The Trump Administration has slapped anti-dumping duties on stainless steel flangs and finer denier polyester staple fiber from China and India. Exporters from China and India received countervailing subsidies of 41.73 to 47.55 per cent and 9.50 to 25.28 percent, respectively, the US Commerce Secretary Wilbur Ross alleged yesterday. The Trump Administration has slapped anti-dumping duties on stainless steel flangs and finer denier polyester staple fiber from China and India. Exporters from China and India received countervailing subsidies of 41.73 to 47.55 per cent and 9.50 to 25.28 percent, respectively, the US Commerce Secretary Wilbur Ross alleged yesterday. The Trump Administration has slapped anti-dumping duties on stainless steel flangs and finer denier polyester staple fiber from China and India. Exporters from China and India received countervailing subsidies of 41.73 to 47.55 per cent and 9.50 to 25.28 percent, respectively, the US Commerce Secretary Wilbur Ross alleged yesterday. As such he has instructed US Customs and Border Protection to collect cash deposits from importers of fine denier polyester staple fiber from China and India based on these final rates. “The US will no longer sit back and watch as its domestic businesses are destroyed by unfair foreign government subsidies. We will continue to take action on behalf of US industry to defend American businesses, workers, and communities adversely impacted by unfair imports,” Ross said. In 2016, imports of fine denier polyester staple fiber from China and India were valued at an estimated USD 79.4 million and USD 14.8 million, respectively, the Department of Commerce said. An investigation was carried out on a complaint by DAK Americas, Nan Ya Plastics Corporation, and Auriga Polymers. An investigations of stainless steel flanges found that exporters in China and India received countervailing subsidies of 174.73 percent, and from 5.00 to 239.61 percent, respectively, Ross said. “With a 58 per cent increase in trade cases initiated since President Trump took office, this administration has made it a clear priority to defend domestic businesses from unfair trade practices,” he said. In 2016, imports of stainless steel flanges from China and India were valued at an estimated USD 16.3 million and USD 32.1 million, respectively.
Source: The Financial Express
Coimbatore: Even as textile exports continue to advance at a slow pace, imports have increased on the back of a sharp surge in shipments from Bangladesh. Textile imports grew 19.7% year-on-year to around $1.4 billion between April and December 2017 while exports went up by a measly 2% y-o-y to $26.1 billion for the timeframe. India's imports of garments from Bangladesh increased 66% y-o-y to $111.3 million during July-December 2017, according to the latest statistics released by Export Promotion Bureau of Bangladesh. While knitted apparel imports from Bangladesh soared 77% y-o-y to $36.5 million between July and December 2017, woven apparel imports grew 62% y-o-y to $74.8 million. "It (imports) is negatively affecting the domestic yarn, fabric and garment manufacturers," said Sanjay K Jain, chairman, Confederation of Indian Textile Industry (CITI). "There is a greater need to impose safeguard measures such as rules of origin, yarn forward and fabric forward rules on countries like Bangladesh and Sri Lanka that have FTAs (free trade agreements) with India to prevent cheaper fabrics produced from countries like China routed through these countries," he said. Garment manufacturers in India have to pay duty on imported fabrics, while Bangladesh can import fabric from China duty free and convert them into garments and sell to India duty free. This has put the garment industry in a spot. "India can increase its exports of cotton yarn and fabrics provided the sector is restored with export incentives," the CITI chairman stated. "India's share of cotton yarn in world trade is 26% and it is declining steeply as the incentives given to the cotton yarn sector were withdrawn in 2014 and MEIS (Merchandise Exports from India Scheme) which was extended to the entire value chain was not extended to cotton yarn," he said. "Moreover, there are various state levies up to the tune of 8% on cotton yarn which are not refunded at any stage," Jain pointed out. "Similarly, fabric sector is not getting refund of state levies of around 6%. By including cotton yarn under MEIS and providing ROSL (refund of state levies) for fabrics, Indian can retain its competitiveness in the global market," he said.
Source: The Times of India
Garment manufacturers in India have to pay duty on imported fabrics, while Bangladesh can import fabric from China duty free and convert them into garments and sell to India duty free. The Confederation of Indian Textile Industry (CITI) has expressed concern over 3% decline in CAGR in textiles and apparels in December 2017 compared to December 2016. The exports of textiles and apparel stood at $2996 million during December 2017 as against $3075 million in December 2016. However, the cumulative export has slightly improved by 2% CAGR as the exports stood at $26,136 million in April-Dec 2017 in comparison to $25,721 million in April-Dec 2016. Sanjay Kumar Jain, chairman, CITI said that the share of textiles and apparel exports in the All Commodity Exports (ACE) has also declined by 2% in December 2017. Mr Jain while appreciating the cumulative increase in the textiles and clothing exports during April-December 2017 also expressed concerns over the consistent increase in imports of textiles and clothing during the same period. The imports of textiles during December 2017 stood at $165.34 million in comparison to $137.24 million in December 2016, registering an increase of 20.48%.He also pointed out that as per the latest statistics released by Export Promotion Bureau of Bangladesh, India's imports of garments from Bangladesh has reached $111.3 million during July to December 2017, indicating a sharp rise of 66% from $66.9 million during the same period last year. Jain also stressed that the on-going scenario is negatively affecting the domestic yarn, fabric and garment manufacturers. He further stated that there is a greater need to impose safeguard measures such as rules of origin, yarn forward and fabric forward rules on the countries like Bangladesh and Sri Lanka that have FTAs with India to prevent cheaper fabrics produced from countries like China routed through these countries. Garment manufacturers in India have to pay duty on imported fabrics, while Bangladesh can import fabric from China duty free and convert them into garments and sell to India duty free. This is putting Indian garment industry at a major disadvantage and this figure is expected to go up in coming months. At the same time, he pointed out that India can increase its exports of cotton yarn and fabrics provided the sector is restored with export incentives. CITI has been strongly representing the case of cotton yarn and fabrics with every government department, including PMO to enhance the competitiveness of the cotton yarn and fabric sector. He stated that at present India's share of cotton yarn in world trade is 26% and it is declining steeply as the incentives given to the cotton yarn sector were withdrawn in 2014 and MEIS which was extended to the entire value chain was not extended to cotton yarn. Moreover, there are various state levies up to the tune of 8% on cotton yarn which are not refunded at any stage. Similarly, Fabric sector is not getting refund of state levies of around 6%. By including cotton yarn under MEIS and providing ROSL for fabrics, Indian can retain its competitiveness in the global market.
Source: The Economic Times
New Delhi, Wednesday, January 17, 2018: On the release of foreign trade data for the month of December 2017 by the Ministry of Commerce & Industry, Shri Sanjay Kumar Jain, Chairman, CITI, expressed concern over the 3% decline in CAGR in textiles and apparel exports compared to the corresponding period ofDecember 2016. The exports of textiles and apparel stood at US$ 2996 million during December 2017 as against US$ 3075 million in December 2016. However, the cumulative export has slightly improved by 2% CAGR as the exports stood at US$ 26,136 million in April-Dec 2017 in comparison to US$ 25,721 million in April-Dec 2016. Shri Jain further stated that the share of textiles and apparel exports in the All Commodity Exports (ACE) also declined by 2% in December 2017. A comparative statement showing the sector-wise performance is given below:
India’s Exports of Textiles & Clothing to the World (Values in US$ Mn)
|
Export Category |
Dec'16 |
Dec'17 |
CAGR |
April -Dec 16 |
April -Dec 17 |
CAGR |
|||
|
Cotton Yarn/Fabs./Made-ups, Handloom Items etc. |
935 |
939 |
0.4% |
7,177 |
7,513 |
5% |
|||
|
Man-made Yarn/Fabs./made-ups etc. |
390 |
417 |
7% |
3,326 |
3,554 |
7% |
|||
|
Apparel |
1,454 |
1,337 |
-8% |
12,426 |
12,386 |
-0.3% |
|||
|
Textile and Apparel (including Jute, Carpet and Handicrafts) |
3,075 |
2,996 |
-3% |
25,721 |
26,136 |
2% |
|||
|
All Commodity |
24,057 |
27,030 |
12% |
199,467 |
223,513 |
12% |
|||
|
% of T&A in Total Exports |
13% |
11% |
13% |
12% |
|
||||
Source : MOC
Shri Sanjay Jain while appreciating the cumulative increase in the textiles and clothing exports during April-December 2017 also expressed concerns over the consistent increase in imports of textiles and clothing during the same period. The imports of textiles during December 2017 stood at US$ 165.34 million in comparison to US$ 137.24 million in December 2016, registering an increase of 20.48 per cent.
Quick Estimates on Imports for the month of December 2017
(Values in US$ Mn)
|
Category |
Dec'16 |
Dec'17 |
% Change |
April-Dec 2016 |
April-Dec 2017 |
% change |
|
Textile Yarn Fabric/Made-ups articles |
137.24 |
165.34 |
20.48% |
1,160 |
1,388 |
19.6 |
Source : MOC
Shri Jain also pointed out that as per the latest statistics released by Export Promotion Bureau of Bangladesh, India’s imports of garments from Bangladesh has reached US$ 111.3 million during July to December 2017, indicating a sharp rise of 66% from US$ 66.9 million during the same period last year. The data regarding imports of garments from Bangladesh post GST is illustrated in table below:
Imports of Garments from Bangladesh Post GST
|
In USD Million |
July-Dec 2016 |
July-Dec 2017 |
% change |
|
Knitted Apparel |
20.6 |
36.5 |
77% |
|
Woven Apparel |
46.3 |
74.8 |
62% |
|
Total |
66.9 |
111.3 |
66% |
Source : Export Promotion Bureau of Bangladesh
Shri Sanjay Jain also stressed that the on-going scenario is negatively affecting the domestic yarn, fabric and garment manufacturers. He further stated that there is a greater need to impose safeguard measures such as Rules of Origin, Yarn Forward and Fabric Forward Rules on the countries like Bangladesh and Sri Lanka that have FTAs with India to prevent cheaper fabrics produced from countries like China routed through these countries. Garment manufacturers in India have to pay duty on imported fabrics, while Bangladesh can import fabric from China duty free and convert them into garments and sell to India duty free. This is putting Indian garment industry at a major disadvantage and this figure is expected to go up in coming months.
At the same time, Shri Sanjay Jain pointed out that India can increase its exports of cotton yarn and fabrics provided the sector is restored with export incentives. CITI has been strongly representing the case of cotton yarn and fabrics with every government department, including PMO to enhance the competitiveness of the cotton yarn and fabric sector. He stated that at present India’s share of cotton yarn in world trade is 26% and it is declining steeply as the incentives given to the cotton yarn sector were withdrawn in 2014 and MEIS which was extended to the entire value chain was not extended to cotton yarn. Moreover, there are various state levies up to the tune of 8% on cotton yarn which are not refunded at any stage. Similarly, Fabric sector is not getting refund of state levies of around 6%. By including cotton yarn under MEIS and providing ROSL for fabrics, Indian can retain its competitiveness in the global market.
Shri Sanjay K. Jain, stated that he is optimistic that the Government would consider CITI’s representations and resolve the issues of the textile and clothing sector on an urgent basis.
Source: CII News Letter
New Delhi, Jan 17 (PTI) The government has constituted a committee to look into issues raised by the apparel industry, which is going through a challenging phase, Minister of State for Textiles Ajay Tamta said today. "The apparel industry is going through a challenging phase and to address the concerns of the industry, a committee has been formed by the government to look into the issues raised by the industry," said the minister. Besides, he said the package announced by the prime minister is benefiting the sector immensely. Addressing at the inauguration of the India International Garment Fair (IIGF) here, Tamta said: "During the last IIGF, business worth USD 200 million was conducted and this time, I would like to see more buyers participating in the fair." Apparel Export Promotion Council chairman HKL Magu, who was also present on the occasion, said the fair is happening at a time when the industry is facing lots of challenges both domestically and globally. "These are challenging times for the industry with global headwinds blowing over us. The post GST transformation for the industry has been challenging, but I am sure the industry will show the resilience it has shown in the past, and emerge stronger," Magu said. A total of 294 exporters from 11 states namely Gujarat, Haryana, Maharashtra, Madhya Pradesh, New Delhi, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh and West Bengal are participating at the IIGF. PTI RSN MKJ
Source: India Today
The government may try to put in place rules to check tax evasion, but trust ingenious businessmen to come up with ways to beat it. Total collection of the Goods and Services Tax (GST) in November added up to Rs 80,808 crore, down from a provisional Rs 83,346 crore in October and a peak of over Rs 94,000 crore in July—the lowest since the tax regime was put in place. Though the decline is partly due to sharp cuts in the tax on close to 200 items from November 15, there could be another reason: tax evasion. Multiple tax rates have become an easy way for many traders to evade taxes. According to a TOI report, tax officials admit that in case of garments, for instance, a number of smaller players are billing one shirt that costs upwards of Rs 1,000 and attracts 12% levy as two pieces of around Rs 600 each to pay only 5% levy. This is in addition to a number of garments that earlier cost more than Rs 1,000 seeing marginal price cuts to fall under the lower tax bracket, where there is nothing wrong. Some garment and utensils traders are using railways to evade tax, according to consultants and officials. Unlike goods moving by trucks, which are stopped on the way, there are virtually no checks in case of railways, making it easier to evade taxes. In the past, traders have ganged up to chase tax authorities at railway stations, making officials extremely wary of conducting raids, a senior official involved with GST told TOI. Even when it comes to trucks, several businessmen based in Surat have found ways to evade taxes. According to industry sources, sari traders often use the same set of invoices to ship goods thrice to Delhi. "I don't know why it's three times but it is an industry norm," says a tax consultant. A senior official acknowledges the massive use of kutcha and pucca invoices with the latter destroyed if tax authorities do not check a truck on the way.
Source: The Economic Times
NEW DELHI: Surat has emerged as India's highest ranked smart city with the largest number of projects implemented and completed under the Smart City Mission. The country's textile and diamond trading hub has stolen a march over other contenders including some state capitals in the official rankings that have been compiled about two years after the Narendra Modi government announced the first 20 cities to be developed as smart cities. A look at the rankings, shared exclusively by the ministry of housing and urban affairs with ET, reveals that as in the case of other flagship programmes of the Modi government, BJP-ruled states are faring better than non-BJP ones. Seven of the 10 top-ranked cities are those ruled by the BJP, including Prime Minister's home state Gujarat, Maharashtra, Rajasthan and Madhya. Pradesh Surat is closely followed by Pune at number two, Visakhapatnam, Udaipur, Bhubaneswar, Ahmedabad, Bhopal, Coimbatore, Jaipur and Indore. The progress of the mission has been slow across the 20 cities. As per statistics provided by the ministry to ET, 964 projects worth Rs 46,800 crore have been planned in the 20 "lighthouse" smart cities, announced in January 2016. The first few months saw a special purpose vehicle (SPV) being floated by the cities to oversee the progress and manage the Smart City Mission. The ministry expects work to be seen on the ground by the end of 2018. "The average time period for implementing the projects is 18 months, so most of these projects would be completed by year-end," said the official. A major chunk of the projects planned in the 20 smart cities are infrastructure projects (626 projects worth Rs 26,714 crore). After winning the smart city competition, which was a pan-India competition to choose the most innovative plans, the 20 cities opted for solar projects, improvement of water supply and smart roads. Almost all cities have planned command and control centres - which are planned as the nerve centre of the city to control urban services like city-wide Wi-Fi network, safety and security, citizen feedback management, integrated traffic management, parking and other citizen services. Many cities have come up with innovative projects. A case in point is Bhopal's bicycle sharing scheme. Envisaged as a feeder service to Bhopal's bus rapid transit system, the project comprises 12 km of dedicated bicycle tracks around 50 locations where bicycles are placed and from where you can hire a cycle using a mobile app.
Source: The Economic Times
The Indian rupee weakened by 3 paise to 64.07 against the US dollar in opening trade on Wednesday morning due to some demand for the American currency from importers and banks. According to PTI reports, forex dealers say that a weak dollar in overseas markets and early gains in stock markets capped the rupee losses. The dollar was trading lower against Japanese yen in Asian trade today. Yesterday, the rupee had lost 55 paise or nearly 1 per cent — its biggest single-day crash in eight months — to end at a fresh two-week low of 64.04 against the US dollar, hit by a double whammy of rising global crude prices and worsening trade deficit. The trade deficit in the month of December widened to $14.88 billions as compared to $10.55 billion during the same period last year after gold imports skyrocketed 72% to $3.39 billion year-on-year. Besides, both exports and imports also rose in the month of December. Exports in the month of December was recorded $27 billion, up 12% year-on-year and imports was recorded $41.9 billion, up 21.1% year-on-year. Oil imports also showed a steep rise, up nearly 35% year-on-year to $10.35 billion. Oil imports last month was recorded at $9.55 billion. Merchandise exports for December rose 12.36% from a year ago to $27.03 billion. Goods imports last month were $41.91 billion, a gain of 21.12% from a year ago, data from the commerce and industry ministry showed. Meanwhile, the equity benchmark indices Sensex and Nifty opened flat on Wednesday morning, tracking domestic and global cues. The Sensex was mainly helped by a surge in prices of TCS, Infosys which were up by more than 2% each. After closing at 33,771.05 on Tuesday, the Sensex opened at 34,753.8 on Wednesday morning, while Nifty opened at 10,702 as compared to yesterday’s closing of 10,700. Earlier, Asian stocks pulled back from record highs, following declines in U.S. counterparts. The dollar declined against most major currencies. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 10,704.50 as of 6:45 a.m. U.S. stocks sank, retreating from all-time highs as commodities producers and industrial shares took a hit with oil and metals in decline.
Source: Financial Express
One of the long-pending reforms to unleash the Indian economy for labour-intensive manufacturing is rationalising the plethora of labour laws applicable to the organised sector, which are perceived as biased against employers, affecting investment in the sector. In fact, some of the punitive clauses of labour laws, such as compulsory and prior government approval in the case of layoffs for firms employing 10 or more persons (Industrial Disputes Act, 1947), consent of the employees to change the nature of the job (Contract Labour-Regulation and Abolition-Act, 1970), allowing outsiders to become office bearers of trade unions (Trade Union Act, 1926), etc, hamper labour-intensive manufacturing, adopting new techniques of production and cordial industrial relations. Realising the need to rationalise labour laws, the NDA government immediately after assuming office embarked on long-pending labour reforms by proposing to amalgamate 44 existing labour Acts into four codes — on industrial relations, wages, social security and industrial safety and welfare. However, the Centre has developed cold feet even as some of the states such as Rajasthan, Madhya Pradesh, Andhra Pradesh and a few others have already implemented most of them. This delay of proposed labour reforms is disappointing and contrary to the central theme of the government to boost manufacturing for job creation through its ‘Make in India’ initiative. The NDA government initiated steps in October 2014 to rationalise labour rules by announcing two major schemes—unified labour and industrial portal, and labour inspection scheme—to bring transparency in inspection and use of rules. However, much desired reforms at the central government level through the proposed four codes is much awaited. It’s well established that China’s flexible and business friendly labour laws have ensured continued investment in Chinese manufacturing, whereas plethora of restrictive labour laws in India, around 245 in total, make it difficult for employers to downsize during business downturn and introduce a new technology. As a result, FDI inflows in India is insignificant in capital-intensive industries unlike in case of China during the first couple of decades of reforms. The existing laws protect only 10% of the total labour force and come in the way of creating opportunities for the rest. Some of the major proposals of industrial relations (IR) code include allowing firms employing up to 300 people—against 100 now—to retrench/lay off workers and/or close down without government approval, requirement of 10% of workers to form a union, fixed-term employment, etc, which will encourage firms to hire workers for seasonal and other jobs. Under the IR code, outsiders will be barred from being office bearers of trade unions and strikes can be resorted to only after 14 days’ notice. The wage code will subsume four existing central labour legislations—the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976. The tripartite consultations (trade unions, employers and the government) are over and the draft is in the final stages to be sent to a group of ministers headed by the finance minister for consideration. The government had already introduced the code on wages in the Lok Sabha that proposes a universal minimum wage for the entire working population, including unorganised sector workers. The labour reforms agenda of the NDA government, in fact, has been holistic. As many steps are regarded as industry friendly, the proposed codes also seek to enhance the workers’ privileges. The code on wages, for instance, proposes making minimum wage a statutory right and extending it to all employees—currently, the relevant Act applies to 51 “scheduled employments” only. The wage code will reduce the disparity in minimum wages across states as the Centre will notify a “national minimum wage” (below which no state can fix its minimum wages) and this will be revised every two years (five years if the dearness allowance becomes part of the minimum wages). The government is in its last year of the tenure, therefore, the delay is to avoid the most sensitive labour reforms. There are also reports of diluting key proposals like allowing firms to hire and fire employing up to 300 people without government nod and barring outsiders from becoming office-bearers of trade unions. While IR code is being weakened, the fixed-term employment that is already in force in the textiles and garment sector may be extended to all sectors. The stiff opposition from trade unions has slowed the reforms’ pace. Moody’s has stressed that labour market, along with land reforms and recovery in investment cycle, could put upward pressure on its India rating, essential to attract investment. A strong legislative intervention in labour market is difficult without developing a consensus on national policy framework. In the time and age of highly automated manufacturing ecosystem, there is a need for simplified and rationalised labour laws that are in line with contemporary economic realities. Labour market liberalisation is likely to augment employment flexibility, skill development and job creation on a wider scale. India is very well placed to reap demographic dividends, provided it can shift large number of labour force from agriculture to labour-intensive manufacturing. China has been hugely successful in attracting FDI into export-oriented labour-intensive manufacturing, in part because of flexible labour laws such as the contract labour system implemented in 1995. Though the encouragement to states for labour reforms has resulted in seven to eight states going for appropriate policy changes relating to labour laws, it is high time the central government carried out the proposed four codes for rationalisation of restrictive labour laws.
Source: Financial Express
Given the government’s thrust on facilities for the poor, it is almost certain there will be a big increase in most programmes for the poor, from low-cost housing to schemes like MNGREGA. From Rs 1,700 crore in FY16, for instance, urban housing schemes—Pradhan Mantri Awas Yojana (Urban) and credit-linked subsidy scheme—saw their outlay increase to Rs 5,400 crore in FY17 and a target of Rs 7,400 crore in FY18. Kotak Institutional Equities expects this to rise further to Rs 11,200 crore in FY19. In the case of rural India, it expects a 30% jump in the FY19 allocation for various programmes. For the Pradhan Mantri Awas Yojana (Rural), allocations rose from Rs 10,100 crore in FY16 to Rs 16,000 crore in FY17 and a budgeted Rs 23,000 crore in FY18—Kotak estimates this will rise to Rs 34,500 crore in FY19. Given the employment benefits from housing construction, apart from the fact that several million houses will get constructed, the scheme is a welcome one, and not just from the point of view of the votes this will help attract. According to a McKinsey report, in urban India alone, the demand for affordable housing will increase to 38 million housing units in 2030 from 19 million in 2012. What needs to be kept in mind, however, is the NPAs that get generated from these subsidised loans. According to data in the latest RBI Bulletin, NPAs in the overall housing loan sector were around 1.1% in FY17—that is, even while property prices fell, home-buyers did not default. This could possibly be a function of the cash component in most home-buying—if, say, 30% of the house is paid for in cash, no one will default since, if the bank repossesses the house, they will lose this component completely. But for loans less than Rs 2 lakh, the NPA levels are a whopping 10.4% in FY17—up from 9.8% in FY16—making it clear that this group of home-owners lack the wherewithal to fund their loans, despite the loan being subsidised. While the government then needs to decide on whether such loans are even viable, if it does decide to continue, it is only fair that it compensate banks for the NPAs and adds it to the costs it is budgeting for. While public sector banks are already burdened with high NPAs, and from priority sector lending that is thrust upon them, it is quite unfair to add to the burden. Another similar problematic area is that of education loans, a thrust area for the government given its desire to ensure as many Indians get educated as possible. Education loans have risen rapidly from Rs 28,579 crore in FY09 to Rs 67,678 crore in FY17 and, according to the Indian Banks Association, NPAs rose to 7.7% in FY17 from 5.7% two years ago. In which case, the government needs to think about whether it should be pressuring banks to give such loans—and those up to Rs 4 lakh are given without collateral. Even if ensuring no poor student gets left behind due to the lack of funds, the government could try to come up with some innovative solutions. Making it compulsory to link loans with Aadhaar numbers and making this information available public would, for instance, deter future employers from hiring these students and therefore force them to pay back on time. And as far as loans taken for local education are concerned, coming up with a way to tag degrees with data on whether the loan has been repaid or not is another possible solution.
Source: Financial Express
The 60th edition of India International Garment Fair (IIGF) was inaugurated today by Minister of State for Textiles, Shri Ajay Tamta, at Pragati Maidan, New Delhi. Addressing the audience, the Minister said that garment sector is one of the largest providers of employment. He said that IIGF is a big platform which brings together overseas garment buyers and garment exporters, with almost half of Indian states participating in the fair. Shri Tamta said that the textile package announced by the Honble Prime Minister has been benefitting the sector immensely. Recalling that business worth US $200 million was conducted in the previous edition, the Minister extended his best wishes to all participating buyers and exporters. The three-day international fair is being held at Hall Nos. 11, 12 & 12A at Pragati Maidan the current edition caters primarily to the Autumn/Winter season of European Union, USA and other Western markets. Speaking on the occasion Chairman, AEPC, Mr. H. K. L Magu expressed satisfaction at the huge transformation the fair and the industry has witnessed in recent years. He said that the fair has grown in scale and scope and has emerged as one of the largest and most popular platforms in Asia, where overseas garment buyers can source products and forge business relationships with Indias finest players in Apparel and Fashion Accessories. A total of 294 exporters from 11 states, namely Gujarat, Haryana, Maharashtra, Madhya Pradesh, Delhi, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh and West Bengal, are participating at the 60th IIGF. The participants will be showcasing womens wear, accessories, kids wear and menswear. International buyers from 95 countries like Brazil, Spain, Japan, Uruguay, UK, Hong Kong and US have registered to participate in the fair. IIGF is also organizing fashion shows, twice a day on all three days, for exhibiting the collections for business development. Besides this, the best-displayed stalls would be awarded Gold, Silver and Bronze Trophies in an award function on 18th January, 2018. International Garment Fair is a B-2-B fair started in 1988. The fair is being organized by Apparel Export Promotion Council (AEPC), in association with International Garment Fair Association and four major Garment Exporters' Associations, viz. Apparel Exporters & Manufacturers Association (AEMA), Garment Exporters Association (GEA), The Clothing Manufacturers Association of (CMAI) and Garment Exporters of Rajasthan (GEAR). This is a B-2-B fair and is meant for conducting meaningful and quality business.
Source: Business Standard
Indian fashion chains are witnessing a leadership churn, with several companies appointing people to key roles. Aditya Birla Group’s Pantaloons Fashion Retail has appointed Sangeeta Pendurkar, former managing director at Kellogg India, as its chief executive. Pendurkar will report to Ashish Dikshit, managing director at Aditya Birla Fashion and Retail. Pendurkar is the first woman CEO in the group’s 160-year history. Pantaloons’ previous CEO, Shital Mehta, had quit in September last year to join Max Fashion, a value retailer. Recently, Raheja-owned department chain Shoppers Stop appointed Rajiv Suri as CEO. Prior to his new role, Suri was the CEO of Majid Al Futtaim (MAF) fashion business, quite prominent in west Asia. Shoppers Stop also announced last month the resignation of its chief financial officer Sanjay Chakravarti.The Future Group has, meanwhile, hired N Mohan from the Tata Group as the director of its footwear business. In April last year, the Tata Group’s retail arm, Trent, appointed Venu Nair, managing director of Marks & Spencer Reliance, India, as its new chief commercial officer.“The fashion segment is seeing churn because of growth in the industry from unorganised to organised and new investments from overseas and domestic investors,” said an analyst, who did not want to be named.While Amazon picked up a minority stake in Shoppers Stop, Kishore Biyani’s Future Group bought its Hypercity chain.The recent decision of the Union Cabinet to allow 100 per cent foreign direct investment (FDI) in single-brand retail via the automatic route would help more than 200 fashion and apparel brands, which are waiting to enter India, reports said.The Indian fashion retail market, worth $46 billion, will grow at a promising CAGR (compound annual growth rate) of 9.7 per cent to reach $115 billion by 2026, analysts said.Fashion retail in the country has seen increased traction after the entry of global retailer H&M, which has aggressively opened stores in the country.
Source: Business Standard
Chinese Customs’ data shows that during the first ten months of 2017 total Chinese textile and apparel exports stood at $221.47 billion slightly down from the previous year. Out of this total exports of textile products were up 2.5 percent and valued at $90.34 billion while the value of apparel exports declined by 2.45 percent. Total textile and apparel exports in October grew steadily with export value up more than 1 percent over the previous year. Given the more competitive domestic cotton price Chinese industry experts remain optimistic about the prospects for stable exports in 2018. Growth in domestic demand for textile and apparel drives cotton use China’s overall increase in demand for textile and apparel products is fueled by higher disposable income rising living standards population growth and urbanization. During the first three quarters of 2017 China’s economic growth (GDP) reached 6.9 percent. Chinese policy allowing a second child per couple contributed to about 1.3 million more new births in 2016 compared to the previous year. According to Chinese industry statistics in the first eight months of 2017 the total domestic sales value of apparel and other textile products increased 7.3 percent and online shopping for clothing increased by 19.6 percent from the previous year. These indicators suggest a steady recovery of the Chinese textile industry and support greater cotton use in MY17/18. Cotton imports expected to grow to 1.3 MMT in MY17/18 MY17/18 cotton imports are forecast to recover to 1.3 MMT from MY16/17 at 1.09 MMT based on a forecast recovery in highgrade cotton consumption and a decline in yarn imports in 2018. The Chinese textile industry’s demand for higher-grade cotton is primarily satisfied by imports. However the government’s restriction on additional quota imports subject to a sliding duty and outside the tariff rate quota amount committed under the World Trade Organization (WTO) have tempered the prospects for any significant increases in cotton imports. The WTO quota allows a yearly volume of 894 000 tons subject to a one percent import tariff. The Chinese government has suspended the distribution of additional quotas since 2016. Since July 2017 anecdotal reports have circulated that the government might be considering special approval to allow for some imports of high-grade cotton. As of the date of this report there have been no official announcements in this regard. A relatively large Xinjiang crop of “higher” grade cotton could partially meet the industry demand in MY17/18. Liberalized yarn imports can also alleviate the shortage of high count yarn for fabric manufacturing. The Chinese textile sector grew steadily in 2017. In consideration of all these factors it is logical for the government to approve some cotton imports to meet the industry demand in 2018. In late November 2017 the China Cotton Textile Association (CCTA) held a Cotton Textile Conference in Shanghai attended by representatives of the National Development and Reform Commission (NDRC) and other relevant government agencies. At the conference Chinese industry advocated that the government add more import quotas to meet industry demands for imported cotton and bring more balance to the domestic cotton market. It was also suggested that the sales of state reserves be conducted beyond the March-August window to all year around. Lastly the industry also recommended that China develop a plan to improve the quality mix of the state reserves by importing cotton when the price gap between the domestic and international markets exceed 1500RMB/ton. Conference participants argued that such a plan would enhance the government’s ability to regulate China’s cotton market. It remains unclear when the government will allow additional cotton imports. Given the government’s traditional role in regulating the cotton market any form of intervention should be expected. In recent years yarn imports have been an important factor exerting downward pressure on cotton imports. Unlike cotton imports yarn imports do not face quota restrictions and enjoy a low import duty. Higher imports of yarn partially lowered cotton imports in 2015 and 2016. In MY16/17 total yarn imports from China’s top three supplying countries (namely Vietnam India and Pakistan) accounted for 72.6 percent. Of note yarn imports from Vietnam have grown rapidly in the last three years as many mills have moved from China to Vietnam. This trend is expected to continue mainly as Vietnam does not maintain quotas on cotton imports and Vietnamese yarn exports to China enjoy a zero duty. The smaller gap between domestic and international cotton prices reduced the profitability of yarn imports and has lowered yarn imports since April 2017. Industry sources report that yarn imports are expected to tentatively rebound during the last two months of 2017 in response to a larger gap between domestic and imported yarn prices. In general yarn imports are forecast to decline moderately which may facilitate cotton imports in MY17/18. Chinese Imports of U.S. cotton rebound but U.S. cotton still faces competition from other suppliers After falling to their lowest level in 14 years in MY15/16 to 192 000 tons Chinese imports of U.S. cotton rebounded to 501 000 tons in MY16/17. This accounts for 46 percent of China’s total cotton imports in MY16 Although the quality and reliability of U.S. cotton appeals to China’s end-users in MY15/16 Australian cotton became very competitive and topped China’s market with 268 000 tons. Given Chinese buyers’ preference for high-grade cotton when import quotas are limited Chinese imports of U.S. cotton are likely to exceed 500 000 tons in MY17/18. Chinese cotton exports remains insignificant China’s cotton exports stand at 13 000 tons in MY16/17 down from 28 000 tons during the previous year. Given the relatively low quality at a high price sporadic exports of Chinese cotton are likely to continue in 2018 and beyond but are expected to remain insignificant. The fixed “Target Price” (at RMB18 600 or $2 776/ton) for Xinjiang from 2017 to 2019 is expected to stabilize cotton acreage in Xinjiang. The MY17/18 implementation of the target price-based subsidy in Xinjiang is expected to stay unchanged from MY16/17. In general Xinjiang farmers welcome this policy as it provides predictability and assures the basic farming profits. As of this report there is no official announcement for the fixed subsidy (RMB2 000 or $313/ton) for the other nine cotton producing provinces. In consideration of the reduction in cotton planting in these provinces and the shortage of domestic cotton supply and use in the post “high state reserves” era China’s industry leaders continue to call for the central government to maintain similar support to these provinces as it does for Xinjiang. To prevent further reductions in cotton acreage in these provinces Provincial governments are taking their own steps to stabilize local production. In Hebei Province for example the provincial government.
Source : Tecoya Trends
Garment exports to India soared 66.41 percent in the first six months of the fiscal year on the back of demand from Western brands operating in the neighbouring country and closure of some small- and medium-scale factories. Between July and December last year, garment shipments to the neighbouring country fetched $111.33 million, according to data from the Export Promotion Bureau. “India is becoming a major market for us,” said Mohammad Hasan, executive director of Babylon Group, a leading garment exporter. The reason for the spike, he says, is that global retail giants like H&M and Walmart have started sourcing apparel items from Bangladesh for Indian consumers. The shuttering of a horde of small and medium factories all over India for their failure to maintain strict compliance requirements and pay higher wages over the last two years also played a part in the surge in shipments from Bangladesh. Abdul Matlub Ahmad, president of India-Bangladesh Chamber of Commerce and Industry, echoed the same. “Our exports to India will grow further in the near future as local exporters are enjoying different trade benefits to the neighbouring country.” The cost of importing garment items to India from other countries is very high, due to which the Western retailers have started sourcing apparel items from Bangladesh in big volumes, he said. “We are expecting that our exports to India will cross the $1 billion mark in June this year. And we have been struggling to reach this mark for many years now,” Ahmad added. Apart from Western retailers, some Indian retail giants have also been sourcing garment items in big volumes from Bangladesh, said Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association. “India, China and Japan are our next big markets in Asian region,” he added. Although the majority of Bangladeshi goods enjoy duty-free benefit in the Indian market, garment exports to India did not rise much over the last few years due to the imposition of 12.5 percent countervailing duty on items from Bangladesh. Bangladeshi garment exporters also face provincial taxes and non-tariff barriers in India, which has an apparel market worth nearly $40 billion. However, garment exports to India have been showing signs of pickup from last year. Overall, exports to India increased 5.99 percent year-on-year to $361.91 million in the July-December period.
Source: The Star News
Trend
Iran exported over 3,000 tons of apparel worth $39 million in the first nine months of the current fiscal year (started March 20, 2017), according to the date released by the country’s customs administration. Afghanistan, Iraq, Turkmenistan, Tajikistan, Kyrgyzstan, Pakistan, United Arab Emirates, Turkey, Oman, Azerbaijan, Kuwait, Armenia, Georgia, Yemen, Germany, Netherlands, Canada, United Kingdom, Lebanon, India, Norway, Japan, Spain and Australia were among the destinations of the country’s apparel exports. The Islamic Republic exported 3,800 tons of apparel worth $46.2 million in the last fiscal year (ended March 2017), up 2.6 percent in volume and 3.9 percent in value when compared to the previous year. Officials put the value of Iran’s apparel market at $11 billion. Almost 1,500 industrial units with 30,000 employees are active in clothing sector, with 340,000 tons of producing capacity. The output currently reaches 300,000 tons of clothing items per year. According to Iranian officials, only 10 percent of Iran’s clothing import is legal, while 90 percent of it is smuggled. Some experts believe that the abundance of foreign brands, which flaunt cheaper price tags, has eroded the competitiveness of domestic producers, as renowned foreign brands employ strong advertisement campaigns worldwide.
Source: Azer News
KARACHI: Listless conditions prevailed on the cotton market on Wednesday as leading buyers withdrew to the sidelines in the backdrop of falling world cotton prices. Trading was overshadowed by higher world cotton production estimate and domestic traders seemed to be waiting for cotton production report due on Thursday. The lack of buying interest from leading spinners further pushed cotton prices lower. However, ginners on their part remained steadfast and were not deterred with falling prices. The New York cotton immediately came under correction when reopened on Tuesday after remaining closed on account of public holiday a day earlier. Only a day before going for holiday the market touched seasonal high over 82 cents per lb. The other world leading cotton markets also remained easy mainly because of higher cotton production forecast by US Agriculture Department. Meanwhile, textile industry looked worried over delay in issuance of statutory regulatory orders related to withdrawal of duty and sales tax on import of cotton as announced by the government earlier this month. The Karachi Cotton Association (KCA) spot rates were adjusted downward to Rs7,500 per maund. The following deals were reported to have materialised on ready counter: 1,000 bales, Haroonabad, at Rs6,800 400 bales Fort Abbas, at Rs6,750 600 bales, Rahimyar Khan, at Rs7,500 and 600 bales, Liaquatpur, at Rs7,500.
Source: Dawn.com
5,000 hectares of cotton thought to be affected by off-target spray drift, says Bernie Bierhoff of Walgett Cotton Growers’ Association. On Christmas Day farmers around Walgett in north-west New South Wales noticed their infant cotton plants had begun to wither. Leaves began to curl and die, killing some plants and stressing others. Within days, it was clear Walgett was facing a serious incident that had affected nearly 6,000 hectares (60 sq km) of cotton farms reaching as far as Burren Junction, and Rowena. The culprit is believed to be a giant plume of 2-4,D, a herbicide that is used to kill broadleaf weeds in fallow fields and in some cereal crops. A few days earlier it had rained, which prompts the weeds to sprout and farmers began spraying – though who is responsible for the 2-4,D plume remains a mystery. The spray, possibly used at night, is believed to have been trapped in an inversion layer in the atmosphere and then drifted over the highly sensitive cotton plants. But cotton might just be the agricultural equivalent of the canary in the coalmine. Jo Immig, coordinator at the Australian Toxics Network said the effects of herbicide drift got public attention when cotton was affected and there were financial losses, but off-target spraying was probably affecting other areas, such as bushland, national parks, waterways and population centres, without attracting the same sort of scrutiny. “It’s not as obvious when it’s in other parts of the environment. The regulators haven’t had nearly enough concern about pesticide drift and its impacts,” she said. “From our pespective, this is evidence that spray drift happens regularly and it explains how pesticides get into the the food chain and the waterway.” So severe is the cotton crop damage that the town convened an urgent meeting of all farmers and agronomists on 4 January to establish its extent and map out a plan to prevent a repeat. The vice chair of the Walgett Cotton Growers’ Association, Bernie Bierhoff, says cotton crops on more than 10 farms, including his own, had been affected by the off-target spray drift – some seriously. “Spray drift damage is a terrible blow for the affected cotton growers, who are already struggling with limited access to water for irrigation this season,” Bierhoff said. “While it is still early days, the information we have to date suggests more than 5,000 hectares of cotton has been affected by off-target spray drift in the days leading up to December 25.” Some cotton growers are facing complete crop loss. Others are weighing whether to remove damaged plants to conserve water. The herbicide was also breathed in by farmers and their families and entered the waterways. 2-4,D is one of the oldest herbicides used in Australia and causes broadleaf weeds to grow uncontrollably and die, without hurting grass crops such as wheat. But despite its long history of use since the 1940s, it remains under scrutiny. The World Health Organisation’s International Agency for Research on Cancer affirmed its classification at 2B in 2015, as “a chemical that possibly causes cancer”. 2-4,D was one of the ingredients in the defoliant, Agent Orange, though not its most toxic element. Often herbicide instructions specify that they are not to be used above a certain temperature, say 30C, because higher temperatures cause them to become more volatile and evaporate into the atmosphere. “Unless they were spraying at night or very early in the morning, it’s hard to believe this incident at Walgett involved spraying within the guidelines,” Imming said. She said some newer products had much more stringent guidelines on when and how they could be used, including requirements for buffer zones, nozzle size, windspeed, temperature and bans on use when there are temperature inversions. But older products such as 2-4,D are not subject to the same requirements. The Australian Pesticides and Veterinary Medicines Authority (AVPMA) says it is conducting a review of its policy on spray drift, but there is no indication of when it might report. This is not the first time off-target drift has decimated cotton crops, but the problem may be getting worse as climate change drives up temperatures. In January 2016 a similar phenomenon wiped out 60,000 hectares of cotton near Walgett, resulting in 20% of the crop dying and losses estimated at $20m. In February 2017 30,000 hectares of cotton was damaged around Griffith in NSW. Bierhoff says farmers in the Walgett area have now agreed to refrain from night spraying of 2-4,D – when inversion layer effects are more likely to occur – and to voluntarily refrain from using the herbicide between October and February. Other more expensive options will be used in that period. None of the regulators had been up to investigate, he says. APVMA also says it has 2,4,D under review and will report by April, though the review has been running for nearly 15 years. The highly volatile ester version of 2-4,D was banned in 2006 in Australia, 20 years after it was withdrawn in Europe. In the meantime, APVMA is going through an unprecedented upheaval as a result of the federal government’s decision to move it to Armidale in National party leader Barnaby Joyce’s electorate. Senate estimates committees have been told the agency has struggled to convince staff to move to Armidale, with the result that almost half the agency’s scientists had left and 20% of jobs were vacant at the end of 2017. A report by consultants Pegasus Economics recommended the agency recruit staff from overseas and consider e-working arrangements in order to keep running.
Source: The Guardian
Merlin, Bulawayo based textile company, which resumed operations this year, primarily targets to bring back Merlin on the map, as one of the biggest textile giant in Zimbabwe and the Southern African Development Community region. In the next few months it will flood the local market with its products and at the same time making inroads to open up export markets, the company’s judicial manager, Cecil Madondo of Tudor House said. He said that the production will start with samples, in order to get orders from the market, hence production in the first months will be customer oriented. The company will resume production at a minimum level, in order to build its market awareness and secure orders. Madondo said that they are targeting to start with 100 employees for the first three months and increase to 350, in response to the anticipated increase in production and demand. In the short-term, the company needs $2,1m, in the medium term $4,5m and in the long term, $23,4m. In total, it needs $30m. The short-term goal is to resume operations which have a lot of benefits to the company, including attracting more investors. The medium term plan should see additional capital investment to raise productivity though carrying out major repairs and maintenance and the long-term objective is to replace the current plant and machinery with state-of-the-art machinery which will see a huge reduction in costs, improvements in quality and overall efficiency. They have also put in place a proposal for the company to establish its own ginning, plant to embrace a full production cycle starting with the cotton farmers. In addition, they will work with the investors to introduce new products such as disposal diapers and sanitary wear to keep up with market chances and current trends. Madondo said that with the coming on board of a strategic partner, they are confident that the company will be removed from judicial management within the next 12 months, as proposed at their last meeting of creditors and members. The current strategic partner has shown interest to invest in the business on a long term basis because of their huge interest in the textile business of Merlin. It is proposed that once the company has made significant progress in its revival and starts operating at a sustainable basis, creditors and members will be invited to a scheme of arrangement involving a credible investor, who can take the company forward after the removal from judicial management.
Source: YarnsandFibers
Chinese firm Wuxi No. 1 Cotton Mill will be setting up textile plant which will lie on 40 hectares of land inside Dire Dawa Industrial Park (DDIP), eastern city in Ethiopia with an investment of USD 220 million. Dire Dawa major’s office stated. The cornerstone laying ceremony for the textile plant was held on Tuesday. The construction of the textile plant will take 30 months and is expected to employ 3,000 Ethiopians once commissioned. The textile plant's cornerstone laying ceremony was held in the presence of Liu Yu, economic and commercial counselor at the Chinese embassy in Ethiopia and Ibrahim Usman, mayor of Dire Dawa city administration. The DDIP, currently being constructed by China Civil Engineering Construction Corporation (CCECC) at a cost of 159 million U.S. dollars on 159 hectares of land, is expected to attract industries specialized in textile, apparel, and agro-processing. Ethiopian government is financing the construction of the industrial park which is expected to be commissioned later this year.
Source: YarnsandFibers
SEOUL: For much of the world, it's a niche product. In North Korea, where winter temperatures are frigid and which cannot produce enough cotton or wool for clothing, the synthetic fibre developed after nylon was glorified as a revolutionary invention. Known outside North Korea as vinylon, it was christened "vinalon" by founder Kim Il Sung. He ordered it be developed to put clothes on people's backs. It's a story which reveals much about the history of North Korea. The state says the fibre symbolises its self-reliance, but diplomatic records show the project was less successful than Kim hoped - Pyongyang was more dependent on others than it claimed. The North Korean government does not provide foreign media with a point of contact in Pyongyang and the state's delegation to the United Nations did not respond to a request for comment. The global vinylon fibre industry was worth $443 million in 2016 and is projected to reach $539 million by 2022, according to Orbis Research. Swedish outdoor clothing company Fjallraven uses a form of vinylon, Vinylon F from Japan, in products including the Kanken backpack.
Wonder fabric
Fjallraven does not source material from North Korea, a company spokesman said. Companies in Japan and China make vinylon based on petroleum. But North Korea has no oil reserves. Instead it makes vinalon from two commodities it has in abundance: coal and limestone. The process starts with workers mining anthracite and breaking limestones. Vinalon dates back to 1939, two years after DuPont of the United States introduced nylon, and with it affordable stockings, American glamour and movie stars. At the time, North Korea was part of Japan and nylon was undercutting Japanese silk and cotton exports. A Korean scientist was on the team that developed an alternative fibre. His name was Ri Sung Gi. Ri's invention starts out as hard, white crystals that look like sea salt. But once drawn out and spun into a thread, it acquires a texture like cotton. It is stiff and hard to dye, but strong. It was promising. But two wars interrupted Ri's efforts to develop his fabric. In 1948, after World War Two, North Korea became a Communist state. The North Koreans invaded the South and in the ensuing three years, the U.S. bombed Pyongyang. Around 2.5 million soldiers and civilians died on both sides, according to South Korea's defence ministry.
In 1953, the Korean War paused with a truce. Ri wanted to help rebuild. He offered to develop his fabric in South Korea. The South, which was allied with the United States, was not interested. At this time, all Soviet states were driving for technological prowess. The North was courting foreign scientists, and it did what it could to keep hold of them. Ri defected. North Korea likened him to Marie Curie, the French chemist who developed the theory of radioactivity. The 170-metre Juche Tower is reflected in Taedong river in Pyongyang. "To bore a hole into the heart of U.S. imperialism, I have been peering through microscopes and shaking my test tubes with determination," Ri Sung Gi wrote in his memoirs. Juche! Under Japanese rule, the North had received more investment in heavy industry than the South and it had ample energy. The Soviet Union was forging ahead. On April 12, 1961 Russian Cosmonaut Yuri Gagarin beat America to be the first man in space. Josef Stalin sponsored Kim Il Sung as founder of North Korea. But North Korea needed overcoats for its people, Kim told the Soviet ambassador, A.M. Puzanov. "If we do not solve the clothing problem it will be hard to compete with the South," he said, according to Puzanov's journal. The Soviet Union could not help supply cotton. Ri had proven in lab tests that vinalon could be made. Kim saw the fibre as a political tool. He created an ideology of self reliance known as Juche. The word translates literally as "subject," but stands for the notion that man is the master of his own destiny. Kim said vinalon was the "juche fibre." "The vinalon industry is the shining fruition that the Juche idea of our Party was reflected in the field of chemical industry," Kim said in 1967. On May 6 1961, he held an opening ceremony for the February 8 Vinalon Plant in Hamhung, in South Hamgyong province. Kim was telling his allies North Korea could produce 10,000 tonnes of vinalon a year and would soon be producing more than 300 million metres of textiles a year, according to documents in the Wilson Center archive. The factory, built by a division of the Korean People's Army working on three shifts of 3,000 people, went up so quickly that the triumphal phrase "vinalon speed" emerged in state propaganda. Looking at the first vinalon strands, Ri said they were "white as snow and lighter than a dandelion puff." Kim Sung-hee, a North Korean who defected to the South, said she attended the ribbon-cutting ceremony. "Inside the factory I saw pink and red jackets. Even after 15 years, the vinalon jackets did not get frayed, although the colours could change a bit," she said. Defectors born before the 1980s said they used to wear jackets, school uniforms and socks made of vinalon. The fibre was part of an industrial drive like the one Mao Zedong launched in China. North Korea's effort was known as Chollima. Embodied by a Flying Horse, it galvanised workers into skipping breaks to boost productivity, helped by slogans such as "drink no soup." In 1961 Kim Il Sung met his Chinese comrade Deng Xiaoping and told him North Korea had "already succeeded" in producing vinalon to ease the country's clothing problem. Deng said the process demanded electricity. But Kim was not worried. "We won't need to use electricity in future. We can use oxygen," Kim said. In the early 1960s, as an anti-Communist coup in South Korea and the Cuban missile crisis sent North Korea down a path of military buildup, the economy was growing fast.
The people's economy
An economist at Cambridge University in England, Joan Robinson, visited in 1964 and wrote that "all the economic miracles of the postwar world are put into the shade" by what she saw, including vinalon. She recorded the formula for making it. The North grew faster than the South - a trend which continued into the 1970s, according to U.N. and CIA economic data. In 1972, the CIA recorded figures from 1956-1971 which showed the North had produced 7 million more metres of textiles than the South. In the early years the North's output of fish products, coal, iron ore, steel, cement, chemical fertilisers and tractors also exceeded that of the South. The CIA figures show that until the mid 1960s, the North consistently exported more than the South in dollar terms. North Koreans called vinalon "the King of Fibres" and featured it in cartoons to teach children how independent and successful the country was.
King of fibresA TV show from 1976 shows Vinalon Man win a race against Mr Nylon. But in reality, the fabric's limits were emerging. It was not good at keeping people warm. And power was becoming a problem. By now, oil was cheap in the West and the outside world was using it in abundance for energy, transportation and synthetic materials. A postcard shows a vinalon factory in North Korea in an illustration (Reuters) North Korea had no oil reserves for making vinalon or powering its factories and Pyongyang depended on oil imports from the Soviet Union. Even so, Kim Il Sung said North Korea must be independent. "It may be cheaper and faster to produce the synthetic fibre using petro-chemistry ... But, constructing industries dependent on other countries' raw materials is the same as having others grab you by the collar," he said. To help make its fabric of stone, the North wanted nuclear power. For years, it asked its Soviet allies to help with generation facilities. It only secured one nuclear power station. In 1967, vinalon inventor Ri was made head of the Atomic Energy Research Institute in Yongbyon. Today, this houses the North's light water nuclear reactor. In 1973, Kim Dong Gyu, a high-ranking North Korean official, told Romania's leader Nicolai Ceaucescu that North Korea was producing "70-80 tons" of vinalon, and finding that hard to increase. "Presently we are struggling to increase production in vinalon factories up to 50,000 tons per year," he said. The Hamhung facility was expanded so it could make more calcium carbide, the coal and limestone compound on which vinalon is based. Soviet economies were driven by targets laid down in plans rather than the laws of supply and demand. Calcium carbide can be used to make many things. Defectors from Hamhung told Reuters that it was thought to make chemical weapons - a claim others have also made and which is technically possible, but which no one has proven. "Every factory in North Korea, whatever factory that would be ... had divisions for the Second Economy," said Lee Min-bok, 60, who worked as a researcher at the Academy of Agricultural Science and visited the first vinalon factory. "People in North Korea call the war industry the Second Economy. The first economy is called the People's Economy." More recently, Western arms experts at the Middlebury Institute of International Studies suggested the vinalon plant might be used to help produce rocket fuel for missile tests. Scientists say this too is technically possible, but unproven. As North Korea built up its military, its debts increased. It eventually owed a total of $11 billion to Moscow, most of which Russia was to write off in 2012. The North also accumulated debts in the West. They went unpaid year after year, totaling around $770 million in the 1970s. Soviet support was declining, and China's new leader Deng Xiaoping was introducing market principles. He signed agreements on trade with North Korea in 1982. North Korea started building a second vinalon factory in Sunchon in 1983, to achieve "a target 1.5 billion meters of cloth." The factory was to be the biggest chemical industrial complex in the country and be controlled by the military. Kim's talk of running it on oxygen never materialised. Despite the reported $10 billion investment, the complex was never fully completed. When the Soviet Union collapsed in 1991, North Korea lost all its Soviet funding. Chinese imports entered ordinary North Koreans' lives. China has exported hundreds of thousands of tons of textiles and clothing to North Korea, customs data show. "In the 1990s, North Koreans relied mostly on Chinese fabric for their clothes. Since then, enormous amounts of Chinese fabric have been imported into North Korea," said Choi Goog-jin, a South Korean entrepreneur who tried to import North Korean vinalon in 2011. On July 8, 1994, Kim Il Sung died from a heart attack. His son Kim Jong Il took over, but within a year, Pyongyang was forced to ask international humanitarian agencies for aid. Hamhung was hit by a flood and received no coal. It suspended fibre production.
Capitalism at night
There was no work. Residents from Hamhung said vinalon became the basis of an exchange scheme to survive. It was a similar story across the country. Famine killed as many as 3 million North Koreans. North Koreans still call those years the "Arduous March," a term introduced by the official media to stir the starving. Defectors say people took machine parts, as well as pure nickel and copper from wires and pipes, to informal markets. "People ripped machines into metal parts from the vinalon factory, smuggled and sold them ... some of them were publicly executed. ... Production lines stopped rolling ... workers starved to death," said Jeong Jin-hwa, 53, who defected to the South in 1999. By 1996, when vinalon's inventor Ri Sung Gi died, even party cadres loyal to the socialist system had turned to trading - a form of capitalist "self-reliance." In 2001, Choi Goog-jin, the South Korean entrepreneur, created a company, Korea Vinylon Co Ltd, to import North Korean vinalon. After one year of sample tests and negotiations, the business failed. "Vinalon doesn't have competitiveness in clothing," said Choi. "If you look at vinalon suits in North Korea, they are rough and heavy." In 2002, in Onsong County, North Korea, a high school student also called Choi said he bought a fake Adidas t-shirt and short pants from a market. The blue clothes were made of vinalon. "I wore that fake Adidas kit until I came here," said Choi, now 30, who defected to the South in 2006. "The colour did not change. It was quite sturdy." "We have this expression - socialism during the day and capitalism at night," Choi said. "That is, politically and what is seen on surface is socialism but beneath the surface, everything people do is capitalistic." In 2010, Kim Jong Il reopened the February 8 Vinalon Complex.
Vinalon "victory"
"This is an extra-big event, as important as launching a new type A-bomb, and represents a great victory of socialism," he said. The next year, he died suddenly on his private train. His son, Kim Jong Un, took over and in 2012 introduced economic changes, including turning a blind eye to the informal markets. There was demand for vinalon - in those private markets. Jung Min-woo, 29, served as a military officer before leaving North Korea in 2013. He said some ranking military officers bought custom-made shiny vinalon uniforms from private markets to look cool. "Many ranking officers wear them... but they are not good for a war," he said. "If war breaks out lots of sparks and bullets go back and forth... Cotton tends to melt and vanish but vinalon burns you because it sticks to your skin," Jung said. Entrepreneur Choi agreed. "The uniforms made of vinalon are not suitable for combat," he said. "When it rains, the uniforms soak up water and become very heavy, which inevitably makes it difficult for soldiers to move. After a while, the uniforms turn very stiff." By now, instead of producing vinalon, many North Koreans made clothes for China. Kang Eung Chan, who defected in 2013, said he hired 40 local seamstresses and used imported fabrics - including nylon - to make jumpers for Chinese customers. He paid locals $40-50 a month. "Who wears vinalon now? Almost no one," said Kang. Even so, North Korea says it still produces the fibre. In his 2017 New Year's speech, Kim Jong Un laid out a plan to revamp the vinalon complex. "This sector should revitalise production at the February 8 Vinalon Complex, expand the capacity of other major chemical factories and transform their technical processes in our own way," he said. If the new leader manages to drive North Korea's vinalon output with as much vigour as its missile tests, the fabric made of stone may yet find a new lease of life.
Source: NDTV
