The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 01 FEB, 2020

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Economic Survey 2020 pitches for integrating 'Assemble in India' into 'Make in India'

On the much debated job creation issue, the Survey highlights that India can look at creating employment by emerging as a major hub for final assembly in a range of products. India can raise its export market share to about 3.5 percent by 2025 and 6 percent by 2030 by integrating 'Assemble in India' for the world into 'Make in India', according to the Economic Survey 2019-20. "In the process, India would create about 4 crore well-paid jobs by 2025 and about 8 crore by 2030," the Survey said. The chapter, titled 'Creating Jobs and Growth by Specializing to Exports in Network Products', said the incremental value added in the economy from the target level of exports of network products would make up about one-quarter of the increase required for making India a $5 trillion economy by 2025. The incremental value is expected to equal $248 billion in 2025. The Survey said that even before the US-China trade war began, China's image as a low-cost location for final assembly of industrial products was rapidly changing due to labour shortages and increases in wages. "As no other country can match China in the abundance of its labour, we must grab the space getting vacated in labour-intensive sectors. This chapter focuses on articulating a clear-headed strategy for the same," the Survey said. The chapter analyses whether India's lacklustre export performance is caused by a lack of diversification in its export basket or is it because of a lack of specialisation by comparing India and China on these two dimensions. The China-India gap in world market share is almost fully driven by the effect of specialisation, the Survey said. "Overall, high diversification combined with low specialization implies that India is spreading its exports thinly over many products and partners, leading to its lacklustre performance compared to China," the chapter said. The Survey said that if India wanted to become a major exporter, it should specialize more in the areas of its comparative advantage and achieve significant quantity expansion. The chapter also highlights that while capital-intensive products account for a higher share in China’s export basket than that of India’s. Exports of capital-intensive products from China expanded since 2000 after the country recorded a major export expansion, for nearly two decades of traditional unskilled labour-intensive products whereas in contrast, India had not undergone a similar transition. "In contrast to India, export growth of capital-intensive products from China has been driven by its high level of participation in GVCs (global value chains) within these industries," the Survey said. The Survey said that India gained a competitive advantage in relatively low- and middle-income country markets driven by the nature of its specialization, but at the cost of losing the much bigger markets in richer countries. "Though India can benefit significantly from utilising the potential opportunities from greater trade with high income markets, this requires a reorientation of our trade specialisation towards labour-intensive product lines," the Survey said. The Survey also said that the above could be achieved by selective focus on traditional labour-intensive sectors such as textiles, especially man-made fibres, and increased participation in GVCs. On the much debated job creation issue, the Survey highlights that India can look at creating employment in two groups of industries,given our comparative advantage in labour-intensive activities and the imperative of creating employment for a growing labour force. It says that India needs to tap into the unexploited export potential in the traditional unskilled labour-intensive industries such as textiles, clothing, footwear and toys. "The GVCs in these industries are controlled by “buyer driven” networks wherein the lead firms that are based in developed countries concentrate in higher value added activities such as design, branding and marketing. Physical production is carried out, through sub-contracting arrangements, by firms in developing countries," the Survey said. It says that India also has huge potential to emerge as a major hub for final assembly in a range of products, referred to as network products. "In general, these products are not produced from start to finish within a given country; instead, countries specialise in particular tasks or stages of the good’s production sequence," the Survey said. As part of its prescription the Survey said that India could reap dividends by adopting policies aimed at strengthening its involvement in the export market for network products (NP). "Given our vast manpower with relatively low skill, India’s current strength lies primarily in assembly of NP," the Survey said. The Survey prescribes that policy measures should focus on reducing input tariffs, implementation of key factor market reforms, providing an enabling environment for the entry of lead firms into the country and reducing the service link costs.

Source: Money Control

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Economic Survey: 'Counter-cyclical fiscal policy' to boost demand justified

The Survey places primary blame for the slowdown on global factors, saying 'the The Economic Survey for 2019-20, presented to Parliament on Friday, laid out an agenda for wealth creation in India and sought to ground pro-wealth and pro-business economic policies in India’s economic experience and philosophical traditions. In the Survey’s preface, Chief Economic Advisor K V Subramanian revealed the Survey’s motivation: Prime Minister Narendra Modi’s speech on Independence Day 2019, which highlighted the contributions of wealth creators and that “only when wealth is created will wealth be distributed”. Subramanian argues that liberalisation is a return to India’s “roots” as a market economy, and thus advocates various wealth-boosting reforms in the Survey. From the macro-economic point of view, the Survey argues that since “the government, with a strong mandate, has the capacity to deliver expeditiously on reforms”, the upside risks to the economy dominate the downside risks. Given the base effect, it thus pegs growth in India’s gross domestic product or GDP in 2020-21 as being in the range of 6 to 6.5 per cent. The Survey admits that meeting the $5 trillion target set by the prime minister will be challenging, given the growth slowdown. The Survey places primary blame for the slowdown on global factors, saying “the deceleration of India’s GDP growth since 2017 has tracked the decline in world output”. It noted also that some recent research suggested that the length of the business cycle in India was about 13 quarters, perhaps faster during the deceleration phase. Given that history, the Survey predicted a resurgence of growth in the current half of 2019-20. The Survey also argues, however, that “the stagnation in private corporate investment at approximately 11.5 per cent of GDP between 2011-12 and 2017-18 has a critical role to play in explaining the slowing cycle of growth and, in particular, the recent deceleration of GDP and consumption”. This stagnation is linked to the decline in credit growth from banks. With important implications for the path of government spending to be outlined in the Union Budget for 2020-21, the Survey argues that boosting sluggish demand and consumer sentiment should be a priority and so “counter-cyclical fiscal policy” — in other words, fiscal slippage — is justified. Among the reforms that the Survey advocates to boost “wealth creation” in India is the end of unnecessary and counter-productive intervention by the government in the economy. deceleration of India's GDP growth since 2017 has tracked the decline in world output'. Here the Survey highlights the Essential Commodities Act (ECA) in particular, using research that shows that the imposition of stock limits had “no effect” on price volatility of onions over the past year, but that 76,000 raids under the ECA were conducted during 2019 of which under four per cent led to convictions. Thus, the main effect of the ECA was to harass traders and to dis-incentivise inventory-keeping. Similar policies which had counter-productive effects included the Drugs Prices Control Order of 2013, which the Survey said increased the prices of drugs sold through hospitals. Highlighting the sharp increase in major subsidies in the Budget, led by the growth in the food subsidies, the Survey pointed out that “the intervention of government has led to a disconnect between the demand and supply of grains” and argued that farmer support needs to be realigned towards incentivising farmers to diversify their production away from foodgrain. The Survey also argues in favour of integrating India with world markets deeply enough that “network products” such as electronics and automobiles are assembled in India for world markets. In this context it dissents from general government policy by pointing out that recent free trade agreements have in fact benefited India, finding that on the average Indian exports to its FTA partners has increased more than imports. The Survey reiterated in this context that policy measures “should focus on reducing input tariffs and implementation of key factor market reforms”. Other chapters of the Survey focused on the growth of entrepreneurship, on dealing with cronyism, and privatisation. On entrepreneurship, the Survey found that a 10 per cent increase in the registration of new firms in a district led to a a 1.8 per cent increase in the district’s output. It argued also that the anti-corruption moves since 2011-12 had led to a reduction in cronyism that was visible in the data on, for example, related party transactions of firms receiving natural resources. In spite of its justification of fiscal slippage, the Survey also pointed out that the root cause of the slowdown was low private investment. It blamed that on risk aversion in scheduled commercial banks (SCBs) following the non-performing asset crisis. But it also gestured at government borrowing as a problem, saying that the “easy investment in G-secs” was a complementary factor and that SCBs “chose to invest thrice the amount in G-Secs in the current year as compared to the previous year, while reducing their credit off-take by more than four-fifths”. In terms of policy prescriptions for the financial sector, however, the Survey has been relatively restrained. Instead of arguing again for greater private control, Subramanian instead suggests leveraging big data algorithms by pooling data held by public sector banks, and by increasing employee ownership to give them more of a stake in the PSB’s performance. The CEA also devoted a chapter to seeking to refute the finding of his predecessor, Arvind Subramanian, that India’s GDP was overstated.

Source: Business Standard

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Budget expectations: Garment and textile industry wants simplified GST

City-based garment and textile manufacturers are anxiously waiting for February 1 when union finance minister Nirmala Sitharaman will announce her second budget in parliament. As far as the their expectations are concerned, they want immediate revamp of Goods and Service Tax (GST), simplified process to apply for funding for technological upgradation and reduction in income tax rates. According to Bhushan Abbi, president of Knit and Fab Cluster, Ludhiana, “Whether its textile or garment industry, the biggest concern of every industry in today’s time is the complex system of GST, which is not only proving to be very tough to comply with but also has serious financial implications in terms of huge penalties and harsh punishments in case of non compliance by the businessmen, even inadvertently. Therefore, it is of utmost urgency that the GST is simplified and its laws are changed in order to ensure that the innocent businessmen do not get treated at par with the habitual tax offenders.” According to Narinder Mittal, a garment manufacturer, “We have very high expectations from this Budget and we are hopeful that garment sector will not be ignored by the finance minister. One of the major problems being faced by the micro and small industry is the e-way bill system. Complying with it is very difficult for the small-scale manufacturers like us and even a minor mistake can cost us dearly. It is impossible for the small businessmen to use this, as it also comes at a cost since we require computer, printer and internet for generating e-way bills and without employing a proper person for this purpose e-way bills cannot be generated by people who are not tech savy. Government should understand our pain and scrap this e-way bill system, at least for the businessmen having turnover below Rs 5 crore.” Speaking to TOI, Sanjiv Sharma, a shawl manufacturer, said, “On the one side, the government is always talking of promoting ‘make in India’ products. But at the same time, till date there is no scheme with which small-time manufacturers can get government assistance to technologically upgrade themselves. The current technology upgradation fund scheme is so complicated and it is very difficult to get any sort of assistance via this scheme. Therefore, we request the finance minister to announce a new and simpler scheme wherein needy businessmen can get prompt funding for technology upgrdation.

Source: Times of India

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Rise in drawback rates comes as relief for textile industry

The increase in drawback rates on made-ups and garment exports has come as marginal relief to the textile industry which is going through testing times. The new rates will come into force from February 4. The increase in the drawback rates is on account of various factors such as the changes in the duties, price (CIF) of imported inputs, FOB value of exports and import intensity. KV Srinivasan, Chairman, the Cotton Textiles Export Promotion Council, said that the rise in drawback rates for cotton textiles products will improve competitiveness of these products in the export markets. Exporters are passing through challenging times on account of difficult export market conditions combined by the removal of some export benefit recently.

Source: The Hindu Business Line

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Majority of trade pacts implemented by India have no effect on exports: Survey

Majority of trade agreements being implemented by India have had "no effect" on the country's overall merchandise exports, according to the Economic Survey. It also said that products manufactured in India have clearly benefitted from eight out of the fourteen trade agreements considered in the survey. "A majority of the trade agreements exerted no effect on overall merchandise exports," it said. The survey considered 14 agreements signed by India -- Chile, Korea, Sri Lanka, Singapore, Bhutan, Afghanistan, Nepal, Malaysia, Japan, Thailand, BIMSTEC, Asean, Mercosur, and SAFTA. Exports of manufactured goods from India has benefitted from trade agreements with Mercosur (a six-country trade bloc including Brazil, Argentina, Paraguay and Uruguay), ASEAN, Nepal, Singapore, Chile, Bhutan, Afghanistan and Japan. It said that four of the agreements (SAFTA, BIMSTEC, Thailand and Sri Lanka) had no effect on exports of manufactured products, while the bilateral agreements with Korea and Japan exerted a negative effect. "Turning to overall merchandise exports, only four trade agreements (Mercosur, Nepal, Singapore, and Chile) show a positive impact," it added. In trade pacts, two or more trading partners significantly reduce or eliminate custom duties on maximum number of goods traded between them.

Source: Economic Times

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Economic Survey: Take a cue from China to create 40 million jobs by 2025

Economic Survey: Take a cue from China to create 40 million jobs by 2025 Survey suggests integration of Assembling in India into Make in India. India needs to take a leaf out of China’s trade playbook and intensively specialise, produce and ship out a select category of ‘network products’ (NPs) such as computers, electronic and electrical equipment, and telecommunications goods, to boost the currently beleaguered export sector, the Economic Survey has suggested. Delhi would also need to integrate the aim of ‘Assembling in India for the world’ with the government’s flagship ‘Make in India’ policy, it said. By focus on NPs, the country can raise its export market share to about 3.5 per cent of the global average by 2025 and 6 per cent by 2030. In the process, creating millions of jobs, the Survey says. Exporters lauded the suggestions. '”As the global market becomes more and more competitive, we completely agree with the assessment of the Economic Survey that India needs to focus on core competencies and value additions even as we are doing some catch up with China,” said Engineering Exports Promotion Council India Chairman Ravi Sehgal. There has been success in cutting import of consumer electronic items from China, it adds, via incentives to domestic manufacturing and imposing of tariffs on finished goods. However, the government might need to pick up the pace in approaching infotech majors like Apple and Samsung — the Survey suggests production processes for most NPs are globally fragmented and controlled by leading multinational enterprises, within own production networks. Chief Economic Advisor Krishnamurthy Subramanian has borrowed from predecessor Arvind Subramanian’s idea of pushing labour-intensive manufacturing investment, to simultaneously boost productivity, job creation and export. The latest prescription of pushing NPs will result in $248 billion of incremental value addition in the economy by 2025, the Survey suggested. Even more attractive for policymakers could be its proposition that NPs might create about 40 million well-paid jobs by 2025, rising to 80 mn by 2030. “To revive exports, the Centre needs to focus on multiple areas. It requires a policy space that typically requires a mix of tariff protection, facilitating development finance for enterprises to maximise employment, and investments in infrastructure. For the medium term, there’s a need for innovation policy,” said senior trade policy expert and professor at Jawaharlal Nehru University, Biswajit Dhar. In other labour-intensive sectors, such as textiles and leather, there is an indication of more structural reform. The Survey calls for drastically raising India’s share in global export through a targeted plan of pushing up market share in major markets. And, to immediately improve the country’s participation in the global value chains of various products. The Survey is also in favour of India signing bilateral trade deals. It stressed that contrary to the popular opinion among businesses that India has been harmed in the free trade agreements (FTAs) it signed, manufacturing export has benefited as a result of 8 of 14 existing FTAs. However, it concedes, this did little to raise total export — several prime foreign exchange earning commodities were restricted by other nations in most deal, it said. It says merchandise shows a 2.3 per cent increase in trade surplus every year. Indian business is in a contentious dispute on whether the government should enter into bilateral deals with America and the European Union, and by extension open larger chunks of its market to foreign competition. Delhi has also been extended an invitation to join talks on the proposed Regional Comprehensive Economic Partnership deal that begin on February 3 but is still on the fence, say sources.

Source: Business Standard

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Eco Survey makes case for correction in inverted duty structure

The Economic Survey on Friday made a case for correction in inverted duty structure as it will help in reducing cost of intermediate inputs imported for making goods for exports purpose. Inverted duty structure impacts the domestic industry adversely as manufacturers have to pay a higher price for raw material in terms of duty, while the finished product lands at lower duty and cost. It said that in recent times, India's tariff regime has come under pressure from trade partners who seek a cut in the country's basic customs duties. India has defended its tariff regime stating that it is necessary for protecting the vulnerable businesses in India. However, it said independent of trade partners, the government is aware that some reduction in tariff rates may have to be done in respect of intermediate inputs and raw material to correct the presently inverted duty structure. "A corrected duty structure will reduce the cost of intermediate inputs imported for manufacturing of exports thereby making the country's exports more competitive," the Survey said.

Source: Economic Times

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30 years later, Economic Survey lays down the ground for Liberalisation 2.0

Nearly 30 years after economic liberalisation started in 1991, an official document doesn’t just praise the private sector but recommends that the government embrace capitalism in a new avatar. Taking a cue from Adam Smith (who in the 18th century talked of the invisible hand of the market, in the book The Theory of Moral Sentiments), the Economic Survey bats for making the “invisible hand” take charge of the economy, to enter the next phase of rapid economic growth. But while the theory says that an individual deciding what is best for him or her is ultimately best for society as a whole, the Survey says that this has to be complemented with “trust” as a public good, suggesting that the government would take up the role of trustworthy institutions, to ensure that greed does not take over. “India’s aspiration to become a $5 trillion economy depends critically on strengthening the invisible hand of markets together with the hand of trust that can support markets,” Chief Economic Advisor Krishnamurthy Subramanian wrote in the Survey. More importantly, Subramanian has taken a direct reference from Prime Minister Narendra Modi’s Independence Day speech on August 15 last year, when the latter had said that wealth creators should not be seen with suspicion. Toeing the line, and underlining India’s “dalliance” with socialism, the Survey tries to shun the scepticism that gets associated with the benefits accruing from a market economy, giving evidence from data. Analysing data on core and transport sectors, the Survey shows that areas such as steel and cement, which are privatised, have shown a higher growth of 7 per cent compared to coal, which remains in the hands of the government to date, at 5 per cent. It also compares the road sector and railways and underlines the faster growth in the former, compared to the latter, where the passenger footfall has been languishing at a level for a long time. But in paving way for structural liberalisation reforms, the Survey recommends that this should happen with enabling and incentivising the formation of new firms. In doing so, it bats for giving favourable grounds for the new entrants, and enabling a fair competition between them and the incumbents. The government has already taken a step in that direction, by slashing the corporate tax for new manufacturing companies in certain sectors to 15 per cent, the lowest in India, ever. The Survey says that a 10 per cent increase in new firms in a district adds 1.8 percentage points to its economy. But it specifies, using data, that the government should focus its efforts on the manufacturing sector. “As the manufacturing sector has the potential to create the maximum jobs, states must focus on enabling ease of doing business and flexible labour regulation to foster job creation,” it says. Critically, the very same sector is undergoing the brunt of the current economic slump. Value added in manufacturing has contracted in the first half of FY20, with the growth in the full financial year set to be at 2 per cent, according to advance estimates. In its defence of the “invisible hand, the Survey underlines the performance of the BSE Sensex, its “exponential rise” post liberalisation.

Source: Business Standard

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Corporate tax cut to mostly benefit less than 1 pc of companies: Survey

The steep cut in corporate tax rate will benefit large companies the most as smaller ones were already paying lower rates, the Economic Survey 2019-20 said on Friday. Finance Minister Nirmala Sitharaman had in September last year announced the lowering of the base corporate tax rate to 22 per cent from 30 per cent for companies that do not seek exemptions and reduced the rate for some new manufacturing companies to 15 per cent from 25 per cent. Including surcharges and cesses (levies to raise funds for specific purposes), the effective corporate tax rate will drop by nearly 10 percentage points to 25.17 per cent. The pre-Budget Survey, tabled in Parliament, said most of the companies (99.1 per cent) have a gross turnover of below Rs 400 crore (say small and medium companies) and are already taxed at the base corporate tax rate of 25 per cent. With surcharge and cess, their tax rate varies from 26 per cent to 29.12 per cent. On the other hand, only 0.9 per cent of the companies i.e. 4,698 companies have a gross turnover of over Rs 400 crore and their effective tax rate varies from 30.9 per cent to 34.61 per cent. "Thus, the impact of corporate income tax rate cut varies from gain of about 3.2 per cent to 13.5 per cent of the existing tax liability for small/medium companies to about 18.5 per cent to 27.3 per cent of the existing tax liability for large companies," it said. With economic slowdown resulting in slippages in direct and indirect tax collections, the Survey said the next financial year is expected to pose challenges on the fiscal front. "While on one hand the outlook for global growth persists to be weak, with escalated trade tensions adding to the risk; on the other hand, the pace of recovery of growth will have implications for revenue collections," it said. In order to boost the sluggish demand and consumer sentiments, counter-cyclical fiscal policy may have to be adopted to create additional fiscal headroom, it said. During the first eight months of 2019-20, the indirect tax collections have been muted. "Therefore, the revenue buoyancy of GST would be key to the resource position of both central and state governments." On the expenditure side, rationalisation of subsidies, especially food subsidy, could be an important tool for expanding the headroom for fiscal manoeuvre, it added. The Survey said 2019-20 was challenging for the Indian economy owing to the decelerating growth rate. Among the various reforms introduced during the year to promote growth and investment, reduction in the corporate income tax rate was a major structural reform, which left a hole of Rs 1.45 lakh crore in the tax kitty.

Source: Economic Times

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Global Textile Raw Material Price 31-01-2020

Item

Price

Unit

Fluctuation

Date

PSF

1007.54

USD/Ton

0%

1/31/2020

VSF

1369.33

USD/Ton

0%

1/31/2020

ASF

2025.17

USD/Ton

0%

1/31/2020

Polyester       POY

1033.48

USD/Ton

0%

1/31/2020

Nylon       FDY

2234.17

USD/Ton

0%

1/31/2020

40D       Spandex

4136.82

USD/Ton

0%

1/31/2020

Nylon       POY

5405.25

USD/Ton

0%

1/31/2020

Acrylic       Top 3D

1290.05

USD/Ton

0%

1/31/2020

Polyester       FDY

2068.41

USD/Ton

0%

1/31/2020

Nylon       DTY

2277.41

USD/Ton

0%

1/31/2020

Viscose       Long Filament

1189.16

USD/Ton

0%

1/31/2020

Polyester       DTY

2472.00

USD/Ton

0%

1/31/2020

30S       Spun Rayon Yarn

2010.75

USD/Ton

0%

1/31/2020

32S       Polyester Yarn

1635.99

USD/Ton

0%

1/31/2020

45S       T/C Yarn

2421.55

USD/Ton

0%

1/31/2020

40S       Rayon Yarn

1787.34

USD/Ton

0%

1/31/2020

T/R       Yarn 65/35 32S

2219.76

USD/Ton

0%

1/31/2020

45S       Polyester Yarn

2176.51

USD/Ton

0%

1/31/2020

T/C       Yarn 65/35 32S

1945.89

USD/Ton

0%

1/31/2020

10S       Denim Fabric

1.27

USD/Meter

0%

1/31/2020

32S       Twill Fabric

0.69

USD/Meter

0%

1/31/2020

40S       Combed Poplin

0.97

USD/Meter

0%

1/31/2020

30S       Rayon Fabric

0.54

USD/Meter

0%

1/31/2020

45S       T/C Fabric

0.68

USD/Meter

0%

1/31/2020

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14414 USD dtd. 31/01/2020). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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UKFT outlines immigration priorities after Brexit

The UK Fashion & Textile Association (UKFT) along with other trade groups representing thousands of firms recently wrote to home secretary Priti Patel to offer to help shape the new immigration system to ensure it meets the needs of businesses. They believe fair and sustainable immigration is critical for growth across the United Kingdom. The other trade groups include the Confederation of British Industry (CBI), the British Chambers of Commerce, the Institute of Directors (IOD) and the Federation of Small Business. “Recent announcements have increased optimism about how a system might work. A new two-year post-study work visa for international students, dropping the target to reduce net migration to the “tens of thousands” and signals that the £30,000 minimum salary test may change are welcome and have sent positive and important signals around the world that the UK is open for business,” The letter said. Together the business groups and trade organisations are calling for a points-based model that provides greater control, whilst providing access to the labour and skills needed to support the economy. This would be in addition to significant investment in training home grown talent. The letter outlined four key priorities, according to an UKFT press release. A minimum salary threshold can work if it is set at a level that supports the economy and protects wages – the right threshold can provide confidence that migrants are not accepting wages lower than those of UK workers. This is currently achieved in the non-EU immigration system by requiring a salary that is both higher than 25 per cent of people in the same occupation and higher than 25 per cent of jobs across all occupations of the relevant skill level. The Migration Advisory Committee already recommends lowering the skill level to ‘A-Level’ or equivalent to secure a work visa post-Brexit. Following this tried and tested formula would mean that a worker from overseas would have to earn both more than £20,100 and more than 25 per cent of people doing the same job. This would protect wages and ensure that shortages in jobs such as technicians, carpenters, translators and care-home managers can be addressed, the letter said. Flexibility for skilled workers to enter the United Kingdom through a points-based system—salary is not the only way to predict somebody’s contribution, and therefore, an ability to hire people with lower salaries based on their qualifications, work experience and other attributes is welcome. This must add flexibility for businesses to hire the labour and skills they need, rather than be an additional requirement. A new unsponsored points-based route for skilled workers is particularly important for smaller businesses and should also be added. Additionally, lowering the salary threshold for shortage occupations is a principle we warmly support. A temporary visa route which supports all sectors of the economy—extending this unsponsored route from one to two years will encourage migrant workers to integrate into local communities whilst also ensuring they are more productive, rather than businesses having to constantly start over by hiring new people. Making this route available to all sectors, with a cooling-off period reduced to six months, will help companies plug vital skills and labour gaps. In-country switching to the skilled worker visa, if the eligibility criteria are subsequently met, should also be allowed. A radically reformed sponsorship process in place for the first day of operation—the government’s ambition to radically simplify the current sponsorship system is both welcome and essential to reduce cost and complexity for firms hiring from overseas. Completing and testing these reforms before switching to the new system will help smaller companies avoid expensive legal advice. Minor adjustments to the existing non-EU visa route would be insufficient and act as a major barrier to accessing the skills needed to grow the economy, the letter suggested.

Source: Fibre2Fashion

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How companies can align their materials strategy to the SDGs

In conjunction with the release of the Textile Exchange 2019 Material Change Index, GreenBiz has partnered with Textile Exchange to publish actionable insights for apparel and textile companies looking to source raw materials more sustainably. The entire series may be found here. The way we produce, (re)use and dispose of or recycle our materials has an impact on nearly every one of the United Nations Sustainable Development Goals (SDGs), a collection of 17 global 2030 goals introduced by the United Nations in 2015. Also known as the Global Goals, the SDGs were designed to be universal (for both developed and developing countries), holistic (people-centered and planet-sensitive) and measurable. They include 169 targets and aim to end poverty, protect the planet and ensure prosperity for all. For the textile industry, "SDG 12: Responsible Consumption and Production" is a gateway to many of the other SDGs. More sustainable cultivation of cotton, wool, wood and other natural raw materials aligns with the "Zero Hunger" and "Life on Land" goals. Converting to renewable energy and deploying cleaner technologies in the fiber processing stages have a positive effect on the "Clean Water and Sanitation," "Industries, Innovation and Infrastructure" and "Climate Action" goals. And designing out waste, keeping materials in use longer and regenerating farmland plays an important role in reducing carbon emissions, a major target of the "Climate Action" goal. The textile industry has a powerful opportunity to shift the needle in both producer and consumer contexts. The Global Goals have been widely adopted by governments, NGOs and businesses. In some cases, companies have a stronger lever to pull than governments do. By aligning their business and sustainability strategies to the Global Goals — or more radically, reshaping their business models — companies are able to position themselves as global leaders, rather than merely business leaders, and reframe their achievements as wins for the world. Not only does business hold the key to long-term SDG success but the SDGs will help shape business transformation.

How can companies level up their Global Goals alignment?

Every year, Textile Exchange publishes a Material Change Index that tracks the fashion industry’s progress toward more sustainable materials sourcing, as well as alignment with global efforts such as the SDGs and the transition to a circular economy. There are some key activities that top performers in the SDGs category have in common. These should serve as inspiration for companies that are looking to push their alignment to the next level. Textile Exchange also will be sharing a more detailed analysis of findings later in 2020.

1. Embed into business

To ensure long-term benefits for all, companies should integrate the SDGs into business models and strategies. To do this successfully requires getting key stakeholders (including employees, suppliers and investors) on board and on the same page. Through materiality assessment or plain, old-fashioned conversations, the top performers make sure to factor perspectives from across the business into the development of their strategies for positive SDG action. Material change in action: Gap Inc. aligned its sustainability framework with the U.N.’s Sustainable Development agenda soon after it was released. The company first identified the issues most material to its business and reviewed how these aligned with the SDGs, finding that its efforts align most closely with the goals on quality education, gender equality, clean water and sanitation, decent work and economic growth, responsible consumption and production and climate action. Gap Inc. formally incorporated these six SDGs into its sustainability strategy in 2016. By 2018, all of its brands (including Gap, Banana Republic, Old Navy and Athleta) had established executive sustainability steering committees, defined their own priorities and led sustainability strategy workshops with cross-functional teams. "The best advice we could give is to work closely with partners across the company to understand how their work is affected by the Sustainable Development Goals and lay a foundation for working together," said Diana Rosenberg, product sustainability manager at Gap Inc. "Then, it is critical to set jointly-held company goals and develop internal metrics that we can use to promote progress and hold ourselves accountable."

2. Leveraging spheres of influence

While each SDG is important, it is likely that some SDGs will resonate more strongly with a company’s business competencies and priorities. Leading companies double-down on their priority SDGs and partner with other organizations to deliver on them. Diversity brings different perspectives to the table, and leading brands see the advantage of partnering within their own supply chain, particularly when tackling complex sustainability challenges in sourcing regions They also keep in mind that the 17 goals are interconnected, and a holistic approach is important to ensure that progress towards certain SDGs has a positive, not detrimental, effect on the others.

3. Partner for change

The SDGs are shared goals, so forming collaborations within and between sectors and industries is essential if we are to achieve them. Engaging others with your efforts will raise visibility for the Global Goals and inspire others to take action against them. Companies leading the charge not only partner with others, but also initiate the kinds of working groups, coalitions and platforms that inspire collective engagement and can scale impact. Material change in action: Sports brand PUMA began efforts to combat the effects of climate change over a decade ago. When it was approached by U.N. Climate to engage in an initiative for the fashion industry, it naturally chose to get involved. PUMA since has worked with multiple stakeholders to develop the Fashion Industry Charter for Climate Action, a framework that helps brands jointly address the climate challenge by preparing and executing their sustainability strategies in line with other players. "Industry collaborations are catalysts for systemic change," said Stefan Seidel, head of corporate sustainability at PUMA. "When we talk about sustainability, brands often have similar goals but to a certain extent, limited resources and limited reach in shared supply chains. Sharing commitments and resources, brands have more chances to make a positive impact. We are only a small company compared to the size of the overall industry, that is why we know how important it is to work together on sustainability."

Source: Green Biz

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Circulose features in H&M Conscious Exclusive collection

H&M will become the first brand to retail a garment made from re:newcell’s breakthrough new material, Circulose. Launching worldwide on 26 March, H&M’s SS20 Conscious Exclusive will feature a jacquard weave day dress made from 50% Circulose recycled from used cotton jeans, and 50% FSC-certified wood. It will be the first time this kind of material becomes available for customers to buy in retail. “This is a major milestone for fashion. For the first time, people will be able to walk into a store and buy clothes made from Circulose - likely the world’s most sustainable fashion material. We are immensely proud to introduce this innovation together with H&M Group, a company with a bold sustainability agenda,” says Patrik Lundström, CEO of re:newcell. The day dress, which is an easy blue colour with feminine ruffles, will be available worldwide – sold in around 100 stores globally and online in all markets. “Through its patented process, re:newcell transforms old clothes containing lots of cellulose (such as cotton and viscose) into Circulose - a 100% natural, recyclable and biodegradable material that the fashion industry can make new clothes without compromising on quality,” the company said today. “The process reduces fashion’s reliance on virgin cotton, oil and forests, uses less water, fewer chemicals, and removes 2 kg CO2e from the atmosphere per kg of textile fiber produced, compared to conventional textiles.” Nicole Rycroft, executive director of Canopy, an environmental not-for-profit working with companies to protect the world’s forests and species, commented: “This Circulose launch reflects the leadership that fashion companies can and need to take to avert the climate and biodiversity crises when sourcing wood-based fibers. In just a few years H&M Group, re:newcell and other investors, who have backed development of this circular textile production, have opened the door to a sustainable future. It’s a good day for our forests and climate.” Re:newcell’s March launch with H&M is one of a string of collaborations with other global brands set to happen in 2020. The company intends to grow its recycling capacity rapidly, targeting 250 000 tons, equal to one billion garments, per year by 2025. Founded by innovators from Stockholm’s KTH (Royal Institute of Technology) in 2012, re:newcell is a multi-award-winning sustainable fashion company based in Sweden. The company’s vision is to lead the way to a sustainable world by producing high quality products from recycled textiles. Through its own patented process, re:newcell can upcycle cellulosic textile waste, such as cotton and viscose, transforming it into a “pristine new material” called Circulose. The company has raised more than $20m funding to date from investors including H&M, The Mills Fabrica and KappAhl and is regularly recognised for its work to make fashion sustainable. Most recently, re:newcell won the Norrsken Impact Award recognising Nordic startups working to solve the world’s greatest challenges.

Source: Innovation in Textiles

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Oerlikon to show latest fibre systems at Egy Stitch & Tex

The Oerlikon Manmade Fibers segment will be presenting itself at the Egy Stitch & Tex 2020, which will be held in Cairo from March 5-8, 2020, with a clear focus on the needs of the African market, in hall 1, stand B2. Egy Stitch & Tex 2020 will display new equipment from weaving, spinning, knitting, and dyeing machinery, technologies, and spare parts. The Oerlikon Barmag and Oerlikon Neumag experts will also be showcasing the comprehensive product and service portfolio of the world market leader for manmade fibre systems at the stand of Oerlikon’s representative ATAG Export & Import. The spotlight of the Oerlikon Manmade Fibers segment’s trade fair attendance will be on two core technologies, the new generation of Oerlikon Barmag eAFK Evo texturing machines is to be unveiled within the African market for the very first time. It promises higher speeds and productivity with consistently high product quality, along with lower energy consumption and simpler operation vis-à-vis comparable market solutions. In particular, the numerous value-added features include two that convince with cutting-edge technology: the optimised, innovative EvoHeater and the EvoCooler, a completely newly-developed active cooling unit, according to a press release by the company. The second technology focus offers new opportunities for the Egyptian market and the Middle Eastern markets in particular: with Oerlikon Neumag’s BCF S8 monocolour and tricolour system, the segment will be unveiling its new carpet yarn production flagship. Superlative spinning speeds, up to 700 individual filaments, finer titers of up to 2.5 dpf – the performance data and technological finesse of the new system have already made a huge impression at numerous trade fairs and roadshows over the past year. The tricolour’s core component is the new, patent-pending Color Pop Compacting unit (CPC-T) for even more flexible and more even colour separation. With the CPC-T, individually-controllable air pressures for each colour provide pre-tangling, which accentuates the colours and hence makes more than 200,000 different shades possible. Whereas it has been very difficult to manufacture strongly colour-separated or colour-accentuated BCF yarns from polyamide 6 to date, this will in future be possible thanks to the CPC-T system. As a result of the new design, the CPC-T is now also suitable for processes with low yarn tensions. Know-how covering all relevant technologies deployed in manmade fibre spinning plants enables Oerlikon – as the world’s only manufacturer – to expand its range of products and services for making carpet yarns. The POY- and texturing-based system concept is designed for a carpet and home textiles segment that demands particularly soft and bulky polyester yarns with BCF-like properties. Here, the aim is to produce yarns with titers of max. 1300dtex and typically more than 1,000 filaments, with typical products including, for example, 1300dtex f1152, 660dtex f1152 and 990dtex f768. The machine concept comprises the well-known WINGS HD POY winder, along with the eAFK Big-V texturing machine.

Source: Fibre2Fashion

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