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| Issue date:01/08/2009 |
| ATA Journal for Asia on Textile & Apparel - Aug 2009 Issue |
| Source:Journal for Asia on Textile & Apparel |
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China
Latest data of yarn and fabric production in first half released
Chinese sizable textile enterprises (with a registered capital over RMB5 million) manufactured fabrics of 25.799 billion meters in the first half of 2009, up 0.16% from the previous year, as shown by the data of the China Textile Economic Information (CTEI) website this July. The CTEI website is the official online portal of the China National Textile & Apparel Council.
Yarns produced by Chinese sizable textile enterprises amounted to 109.622 billion meters in the first six months this year, representing an annual growth of 9.4%. CTEI reported that Chinese sizable chemical fiber producers produced 12.884 million tons of chemical fibers in the first half, rising 10.57% from last year. The annualized growth rate of 2008 was 2.3%.
Korea
Reaches free trade consent with EU
South Korea and the European Union reached a free trade agreement this July. The free trade deal is expected to eliminate tariffs on 96% of EU goods and 99% of South Korean goods in three years after the accord takes effect. They will also abolish tariffs on most industrial goods within five years after the deal takes effect.
The deal, which requires legislative approvals by both sides, may take effect by early next year.
The full contents of the accord will be disclosed after a preliminary signing takes place this September following a legal review, South Korean officials said. South Korea has sought greater access to the EU’s auto, textiles and electronics markets, whereas the EU is interested in machinery, medical equipment, and dairy and pork industries.
Vietnam
Apparel gains market share in US
Vietnam saw its textile and garment products’ market share in the US rose to 4.74% in the first quarter of 2009 from 3.4% in the same period last year, according to the Ministry of Industry and Trade.
The US consumed 2.9% less Vietnamese textile and garment exports, worth US$1.06 billion, during the first three months of this year, compared to the same period in 2008.
Statistics of Vietnam’s Customs showed that the country had earned US$1.94 billion from exporting textile and garment products in the January-March period, representing a year-on-year growth of 3%.
Textile and garment exports to the EU also declined 1.1% to US$334 million in the first quarter of this year, whereas those to Japan and Taiwan jumped 24.9% and 59.4% to US$220 million and US$67 million respectively.
Textile and garment exports drop
Vietnam’s textile and garment exports turnover reached US$4.077 billion in the first half 2009, down 4.7% from the previous year. It was mainly due to a strong price drop of Vietnamese products by 15% in the first six months this year compared to the same period in 2008.
The country earned US$789 million from exporting textile and garment products in June 2009, which was US$60 million more than this May, but an 8.85% fall from last year, according to theVietnamese Ministry of Industry and Trade.
Allegedly illegal Chinese apparel floods to local markets
Chinese garment products accused of formaldehyde content were imported in large quantities into Vietnam, especially Hanoi and Ho Chi Minh city, source from the Vietnam Textile and Apparel Association said.
The products are mainly originated from Guangdong province, including kids’ and ladies’ wear, as well as fabrics. They were alleged to have contained toxic chemicals thus forbidden in China. Some of these goods, especially lingerie, were found to be fake products of famous brands.
These garment products were illegally imported through the Northern border gates, and their prices were very cheap, according to an official from the Vietnamese Customs.
Boosts textile exports to Japan
Vietnamese textile and garment enterprises have sped up their exports to Japan since 2009 as a result of the Vietnam–Japan Economic Partnership Agreement (EPA).
The Sai Gon No.3 Garment company is one of the Vietnamese garment makers exporting to Japan and its exports turnover to the market reached US$16.25 million with a order of 800,000 khaki and jean trousers during the first quarter of 2009. “Our exports turnover to Japan accounts for 65% of the total, which did not experience order and price decreases,” said Pham Xuan Hong, President of the company.
According to the EPA between Vietnam and Japan, made-in-Vietnam textile and garment exported to Japan enjoy a zero tariff instead of a 5-10% tax in the past. Therefore, more Japanese companies have place orders in Vietnam, including Shikibo and Mitsui. “More Japanese clients placed orders on Vietnam since they appreciate stability and skilled labor of the country,” said Le Quoc An, Chairman of Vietnam Textile and Garment Association (VITAS).
During the first quarter of 2009, the textile and garment industry fetched an exports turnover of US$1.903 billion, down 0.1% from the previous year.
DHL builds garment logistics center
DHL, an international logisitcs firm, was reported to plan on investing US$10 million to expand its services in Vietnam over the next five years, including the construction of a DHL Fashion and Apparel Center for Excellence.
This center once going into official operation at the end of 2009 will support the country’s textile and garment industry to improve exporting activities. This will be the firm’s first center in South East Asia (ASEAN).
The DHL estimates that logistics industry served for textile and garment industry in the ASEAN is worth about US$3.9 billion per year - of which Vietnam, Indonesia and Cambodia accounted for over US$2.5 billion.
Besides the center in Vietnam, the DHL has a Fashion Competency Centre in Hong Kong to service customers in the North Asia Pacific area, as well as Fashion Centers of Excellence in India and Sri Lanka.
India
Shifting gaze to the East
Indian players should also direct their attention to eastern markets other than the US and European markets for knitwear exports, a government official commented.
Union textile minister, Dayanidhi Maran highlighted the potential of Indian textiles beyond the traditional markets, citing the instance of some Japanese buyers appeared to prefer Indian brands. He led a delegation of textile exporters to Japan this July to explore new opportunities.
More possible markets include Australia, Brazil, Cambodia, Russia, South Africa and Turkey, and he added that domestic textile products should be aggressively marketed under an India-made image.
Home market was also critical, as about 70% of the textile and apparel products made in India are consumed domestically, the textile minister remarked.
Indian maker acquires US firm
Indian textile manufacturer, S Kumars Nationwide, acquired Hartmarx Corp for US$119 million, which is a US clothing manufacturer that makes suits for President Barrack Obama.
A consortium of S Kumars US-based subsidiary, Nationwide (SKNL) North America BV, and its operating partner Emerisque UK won in a competitive bidding process to achieve the highest possible value for Hartmarx’s stakeholders.
SKNL planned to directly invest US$35 million into the transaction. “This acquisition will add tremendous value to S Kumars Nationwide as Hartmarx is the largest formalwear clothing company in the US and directly owns and/or controls (through licenses) 34 clothing brands,” it said.
Foreign investment needed
India should tap the opportunity and attract substantial foreign direct investment (FDI) into the sector as textile production in the West declines, according to the Confederation of Indian Industry (CII), one of the largest business associations in India.
Textile business has largely shifted to Asia, including China, India and Pakistan. “With many factories in the West closing down, production and the use of technologies are moving to the Asian region (e.g. India) along with capital investment,” noted T Kannan, Chairman of CII’s Textiles Committee and Managing Director of Thiagarajar Mills.
“India is known as a quality supplier of textiles. The government should market India as an ideal investment destination by introducing special packages for FDI. It should also facilitate the domestic manufacturing sector to be more competitive by lowering the cost of energy, transport and so forth,” he added.
Although 100% FDI is allowed in India, it attracted US$677 million from April 2000 to March 2009 — only a tiny fraction (2%) of the total investment in the country’s textile and apparel industry came from abroad, as shown by the statistics of the Department of Industrial Policy and Promotion. CII also wanted the government to step up budget allocation for subsidy (interest subvention) under the technology upgradation fund scheme (TUFS) to clear the backlog (around Rs 3,000 crore now). Mr Kannan said while Rs 2,300 crore is required each year, the public funding is about Rs 1,000 crore.
Pakistan
Governmental remedy proposed
The Pakistani government pledged to set up an Export Investment Support Fund to boost the country’s textile export earnings as part of the 2009-10 federal budget.
The new fund was proposed to achieve a 25% growth rate in exports (textile and apparel) in the next few years. With funding equally contributed by both public and private sectors, the fund would be a public-private partnership.
Five areas were focused in the new textile policy to enhance growth of the textile industry, according to the Pakistani authorities. Measures would be proposed to attract foreign investment to set up textile factories, and the existing ginning units would be upgraded so as to achieve contamination-free ginning of cotton.
Training to workers is another area of concern, as well as the establishment of new laboratories in the National Textile University, Faisalabad, the third largest city in Pakistan after Karachi and Lahore.
Disputes over polyester import duty
The All Pakistan Textile Mills Association (APTMA) reacted strongly to the application by domestic manufacturers of polyester staple fibre (PSF) to the National Tariff Commission (NTC) for doubling protection against import of PSF. The APTMA spokesman said early this July that textile manufacturers demanded the government to uplift import duty of 4.5% on PSF, which was burdening the industry.
In the meantime, PSF manufacturers approached the NTC for increasing import duty on PSF from 4.5% to 8%.
An import duty on PSF was fixed at 4.5% under the Duty and Tax Remission for Export (DTRE) scheme in 2008-09. A shortage of PSF supply was observed in the country last year, partly due to the reluctance of banks to extend financial services to spinning mills and especially to establish letters of credit for PSF imports.
This deepened the scarcity of PSF in the domestic market, and price levels of domestic PSF were significantly higher than the landed cost of imported PSF materials, according to APTMA.
Cotton output jumps
Cotton production may exceed the target set for fiscal year 2009-10 at 13.36 million bales by about 9.4% to 14.6 million bales following a 40% increase in cotton growing areas and the use of BT seed.
The sowing of rice was banned in some areas of Sindh province, as well as Punjab province, leading to an increase in the land for growing cotton. Average production last fiscal year remained 21.20 maunds per acre, while 40 maunds per acre production is expected in Punjab and Sindh due to use of BT cotton seed. Consequently, cotton output increased.
Bangladesh
Industry asks for special fund
Bangladeshi apparel exporters urged the government to create a special fund allowing a 5% interest subsidy on export loans under the global economic downturn.
“We’ve requested for support from the central bank governor for the creation of the fund in the budget for fiscal 2009-10,” said Abdus Salam Murshedy, President of the Bangladesh Garment Manufactures and Exporters Association (BGMEA) after a meeting with the Bangladesh Bank (BB) governor.
Deputy Governor of the BB, Ziaul Hassan Siddiqui, said: “The central bank will provide policy support such as charges reduction and lower interest rates on lending to textile and apparel exporters.”
Mr Murshedy from the BGMEA also urged the central bank to increase the amount of the export development fund (EDF) to US$300 million from the existing US$150 million in order to improve exports. Meanwhile, the BB agreed to raise the single exposure limit for re-financing facilities to US$1.5 million from US$1 million to alleviate pressure felt by domestic textile and apparel exporters.
The BGMEA leader also requested the BB governor to extend the deadline for loan rescheduling without any down payment from September 30 this year to June 2010.
Large Turkish buyer impresses the industry
Top Turkish retailer, Tema group, planned to procure US$500 million worth Bangladeshi apparel goods by 2012 as it moves to make the country its main sourcing hub, a top company official said.
The Istanbul-based group with an annual sales turnover of US$812 million will also set up joint venture apparel plants in the country to manufacture denim products and jackets.
Group Vice President, Ted Southall, commented that the company planned to import Bangladeshi garment goods worth at US$ 200 million this year despite of the global economic recession. “This country, I think, has incredible future. What you need is to improve mid-management and make policies predictable and consistent,” he commented.
Last year, the Turkey-based group imported garments worth US$182 million from the country, but Mr Southall estimated that the amount would nearly triple to around US$500 million by 2012.
The company’s major Bangladeshi suppliers include Square Group, Fakir Group, Misami, Mohammadi and Babylon, making up three-quarters of the company’s total procurement from Bangladesh.
Global consultancy Nielson last year put Tema’s LC Waikiki brand as the six most popular in the world, which currently operates 240 LC Waikiki stores in 50 cities across Turkey.
Sri Lanka
Steady recovery observed
The Sri Lankan apparel industry showed signs of recovery, according to the country’s industry observer.
“The Joint Apparel Association Forum (JAAF) expects an apparel export turnover to reach US$3.3 billion this year and further to top US$5 billion by the end of 2011, said Rohan Masakorala, Secretary General, Joint Apparel Association Forum early this July.
“New orders are being received and there appears an increase in demand. Markets are expected to recover in the second quarter,” he added, who attributed several factors for this optimism. One of the factors was the government’s reward scheme for export industries, facilitating domestic manufacturers to be more market competitive. He also expected a revival of overseas markets.
Depreciation of Sri Lankan rupee was considered a strong positive factor as well. The Sri Lankan rupee depreciated by 5.1% against the US dollars this April. This helped ease the cost pressure of textile and apparel makers in Sri Lanka, according to Mr Masakorala.
Local firm empowers rural people
The Tri Star Apparel group, a leading garment manufacturer in Sri Lanka , commenced the first garment factory and a training centre in the Trincomalee district, which area was formerly controlled by Tiger rebels.
The factory was opened under the Rural Empowerment Concept this July as the Tri-Star Group is eager to provide training and working opportunities to the rural talents of the country, according to Kumar Dewapura, Chairman of the company.
“We are targeting over 1,000 jobs for the local rural community and a first group of 800 girls will be trained. The project will help generate money and it will directly support development in the area,” he said.
“The total investment on this project is US$2 million, and the factory has a production capacity of 100,000 pieces per month, mainly for exporting to the US market. Further expansion of this factory is in the pipeline and we also hope to expand to the Northern province,” he added.
“With the dawn of peace in the country, overseas buyers are willing to work with Sri Lanka again and it will create more opportunities not only in the apparel industry but also in other industries,” he said.
Chinese economic zone to be built
Sri Lanka agreed to have an exclusive Chinese Special Economic Zone (SEZ) situated in Mirigama.
The Board of Investment of Sri Lanka (BOI) signed an agreement early this July with Huichen Investment (Holdings) from China, to construct and manage an exclusive SEZ. The site was conveniently located 40 kilometres from the Katunayake International Airport and 55 kilometres from the Colombo Port.
“The Chinese company will invest US$28 million under the first phase and further investments will be made in the next phases,” said Minister of Enterprise Development and Investment Promotion, Anura Priyadharshana Yapa.
Closely 30 Chinese companies showed interest and planned to enter the Mirigama SEZ.
For daily news of the textile industry, please visit textile.2456.com
Country Focus: Turkey
Producing higher-value goods for survival
by Staff Reporters
The textile industry, combining cotton and synthetic yarns, fibers and fabrics, home textiles, ready-wear and apparel, is the largest economic sector of Turkey, employing about 2.5 million people and providing indirect jobs of over six million. The industry contributes to one-tenth of the country’s GNP, according to the Turkish-American Business Council (TAIK).
The TAIK reported that the value of textile and clothing manufacturing reaches approximately US$30 billion. Turkey exported textile and clothing at a value of US$23 billion in 2008.
The Turkish textile and clothing exports grew robustly in recent years, partly fueled by its abundant domestic supply of cotton. Primary textile and apparel production areas in Turkey include Istanbul, Izmir, Bursa, Denizli, Gaziantep and Kayseri.
Turkish textile and clothing exports in 2008 included embroideries, narrow fabrics, interlining, trimmings and garment, while key destinations were Russia, Poland, Germany, Iran, Romania, Bulgaria, the UK, Italy and the USA.
Key buyers of Turkish apparel exports
(in US$), Jan-Oct 2008
(Source: Cotton Inc) |
It was reported that Turkey is the world’s sixth biggest ready-wear and apparel manufacturer and the European Union’s second largest supplier after China. Its textile industry is the world’s tenth biggest.
With reference to figures from the Turkish Clothing Manufacturers’ Association and the Center for the Promotion of Exports (IGEM), Turkey shares about 4.3% of the global clothing export trade, 6.4% in apparel exports to the European Union (EU), and 1.7% of apparel exports to the US.
Partly due to its free trade agreements with the European Free Trade Association (EFTA), Turkey is one of the largest apparel exporters to the EU. Turkey is also a member of the World Trade Organization (WTO) and has a friendly trade relationship with the US.
Challenges at the corner
Turkey’s position as a dominant exporter to Europe was challenged after the opening of both the EU and Turkish markets to Chinese exports in recent years. Tough competition has caused negative effects on Turkey’s textile and apparel industries.
Data of the Turkish Statistical Institute showed that Turkey remains a net apparel exporter, with an estimated US$13.4 billion in exports and US$1.3 billion in imports in 2008. Nonetheless, imports from China and other countries are rising rapidly. From 2007 to 2008, exports were up slightly (by 6.1%), while imports were up significantly (by 53.9%). Turkey’s apparel production was down 16.9% from 2007 to 2008.
In face of the immense competition, some 50 Turkish ready-wear manufacturers invested in factories in low-labor-cost countries, e.g. Tunisia, Bulgaria, Egypt, Uzbekistan, Jordan, Moldova, China, Russia, Pakistan, Sudan and the Czech Republic and the Gaza Strip, the TAIK observed.
Moreover, about 100 Turkish firms, mainly engaging in ready-wear business, had plans to invest a sum of US$4 billion in a special industrial zone in Egypt, where labor and energy costs were relatively lower. India and other Asian countries were also options for production relocation.
Heading to higher technology
In addition, more Turkish manufacturers entered the segment of technical textiles in view of improved economic development in the country and the availability of textile technology, a May 2009 report of the Export Promotion Center of Turkey (IGEME) stated.
The IGEME estimated that the production capacity in Turkey for nonwovens is over 110,000 metric tons per year across Istanbul, Bursa, Gaziantep, Kocaeli, Tekirdag and other cities.
Prominent end-user sectors for Turkish technical textile and nonwoven producers are automotive, packaging, hygiene, medical supplies, construction, clothing, military, agriculture and filtration.
The country is also an important producer of tire cord fabrics, industrial yarns (e.g. of nylon) and flexible intermediate bulk containers (FIBC).
In 2008, the total value of technical textile and nonwoven exports was estimated to exceed US$1.2 billion, in accordance to the IGEME data. Top export products in 2008 were bulk containers (FIBC), tire cord fabrics, technical fabrics, nonwovens, glass fibers and articles, safety seat belts and safety airbags. Europe (Germany, France, the UK, Italy and Spain), Russia, the US and Romania were prime markets for Turkish technical textile and nonwoven sectors.
Despite the adverse impact brought by the global financial crisis, Turkish industry players remained eager to survive and advance themselves and learned about the latest internationally advanced machinery in the International Textile Machinery Exhibition (ITM) held in Istanbul early this June.
Exhibitors at ITM 2009
Turkey is one of the main markets for textile machinery builders in the Middle East area due to the country’s established textile production industry. However, with the market weakened by the global financial crisis, investments in new machines appeared to hold back.
Some exhibitors in this year’s International Textile Machinery Exhibition (ITM) 2009 exhibition, held early June in Istanbul, noticed that the Turkish market had been very quiet. Even though some visitors were talking about new projects, the plans would not be realised within a short time. In spite of this, the exhibitors found it important to stay in touch with customers by being present at major exhibitions in different regions. And in Turkey, it was ITM 2009.
Some exhibitors we spoke to at the show commented that the textile markets for their products had been shrinking significantly worldwide, while there is over-capacity to be reduced. But a slow pick-up of the spare parts business was observed, which indicated that the factories’ machines have not been left idle.
Textile components
Iris Biermann, head of markets and product strategy, Oerlikon Textile Components (right) and the company’s authorised dealer in Turkey, Kazim Erdoğan, at the first Oerlikon Textile Component Store opening in Istanbul. |
During the show, the Oerlikon Group announced the new opening of its worldwide first textile components store in Istanbul, and introduced the authorised dealer for Turkey, Kazim Erdoğan.
Iris Biermann, head of markets and product strategy, said that the store provides a one-stop-shop service for Oerlikon’s customers, with the product portfolio including all components, spare parts and consumables relevant to ring spinning.
The store holds stock on the spot, which helps the customers to reduce machine down times and spare parts stock at the mills, she said.
Urs Gull (right), director of sales and marketing, and Thomas Elsener, marketing service, SSM |
A second store in Turkey will be opened later this year, followed by those in other countries, including India, Bangladesh, Pakistan and China. “We are listening to our customer to see if additional products and services are needed, such as grinding service and delivery service,” said Ms Biermann.
André Wissenberg, vice president of Oerlikon Textile corporate communications, pointed out that keeping in contact with the group’s more than 5,000 customers worldwide was important when tackling a downturn.
Erwin Devloo, marketing communication manager of Picanol |
He said that the strong decline in the global textile machinery market in 2008 was unprecedented. Before the worldwide financial crisis, the textile industry had already faced the unfavorable factors of over-capacities, high raw material and energy prices. The company does not expect an upturn in textile machinery market this year.
Also coping with the influence of a weakened market, Urs Gull, director of sales / marketing of SSM, said that the textile industry had invested a lot in the past few years, hoping for a sustainable market. But now there was over-capacity, and the global markets for both household applications and clothing had shrunk.
Benninger’s CEO, Heinz Michel (middle), commented that the show had good quantity of quality visitors, but after a few months of economic downturn, many of the potential buyers had adopted a wait-and-see attitude. He was at the company’s booth with Tom Knauer, sales manager (left), and Guido Benz, executive sales director, of textile finishing. |
“The good sign is that there are still activities in the spare parts business, indicating that the machines have not stopped running in the factories,” he remarked. On the other hand, he noticed that there were more activities on second-hand machinery, while customers were expecting “very good price”. “We need to fight for each simple order,” he added.
Picanol also observed that spare part sales have been picking up slowly while the market was consuming the over-capacity. Erwin Devloo, marketing communication manager of Picanol, said that many buyers were looking for energy saving features in the machines. However, due to the downturn, which is regarded to be temporary, a lot of potential buyers tend to hesitate in making purchase decisions.
Mr Devloo is confident in the future development of the Asian textile industry, especially for commodity textiles. Individuals in third world countries consume only 10% of the amount consumed by those in developed countries, he said.
Potential of new territories
Turkey is one of the main markets in the Middle East targeted by another exhibitor Uster Technologies, which is finding opportunities in a number of growing regions that span from South Africa to Russia, covering such less developed markets as Kenya, Tanzania, Mali, Uzbekistan, and so on.
Andreas Tanner, sales manager (left) and Peter Egli, vice president of sales and service west, of Uster Technologies |
These new markets are smaller in size when compared with China and India, and usually involve the local governments in certain manner when it comes to investment in high technology.
The cotton classing offices in China have ordered about 400 units of HVI 1000 M 1000, which help the users to classify their cotton and set the price, from Uster in the past three years, but the numbers of orders expected from these new markets would be much smaller, said Andreas Tanner, sales manager of Uster for these developing territories.
Stäubli offers its customers in Turkey, where it has four sales offices and one technical office, its specialized machines for carpet manufacture, in addition to its jacquard, toweling and upholstery machinery.
Helmut Lauterbach (front) and Klaus Weinhold, area sales managers of Schönherr, Stäubli Group |
The carpet machines were specially adapted to the Turkish carpet-making industry, according to Helmut Lauterbach, area sales manager of Schönherr, Stäubli Group. Although sales of the machines last year was a far cry from that of 2006 and 2007, Turkey offers a huge market, he said.
Stäubli offers five different looms for carpets. Users can switch easily from producing one type of carpet to another, and can react quickly to changes and cope with small batch orders. The end products range from area rugs, wall-to-wall carpets, to home and transport carpets.
“Turkish factories have over-capacity at the moment, but they’ll come back, “ said Mr Lauterbach, adding the high season of making carpets is approaching. |
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| Copyright © Adsale Publishing Limited. Any party needs to reprint any part of the content should get the written approval from Adsale Publishing Ltd and quote the source "ATA Journal for Asia on Textile & Apparel", Adsale Textile English Website - www.AdsaleATA.com. We reserve the right to take legal action against any party who reprints any part of this article without acknowledgement. For enquiry, please contact Editorial Department. |
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| Copyright © Adsale Publishing Limited. Any party needs to reprint any part of the content should get the written approval from Adsale Publishing Ltd and quote the source "ATA Journal for Asia on Textile & Apparel", Adsale Textile English Website - www.AdsaleATA.com. We reserve the right to take legal action against any party who reprints any part of this article without acknowledgement. For enquiry, please contact Editorial Department. |
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