SURAT - The 3-day Source India Reverse Buyers Sellers Meet (RBSM) organised by the Synthetic & Rayon Textiles Export Promotion Council (SRTEPC) met with overwhelming response. The response from over 150 overseas buyers at the RBSM was splendid was the unanimous opinion of the exhibitors at the exhibition. The mood amongst the exhibitors was extremely positive at the 2nd Edition of Source India. The exhibitors opined that “Source India is fantastic RBSM. The quality of the visitors at this Source India was outstanding ” said the exhibitors and added that Source India proved to be a perfect platform on which Indian MMF industry was able to present its product highlights and innovations to the global buyers. The Council this year took appropriate steps to select and invite around 150 leading buyers from around 30 countries to participate in this edition of Source India for sourcing their requirement of Indian Man-made Fiber Textile products from SRTEPC member exporters informed Mr. Narain Aggarwal Chairman SRTEPC. Source India was inaugurated by Mrs. Smriti Zubin Irani Union Textile Minister on 21st September 2018. She lauded the efforts of SRTEPC in organising the mammoth event where all the leading players such as Reliance Grasim Wellknown Banswara Indian Rayon Shrijee Lifestyle Topman among others unveiled their latest collections of MMF yarns and fabrics. Mrs. Irani noted that Indian MMF textiles industry is vibrant and growing rapidly. India is the second largest exporter of MMF Textiles in the world with exports to nearly 150 countries She informed and hoped that Source India would play a pivotal part in scaling new export heights. She called upon the foreign visitors to place order in large number while assuring them of the impeccable quality of Indian man-made textiles. The entire range of Indian MMF textile products including Fabrics Made-ups Home Textiles Technical Textiles Fashion Accessories Yarn and Fibre of different varieties were on display at the RBSM. The Fashion Show on the first day organised by Reliance Industries Limited (RIL) presented its R-Elan collection to the trade buyers and exhibitors of Source India. Mr. Gunjan Sharma Chief Marketing Officer Polyester Sector RIL in his presentation before the fashion show informed that R/Elan offers multiple possibilities with fabrics infused with different technologies each with a special benefits carting to a specific consumers. These fabrics are grouped into 3 buckets based on their tactile experience and functional benefits. The first bucket comprises of sensorially superior and aesthetic fabrics which are classified as SuperFeel FreeFlow and SuperBlack and provide highly aesthetics benefits of hi-fashion apparel. The second bucket is of Eco-Friendly fabrics which help reduce carbon foot print actively. The GreenGold Fabrics are made from recycled PET bottles and offer end to end traceability supply chain from PET bottle to fabrics. The third bucket comprises of high-performance fabrics such as Kooltex and Feelfresh are for hi-performance sports-wear and active wear. Mr. Ritesh Sharma Head Retail at RIL informed that along-with launching E/Elan next generation fabric range RIL has created robust fibre-to-fabric value chain to ensure that these innovations match the commercial expectations of fashion brands. Mrs. Smriti Zubin Irani Union Textile Minister at the inaugural ceremony of the Source India in Surat On the second day of the RBSM SRTEPC had organised an exclusive seminar for the benefit of the international trade buyers and exhibitors. During the seminar 2 presentations were made giving an insight of Indian MMF industry and its export potential. The presentation was made by Gherzi India and Wazir Advisors.
Source: Tecoya Trend
A persistent shortfall in the goods and services tax (GST) collections has forced the GST Council to move slowly on the plans to give more sops to micro, small and medium enterprises (MSMEs). Till the next elections, the GST structure might not see any major change, sources said, adding that even the new return filing system may have to wait till the polls are concluded and the new government assumes office. The government reckons that the rolling out the proposed additional sops to MSMEs one suggestion was to refund a portion of the taxes paid by these units to reduce their tax liability without upsetting the GST chain closer to elections could create technical hassles. Such irritants during the poll season might offset whatever political benefit the NDA government could get through the tax sops for small businesses. Besides, with the government being firm on sticking to the fiscal deficit target of 3.3% of GDP for the current fiscal, denting GST revenue further is something it can ill afford. The government’s average monthly GST revenue for this fiscal now stands at a little over `94,700 crore compared with around `90,000 crore in FY18. That means a shortfall of 20% for the Centre. GST collections for July came in at `93,960 crore, down 2.5% from the receipts in the previous month and reversing the recent trend of a gradual month-on-month increase in the mop-up. The rate cuts for 88 items and 24 services announced on July 21 to give relief to MSMEs and customers did have an impact on the collections. The impact of the rate cuts could be more pronounced for August. Although the council set up a group of ministers (GoM) in its last meeting held on August 4 to formulate a plan for further relief to MSMEs, the panel hasn’t met even once since. Three panels of tax officials law, fitment and IT are tasked with assisting the GoM but even these have only met once each and that too without any major outcome. As the council meets here on September 28 for its 30th session, it’s unlikely to have an interim report from the GoM for consideration. “Tax officials and the political dispensation are wary of implementing new measures close to general elections. Apart from revenue considerations, we also have to factor in the IT-related issues that may arise after implementation,” a source said. As FE reported earlier, due to similar apprehensions, the government will likely defer the new return-filing system, crucial to check evasion, to after the general elections. The plan to provide more relief to MSMEs was based on the fact that many small taxpayers were exempt from the excise duty in the pre-GST regime, but their tax liability now is equivalent to a combination of excise and VAT, which is believed to have deprived them of their competitive advantage.
Excise duty had kicked in at a turnover threshold of Rs 1.5 crore.
Incentives for MSMEs will come with adverse revenue implications, but sources said even a small quantum of relief would cover a large part of the tax base, given that small taxpayers contribute only a small fraction of the GST revenue. According to official data, registered taxpayers up to turnover of Rs 1 crore constitute over 78% of the total base, but contribute less than 7% to the revenue collection. In absolute terms, assessees below `1 crore pay about `6,000 crore as GST every month while the total collection is over `90,000 crore. So, even if `1,000 crore of this is refunded to them, the tax liability of nearly 80 lakh taxpayers would reduce by 15%.
Source: Financial Express
The government is concerned about the rupee’s slump and its adverse impact on the Current Account Deficit. The government will “very soon” implement the second set of measures including curb on imports of non-essential items to shore up rupee to 68-70 level against the U.S. dollar, Economic Affairs Secretary Subhash Chandra Garg said, terming the about 12 per cent slide in the currency as a temporary phenomenon. The government had earlier this month announced easing of overseas borrowing norms for manufacturing companies, removal of restrictions on foreign portfolio investors (FPI) investment in corporate bonds and tax benefits on Masala bonds to shore up rupee and check widening of current account deficit. Now, the Centre has prepared a list of non-essential items whose imports can be curbed and also drawn up a separate list of goods whose exports can be boosted with a little policy intervention, Mr. Garg told PTI in an interview here. On the rupee continuing to fall despite the first set of measures, he said “full components of the steps have not been implemented as yet, especially curb on import of non-essential items and boosting some of the exports etc. Those are still to come. These measures are at the final stage. Very soon, these should be announced,” he said. A group headed by the Commerce Secretary has “more or less” completed its task on finalising the list, the DEA secretary said. “Once it gets the nod from higher-ups, it will be announced...It will happen very early,” he added. The rupee has been battered for over a month now amid sell-offs sweeping emerging markets following a rout in the currencies of Argentina and Turkey. The Indian currency has set a string of record lows, dampening some of the optimism about India’s world-beating economic growth. The rupee on last Friday closed at 72.20 to the U.S. dollar, higher than the record low of 72.91 it had hit earlier this month. The government, Mr. Garg said, is concerned about the rupee’s slump and its adverse impact on the Current Account Deficit (CAD). The CAD, difference between inflow and outflow of foreign exchange, widened to 2.4 per cent of GDP in the first quarter. The fall in rupee has shot up oil import bill for the world’s fastest-growing oil user by 76 per cent to USD 10.2 billion in July. Mr. Garg said the appropriate level for the rupee is 68-70 per dollar, with 72 being the reasonable outer limit for depreciation. With first round of measures not having any desired impact, he said there is no question of government being helpless as there are more measures to be taken to rein in falling rupee. Mr. Garg further said that in view of present circumstances, CAD and present capital flows, 68-70 range appears to be a reasonable level. “When it suddenly went down from 69 to 72, the government rightly got concerned that this kind of sudden depreciation is not justified,” he said. Mr. Garg added that the Indian economy recorded an excellent growth of 8.2 per cent in the first quarter, inflation is low, macroeconomic fundamentals are good, the government is strictly maintaining fiscal deficit and expenditure programme is going on well. “So why on earth should there be such a depreciation of 10-12 per cent in 6 months or 6-9 per cent in two months. That’s why the Prime Minister took a meeting (on September 14). The Finance Minister got into the act and several decisions were taken and some of them are under implementation,” he said. He expressed confidence that with the measures announced and those in works, the rupee will regain comfortable levels. “I am sure this is temporary and this will come back (to the comfortable level),” he said.
SOURCE: The Hindu
We had exported certain goods without payment of Goods and Services Tax (GST) under legal undertaking. The buyer had paid for the goods. However,the buyer says that he wants to send back the exported goods for repairs and re-export. How to deal with the situation under FEMA, GST and Customs laws?
You can re-import the exported goods under notification no. 158/95-Cus dated 14th November 1995 without payment of basic customs duty and IGST.
You have to execute a bond with the Customs that you will re-export the goods after repairs, within six months from the date of re-import. This period can be extended by six months. If you fail to re-export the goods within the period allowed, you have to pay full duties and IGST that were exempted. An important condition is that the re-imported goods must be identified as the same as exported. At the time of re-export, the goods again must be identified as the same as imported and you must seek redemption of the bond upon fulfilment of the conditions of the notification and the bond. You can re-export the goods without IGST payment under legal undertaking. Since the customer has already paid for the goods and has only sent it back for removal of defects, there is no FEMA implication. You can get a GR waiver from banks for the re-export and submit to the customs.
We have placed an order for import of goods from a foreign party. The payment terms require us to open a letter of credit. There are many conditions in the order. So, we asked our bankers to make the order a part of the letter of credit but they have refused. Are they correct?
Yes. A documentary credit is, by its very nature, a separate transaction from the sale or other contract on which it may be based. The letter of credit must be seen essentially as a tool to facilitate the process of payment against performance as evidenced by the documents presented. Banks are not in any way concerned with or bound by the terms and conditions in the contract, even where any reference to it is included in the letter of credit. Banks should discourage any attempt by the applicant to include, as an integral part of the credit, copies of the underlying contract, proforma invoice and the like. Article 4 of Uniform Customs and Practices for Documentary Credits (UCP 600) is explicit on this point.
We have obtained advance authorisation on self declaration basis, as the standard norms are not fixed. We have filed necessary documents but we have not heard anything from the Norms Committee regarding fixation of the norms. How can we know the status of our application?
Please see DGFT Trade Notice no. 24 dated 16.08.2018 regarding the facility to view status of your application online. The status displayed is for information only. For regularization of authorisation, you need actual signed minutes.
Source: Business Standard
A dip in revenues notwithstanding, the GST Council may decide to cut rates on more items this week to keep the consumption story going which typically slows in an election year despite a rise in government spending. The 30th meeting of the GST Council will be held on Friday, September 28. Finance Minister Arun Jaitley, who will chair the meeting through video-conferencing, is expected to announce a further pruning of the peak 28% rate structure. Jaitley has promised to remove all items from that, barring a few super luxury and sin goods. Goods expected to see their way out of the 28% tax bracket include cement, certain automobile parts, digital cameras and certain categories of television sets, sources close to the development told DH. These may be placed under 18% or 12% slabs. Cement is the only item of construction which remains under the 28% slab. Its removal from the highest bracket makes sense as construction activity, which slows during monsoon, is expected to pick up from next month. After all, Jaitley believes GST has given a lot of purchasing power to consumers. “There is no better opportunity for consumers to make purchases than in the environment which the GST has created. It is an opportunity to celebrate the biggest tax reform since Independence,” the minister said recently. In the last last 14 months since GST was implemented, the council has slashed rates on 191 items from the 28% category. Originally, it consisted of 226 goods. Apart from cement and automobile parts, tyres, automobile equipment, motor vehicles, yachts, aircraft, aerated drinks, betting and demerit items like tobacco, cigarette and pan masala remain in the 28% slab. Even though the Centre has suffered a loss of about Rs 70,000 crore on account of reduction in tax on goods and services, the move has reduced the cost to consumers, increased purchasing capacity and added to the economy, Jaitley said. The budgetary estimates of GST collections were more than Rs 1 lakh crore per month but the revenues have not met the target barring in April when collections topped Rs 1 lakh crore. However, the finance minister expects that the forthcoming festive season will give a boost to GST revenues.
Source: Deccan Herald
KOCHI: Kerala should try to build textile industry hubs as it creates higher number of jobs in the local economy than any other industry, said industry leaders. With government implementing a single-window clearance system for industries, chances of developing a hub is a realistic target, they said. “Other states are aggressively promoting textile industry and setting up hubs. This is because they have understood this industry’s job creation potential. Jharkhand is setting up a hub in 500 acres, where Aravind Mills and Page Industries are starting manufacturing facilities,” said Kitex Garments MD Sabu M Jacob. He added that Odisha is also promoting the industry in a big way that they have termed it an essential service, where flash strikes will not be permitted. “Many states are setting up multiple hubs there are states with five or six hubs,” Jacob said. Kitex has serious expansion plans. “We will be investing Rs 2,000 crore by 2025 to set up new manufacturing facilities. Our board of directors have passed the plans for Rs 920 crore investments,” he said, adding that the new investment destination has not been chosen and Kerala's single-window clearance is an attractive proposition. Maryan Apparel MD Thomas Olickal believes that there is a huge opportunity in providing uniforms to schools and companies in India, which Kerala should tap. “Kerala’s domestic market for uniforms could alone sustain 20 companies like that of mine,” he said. There is an increased demand for workwear in India, which is a result of growing awareness among corporates regarding the benefits of workwear, said a report from Technopark, a management consultancy. “Indian hospitals, for instance, have understood that when adopted, uniforms not only assist patients in identifying the hospital staff, but also create an atmosphere of professionalism and team spirit among staff. Other sectors are now realizing these benefits,” it stated. Workers in manufacturing and allied sectors such as automobile, oil and gas are becoming aware of occupational hazards, and hence companies are enforcing a safer work environment, added the report. “Vendor companies that have tie ups with MNCs are often required to comply with international safety standards. Furthermore, having workwear assists in creating a better corporate identity. These drivers are fuelling growth in India’s workwear market,” said the report titled ‘Work Apparel Uniform and Non-Uniform’. Jacob said that small export oriented units of Kerala could tap the Middle Eastern markets, easily. “There are small markets in GCC countries which could be individually serviced by Kerala companies,” he said.
Source: The Times of India
Indian manufacturers look to capture a bigger share of the fabric market in Bangladesh as the country has already shown its strength in the global readymade garment supply chain, India’s textile raw material exporters said. Bangladesh, the second largest garment exporter worldwide, largely relies on India, apart from China, for garments raw materials. Currently, Bangladesh imports fabric worth $7 billion a year to run its garment sector. Of them, fabric worth more than $2 billion come from India and $5 billion from China, according to industry people. “Bangladesh is a better garments manufacturer than India and the garment sector is dependent on fabric import, which has created an opportunity for Indian fabric manufacturers,” said Rahul Kaviya, director of Ayma Creations Pvt Ltd, India. Kaviya spoke while taking part in the 19th Textech Bangladesh International Expo 2018, at International Convention City Bashundhara in Dhaka. Around 1,200 foreign companies, including some 92 textiles related firms, took part in the four-day fair. Ayma Creations is a Gujarat-based manufacturer of suiting fabric and exporter to Gulf countries. Kaviya said he would not have known about the demand of fabric in Bangladesh had he not taken part in the event. “I discussed with a number of garment manufacturers in Bangladesh and they showed interest to purchase our products,” he said. Ayma Creations is also thinking about importing a huge volume of garment items from Bangladesh as prices are cheap compared to those in Vietnam and Indonesia, he said.
“The quality is also very good,” Kaviya told The Daily Star.
He said another advantage of importing garment items from Bangladesh is that Ayma Creations will not have to pay duty as Bangladesh has duty-free access to Indian market. This offers a good chance to garment manufacturers to boost their exports to India, Kaviya said. Rajesh Kumar Somani, director of Ramkumar Textiles Pvt Ltd, sees a good future for the Indian fabric manufacturers in Bangladesh thanks to increasing demand for Indian fabric. He lauded the entrepreneurs of Bangladesh for developing the garment sector. Somani said the fabric manufacturing sector is yet to develop in Bangladesh compared to India largely because of non-availability of raw materials. Ramkumar Textiles exports to Latin American and Gulf countries. The fair has opened the door to export its products to Bangladesh, Somani said. Hanish Vikmani of AM Industries Ltd, an exporter of premium shirting and suiting fabric, said he is hopeful to start exporting products to Bangladesh as a number of customers have shown interest. Rawalwasia Yarn Dyeing Pvt Ltd, a manufacturer and exporter of woven and knitting fabrics, is trying to enter the market in Bangladesh. And Pradip Marathe, head of customer service of the company, believes that Rawalwasia Yarn will get a good market share as it manufactures high quality products. Babita Singh, proprietor of Ashok Vatika, a Kolkata-based fashion house, said she is looking for partners to set up joint venture in Bangladesh.
Ashok Vatika will provide technical support along with fabric. “Our products have big demand among the fashion-lovers in Bangladesh. During Eid-ul-Fitr, a huge quantity of our products is imported to Bangladesh. So, I am confident about capturing a share of the market.”
Source: The Daily Star
New Delhi : Rising imports from China have taken a heavy toll on the employment-generation potential of the manufacturing sector, especially among the micro, small and medium enterprises (MSMEs), the parliamentary standing committee on commerce said. The major impact of Chinese imports has been felt by labour-intensive sectors like textile, steel and power. “The stainless-steel industry is a case in point, where a number of MSMEs have had to close down, particularly manufacturers of stainless steel grades of the 200 series due to Chinese imports,” the report, titled ‘Impact of Chinese goods on Indian industry,’ said. The panel recommended that India take more stringent measures to completely protect local industries against illegitimate, protectionist and unfair trade practices used by trading partners. However, the committee observed that imposition of anti-dumping duties against Chinese products have largely failed as these duties are relatively few compared with the amount of Chinese dumping that takes place. “Nearly 75-80% of Chinese steel products are covered under anti-dumping duty, yet despite this, import of such steel products have increased by 8%. This clearly shows that anti-dumping measures have become completely ineffective,” the committee noted in its report. The report suggested further measures to curb dumping of Chinese goods. It said that quality standards and technical regulations are potent tools to check sub-standard Chinese imports. “However, the Quality Control Orders and Compulsory Registration Orders laying down technical standards of the products being imported need strengthening,” the report said. The committee said that the impact of Chinese imports was far reaching as downsizing and closing of industrial units would adversely impact the tax collection and Make in India program. Further, the closure of industry will also stress the banking sector, which is already reeling under the burden of huge non-performing assets (NPAs), the report said. The trade between the two countries has been lopsided, with India running a trade deficit of $63 billion with its neighbour. This accounts for 40% of India’s total trade deficit. During the period 2007-08 to 2017-18, India’s exports to China increased by $2.5 billion; imports, however, increased by $50 billion during this period, the report said. Making an observation on Chinese competitiveness, the report said that the Chinese industry has also been benefited by opaque government interventions to boost low-cost production. The effect of this legitimate and illegitimate support has helped China create a huge inventory of products and dump their products globally, the report said. China is involved in anti-dumping investigations for 214 products. In comparison, there are 86 anti-dumping cases initiated against the EU, 64 cases against South Korea, 62 cases against Taiwan and 41 cases each against Japan and the US. “China faces the major chunk of anti-dumping investigations which is a clear indication that Chinese goods are causing unfair trade disruption,” the report said.
Source: Financial Express
KOLKATA: The manufacturing sector paid Rs 230.9 per hour, 5.2 % more than the overall median salary of Rs 219.4 per hour in the Indian economy, the latest Monster Salary Index for the sector has revealed. Though this is an approximately 21% decline from overall median gross salary of Rs. 277.1 per hour in 2015, the sector is the only one amongst the eight captured in MSI to see a notable increase (9%) in median gross hourly salary. In 2017, manufacturing has also been the second highest-earning sector in India and with the exception of the IT sector, manufacturing also remains the only other sector that paid median gross salary of above Rs. 200 per hour threshold. The report said that the IT sector paid median wage at Rs. 317.6 per hour, the highest among all monitored sectors, but 17.8% less than the last year. This is one of the reasons why more than half (51%) were not satisfied with their jobs. Some other aspects contributing to job dissatisfaction are commuting time, work-life balance, and working hours. Interestingly, employees in the IT sector are most satisfied with their relationships at work. They rated their relationships with colleagues and supervisors a high 90%s. Sharing his views, Abhijeet Mukherjee, CEO, Monster.com, APAC and Gulf said, “As Industry 4.0 continues to gain wider acceptance and reshapes the manufacturing industry, India is well positioned to become one of the largest manufacturing economies in the world. The momentum is mirrored by the increased median gross hourly wage recorded for the manufacturing sector in the Monster Salary Index. There are already clear signs of green shoots sprouting in pockets of local manufacturing in sectors as diverse as steel, auto, chemicals and energy and this is also reflected in the 60% y-o-y growth in online hiring in the production & manufacturing sector till July 2018, as reported by Monster Employment Index.” The advent of automation and AI has brought about some uncertainty, but job creation is expected to continue with an impetus on upskilling and re-skilling the current workforce, added Mukherjee. The IT and BFSI sectors have shown a correction in wages and it isn’t surprising that pay satisfaction is low with only over 40% of employees satisfied with their salaries.
Source: The Economic Times
New Delhi : Tiruchi District Tiny and Small Scale Industries’ Association (TIDITSSIA) has urged the State government to establish the textile park at Manaparai to strengthen the textile sector further in the region. The association also asked for the provision of subsidy benefits for manufacture of ‘korai’ mats, handloom and power-loom products, and readymade garments to strengthen rural economy. Rural youth must be imparted skills through training programs of Ministry of Small and Medium Enterprises, Entrepreneurship Development Institute of India, District Industries Centre and Tamil Nadu Industrial Investment Corporation to avail the utility of Unemployed Youth Employment Generation Program, Prime Minister's Employment Generation Program, and New Entrepreneur cum Enterprise Development Scheme, and other schemes, the association added. The forum called for creation of a right eco-system for development of the region through operation of daily day-train services to Coimbatore and Bengaluru, establishment of Directorate General of Foreign Trade branch in Tiruchi, and upgrading the cargo division at Tiruchi International Airport to global standards. The capacity to export fruits and vegetables must be augmented and the customs procedures must be simplified, they said. The association also called upon the government to issue an early order for formation of a Special Purpose Vehicle to establish the Trade Centre. The Ring Road project on which the success of the Trade Centre hinges must be executed quickly, another resolution said. The meeting also called for expansion of the ELCOT’s IT Park in Navalpattu. The State government must ensure that at least 20% investment was routed to the Tiruchi region after the Global Investor Meet 2019, the forum added. Besides, the association has urged the State government to make Tiruchi the second capital of the State. Citing the desire of late Chief Minister MGR’s desire to develop Tiruchi by according it the status of a capital city, TIDITSSIA president N. Kanagasabapathy and secretary S. Punniyamoorthy said the government must hold at least one Assembly session in Tiruchi every year.
Source: Knn India
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1593.92 |
USD/Ton |
-1.97% |
9/24/2018 |
|
VSF |
2202.03 |
USD/Ton |
0% |
9/24/2018 |
|
ASF |
3033.26 |
USD/Ton |
0% |
9/24/2018 |
|
Polyester POY |
1673.40 |
USD/Ton |
0% |
9/24/2018 |
|
Nylon FDY |
3514.50 |
USD/Ton |
0% |
9/24/2018 |
|
40D Spandex |
4987.39 |
USD/Ton |
0% |
9/24/2018 |
|
Nylon POY |
1866.62 |
USD/Ton |
0% |
9/24/2018 |
|
Acrylic Top 3D |
3660.33 |
USD/Ton |
0% |
9/24/2018 |
|
Polyester FDY |
5512.37 |
USD/Ton |
0% |
9/24/2018 |
|
Nylon DTY |
1881.21 |
USD/Ton |
0% |
9/24/2018 |
|
Viscose Long Filament |
3237.43 |
USD/Ton |
0% |
9/24/2018 |
|
Polyester DTY |
3208.26 |
USD/Ton |
0% |
9/24/2018 |
|
30S Spun Rayon Yarn |
2887.43 |
USD/Ton |
0% |
9/24/2018 |
|
32S Polyester Yarn |
2304.11 |
USD/Ton |
0% |
9/24/2018 |
|
45S T/C Yarn |
3018.68 |
USD/Ton |
0% |
9/24/2018 |
|
40S Rayon Yarn |
2449.94 |
USD/Ton |
0% |
9/24/2018 |
|
T/R Yarn 65/35 32S |
2566.61 |
USD/Ton |
0% |
9/24/2018 |
|
45S Polyester Yarn |
3193.68 |
USD/Ton |
0% |
9/24/2018 |
|
T/C Yarn 65/35 32S |
2727.02 |
USD/Ton |
0% |
9/24/2018 |
|
10S Denim Fabric |
1.36 |
USD/Meter |
0% |
9/24/2018 |
|
32S Twill Fabric |
0.84 |
USD/Meter |
0% |
9/24/2018 |
|
40S Combed Poplin |
1.17 |
USD/Meter |
0% |
9/24/2018 |
|
30S Rayon Fabric |
0.67 |
USD/Meter |
0% |
9/24/2018 |
|
45S T/C Fabric |
0.71 |
USD/Meter |
0% |
9/24/2018 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14583 USD dtd. 24/9/2018). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The stakeholders of the fabric and textile industry hailed the government decision to reduce Value Added Tax (VAT) to support the sector. “We have no issue with regard to the tax reduction. However, we were worried about the cess been removed. The government considered our request and the cess is in place. This will support the industrialists in the long term,” President Local Textile Manufacturing Association Nimal Perera said. Recalling the past, he said that Sri Lanka had a vibrant textile industry. “We lost our way due to the removal of duties and the whole industry collapsed. We faced difficulties. However, with the re-imposition of cess in 2006-7 the industry started moving on. The main reason for the re-introduction of cess was to prevent the under-invoicing that was going on. The industry was revived and heavy investments were coming in to the industry which include textile, power loom, knitting, yarn manufacturing, dyeing and finishing,” he said. The textile imports to the country increased by five folds during the last few years. This was more than the requirement. This disparity and the falling rupee value have a negative impact on the textile imports, he said. Minister of Finance and Mass Media Mangala Samaraweera considering the request made by the stakeholders in the fabric industry reduced the VAT on imported fabric to 5 percent. Minister Samaraweera signed the gazette notification last week. Earlier fabric was subjected to Rs. 100/kg cess at the time of imports. The budget 2018 has proposed to impose a 15 percent VAT on goods and the Value Added Tax Act No 14 of 2002 was amended accordingly. The new VAT scheme came in to effect from August 16 2018. As fabric was also subjected to this 15 percent VAT, the importers, traders and industrialists using fabric as raw material for making ready-made garments appealed to the Minister of Finance to provide them some relief as small scale traders and industrialists who are not covered under VAT Act have been adversely affected. The Minister made the decision to amend the VAT Act further to reduce the VAT on imported fabric to 5 percent considering the possibility of giving a helping hand to proposed small scale industrialists under the Enterprise Sri Lankan scheme. The Enterprise Sri Lanka, the subsidised loan scheme by the Ministry of Finance and Mass Media has introduced an interest subsidised loan scheme for medium and small scale manufacturing industrialists and they can obtain fabric as raw material at a low cost.
Source: Fibre2fashion
KUALA LUMPUR: An economist has criticised the government as being short sighted in its decision to scrap the goods and services tax (GST), saying it has apparently failed to consider the reduction in income tax collection as the Malaysian population gets older. Speaking to FMT, Firdaos Rosli of the Institute of Strategic and International Studies (Isis) noted government statistics showing that the proportion of elderly Malaysians has been steadily increasing, from 5.4% of the population in 1970 to 8% in 2010. According to the statistics, the elderly will make up 23.6% of the population by 2050. “The government cannot generate revenue from retirees,” Firdaos said. “That is why the GST was important in collecting revenue from a broad group of people. “The sales and services tax (SST) is inherently weak in collecting taxes because it has a narrow base and a lot of room for tax evasion.” He said the 6% GST should not have been abolished but its rate reduced and exemption list tweaked. He also disagreed with the government’s plan to eventually abolish the 1 Malaysia People’s Aid (BR1M), saying it should be allowed to remain as the only cash transfer aid. “If we abolish BR1M and boost other subsidies like fuel subsidies, this will be a worse option of helping the poor because blanket subsidies benefit even those who don’t need it,” he said. He cited research showing that recipients of cash transfers purchase goods that help them become more productive. These would include food to keep them healthy, he added. However, he said the continuation of BR1M must come with the abolition of all other cash aid so there wouldn’t be any overlap. “If we have only one form of cash aid, we can evaluate its effectiveness and set targets,” he said. “If we have multiple cash aids like we do now, it is difficult to determine how the money is used and how effective the different forms of aids are.” Prime Minister Mahathir Mohamad is on record as saying that BR1M made people dependent on the government, but Firdaos said there would always be pockets of people needing help. “The aid mechanism can always be improved upon to prevent abuse,” he added.
Source: Free Malaysia Today
(CNN)Negotiations between the United States and China have stalled after President Donald Trump ordered new tariffs on Chinese goods. Senior US officials, led by Treasury Secretary Steven Mnuchin, have been working to end the trade standoff through diplomacy. A new round of talks was in the works for the coming weeks, but Trump's decision to slap tariffs on an additional $200 billion worth of Chinese imports appears to have forestalled the negotiations for now. On Friday, a senior White House official said no new meetings are currently planned. "There is no scheduled US-China negotiation at the moment," the official said. "That doesn't mean it wouldn't happen." While no meetings between US and Chinese officials had been formally scheduled ahead of the tariff announcement, officials had been laying the groundwork for a new round of talks at the end of September that now appear to be off. "There is no meeting that is on the books," the senior White House official said. The tariffs Trump announced on Monday marked an escalation in a growing trade war between Washington and Beijing. Trump's aides are divided on a best strategy. Mnuchin has led diplomatic efforts to convince China to alter its trade practices. Meanwhile, hardliners within the administration have advocated a tougher approach. Despite warnings of political fallout, Trump has sided with the hardliners, at least for now. He remains convinced that a trade battle with China is winnable and is bolstered by polls showing his tariffs are popular among his base of Republican voters. But analysts and even some of Trump's aides worry the fallout from his trade war will not fade quickly, even if a deal is struck. A number of businesses, including Target, Apple, and Walmart, the country's largest retailer, warned the administration in a letter that new tariffs on Chinese goods would result in price hikes. And Jack Ma, the billionaire Alibaba chief, said this week the budding trade war has undermined his promise to bring 1 million jobs to the US. "This promise was on the basis of friendly China-US cooperation and reasonable bilateral trade relations, but the current situation has already destroyed that basis," Ma said. "This promise can't be completed." Beijing has vowed to retaliate and is poised to slap $60 billion worth of tariffs on US goods starting next week. Even as he was announcing new tariffs this week, Trump threatened an additional round on $267 billion worth of Chinese imports if Beijing retaliates against US farmers or industrial workers. That would mean essentially all Chinese imports to the US would be subject to tariffs. At the same time, Trump has not ruled out further negotiations with China, including a possible meeting with Chinese President Xi Jinping, perhaps on the sidelines of the G20 summit set for November in Argentina. Some officials have said talks may have a greater chance of success after November's midterm elections, though deep Republican losses could drive Trump to stake out a harder line on an issue he believes is politically advantageous. Trump has hailed his good relationship with Xi as a reason to believe the trade standoff can be resolved. "They want to make a deal, and let's see if we can make a deal," he said on Friday evening during a campaign rally in Missouri. Trump has also questioned whether his tough trade stance has pushed China to be less cooperative in applying sanctions pressure on North Korea. "I hope they're still helpful," he said during an East Room press conference this week. "There's a question about that." CNN's Cristina Alesci, Jeremy Diamond, Matt Rivers and Donna Borak contributed to this report.
Source: CNN
Due to the greenback appreciation, local textile industry is making losses, according to Myanmar Textile Entrepreneurs Association. The value of a US dollar has increased from Ks1,500 in early September to Ks1,650 on September 20. Yin Yin Moe, Secretary of Myanmar Textile Entrepreneurs Association said: “The greenback appreciation has impacts on local garment industries as we have to import all materials from foreign countries. In addition, it also affects some garment industries which import its products. Even textile industries have suspended their sales due to losses.” The textile shops will resume their sales after the situation returns to normal. “We cannot expect to what extent the textile industries suffer losses. I think it would be about 50 to 80-per-cent loss in the local market, she added. Local textile industries have stopped the recruitment of new workers due to losses. Some garment factories have temporarily suspended some workers from their works.
Source: Eleven Myanmar
Vietnam could suffer collateral damage if Chinese businesses use made-in-Vietnam labels to avoid U.S. tariffs, experts warn. Economist Vu Dinh Anh said it is “highly possible” that Chinese businesses would seek to export their goods through Vietnam to the U.S. amid the trade war between the world’s two largest economies. One way they can do this is exporting their products to Vietnam and asking a Vietnamese business to label them as “made in Vietnam,” he told VnExpress International. They can also set up factories in Vietnam and manufacture products with materials imported from China, he added. “This will result in bad consequences for Vietnam as the U.S. might impose the same tariffs on Vietnam as it did on China.” Vietnam’s textile and footwear industry insiders expressed the same concern. Pham Xuan Hong, chairman of the HCMC Association of Garment, Textile, Embroidery and Knitting, said it is possible Chinese garment products would be labeled as made in Vietnam and exported to the U.S. “We propose that the government control this situation by tracing products’ origin and severely penalizing violations. Otherwise the whole industry will have to suffer consequences,” he told local media. Diep Thanh Kiet, vice chairman of the Vietnam Leather, Footwear and Handbag Association (LEFASO), said there is a “very high” possibility that Chinese bags would be exported to the U.S. through Vietnam. If Chinese bag makers want to export to the U.S., they can set up a factory in Vietnam to facilitate the exports, and this can be easily done with a budget of just $200,000, he said. If this cannot be controlled, there could be grave consequences for Vietnamese textile firms since “the U.S. might apply the same tariffs as they have done on China,” he warned. This has happened before with steel. In May this year the U.S. slapped anti-dumping duties of 199.76 percent and countervailing duties of 256.44 percent on imports of cold-rolled steel produced in Vietnam using Chinese-origin substrate. Anh said Vietnam should not repeat this mistake twice since there is a possibility that the U.S. would conduct investigations if it has any suspicion about product origin.
A chance to thrive
But there are opportunities for Vietnamese consumer goods exports amid the trade war. About 27 percent of Chinese goods set to be affected by the new tariffs are consumer goods, and Vietnam exports many similar items to the U.S., said Can Van Luc, chief economist with the Bank of Investment and Development of Vietnam (BIDV). “The escalating trade war will create opportunities for Vietnamese exporters of consumer goods to expand their market share in the U.S.,” Luc said. A recent report by Bao Viet Securities (BVSC) said footwear and textile products have a “great opportunity” to grab U.S. market share from China. Since the Chinese yuan has weakened against the U.S. dollar and dong, Vietnamese businesses would be able to import garment, leather and other materials cheaper, and this would result in more competitive prices in the U.S., the report said. Other products to benefit from the trade war are wooden furniture, electronics, sports equipment, and toys, BVSC said. Viet Capital Securities (VCSC) pointed out in a report, “Vietnam will benefit from the trade war if U.S. businesses look for an alternative supply chain and Americans start buying Vietnamese goods.” It added that foreign direct investment might shift to Vietnam from China to avoid U.S. tariffs. The U.S. administration said it would begin to levy new tariffs of 10 percent on about $200 billion worth of Chinese products on September 24, with the tariffs to go up to 25 percent by the end of this year. China retaliated immediately with 5 and 10 percent tariffs on $60 billion worth of U.S. products. The U.S. has been Vietnam’s largest trading partner this year, with $30.2 billion in turnover in the first eight months, according to the Ministry of Planning and Investment.
Source: VnExpress International
Hundreds of thousands of garment workers once toiled in the sweaty, elbow-to-elbow workshops of midtown Manhattan before the whirring of sewing machines was mostly silenced by foreign competition.
But the city‘s garment district isn‘t dead yet.
A group of manufacturers, landlords, designers and politicians has a plan to preserve a remnant of the garment industry in a neighborhood where about 5,000 people are still employed in workshops mostly serving higher-end designers, while doing away with zoning rules that critics said put onerous restrictions on prime real estate. City Hall wants to preserve at least 300,000 square feet for garment manufacturing, but allow real estate developers to bring in more 21st century businesses. Property owners have already pledged to fill 300,000 square feet with apparel manufacturing, and the city is seeking to add more. For now, that‘s millions of fewer square feet than factories occupied in the industry‘s glory days from the 1920s to the 1960s. No one covers what is happening in our community better than we do. And with a digital subscription, you'll never miss a local story. The plan, if approved by the City Council, would lift 1987 zoning that reserved about 4 million square feet of space in the garment district‘s high-rises for apparel-production businesses. Today‘s garment workshops occupy only an estimated 700,000 square feet, according to the city‘s Economic Development Corp. And many say that number will likely dwindle away without the city‘s protection. “The truth is, it‘s a dying industry in the garment district, and who knows what would have happened to the remaining jobs without the city‘s intervention,” said EDC spokeswoman Stephanie Baez. A Council vote is expected in the next few months, after more reviews to tweak details. Under the plan, landlords would get a tax break for setting aside at least 25,000 square feet in a building for manufacturers, with tenants offered the option to sign leases for at least 15 years. The city would also spend $20 million to acquire a building that would be dedicated to manufacturing. The proposal represents a retreat from an earlier plan that would have done away with special protections entirely. That idea had been opposed by representatives of New York City‘s fashion design and theater industries, which still need highly skilled garment workers close by. “The New York fashion world depends on the Garment Center‘s tight-knit cluster of specialty suppliers and skilled workers,” said Manhattan Borough President Gale Brewer, who teamed with Council Speaker Corey Johnson to craft the new plan. Gabrielle Ferrara, who with her mother runs Ferrara Manufacturing, one of the neighborhood‘s largest garment factories, said she supports the plan. Something needs to be done, she said, to stabilize the shrinking district. “We‘re at a crisis point, 100 percent at a crisis point,” said Ferrara, whose 30-year-old business employs about 70 people and works with high-end designers. “When the city talks about investing in machinery and technology, the fact is, you can‘t invest without permanent real estate space,” she said. “I‘m nervous for the two-thirds of the industry with short leases of just months or a year there‘s no safety net for them.” As recently as 1960, many of the clothes sold in the United States were made in Manhattan‘s garment district, where the city now proposes to preserve apparel-production space from 35th to 40th streets, just south of Times Square, and from Broadway to Ninth Avenue. Remnants of the old district remain. On the second floor of a massive building on West 37th Street is Absolute Couture, where ethnic Chinese workers sit all day at rows of sewing machines — not unlike the old days, at first glance. But the workers are better paid and more skilled than the ones who once eked out a living in shifts of 12 hours or more, with an occasional rat or mouse scurrying by. Workers overheard on the street now speak Spanish, Arabic, Chinese and Korean, with Yiddish still spoken by Jewish businessmen who once dominated the district. Newcomers to the neighborhood include shiny boutique hotels, spiffy restaurants and bars, and even a tiny hotel called Nap York where guests may reserve a sleeping “pod” for as little as an hour. Recent tenants also include artists, architects, and firms specializing in advertising, technology and media. They mingle with old-fashioned wholesale storefronts that offer everything from clothing, buttons and beads to trimming, just pockets and pleating work. Outside, workers pushing racks of garments on wheels squeeze past a cacophony of trucks, cars, bicycles and people on foot. Sitting on Seventh Avenue is a tribute to the human hands at the heart of the neighborhood: Israeli-born Judith Weller‘s life-size sculpture of her father, a Jewish man wearing a skullcap at a sewing machine, next to a needle threading a button.
Source: LNR
ADDIS ABABA -- Arkebe Equbay, special adviser to Ethiopian Prime Minister Abiy Ahmed, is a busy man, as the country of around 105 million people races to meet the economic needs of the estimated 70 percent of the population that is believed to be below 30 years old. In particular, Equbay sees the textile and apparel sector and the experience of China in this sector as crucial to lifting his country from poverty and achieving an industrialized middle-income economy status by 2025. Emphasizing that the textile and apparel sector is the largest employment generator globally, Equbay told Xinhua he foresees his country, with the help of China, achieving a 30 billion U.S. dollar revenue from the sector in 10 years' time. "Ethiopia needs China's experience and knowledge in the textile and apparel sector to fill our skill gap and make Ethiopian textile products competitive in the global market," he said. With Chinese firms already an integral part of the global textile and apparel value chain and a major part of its output, Ethiopia has decided it needs China's help for its own burgeoning industry. With China announcing during the Forum on China-Africa Cooperation (FOCAC), held in Beijing earlier this month, plans to step up its efforts to help the industrialization ambitions of African countries, Ethiopia sees China as a strategic partner to achieve its manufacturing ambitions. Equbay said Ethiopia has learned from China's experience on the need first for skilled manpower and basic infrastructure, if the east African country's manufacturing ambitions are to be realized. "Ethiopia has an abundant trainable labor force, low energy cost... and almost free provision of land for those interested to invest in the textile and apparel sector," he said. Ethiopia has also learned the need for an integrated supply chain in the textile and apparel sector and, for this purpose, is currently in negotiations with 12 large Chinese mills for them to set up plants in Ethiopia. Having reconciled recently with its former bitter rival Eritrea and deciding to allow foreign investment in its logistics sector, landlocked Ethiopia is working to ease transportation bottlenecks for its exports and expand its port options now largely restricted to Djibouti. Equbay's optimism in Ethiopia's textile and apparel sector is shared by Liu Yu, economic and commercial counselor at the Chinese embassy in Ethiopia. Speaking to Xinhua, Liu said the recent FOCAC summit concluded with China pledging to assist African countries in eight major initiatives, including industrial promotion, infrastructure connectivity, trade facilitation and green development, and that Ethiopia, the first African host of FOCAC back in 2003, is one of the key African countries expected to benefit from those initiatives. "China in the next three years will provide 60 billion U.S. dollars in financing for African countries and Chinese companies will be encouraged to invest 10 billion dollars during the next three years, based on the principle of open and inclusive approach to African countries," Liu said. With China starting its successful industrialization process with the textile and apparel sector 40 years ago, Liu noted, Ethiopia, which is looking to emulate China's manufacturing success, will be given special attention. "Chinese investment has covered well over half of increased investment to Ethiopia over the past two years, with an increasing trend, helping complement Ethiopia's manufacturing ambitions," Liu told Xinhua. He said China also hopes to help Ethiopia avoid the environmental cost China had to endure to achieve its four decades of rapid economic growth. "We advise Chinese investors to establish environmentally friendly manufacturing plants, in strict compliance with Chinese and Ethiopian environmental standards," said Liu. Ethiopia, which hopes to create a carbon neutral economy by 2025, is already being supported environmentally by China, including in flagship projects like the 4 billion dollar Ethiopia-Djibouti electrified rail line and the eco-friendly Hawassa Industrial Park.
Source: Xinhua
Vietnam’s textile and garment exports to South Korea are expected to increase by 20 percent this year and continue rising in upcoming years.
Vietnam is a big garment exporter
The advantages for Vietnam’s textile and garment exports increased after multilateral and bilateral agreements took effect. According to the General Department of Customs (GDC), in the first seven months of the year, Vietnam’s total export turnover to South Korea reached $10.2 billion, increasing by 32 percent compared with the same period last year. Of these, textile and garment exports to South Korea reached $1.5 billion, an increase of 24.9 percent. In July alone, the figure was $270.7 million, up by 24.18 percent over June and 24.06 percent over July 2017. Vietnam and China are the two biggest suppliers of textiles and garments in South Korea which hold 32.7 percent and 34.5 percent of market share, respectively, compared to 29.5 percent and 40.2 percent as seen three years ago. Vietnam has made a big leap in the South Korean market, narrowing the market share gap with China. Also according to GDC, South Korea has become the fourth largest export market of Vietnam, after Japan, with import turnover of $2.7 billion in 2017. The EU-Vietnam FTA (EVFTA) applies cumulative rules of origin, allowing Vietnamese exporters to use fabric made by third countries which have FTAs with Vietnam and China are the two biggest suppliers of textiles and garments in South Korea which hold 32.7 percent and 34.5 percent of market share, respectively, compared to 29.5 percent and 40.2 percent as seen three years ago. Vietnam or the EU. South Korea is one of the third countries. Analysts commented that the principle will bring new opportunities to Vietnam to boost exports, because in the future, when more ASEAN countries sign FTAs with the EU, Vietnam will be able to expand material supply sources, while still enjoying preferential tariffs. As such, Vietnam can import fabric from South Korea to make products domestically and then export finished products back to South Korea, and use South Korean materials to make products for exports to the EU. This is a great advantage for Vietnam, which has been mostly importing materials from China. Analysts predict that Vietnam’s textile and garment exports to South Korea will increase by 20 percent this year. They said becoming the biggest garment supplier to South Korea is within reach of Vietnamese enterprises as South Koreans favor Vietnam-made garment products. As Vietnam’s textile and garment exports have bounced back, the price of textile and garment companies’ shares has increased by 20 percent. Thanh Cong Textile & Garment, Investment and Trade (TCM) reported that its profit in July alone was equal to 77 percent of the profit of the entire third quarter of 2017.
Source: VietNamNet Bridge
KARACHI: A world famous apparel brand Uniqlo plans to outsource textile garments from three Pakistani companies for its more than 3,000 outlets worldwide, people familiar with the matter said on Monday. Uniqlo Inc – a subsidiary of Japanese retail holding company Fast Retailing Inc. – has planned joint venture with three local companies, which would boost textile exports, an official told The News. Uniqlo initially selected five textile companies in Lahore, Faisalabad, and Karachi and sent its two member team to meet their representatives and assess the potential. “The initial visit of the Uniqlo team has been successful, which is a big breakthrough,” the official said, requesting anonymity. Uniqlo finally chose three companies for joint ventures in Pakistan. “They still requested for some more companies for shirt fabric and others for circular cutting and sewing,” the official added. Pakistan’s textile exports rose around nine percent to $13.53 billion for the fiscal year ended June 30, which account for more than 60 percent of the country’s total exports. Yet, Pakistan has lost its textile export share in the world market to 1.7 percent from 2.2 percent over the last decade. In February, Spanish Inditex Group, the world’s biggest clothes retailer and owner of an internationally-acclaimed fashion brand Zara, opened its maiden branch office in Pakistan to double its imports from the country. Other key foreign buying houses in the country include IKEA, Walmart Global Procurement, Li and Fung Pakistan, Target and JC Penny. The official said Uniqlo’s team planned another trip to Pakistan by end of the current month to conclude agreements with the local factories made in August. Uniqlo is a household name In Japan and known for very high quality products at low price. The brand is known for maintaining on-ground presence for quality control. “Therefore, any significant move by Uniqlo into Pakistan for investment and procurement will generate a ripple effect… it will boost textile export. From its factories, Uniqlo supplies apparels to its more than 3,000 sales outlets all across the world,” the official added. Fast Retailing is considered as the world’s third largest apparel manufacturer-retailer company. The company has 236 manufacturing factories and all are in Asia. Several are located in China and Bangladesh. Uniqlo has 3,370 sales outlets across the world and its total annual turnover is almost equal to $17 billion.
Source: The News International
In a letter to US lawmakers, the American Chamber of Commerce Cambodia (AmCham) representing US businesses there has cautioned that any US Government sanctions against the country’s garment industry would result in ‘dire consequences’, harming most at the bottom of the socioeconomic pyramid and pushing the southeast Asian nation further into Chinese arms. The US House of Representatives passed the ‘Cambodia Democracy Act of 2018’ on July 25 that could pave the way for sanctions against the country. This was after former opposition leader Kem Sokha was charged with treason and his party was dissolved by the supreme court last year. The chamber observed that despite significantly increased levels of investment from China, many of the skilled labour and management jobs within Chinese-run garment companies are held primarily by Chinese professionals, according to Cambodian media reports. This, coupled with a perception that the corporate culture within these Chinese-run organisations is difficult to tolerate, implies that the average Cambodian would choose to work in a US concern, the letter said. “As a community, this leaves America, Americans and American businesses in a strong position, provided we continue to engage,” it added. (DS)
Source : Fibre2fashion
The Textile-Home Furnishing industry — comprising manufacturers, designers, distributors and marketers of flooring, carpet and upholstery products — seems to be going through a rough patch. Rising raw material costs, higher transportation costs, a stronger dollar and a tight labor market have been creating hurdles for the industry players.
Nevertheless, the companies are registering higher demand courtesy of improving consumer confidence, a lower unemployment rate and higher disposable income. Also, the positive momentum in the U.S. housing market on the back of rising rentals, rapidly increasing household formation and a limited supply of inventory are expected to provide much support to the industry going forward. The companies are also actively pursuing accretive acquisitions in order to broaden their product portfolio and expand geographic footprint as well as market share. The companies are trying hard to offset higher costs by raising prices, expanding in growing channels, and participating in new products and geographies. Meanwhile, Hurricane Florence, the first major hurricane to hit the eastern United States this year, could be damaging for some sectors like restaurants, insurance and agriculture. That said, homebuilding companies/building product suppliers/home furnishing companies will remain in focus as cleanup and rebuilding efforts pick up the pace. Indeed, increased raw material costs as well as start-up expenses behind new products and production continue to raise concerns as the companies are required to make significant investments in new products, distribution network and manufacturing facilities, being in a highly competitive landscape. Moreover, the threat of tariffs on imports and retaliatory tariffs on exports spell trouble for the industry. If tariffs are implemented, sourcing difficulty faced by home furnishing manufacturers will end up increasing costs.
Industry Lags on Shareholder Returns
Looking at the share price performance over the past year, it is quite evident that the acquisitions and product innovations have not been able to provide a much-needed impetus to Textile - Home Furnishing industry as the industry is lagging both the broader sector and the S&P 500 market. Despite an improving economy and higher demand, the space still has a lot of uncertainty shrouding increased expenses. The Zacks Textile-Home Furnishing Industry, a six-stock group within the broader Zacks Consumer Discretionary Sector, has underperformed the S&P 500 index as well as its own sector over the past year. While the stocks in this industry have collectively declined 20.5%, the Zacks S&P 500 Composite and the Zacks Consumer Discretionary Sector have gained 17.8% and 11.8%, respectively.
One-Year Price Performance
Furniture Stocks Trading Cheap
Owing to the underperformance of the industry over the past year, the valuation looks really cheap now. One might get a good sense of the industry’s relative valuation by looking at its price-to-earnings ratio (P/E), which is the most appropriate multiple for valuing Consumer Discretionary stocks because their earnings are effective in gauging performance. Generally, the price of a stock rallies on a rise in earnings. As forecasts for expected earnings move higher, demand for the stock should drive its price. If the P/E of a stock is rising steadily, it means that investors are pinning their hopes on the company’s inherent strength. This ratio essentially measures a stock’s current market value relative to its earnings performance. Investors believe that the lower the P/E, the higher will be the value of the stock. The industry currently has a trailing 12-month P/E ratio of 14.1, which is the lowest level in the past year. When compared with the highest level of 21.2 and median level of 17.2 over that period, there is apparently plenty of upside left. The space also looks quite cheap when compared with the market at large, as the trailing 12-month P/E ratio for the S&P 500 is 20.2 and the median level is 20.1.
Price-to-Earnings Ratio (TTM)
The chart below compares the industry's valuation picture with its sector. Such a comparison ensures that the group is trading at a decent discount. The Zacks Discretionary Sector’s trailing 12-month P/E ratio of 24.9 and the median level of 24.9 for the same period are significantly above the Zacks Furniture Industry’s respective ratios.
Price-to-Earnings Ratio (TTM)
Underperformance May Continue Due to Bleak Earnings Outlook
Broader economic growth and positive U.S. housing market fundamentals present solid growth opportunities in the Textile - Home Furnishing space. However, bleak earnings arising from weak margins given high costs of raw materials, freight expenses along with start-up of new projects are certainly weighing on the near-term results of the companies in this space. But what really matters to investors is whether this group has the potential to perform better than the broader market in the quarters ahead. One reliable measure that can help investors understand the industry’s prospects for a solid price performance going forward is its earnings outlook. Empirical research shows that earnings outlook for the industry, a reflection of the earnings revisions trend for the constituent companies, has a direct bearing on its stock market performance. The Price & Consensus chart for the industry shows the market's evolving bottom-up earnings expectations for the industry and the industry's aggregate stock market performance. The red line in the chart represents the Zacks measure of consensus earnings expectations for 2019, while the light blue line represents the same for 2018. Clearly, a downward trend has been witnessed in both years.
Price and Consensus: Zacks Textile-Home Furnishing Industry
This becomes even clearer by focusing on the aggregate bottom-up EPS revisions trend. The chart below shows the evolution of aggregate consensus expectations for 2018. It appears that analysts are losing confidence in this group’s earnings potential. Please note that the $6.91 earnings estimate for the industry for 2018 is not the actual bottom-up dollar EPS estimate for every company within the Zacks Textile-Home Furnishing industry but rather an illustrative aggregate number created by our proprietary analytics model. The key factor to keep in mind is not the industry’s earnings per share for 2018 but how this estimate has evolved recently.
Current Fiscal Year EPS Estimate Revisions
As you can see here, the EPS estimate for 2018 has dropped from $7.41 at the end of March but has increased slightly from $6.88 this time, last year. In other words, the sell-side analysts covering the companies in the Zacks Textile-Home Furnishing industry have been lowering their estimates.
Zacks Industry Rank Indicates Cloudy Prospects
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates continued underperformance in the near term. The Zacks Textile - Home Furnishing industry currently carries a Zacks Industry Rank #233, which places it at the bottom 9% of more than 250 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1. Our proprietary Heat Map shows that the industry’s rank has been languishing in the bottom half over the past eight weeks.
Industry Lags in Long-Term Growth
The long-term (3-5 years) EPS growth estimate for the Zacks Textile - Home Furnishing industry has decreased to 6.7% over the past year. This compares unfavorably with 9.8% for the Zacks S&P 500 Composite.
Mean Estimate of Long-Term EPS Growth Rate
Bottom Line
The Textile - Home Furnishing industry has been grappling with increased expenses. Margins remained under pressure as accelerating raw material, transportation and labor costs continue to hamper the space.
Currently, there is only one stock that is cashing in on the positive economic fundamentals and is witnessing positive earnings estimate revisions with a bullish Zacks Rank. (You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.) Interface, Inc. (TILE - Free Report) : Headquartered in Atlanta, GA, Interface sports a Zacks Rank #1. The stock has gained 9% over the past year. The consensus estimate for current-year EPS has moved 1.4% north over the past 60 days.
Price and Consensus: TILE
However, poor price performance and south bound earnings estimate revisions mirror bleak prospects of the industry given ongoing headwinds. Below are four stocks that carry a bearish Zacks Rank that we would recommend investors to stay away from for the time being. Culp, Inc. (CULP - Free Report) : High Point, NC-based Culp carries a Zacks Rank #4 (Sell). The consensus estimate for current-year EPS has moved 14.9% south over the past 60 days. Price and Consensus: CULP The Dixie Group, Inc. (DXYN - Free Report) : Dalton, GA-based Dixie Group’s consensus estimate has declined to a loss per share of 4 cents from earnings of 6 cents per share for the current year over the last 60 days. Price and Consensus: DXYN Mohawk Industries, Inc. (MHK - Free Report) : Calhoun, GA-based Mohawk currently carries a Zacks Rank #5 (Strong Sell). The consensus estimate for current-year EPS has moved 5.8% south over the past 60 days.
Price and Consensus: MHK
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Source: Zacks
A THAI company has signed a memorandum of understanding (MoU) with a petrochemical refiner to develop textile products using plastic waste, at a time when all eyes are on the harm plastics are doing to the planet. Saha Pathana Inter-Holding Plc (SPI) and PTT Global Chemical PLC (GC) aim to bring Thai textile products up to international standards, a media release said on Tuesday. Under the MoU, GC will provide technological know-how and support for transforming plastic waste into textile products. The companies will focus on developing products that are less environmentally damaging, while bringing high standards to the task of reducing Thailand’s waste problems. “SPI recognises the importance of investment in the textile industry, and realises that textile products created from plastic waste are an interesting business, as the global shift of sustainability and environmental protection continues to rise among consumers,” Vichai Kulsomphob, SPI president and executive director, said. “In this partnership, GC will bring expertise in the petrochemical business and manufacturing of plastic resin by incorporating innovative and groundbreaking technology. The combined strengths of the two organisations will ensure the promise of long-term business and simultaneously maximise the potential for Thai businesses, while also corresponding with the growing trend of green business across the world,” Vichai added. Apart from creating high-value textile products from plastic waste, the business collaboration also aims at expanding into both domestic and international markets. The tie-up will also extend efforts to pursue corporate social responsibility activities such as exhibitions and community development activities.
Source : The Nation
