said that the transition period for the tax, starting October 1, brings extensive data compliance requirements for Indian exporters. The GTRI suggestions assume significance as the EU on August 17 notified compliance requirements for the CBAM transition period, which starts from October 1 this year. "The CBAM documents exceed 800 pages of complex legal, technical texts, necessitating thorough understanding by the government and industry," he added. The CBAM will translate into a 20-35 per cent tax on select imports into the EU starting January 1, 2026. India's 26.6 per cent of exports of iron ore pellets, iron, steel, and aluminium products go to the EU. These products will be hit by CBAM. India exported these goods worth $7.4 billion in 2023 to the EU. "CBAM imposes massive data compliance requirements on Indian exporters. For every consignment, exporters have to share hundreds of 1000 data points, explanations, and methods used with EU counterparts. Neglect or misreporting leads to stiff penalties," Srivastava said. He said that with low level of domestic data capture, Indian firms need to set up systems first before reporting data. "Small firms will suffer more from penalties than tax burden," he cautioned. The nine steps include awareness and education; data collection and management; compliance strategy; reporting and submission; risk mitigation; long-term planning; monitoring and review; and industry-academia collaboration. The report asked for setting up of a dedicated task force or working group comprising representatives from relevant ministries like commerce and environment to oversee CBAM compliance and facilitate communication between industries and government bodies. It also said that companies should invest in setting up robust data collection systems to accurately track emissions throughout their production processes, and collaborate with technology providers to develop software tools that can help streamline data capture and management for reporting. On data preparation, it said industries should form dedicated teams responsible for data preparation and submission in line with the CBAM requirements. "Companies should develop standardized templates for data collection and reporting, aligning with EU's specified formats; and foster open communication with EU-based importers to ensure a smooth exchange of emissions data and reporting information," it added. As there will be a quarterly reporting system, the report said that there is a need for internal protocols for review and verification of data before submission to avoid penalties. Further for long-term planning, the report recommended industries to invest in research and innovation to reduce emissions and improve energy efficiency; and asked the government to provide incentives, grants, or subsidies to companies that adopt greener technologies. To strengthen industry-academia collaboration, it asked academic institutions to offer specialized courses and training programmes on carbon emissions reporting and management. "By systematically following the action plan, the government and industries can prepare for the challenges posed by the CBAM, ensure smooth compliance, and minimize the risk of penalties while positioning themselves for a more sustainable future," it added.
Source: Economic Times
India and Bangladesh have reafrmed their commitment to bolstering customs cooperation and streamlining cross-border trade. The two countries concluded their 14th Joint Group of Customs (JGC) meeting in New Delhi on 21-22 August. "The 14th JGC meeting discussed a host of bilateral issues such as opening of new land customs stations, easing port restrictions, development of road and rail infrastructure, pre-arrival exchange of customs data and a bilateral agreement on customs cooperation, "the nance ministry said. The meeting was co-chaired by member (Customs), Central Board of Indirect Taxes and Customs, India and Member (Customs: Audit, Modernization and International Trade), National Board of Revenue, Bangladesh. The India-Bangladesh Joint Group of Customs meetings are held on an annual basis to discuss issues relating to customs cooperation and cross-border trade facilitation. These meetings play a vital role in enhancing connectivity and developing trade infrastructure for smooth customs clearance at land borders, it added. There are 62 land customs stations (which include land border crossing points, railway stations and river banks/ports) along the IndiaBangladesh Border in the States of West Bengal, Assam, Meghalaya, Tripura and Mizoram. According to the ministry, several trade facilitative measures have been undertaken by India in this context recently such as enabling exports from Bangladesh to India by rail in closed containers, with customs clearance facility at any Inland Container Depot (ICD) vide Circular dated 17th May 2022. This would also help decongest the border trade points. India has facilitated cargo exports from its ICDs to Bangladesh using Inland Waterways, following the circular dated 09 September 2022. The circular dated 14th September 2022 paves the way for the transshipment of containerized export cargo from Bangladesh, destined for third countries, through India using riverine and land routes. In the air cargo sector, the Circular dated 07 February 2023 authorizes the transshipment of Bangladesh's export cargo to third countries via Delhi Air Cargo.
Source: Live mint
The finance ministry has cautioned that global and regional uncertainties and domestic disruptions may keep inflationary pressures elevated in the coming months, warranting “greater vigilance” by the government and the Reserve Bank of India (RBI). “Russia’s decision to terminate the Black Sea grain deal, along with dry conditions in major wheat-growing areas, caused a price spike in cereals. Domestic factors like white fly disease and an uneven distribution of monsoon exerted pressure on vegetable prices in India,” the ministry said in its latest Monthly Economic Report for July, released on Tuesday. However, the report maintained, the recent price surge in certain food items “is expected to be transitory”. “Tomato prices are likely to decline with the arrival of fresh stocks by the end of August or early September. Further, enhanced imports of tur dal are expected to moderate pulses inflation. These factors, along with the recent government efforts, can soon lead to a moderation in food inflation in the coming months,” it said. Retail inflation galloped to a 15-month high of 7.44 per cent in July, mainly due to skyrocketing prices of vegetables, pulses, cereals, and spices. In its latest monetary policy review, the RBI revised upwards its inflation forecasts -- to 6.2 per cent for the September quarter and 5.4 per cent for FY24 -- while keeping the policy rate unchanged at 6.5 per cent. RBI Governor Shaktikanta Das in a statement had said that while a substantial increase in headline inflation would occur in the near term, led by the accentuated vegetable prices, “monetary policy can look through high inflation prints caused by such shocks for some time”. The finance ministry report noted that maintenance of macroeconomic stability was paramount to keep interest rates from rising too much, to underscore the relative attractiveness of India as a zone of performance and promise for domestic and international investors and to maintain steady economic growth. July’s monthly review also highlighted that the robustness of domestic investment was the result of the government’s continued emphasis on capital expenditure. “Enhanced provision for capital expenditure by the government is now leading to crowding in of private investment, as evident in the performance of various high-frequency indicators and industry reports, which highlight the emergence of green shoots of a private capex upcycle,” it added. The Union government in its FY24 Budget increased the capital outlay by 33.3 per cent, raising the share of capital expenditure in total expenditure from 12.3 per cent in FY18 to 22.4 per cent in FY24 Budget estimates. The monthly report also said the external sector required a closer watch to strengthen merchandise export growth in the face of slowing global demand. It said persistent geopolitical concerns continued to shadow the world trade growth, which is expected to decline to 2 per cent in 2023 from 5.2 per cent in 2022. “Services exports continue to do well and are likely to continue doing so as the preference for remote working remains unabated, typically manifested in the proliferation of global capability centres,” it said. The report said domestic consumption and investment demand might continue to drive growth. “Going forward, increased minimum support prices and prospects of healthy kharif crops will further add strength to the rural demand,” it added.
Source: Business-Standard
The global economy this year is full of puzzling surprises. Japan’s GDP growth is currently surpassing that of China, and July retail sales in the United States were double the consensus forecast, despite the US Federal Reserve pursuing one of the most concentrated rate-hiking cycles in decades.In the United Kingdom, wage growth has risen to an annualised rate of 7.8% and core inflation has remained high, even after 14 consecutive rate hikes by the Bank of England (with more to come). Meanwhile, Brazil and Chile have both cut interest rates, diverging from market expectations that the Fed will keep rates high for a prolonged period.These oddities are just a few of many, and adding to the complexity are the uncertain implications of significant structural shifts on the horizon. These include the necessary transition to zero-carbon energy, the artificial-intelligence revolution, and various other innovation-driven changes. Add in geopolitical tensions and the retreat from economic and financial globalisation, and a wide range of potential scenarios opens up.With so many moving pieces, and under such unconventional (and in many cases unprecedented) conditions, navigating this landscape would be challenging for anyone. That is when I find it particularly useful to return to a simple analytical framework that I learned early in my career as an economist. It is an extreme version of a “reduced-form equation” that economists use to focus on just a handful of key factors for predicting outcomes.These factors may not fully explain a phenomenon, but this strategy is better than relying on an impractically large and unwieldy set of factors.In today’s context, my analytical approach poses a simple question: What single piece of information would be most valuable if I were stranded on a desert island for six months and wanted to understand what had happened to the global economy during that time? Given the current state of affairs, I would primarily want to know how the US had managed its growth-inflation dynamics. Or, more to the point, I would want to know whether the Fed had achieved a “soft landing” (bringing inflation back down toward its target without causing a sharp increase in unemployment).This information is crucial, because the global economy currently lacks alternative engines. After all, the growth challenges facing China, the UK, and the eurozone are not susceptible to quick policy fixes; a still-levered international financial system with high debt levels can ill afford another surge in US interest rates and strong dollar appreciation; Japan has yet to figure out how to exit its “yield-curve control” policy in a smooth manner; and the global economy continues to suffer gradual fragmentation. At first glance, the prospects for the Fed achieving a soft landing do appear promising. Inflation has receded from its peak of over 9% last year to slightly above 3%, bringing it much closer to the 2% target. At the same time, household spending continues to drive economic growth, and corporate balance sheets are solid. These conditions suggest that the US economy can absorb the cumulative impact of the Fed hiking rates by five percentage points, while also sidestepping the effects of faltering Chinese growth and Europe’s on-and-off flirtation with recession.But, as the economic historian Niall Ferguson recently pointed out, “managing monetary policy is not in the least like flying a plane.” This simile seems especially applicable to the current Fed, for several reasons. First, the Fed’s operating manual is outdated. Its “new monetary framework” is, in fact, suited for the prior decade of insufficient aggregate demand, rather than to this decade of insufficient aggregate supply. Second, the Fed’s landing zone is questionable, because the inflation target it is pursuing may well be too low given current structural and secular realities.Third, with its excessive focus on immediate conditions, the Fed could end up neglecting the future wind patterns that it will encounter as its altitude changes. Fourth, it initiated its landing sequence late, following a long period in which it had mischaracterised inflation as “transitory” before finally implementing an intense cycle of rate hikes. And, finally, it is not clear whether the Fed has learned enough from its forecasting and communication mistakes to make the necessary course corrections. Yes, the US economy has defied sceptics by maintaining robust growth above that of other major economies, and despite its notably higher interest rates and significant external headwinds. But the continuation of this exceptional performance hinges on the Fed’s ability to establish a low and stable inflation rate without triggering a recession. This is a delicate balancing act, and whatever happens will significantly influence the rest of the global economy and how policymakers navigate today’s extraordinary uncertainty. My hope is that six months from now, we will celebrate the Fed’s success in achieving a soft landing and in positioning the US and the global economy to manage the exciting, but challenging, secular and strategic transitions ahead. My fear, however, is that the process will be much more complicated than many economic and market analysts expect, casting a once-avoidable shadow over one of the few bright spots in the global economy.
Source: Financial Express
A new study suggests applying certain cutting and sewing methods during the fashion manufacturing process can significantly reduce the amount of microfibres released when the garments are washed. According to the study “Impact of sewing on microfiber release from polyester fabric during laundry,” the microfibre release of clothing can be reduced by up to 20 times utilising laser and ultrasonic cutting techniques. This is in comparison to using traditional scissor-cut edges. The study examined how knitted textiles are cut and sewn and how this affects the release of microfibers from clothing during washing. When comparing the various stitch types, it was found that the overlock stitch type shed less than the flatlock stitch and single needle lockstitch. The study’s findings also indicated that using more needles enhances the emission of microfibres in the same stitch type’s various stitch variations. The research reported, the 4-thread overlock stitch (two needles) emits 45.27 per cent more microfibers than the 3-thread stitch (one needle). In addition, the proposed edge finishing seam (EFb), which completely encloses the edges, was successful in eliminating 93 per cent of microfibre release in the trial. The study took thread density into account and found that both the single needle lockstitch and flatlock stitch, greater stitch density decreased microfibre release. But the overlock stitch showed a different pattern, which the authors note requires more investigation in the future.
Source: Apparel Resources
India is awaiting certain data from Bangladesh that could come any time before both sides resume their discussions on the Comprehensive Economic Partnership Agreement (CEPA), a senior official said. “We have a bilateral mechanism with Bangladesh. They told us (at the last meeting) they will share some data with us. And after the data is shared the talks shall formally resume,” the official said. The last meeting between both sides was held in the first week of August.Talks on CEPA between the two countries began informally in 2018. Joint feasibility on the agreement has been carried out after the two countries agreed to explore the Free Trade Agreement. The study confirmed that a trade agreement between India and Bangladesh would provide a sound basis for substantial enhancement of trade and commercial partnership between the two.At the summit level talks between the two countries in September last year the decision was taken to restart the discussions. Since then officials of both sides have met regularly to prepare the ground for negotiations to start. The proposed CEPA with Bangladesh would cover trade in goods and services and investments.At present trade ties between the two are conducted under the South Asian Free Trade Area (SAFTA). The members of SAFTA are Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. Due to the politics of the region the SAFTA is dysfunctional. Bangladesh is the sixth largest export market for India accounting for 2.59% of its total exports. Exports to Bangladesh in 2022-23 stood at $ 12.2 billion down from 4 16.1 billion in the previous year. Electric energy, cotton yarn and petroleum products are the biggest exports to Bangladesh. India’s imports from Bangladesh stood at $2.02 billion in the last financial year. India’s imports from its eastern neighbour mostly comprises, textiles and apparel and fish.
Source: Financial Express
MyTrident, the home furnishing brand of Trident Group, a US $ 2 billion conglomerate, is geared-up for growth. The brand specialising in luxurious and premium home furnishings. In a statement, the company said the brand aims to cross a revenue of Rs. 1,000 crore by FY 2025-26 and it announced actress Kareena Kapoor Khan as their brand ambassador during the launch of its Fall-Winter ’23 collections. The company believes that Kareena Kapoor Khan will be instrumental in realising the vision of ‘Ghar Ghar mein MyTrident’. The brand has a target of reaching 10,000+ retail touch points across the country including 100 exclusive stores by the end of FY 2025-26 Currently, it has a retail network of 3,500+ retail touchpoints, including 50 exclusive stores across India. “We are super-excited and thrilled to welcome Kareena Kapoor Khan in MyTrident family. As we continue to strive for excellence and innovation in our products, we are confident that Kareena’s influence will enhance our brand’s narrative of providing value to our customers” said Rajinder Gupta, Chairman – Trident Group.
Source: Apparel Resources
The Indian economy is expected to have grown 7.8-8.5 per cent in the April-June quarter on the back of robust capital expenditure by Centre and states and a pickup in services sector, economists said. Some drag to growth, however, is expected from weaker momentum in mining, and exports, and a possible slowdown in momentum of government capex as the country will approach the elections, which could dampen economic growth in the second half of the ongoing financial year 2023-24, they said. The growth estimates are higher than the projection of the Reserve Bank of India (RBI), which has estimated Q1 FY24 real Gross Domestic Product (GDP) growth at 8.0 per cent and full year FY24 growth at 6.5 per cent. Barclays has estimated Q1 GDP growth at 7.8 per cent, while SBI Research and ICRA have pegged Q1 growth at 8.3 per cent and 8.5 per cent, respectively. ICRA said economic activity in Q1 FY2024 was boosted by a “continued catch-up in services demand and improved investment activity”, particularly front-loading of the government capital expenditure. “We peg GDP growth in Q1 FY2024 at 8.5 per cent, exceeding the Monetary Policy Committee’s (MPC’s) forecast of 8.0 per cent. However, we are circumspect that erratic rainfall, narrowing differentials with year-ago commodity prices, and possible slowdown in momentum of Government capex as we approach the Parliamentary elections, could dampen GDP growth in H2 FY2024 below the MPC’s forecasts. Overall, we maintain our FY2024 GDP growth estimate at 6.0 per cent, lower than the MPC’s projection of 6.5 per cent for the fiscal,” Aditi Nayar, Chief Economist, Head-Research & Outreach, ICRA said. State Bank of India Research said in its Ecowrap report said that economic activity remained resilient mainly driven by the services sector. “More importantly, there has been a surge in capital expenditure in Q1, with Central government spending 27.8% of budgeted, while states at 12.7 per cent of budgeted. States like Andhra Pradesh, Telangana, Madhya Pradesh where are elections are due have registered capital expenditure growth up to 41 per cent,” Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI said in the report. The growth in incremental deposits growth has almost doubled at Rs 11.3 lakh crore, compared to Rs 5.0 lakh crore last year (Rs 2.73 lakh crore received through Rs 2000 banknotes and Rs 1.5 lakh crore from HDFC merger), the report said. “Despite rising interest rates, the overall economic growth led to higher credit demand leading to banks reporting a robust rise in advances. Both the PSBs and private sector banks logged in equal pace of loan growth during Q1FY24. All the major financial parameters viz., credit deployment, profitability, asset quality, capital adequacy etc. indicate that the performance of PSBs has significantly improved,” it said Barclays India in a note said that construction sector will standout in April-June GDP data, as it is likely to post its second straight double-digit growth print amid front-loaded capital expenditure by both central and state governments, and a pickup in non-financial corporate investments. “Some drag to growth is expected from weaker momentum in mining, and exports, the latter given external headwinds and ebbing reopening demand. We think robust domestic demand is anchoring economic growth, with strong momentum in areas such as construction, underpinned by government capex…this should ensure that growth remains anchored close to trend levels, giving enough room for RBI to be on a long pause. We continue to believe that the window for rate cuts is closed for now, and the RBI is likely to be on hold for the rest of the fiscal year, in our view, with only a strong growth shock likely to stir it into action,” Rahul Bajoria, MD & Head of EM Asia (exChina) Economics, Barclays said.
Source: Indian express
India's central bank is nudging local banks to ask their clients to settle trade between the United Arab Emirates and India using the dirham (AED) or Indian rupee (INR) to reduce US-dollar-based transactions, five sources said. The move is part of the Reserve Bank of India's broader aim of promoting settlement in local currencies with countries with which India has a trade deficit, with the knock-on effect of boosting the rupee's global reach, reports Reuters citing three banking sources. India's trade deficit with the UAE was $21.62 billion in 2022/23, or 8.2 per cent of its total deficit, government data shows. In July, the two countries agreed to facilitate trade in rupees instead of dollars. The idea, a government source said, was to reduce the outflow of dollars on account of this trade deficit, reports Reuters. "The RBI has asked banks to encourage clients and corporates to initiate INR-AED trades gradually, instead of using the dollar," said a treasury official at a private bank. An RBI official communicated this message verbally to foreign exchange dealers at a seminar this month, four sources said. This communication has not been previously reported. None of the sources wished to be named because they are not authorised to speak to the media. The RBI and trade ministry did not respond to a Reuters email seeking comment. The RBI may consider setting internal targets for the quantum of India-UAE trade it would like to see moved away from dollars, said the government source. The central bank is "keen that volumes of such trades go up" and "has assured the market that they will be ready to support banks with INR-AED trades," this banker said. While data on such cross-currency trade volumes is not publicly available, at least three bankers said the current volume is low and may act as a hurdle for corporates to pay for the entire import in dirhams. Indeed, earlier this month, Indian Oil Corp paid Abu Dhabi National Oil Co (ADNOC) in rupees to buy a million barrels of oil. "The RBI is telling banks to first encourage large clients and corporates to start INR-AED trades because their balance sheets are relatively stronger," another banker said. But large corporates have, so far, been reluctant in engaging in non-dollar-denominated deals, said a banker with a state-run firm. With smaller companies, on the other hand, bankers have pushed for such transactions by offering discounted service charges as an incentive, the banker said.
Source: The Financial Express
INTERNATIONAL
Pakistan's rupee fell to a record low in the interbank market on Tuesday due to an easing in import restrictions that has lifted demand for the dollar. Traders said the rupee fell 0.6 per cent to an intraday low of 299 against the dollar. On May 11, it logged a record closing low of 298.93. That was two days after former prime minister Imran Khan was arrested on allegations of land graft, plunging the country further into political turmoil, reports Reuters. Pakistan is currently being governed by a caretaker government that is tasked with steering the country through to a national election that should, in theory, take place by November, while grappling with searing political tension as well as historically high inflation and interest rates. Tahir Abbas, head of research at Arif Habib, a Karachi-based brokerage company, said he expected the rupee to trade between 295 and 305 to the dollar for the time being. "The declining trend is mainly attributable to the ease off in the import restrictions coupled with clearance of backlog for goods and services," he said. He added that multinational corporations were able to repatriate some profits, furthering rupee outflows.
Source: The Financial Express
Chairman of Chittagong Port Authority (CPA) Rear Admiral Mohammad Sohail said Chittagong Port will be one of the international business hubs. He also said, "Chittagong seaport will play a vital and positive role within the next 3 to 5 years for the economic development of the country”. The CPA Chairman said this while addressing a viewexchange meeting with the senior journalists at the CPA Conference Hall on Tuesday. He said, "Chittagong Port is on the way to a smart and modern international seaport. Many countries can use the port as it will be one of the biggest seaports in the world. The seaport will cover the area from Sadarghat to Matarbari with its Deep Sea Port, Bay Terminal, Patenga Container Terminal (PCT) and New-mooring Container Terminal (NCT) facilities." He also said, "Quality and capacity of Chittagong seaport is being increased and updated day by day to compete with the other modern ports of the world. Following the development of Chittagong Port, we are trying to increase our service quality, area, and sea routes now. The deep seaport at Matarbari will give us direct shipping facilities which will be a new era in the shipping sector of Bangladesh." "The work of the dream project, Deep Sea Port at Matarbari in Cox's Bazar, is going on in full swing now," he added. The CPA Chairman further said Chittagong seaport upheld its business and increased activities of handling cargoes and containers overcoming the crisis due to the Ukraine war and coronavirus outbreak. Mentioning that the Chittagong-Europe sea route resumed formally on February 7 in 2022 last after long 45 years from 1977 by leaving MV Songa Cheetah berthed at jetty number-4 at NCT of Chittagong port, he said, "The ports of Portugal, Slovenia, and Dubai of UAE want to sign an agreement with Chittagong port for direct sea routes. If the new routes start, the export and import of the country will increase remarkably." He said, "We have taken important projects to make the seaport the most modern one following the international standard. We have already made 50 software modules for the automation of the port activities. We extended the port limit from 7 NM to 62 NM. We will build new lighterage jetties in the Hamider Char area soon." He also said the pilots of CPA can berth 210-metre-long ships to the jetties of the Chittagong port now. He said, "Chittagong port handled a record quantity of containers in 2022. The prime seaport of the country handled a total of 307,344 TEUS containers in the 2022-23 fiscal year." CPA chief said, "Chittagong seaport handled 118,296,743 MT open cargoes in the 2022-23 fiscal year. A total of 4,253 ships were handled in the 2022-23 fiscal year."
Source: The Financial Express
Bangladesh cannot grab or take full advantage of foreign RMG buyers' changed sourcing strategy of placing orders in small quantities, as they (buyers) still prefer China for its flexibility and agility, industry people said. Due to the changes in consumers' demand patterns and fashion trends, the buyers are now placing work orders in small quantities. Bangladesh is recently taking some such orders, but still not high in number. They identified long lead-time that the country needs for shipping goods, absence of adequate backward linkage industry - mostly for woven garment, and mentality of the owners as the major reasons behind the scenario. A recent case study - 'US Fashion Companies Evolving Sourcing Strategies - A PVH Case Study' - by Dr Sheng Lu, Associate Professor of Department of Fashion and Apparel Studies at University of Delaware, also hinted the same. PVH Corporation (PVH), which owns the well-known brands like Calvin Klein, Tommy Hilfiger, Van Heusen, Arrow, and Izod, is one of the largest US fashion companies with nearly US$9.2 billion sales revenue in 2022. By leveraging PVH's publically released factory list, Dr Lu analysed the company's detailed sourcing strategies and changes from 2021 to 2022. In 2022, PVH sourced apparel items from 80 factories from China, followed by 60 from Brazil, 56 from Turkey and India each, 49 from Sri Lanka and Vietnam each, 43 from Portugal, and 40 from Bangladesh. According to the study, PVH's source garment factories in China are smaller than their peers in other Asian countries. In 2022, most of the PVH's contracted garment factories in the top Asian supplying countries, such as Bangladesh (87.5 per cent), Vietnam (63.3 per cent), and Sri Lanka (65.3 per cent), had more than 1,000 workers. In comparison, only 11.3 per cent of its Chinese vendors had 1,000 workers, and more than 62.5 per cent had less than 500 workers. "The result suggests that PVH treats China as an apparel sourcing base for flexibility and agility, particularly for those orders that may include a greater variety of products in relatively smaller quantities," read the study. PVH often priced "Made in China" apparel items higher than those sourced from the rest of Asia. Talking to the FE, Fazlul Hoque, former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said Bangladesh previously did not receive the work orders of small quantities for some reasons. But now the country is getting such orders. An individual part is done by a worker, and it takes a day to perform the single operation, which is not cost effective, noted Mr Hoque, managing director of Plummy Fashions Ltd. Besides, Bangladesh needs long lead-time of up to four months - from manufacturing to sending goods. If fabrics are imported, additional 45 days would be required. For knit items, lead-time could be shortened by 10 to 30 days due to its strong backward linkage. But for woven items it is not the same, as most of the fabrics are imported, he added. Sheikh H M Mustafiz, managing director of Cute Dress Industry Ltd, said his company annually exports goods worth $7.0 million. His factory, having around 550 workers, can do work orders of only 100 pieces. Opposite to most of the local apparel exporters, it does small quantity garment orders by adding value through complex works, he told the FE. Most of the exporters manufacture t-shirts with 100 per cent cotton. But in his factory, t-shirts are manufactured with 70 per cent cotton and 30 per cent linen, which is a complex one, Mr Mustafiz explained. Most other units cannot do the same, as they work in a price sensitive way with large capacity. These units fall in the competition of offering reduced price rates. "But in the small quantity orders, you can't reduce price. Besides, we need to properly handle issues like safe workplace," he noted.
Source: The Financial Express
Lynda Kelly, senior vice president, Americas & Business Development, will leave Suominen for medical reasons. Markku Koivisto has been appointed as interim senior vice president, Americas in addition to his current role as senior vice president, Europe and R&D. The change is effective immediately. The process to recruit a new senior vice president, Americas has been started. “I want to thank Lynda for her contribution to the company both in her role as SVP, Americas & Business Development and in her previous role in heading the Care business. I also want to thank Lynda for her valuable contribution in our Executive Team,” said Tommi Björnman, president and CEO of Suominen. “With a full heart, I leave Suominen to focus on my health recovery. It has been an honor and a privilege to serve the employees, customers, and suppliers of Suominen,” Kelly said.
Source: Textile world
