The lender said that the borrowing account was classified as non-performing asset (NPA) in July 2015 and had been fully provided for and as such, no negative impact on the bank's profitability at present. Private lender Karnataka Bank on December 4 said it has reported to the RBI a fraud of Rs 40.39 crore in the credit facilities to Hanung Toys and Textiles Ltd, which has already been declared a non-performing borrowing account. Hanung Toys and Textiles Ltd (borrowing account) dealing with the bank since 2008 had availed various credit facilities under consortium arrangement wherein, Karnataka Bank was one of the member banks, it said in a regulatory filing. "On the basis of forensic auditor's report submitted to the consortium, some of the member banks have reported to the Reserve Bank of India (RBI) regarding fraud in the borrowing account. "In line with the Consortium decision, Karnataka Bank has reported to RBI a fraud amounting to Rs 40.39 crore in the credit facilities extended earlier to the borrowing account, on account of diversion of funds," Karnataka Bank said. The lender said that the borrowing account was classified as non-performing asset (NPA) in July 2015 and had been fully provided for and as such, no negative impact on the bank's profitability at present. Earlier in November, Authorities at Delhi airport had detained debt-ridden Hanung Toys promoter Ashok Kumar Bansal and his wife Anju Bansal following lookout circular (LOC) issued by Punjab National Bank (PNB).Hanung Toys and Textile Ltd owes Rs 2,300 crore to a consortium of 15 lenders led by state-owned PNB, which alone has exposure of Rs 599 crore. PNB had issued 13 LOCs including one against the promoter of Hanung Toys. Several banks of the consortium have already declared the company a wilful defaulter.

Source: Money Control

India’s GDP could decline by one per cent due to trade wars and protectionism: World Bank

The Bank estimates that if trade wars and protectionist tendencies continue among India’s major export destinations, then India’s income and exports could both decline by up to one percentage point. India faces twin threats to its income from global trade which makes up 48 per cent of India’s GDP – rise of protectionism and trade wars and technological change. The World Bank believes that as much as 1 per cent of India’s GDP could be shaved off by ongoing trade wars. “If trade wars escalate, it could cost India half to one per cent of its GDP,” said Aaditya Mattoo, the World Bank’s Chief Economist for East Asia and Pacific and coauthor of World Development Report 2020 :Trading for Development in the Age of Global Value Chains, in an interview to The New Indian Express. Around 44 per cent of India’s GDP is accounted for by its exports and imports. While India has gained so far from trade wars as some trade has been diverted to India and its exports have risen by half a percentage, the Bank estimates that if trade wars and protectionist tendencies continue among India’s major export destinations which include the US and Europe, then India’s income and exports could both decline by up to one percentage point. In such a scenario, Mattoo argues that poverty could actually increase in India by half a per cent, pushing as many as 7 million people into poverty defined by an income per day benchmark of $ 5.50 a day. Globally it is estimated that protectionism could push more than 31 million people into poverty and see global GDP contract by $ 1.4 trillion. Mattoo says that the twin threats from automation and protectionism is disrupting global value chains where countries trade parts across borders to create a product. New technologies threaten to draw production closer to markets and reduce demand for labour. Global value chain production which made up 38 per cent of India’s exports has now slumped to 36 per cent. The problem with a fall in exports which are part of the global value or supply chain is that a 1 per cent increase in GVC participation is estimated to boost per capita income by more than 1 per cent, almost double the rise in per capita due to conventional trade. Interestingly, the study says India has over-achieved in global value chains in the more complex services chain but has under-achieved in basic labour-intensive manufacturing, especially in sectors like textiles and light engineering where manufacturers are moving out of not only the sophisticated West but also out of China.

Source: The New Indian Express

Miscellaneous goods: Commerce ministry seeks better classification of ‘other’ imports

The government has already hiked customs duties on scores of items in recent years to discourage inflows of select items, ranging from electronics items such as AC and refrigerator to jewellery. The commerce department has asked the revenue department to clearly identify each product in the ‘others or miscellaneous goods’ categories so that imports of each item can be better monitored, a senior government official told FE. A customs official said the value of imports under such categories has come down drastically in recent years due to better classification of goods. Nevertheless, more steps can be taken in this direction to further bolster this system, he added. Imports under the ‘miscellaneous’ goods category – which made up for as much as $7.1 billion, or 1.8% of the country’s total merchandise imports in FY17 – stood at $15 million in FY17 and $51 million in the last fiscal, thank to an upgrade of the classification system in recent years, said the official. For its part, the commerce ministry wants to ensure that the classification system should be strengthened in such a way that unscrupulous elements don’t get a chance to push unclassified commodities into the country in large volumes without causing a flutter. The move comes at a time when the ministry is tightening its scrutiny of irrational spike in imports or illegal trading and has also stepped up efforts to promote the Make in India programme. India has been seeking to contain its trade deficit, which hit a six-year high of $176 billion last fiscal, according to a quick estimate of the commerce ministry. Reining in nonessential imports is part of the drive to curb the trade deficit. The government has already hiked customs duties on scores of items in recent years to discourage inflows of select items, ranging from electronics items such as AC and refrigerator to jewellery. In September last year, basic customs duties were raised on 19 tariff lines that accounted for an import bill of Rs 86,000 crore in FY18 by 2.5-10 percentage points. It was followed up by another round of hike last year on scores of other items. The government is planning another round of hike on items, including toys and furniture, in the current fiscal.

Source: The Financial Express

RBI must take unconventional measures as rate cuts fail to stimulate faltering economy

It’s time for the Reserve Bank of India to take unconventional policy measures as rate cuts are failing to stimulate the economy, according to the head of fixed income at IDFC Asset Management Co. It’s time for the Reserve Bank of India to take unconventional policy measures as rate cuts are failing to stimulate the economy, according to the head of fixed income at IDFC Asset Management Co. The central bank, which reviews policy on Thursday, should look to pull down long-term yields by selling short-tenor bonds and reinvesting in longer-term ones, said Suyash Choudhary, who correctly predicted the credit crunch that has been hurting banks. “Cutting policy rates is no longer enough,” Choudhary, who oversees $10.5 billion in debt, said in an interview in Mumbai. The concept proposed by Choudhary is similar to Operation Twist used by the U.S. Federal Reserve in 2011-2012 in an effort to cheapen long-term borrowing and spur bank lending. The Fed then swapped short-term Treasury securities for longer-term government debt, which reduced the gap between two- and 10-year yields. In India, the spread between the most-traded 10-year notes and two-year debt is the widest in nine years. That’s hindered the pass through of five rate cuts this year, frustrating efforts to revive the $2.7 trillion economy. Data last week showed gross domestic product fell below the 5% rate for the first time in six years. “The RBI can buy bonds from the market to adjust the term spreads with a view to facilitate transmission,” said Choudhary. “Alternatively, it can buy medium- to long-end bonds and sell short-end bonds. These measures require conviction on the conceptual point of whether term spreads matter for transmission.” The Reserve Bank of India didn’t respond to a request for comments. The weak GDP print has also reinforced doubts about the government meeting its budget aim of 3.3% of GDP this fiscal year as it continues to push for growth. That’s put long-tenor bonds under pressure despite the more than 3 trillion rupees ($42 billion) of excess liquidity in the banking system. “There are enough people who fear that the fiscal lever will ultimately be deployed to boost growth even though there’s zero space,” said Choudhary. “If that were to happen, the yield curve can steepen further.” The yield on benchmark 10-year bonds was little changed at 6.47% on Wednesday. The yield spread between the most-traded 10-year notes to two-year debt is at 110 basis points, the highest since 2010.

Source: The Financial Express

States demand pending GST compensation

At least eight states have asked the central government to expeditiously release the compensation promised to them for any revenue loss due to switchover to goods and services tax. The states have not yet received compensation for August and September. Moreover, compensation for October and November is due on December 10. Finance ministers of Delhi, Punjab, Puducherry and Madhya Pradesh, and representatives of Kerala, Rajasthan, Chhattisgarh and West Bengal met Union finance minister Nirmala Sitharaman on Wednesday and said the delay in GST compensation transfer has put them in an acute financial position. With compensation for the next period (October-November) due soon, the “government is under obligation to pay”, Punjab finance minister Manpreet Singh Badal said. He said Sitharaman assured states that the compensation will be released as early as possible, but she did not specify any timeline. Delhi deputy chief minister Manish Sisodia alleged that the Centre has delayed payment despite adequate money in the compensation fund. Around Rs 50,000 crore is there through cess collection, he said. “We thought we will make appeal to the Union finance minister saying that she must personally look into this and not violate the constitutional provisions as passed by Parliament of India,” Sisodia said. Madhya Pradesh commercial tax minister Brajendra Singh Rathore said the Centre owes nearly Rs 3,000 crore to the state for August-November.

Source: The Economic Times

Commerce Ministry division to track FTA utilization

Separate division planned by Commerce Ministry to monitor information on trade pacts India’s existing free trade agreements (FTAs) with partner countries are likely to be monitored by a separate division to be created in the Commerce & Industry Ministry. This division will keep track of the extent to which FTAs are being utilised by Indian industry and also identify non-tariff measures that are acting as hurdles. “The Commerce & Industry Ministry is considering setting up a trade monitoring division that will monitor utilisation of current FTAs and the non-tariff measures taken by partner countries,” a government official told BusinessLine. Tracking trade diversion The division, if created, will also take note of the trade diversion taking place due to third country FTAs and will give the Ministry some indication of whether an FTA needs to be explored with a particular country or grouping. It is to coordinate with the Directorate General of Foreign Trade, the Department of Revenue and the Directorate General of Commercial Intelligence and Statistics. After India’s last-minute decision to exit the Regional Comprehensive Economic Partnership — a mega FTA being negotiated between 16 countries — the government is focussing more on trying to understand how free trade pacts could work for India. The RCEP included the 10-member ASEAN, China, Japan, South Korea, Australia, New Zealand and India. As per various studies, including one carried out by the NITI Aayog, India’s utilisation rate for most FTAs is very low (between 4 per cent and 20 per cent). India’s existing FTAs with the ASEAN, Japan and South Korea, too, have worked out more in favour of the partner countries and has resulted in an increase in trade deficit with the countries. “It is evident that Indian industry can benefit from FTAs only when utilisation rate is improved. “It will happen when there is more awareness about the pacts and also non-tariff barriers are removed,” the official said. The proposed division is also likely to undertake outreach programmes to sensitise exporters on the utility of existing FTAs, the existing provisions and how to go about the paperwork required to get the entitlements.

Source: The Hindu Business Line

In a WTO Without Dispute Settlement

India’s international trade, already affected by the general slowdown in global growth, is likely to face further headwinds. The appellate body of the World Trade Organisation (WTO) would almost certainly become non-functional soon, because America has blocked new appointments to the court. India’s trade policy needs to anticipate a broken dispute-settlement mechanism at the WTO, for now, and take proactive action, including to promptly seek regional and bilateral trade pacts. The WTO appellate court is supposed to consist of seven judges; the court decides on appeals against decisions by the Dispute Settlement Mechanism on alleged violation of global trade rules. But the WTO bench has of late dwindled to just three judges, and two of them will retire this month; a single judge cannot hold court. So, dispute settlement may well go into deep freeze at WTO, unless the Trump administration does a rethink, which is unlikely. India accounts for a mere 2% of world trade, and there can be much upside to our trade relations if we can get our act together. The way forward is to rationalise tariffs, so as to gain from increased trade and openness. In tandem, there is the pressing need to shore up innovation, enterprise and profit from trade gains. What is also required is systematic policy action to fill the infrastructure deficit to bring down costs and boost our trade competitiveness. Trade strategy needs sound thinking through. The EU, Canada and Norway are reportedly going ahead with an interim arbitration mechanism at the WTO, consisting of retired appellate body members. India clearly needs to support the move. In parallel, New Delhi needs to urge Washington to revisit its summary stalling. The US deems the appellate body much too European, and a via media is surely possible going forward. The Americans have been unhappy with the appellate body rulings for long, and India needs to back calls for WTO reforms. It is very much in our interest to seek a rule-based multilateral trading system. Unilateralism merely makes world trade more uncertain.

Source: The Economic Times

Leading industrialists to take part in Punjab investors’ summit starting Thursday

The highlight of the session will be an MoU exchange with e-commerce platforms Flipkart and Amazon. Leading corporate honchos of the country, including Sunil Mittal, Uday Kotak, Sanjiv Puri, will attend the two-day Progressive Punjab Investors Summit, starting on Thursday. The event, which is being organised by the Punjab government, will see participation from micro, small and medium enterprises (MSMEs), leading industrialists, new-age entrepreneurs, foreign missions and other dignitaries. An interactive session with Chief Minister Amarinder Singh on Thursday will be the highlight of the investors’ summit, with a focus on putting the state’s MSME sector on the centre stage of the global value chain, the state government said in a release on Wednesday. The chief minister’s session on ‘Blueprint for accelerating growth’ will have East India Hotels Executive Chairman P R S Oberoi, Kotak Mahindra Bank Executive Vice Chairman & MD Uday Kotak, ITC Chairman Sanjiv Puri, Hinduja Group Europe Chairman Prakash Hinduja, Hero Enterprise Chairman Sunil Kant Munjal and Vardhman Textiles Vice Chairman & Joint Managing Director Suchita Jain as participants, it said. Satoshi Suzuki, Ambassador of Japan to India, will deliver his keynote address and will also set the tone of the two panel discussions, the release said. The second panel discussion of the afternoon session will see participation of Bharti Enterprises Chairman Sunil Bharti Mittal, HDFC MD Aditya Puri, DLF Vice Chairman Rajeev Singh, Sharaf Group Vice Chairman Sharafuddin Sharaf and Bharat Hotels (Lalit Hotels) CMD Jyotsna Suri. The investor summit is set to build strong business partnerships for the state across sectors, with thrust on MSMEs, it added. It will be a platform for global leaders, industrialists and experts to come together to share their narratives on emerging markets and discuss ways to address the shifting industry requirements in this age of disruptions, said Vini Mahajan, Additional Chief Secretary, Punjab. The panel for MSME session will include representatives from World Bank and UNIDO, and will set the context of the summit’s theme. The highlight of the session will be an MoU exchange with e-commerce platforms Flipkart and Amazon. The UK Country session will see a discussion on ‘Punjab & UK: Opportunities for Innovation and Technology’. British Deputy High Commissioner to India Andrew Ayre will make a presentation during the session, the release said.

Source: The Financial Express

Rupee settles 13 paise higher at 71.53 against dollar

The Indian rupee pared initial losses to close 13 paise higher at 71.53 against the US dollar on Wednesday as sentiment revived after reports suggested the US-China deal is nearing. Forex traders said market participants are hopeful that the Reserve Bank will go for another rate cut in the RBI policy meet on Thursday. Besides, the rupee also got support from foreign fund inflows in primary equity market. At the interbank foreign exchange, the rupee opened weak at 71.76 against the US dollar. During the day, the domestic unit touched a high of 71.53 and a low of 71.81. The local unit finally settled for the day at 71.53 against the US dollar, higher by 13 paise over its previous closing. The Indian rupee on Tuesday had closed at 71.66 against the US dollar.

Source: The Hindu Business Line

International

OPEC nations grapple with oversupply of oil

Saudi Aramco's stock market debut, which is expected Friday, has put Saudi Arabia in a precarious position as it bets on what volume of oil production will hit a sweet spot for prices, with the added pressure of considering the interests of the state-run oil giant's shareholders. The world may be heading for an even greater oversupply of oil, and that possibility — which could drive down fuel and energy prices — is hanging over members of the OPEC cartel as they head into negotiations Thursday. The oil-producing nations will decide whether to stick with production cuts they’ve endured for the past three years, relax them or deepen them in the hopes of propping up prices. They’re negotiating through a tangle of tensions driving members in competing directions. Saudi Aramco’s stock market debut, which is expected Friday, has put Saudi Arabia in a precarious position as it bets on what volume of oil production will hit a sweet spot for prices, with the added pressure of considering the interests of the state-run oil giant’s shareholders. The nation is already bearing the burden of the largest share of OPEC’s production cuts. But some nations such as Iraq have been ignoring the agreement and producing more than their allotted amount. “If people are already not complying to the current agreement, what’s the point to those that are complying cutting more? So the others can go on cheating?” said Bhushan Bahree, executive director of global oil at research group IHS Markit. “I think the Saudi position is they’re willing to cut more if needed, but they want better compliance.” Brent crude oil hovered around $61 per barrel Wednesday afternoon. Prices have fluctuated throughout the year, reaching nearly $75 per barrel in April after US sanctions on Iran and Venezuela limited world supply, but lingering trade tensions between the U.S. and China dampened economic expectations, pushing prices back down. West Texas Intermediate, the U.S. benchmark crude, was trading at around $56 Wednesday afternoon, and its price followed a similar trajectory throughout the year. As it stands, OPEC nations have agreed to cut production by 1.2 million barrels per day through March 2020, and most analysts expect OPEC nations to extend those production cuts until at least summer. “If they just keep the existing situation, then you get this massive oversupply,” said Jacques Rousseau, managing director at Clearview Energy Partners. Rousseau believes OPEC nations will cut production by an additional 400,000 barrels per day to keep supply and demand in balance during the first half of next year, with the cuts made mainly by Kuwait, Saudi Arabia and the United Arab Emirates. But substantial cuts may be difficult to achieve with some OPEC members following their own agendas. “Iraq has exceeded its production target every month this year,” Rousseau said. “Granted, there’s some unrest going on in the country, but I don’t think they’ll voluntarily reduce.” Meanwhile, Russia, which is not part of OPEC but has been following its lead on production limits in recent years, has indicated it wants its oil production re-calculated in a way that’s in line with OPEC nations. That could enable it to produce more oil. And even if members of the cartel cut production, there’s more oil coming online from non-OPEC nations including the U.S., Canada, Brazil, Norway and Guyana, which will more than make up for any drop in production, according to IHS Markit. The dynamic to watch will be whether Russia and Saudi Arabia will come to an agreement on production levels in the early and middle parts of next year, said Heather Heldman, managing partner at Luminae Group, a geopolitical intelligence firm. “If something goes awry with Saudi production in the next few months, and there’s a fairly good chance something will happen … Russia’s going to be the first party looking to fill that gap,” Heldman said. “And I think the Saudis know that.”

Source: The Financial Express

Africa: Ethiopia Is Well Positioned to Become the Textile and Apparel Manufacturing Hub of Africa

On 19 November, the International Trade Centre (ITC) organized, under the Partnership for Investment and Growth in Africa (PIGA) project, a dialogue on Ethiopia’s potential to become the next textile and apparel (T&A) supply base for the world. The discussion was organized in collaboration with the Ethiopian Investment Commission (EIC) and the China Chamber of Commerce for Import and Export of Textile and Apparel (CCCT). The event gathered more than 100 international buyers, potential Chinese investors, representatives of Chinese and foreign-owned companies in Ethiopia and representatives of Ethiopian institutions. It was followed by field visits to T&A factories in several industrial parks around Addis Ababa. Several advantages to become a world textile manufacturing hub Despite challenges to overcome, such as reliable energy supply, customs procedures, lack of backward linkages and insufficient skills, all participants agreed that Ethiopia could become one of the next textile manufacturing hubs of the world with its wide and young labour pool, growing market potential, advantageous trade agreements, including the future African Continental Free Trade Area (AfCFTA), and strategic position. Mr. Zhang Xi’an, the Vice President of the China Chamber of Commerce for Import and Export of Textile and Apparel (CCCT), explained, “I led several missions of potential Chinese investors to Ethiopia in recent years and witnessed the great progress made in the development of the industry. I believe Ethiopia can become an important T&A manufacturing hub.” “If Ethiopia manages to solve its power issue, it has the potential to become a key T&A supplying hub,” added Mr. Neil Hackett, Edinburgh Woollen Mill Ltd. Group Managing Director for Sourcing & Supply Chain. “We now have an office in Ethiopia and we are aiming for long-term development,” said Mr. Anas Tazi, Country Leader for Decathlon in Ethiopia. Mr. Arwin Ludiansyah, Country Controller of H&M Ethiopia Production Office, pointed out that, “Ethiopia may be able to develop the sector more quickly than other countries have in the past because of technological advancement and lesson learning.” The government has also prioritized the development of this sector, set up the Ethiopian Textile Industry Development Institute (ETIDI) to strengthen the overall value chain, and created a conducive investment climate for the sector. These efforts have been acknowledged by all participants, even though the above outlined challenges remain to be solved. Sustainable investments are key for the sector’s development All stakeholders emphasized the role of foreign direct investment (FDI) in leveraging this potential and the importance of attracting sustainable investments that comply with social and environmental standards. Mr. Goshu Negash, President of the Ethiopian Textile and Garment Manufacturers Association, explained, “The T&A sector stagnated for many years, but it has been growing rapidly in the recent years, mostly due to foreign investors. The CMT (cut, make and trim) purchasing model can only be a stepping stone for the sector’s growth.” “Chinese investment has contributed to the growth of the sector through knowledge and technology transfer, closing local companies’ capital gap and opening up new markets, and the government is looking forward to working with more Chinese investors and international buyers to further develop the sector,” added Mr. Sileshi Lemma, the Director General of the Ethiopian Textile Industry Development Institute (ETIDI). Underlining the magnitude of Chinese investment in Ethiopia, which makes up 60% of overall FDI in the country during the last two decades, His Excellency the Ambassador Tan Jian advised, “The Ethiopian Government should focus on addressing the concerns of existing investors, because they will talk to other potential investors about the business environment and will influence their investment projects.” Mr. Temesgen Tilahun, Deputy Commissioner of EIC, emphasised, “Attracting sustainable investment is at the heart of our efforts to attract and benefit from foreign investment. We want investment that generates inclusive growth without generating irreversible destruction to the environment and resulting in unsustainable development.” International buyers are looking for suppliers who comply with sustainability standards “With end customers and millennials requesting increased transparency and traceability on products purchased, implementing sustainable practices is not an option, but a nobrainer,” explained an international buyer. “We are aware that companies sometimes need time and support to understand and implement these standards, but we are willing to support them in this process.” The sustainable investment handbook developed by PIGA to guide investors on how to incorporate sustainable practices into their investment journey was, therefore, very well received, as it gives concrete guidance on which social and environmental regulations investors need to comply with, where to seek support and which additional sustainability measures could be implemented. Mr. Temesgen explained, “We are confident that investors will find these guidelines useful to their efforts in making socially and environmentally responsible investments. EIC management and staff are ready to respond to investors seeking clarification.” Decisive progress on T&A investment projects Along with the fruitful discussions, the event enabled PIGA to make progress on three investment projects in Ethiopia’s textile sector. The projects, worth approximately $100 million, have the potential to create an estimated 10,000 jobs, mostly for young women. These projects should materialize in the coming months. The Partnership for Investment and Growth in Africa (PIGA) is part of Invest Africa (IA), a flagship programme of the United Kingdom of Great Britain and Northern Ireland’s Department for International Development (DFID) facilitating foreign direct investment with high development impact into selected African countries. Under IA, PIGA aims to contribute to job creation and sustainable growth in Ethiopia, Kenya, Mozambique and Zambia by supporting these countries to attract foreign direct investment, specifically Chinese investment, in the agro-processing and light manufacturing sectors. PIGA is also designed to enhance the capacity of these countries for effective investment promotion. PIGA is implemented by the International Trade Centre (ITC) in cooperation with the China Council for the Promotion of International Trade (CCPIT) and the China-Africa Development Fund (CADFund).

Source: Geeska Afrika

Netherlands roundup: Textile scheme MITT to temporarily reduce accrual to avoid cuts

MITT, the €3.2bn Dutch pension fund for the textile sector, said it wanted to temporarily reduce annual pensions accrual from 1.6% to 1.5% in order to minimise the chance of rights cuts in 2021. It explained that the measure would set the scheme on a course to a funding of 100% at 2020-end. The pension fund had to come up with a new contribution proposal after it had charged a premium of 24% of the pensionable salary in the past five years. “Continuing the current arrangements is likely to lead to a coverage ratio of 99% at the end of next year, which would mean a 1% cut if the minimum required funding were to be 100%,” explained Gaby Lammers, the pension fund’s chair. “Preventing this is very important. As we need to raise our contribution to a costscovering level, and also must factor in lower future returns on investments, we already expected a significant premium rise for 2021,” he pointed out. The contribution increase must enable annual pensions accrual to return to 1.6%. Recently, social affairs’ minister Wouter Koolmees decided to temporarily reduce the minimum required funding to 90% in order to avoid a reduction of pension rights and pensions pending the elaboration of the pensions agreement set in June. In the direct wake of the accord, the minister had already decided to decrease the minimum required coverage from 104.3% to 100% for the same reason. Aegon to switch to IDC plan for its staff Dutch insurer Aegon has confirmed that it wants to switch pensions accrual for its 3,800 staff from an insured plan to individual defined contribution (IDC) arrangements. It said continuing the current insured pension plan – carried out by the sponsor – was no longer affordable. The trade unions as well as the central works council (COR) have approved the plan. The unions said the employer had declined to discuss the alternatives suggested by them, including joining a consolidation vehicle (APF) or an industry-wide pension fund. Aegon, which has a low-cost defined contribution vehicle – Aegon Cappital – said it hadn’t yet completed the selection process for a new provider. The recent negotiations between Aegon and the unions in particular focussed on the compensation of workers for the shift of risks to staff. Although Aegon insisted that it would come up with a compensation deal, it declined to provide details. Trade union De Unie, in turn, said its members weren’t very satisfied with the compensation proposal, but they had agreed because it was the best result achievable. The new IDC plan is to come with an age-dependent contribution.

Source: IPE

What differs garment from expensive to cheap: in a tech view

We spent a whole lifetime surrounded by all kinds of textiles since our birth, we might have some cheap clothing bought from the local store, just something off-the-rack, or some really nice brand garment from the super mall stores, but, what makes the price so different? Why we agree to pay the extra money? Regardless of the identical branding effect as a status symbol, the short answer might be: They look nicer, last longer and comfortable to wear. Yes, quality is all about the fabric and the construction, today we are going to dive right into this topic from a Tech view – testing brings high quality and safety textiles, which in return differs the selling price. All fabrics are created equal? With the thought of all fabric types are created equal like “Cashmere is cashmere, and cotton is cotton.” is a common mistake people make. They are not created equally, high quality means intervention at the source, let’s revert back the journey of the garment, from the fiber to yarn, from yarn to fabrics, and finally to garments, every stage needs to be tested to ensure some standards are met, good fiber makes good yarn, good yarn be made to good fabrics. What makes fabrics durable? Strong to wear Durable means garment is not to break down easily in daily wearing, no one like their clothes being too easy to break while wearing. How industrial professionals ensure durability? There is a list of testing need to be conducted to ensure the physical strength of garments like: Yarn strength testing, textile tensile testing, tear testing, bursting strength testing, abrasion testing… *bursting strength: bursting strength is the resistance ability to bursting pressure, it describes how strong the textile reacts to applied pressure. If you are interested in how to conduct the test through a bursting strength tester. Still looks nice in color after a lot of washing and daylight exposure To ensure the color does not fade away after washing and sun exposure, procedures like washing fastness test, light fastness test are done to get the performance of the fabrics. Colorfastness testing usually is carried out before the garments production(cloth cutting, sewing and etc). What ensures the clothes comfortable to wear? For different situations, you will choose different clothes, for example, what you would like to describe your favorite sportswear for running? “It does breath” it won’t make you feel wet after sweating, in textile industry, air permeability test is designed for this special purpose, to offer the garment designer solid information about whether the materials he or she choose will be comfortable to wear in after being made to garments. Garment safety consideration The safety of fabrics are mainly related in one stage: the dyeing and finishing process, there are five common potential hazards need to be tested to ensure the safety: Formaldehyde content, pH content, colorfastness, odor, banned azo dyes: o Formaldehyde content: Textiles containing formaldehyde will release free formaldehyde during use and wearing. Through the human respiratory tract and skin, it strongly stimulates human respiratory tract mucosa and skin, which can cause respiratory tract inflammation and skin inflammation. May cause strong irritation to the eyes. o Fastness to dyeing. There are three reasons for using dye fastness as a basic safety indicator (compare to good looking factors, this one is much more serious). The first is that dyeing fastness is directly related to the detection of banned azo dyes and heavy metals in textiles. The second is that if the dye can be permanently fixed on the textile without being transferred to the skin, it will not cause harm to the human body. When the dyeing fastness of the textile is not good, the dye will be transferred from the textile to the human skin during wear and use on. Third, for infants and young children, it is possible to chew the used and worn textiles and suck the dyes in the textiles, thereby causing harm to the physical health of infants and young children. Conclusion As you can see, high-quality garments is the result of a lot testing to guarantee, which demands more investment to the raw material testing, manufacturers will either to build their own textile testing labs or find a third-party testing agencies, which do add a lot of costs to the whole products, material quality and safety performance plus the design, fit, craftsmanship, brand story, all these add the value to the garments, that what exactly you for your extra money for.

Source: isurfwebster

Lenzing strengthens commitment to circular economy

Lenzing Group has announced another breakthrough for its pioneering Refibra technology with the industry’s first successful production of Tencel Lyocell fibres using post-consumer cotton waste as part of the recycled raw material proportion. Currently, Refibra technology features the upcycling of a substantial proportion of preconsumer cotton scraps from garment production and mixing with virgin wood pulp, to produce new Tencel Lyocell fibres. In September 2019, Lenzing announced the first phase of Refibra technology upgrade, by increasing the composition of pulp made from upcycled cotton scraps collected from garment manufacturing process to up to 30%. In the second phase, amongst the 30% of recycled raw material content, Lenzing can incorporate up to 10% of post-consumer cotton waste into the mixture of recycled materials alongside pre-consumer cotton waste. Tencel Lyocell fibres with Refibra technology are produced on demand and capacity can reach thousands of tons for both generations, the Austrian headquartered company reports. “Our world’s forests and climate need these kinds of Next Generation Solutions at both scale and speed in the cellulosic fibre sector. Canopy applauds Lenzing for the vision of making textile waste recycling common place and for launching this commercially available product line with the first steps of post-consumer recycled content,” said Nicole Rycroft, Executive Director of Canopy. “We look forward to Lenzing’s leadership as they work to significantly increase the volume of their raw material that comes from Next Generation feed-stocks, and we know brands and retailers are looking to preference producers who hit the goal of a 50% post-consumer recycled fiber line first.” With growing interest around the concept of ‘circular economy’ across the globe, the scaled production of Tencel Lyocell fibres using post-consumer cotton waste is a key milestone for Lenzing’s pursuit to build a fully sustainable textile ecosystem. The second phase upgrade of Refibra technology poses tremendous business opportunities and helps drive greater developments for circular economy. Lenzing believes that the growing adoption of recycled textiles is an essential part of the fiber industry’s future growth strategy. Such frontier production model can help revolutionize the fashion industry and empower brands who are looking for ecoresponsible textile value chains. Lenzing’s vision is to make textile waste recycling a common process like paper recycling. “Based on the UN Sustainable Development Goal (SDG) 12, Responsible Consumption and Production, it is Lenzing’s clear vision to produce fibres with Refibra technology using post-consumer textile waste as raw materials. Being able to use discarded garments consisting of a wider range of materials will greatly enlarge the raw material basis for textile recycling,” the company said in a statement. “This innovation is a ground-breaking step towards tackling the global issue of textile waste disposal. At the same time, it reduces the extraction of wood as a raw material and relieves the pressure on global forest ecosystems. Our vision includes recycling of fabrics and garments from Lenzing’s own materials. Lenzing is the first producer of wood-based cellulosic fibres offering Global Recycling Standard (GRS) and the Recycled Claim Standard (RCS) offering perfect transparency for the materials used during production.” Produced in eco-responsible closed-loop production process, fibres produced using Refibra technology are 100% bio-based. The fibres will also feature properties of enhanced breathability through good moisture management, silky smoothness and strength. By leveraging such innovative breakthrough, Lenzing says it has been working closely with brands and industry stakeholders to pursue a more collaborative driving force for the transition towards greater inclusive and circular economic growth. “For several years, we have witnessed a rise of eco-consciousness amongst consumers. Consumers have been demanding more sustainable product options in their shopping list. If a company wants to truly improve its sustainability practice, it needs to re-examine its current business model and consider introducing new products or technologies with recyclability and reusability in mind. At Lenzing, sustainability is part of our DNA, and we will continue to stand at the industry forefront to assist businesses with the implementation of eco-practices in their operations,” said Florian Heubrandner, Vice President of Global Business Management Textiles of Lenzing.

Source: Innovation in Textiles

Japan’s parliament approves trade deal with US

Trump was eager to make a deal with Japan to appease the US farmers. Japan’s parliament approved a trade pact with the United States (US) that opens the country’s markets to American beef and other agricultural products, as Tokyo tries to thwart a threat from Donald Trump to impose new tariffs on its lucrative car exports. The deal cleared a last hurdle with approval from Japan’s upper house on Wednesday, clearing the last hurdle. The US has been pressing for the agreement to come into force by January 1, which could help Trump land votes for his 2020 re-election campaign in agricultural areas that may benefit from the deal. Prime Minister Shinzo Abe’s ruling Liberal Democratic Party coalition holds majorities in both houses of parliament and was able to win passage easily. The deal has nevertheless been criticised by opposition lawmakers, who say it gives away bargaining chips without a written guarantee that Trump wont impose so-called national security tariffs as high as 25 per cent on the country’s auto sector. Trump was eager to make a deal with Japan to appease the US farmers whose access to the Chinese market has been constrained as a result of his trade war with Beijing. US agricultural producers, also reeling from bad weather and low commodity prices, are a core component of Trumps political base. The threat of punitive tariffs on the exports of cars and car parts, a $50 billion-a-year sector that is a cornerstone of the Japanese economy, pushed Abe to accept two-way trade talks with the US after he failed to persuade Trump to return to a Pacific pact he had rejected. Abe has said Trump assured him when they met in New York in September that he would not impose fresh tariffs. Under the current deal, Japan is set to lower or abolish tariffs on US beef, pork, wheat and wine, while maintaining protection for its rice farmers. The US will remove duties on Japanese exports of some industrial parts. A second pact that was approved simultaneously aims to provide a legal foundation for smooth digital trade between the worlds largest and third-largest economies. It bans both countries from imposing tariffs on products distributed electronically, such as software and games. Japan’s Cabinet Secretariat calculated that the two-way deal would bolster its real gross domestic product by 0.8 per cent, but its calculations were based on the assumption that existing tariffs on Japanese car exports to the US would be removed. Domestic agricultural production was set to fall by between 60 billion-110 billion yen ($552 million-$1 billion), according to the same calculations. The two sides are set to enter preliminary talks on a second round of trade negotiations after the deal goes into force, with Japan saying it still hopes to get existing car tariffs removed.

Source: The Hindu Business Line