00:24:39 local time CHINA
* Textile exporters told to brace for hard times ahead:
CHINESE textile companies may continue to face difficulties in the second half of this year as shrinking demand and rising costs erode their profitability, the Ministry of Industry and Information said today.
Textile production increased 11.8 percent from a year earlier to 2.14 trillion yuan (US$339 billion) in the first five months, down from a growth of 30.1 percent recorded in the same period of last year.
Textile profits decreased 2.4 percent to 91.7 billion yuan in the January-May period, a sharp contrast with a 38.1 percent rise a year earlier.
“Insufficient market demand, rising production costs and increasing global competition are major challenges for Chinese textile companies,” the ministry said in a statement. “These conditions are not easy to change. Along with uncertainties in external markets, we suggest textile companies to brace for hard times ahead.”
* Textile companies in for tough times:
CHINESE textile companies will continue to face challenges in the second half of this year as shrinking demand and rising costs eat into their profits, the Ministry of Industry and Information said yesterday.
Textile output grew 11.8 percent from a year earlier to 2.14 trillion yuan (US$336 billion) in the first five months of this year, compared with a rise of 30.1 percent recorded in the same period of last year.
Profit of textile producers fell 2.4 percent to 91.7 billion yuan in the January-May period, a sharp contrast with the 38.1 percent hike a year earlier.
“Insufficient market demand, rising production costs and increasing global competition are major challenges for Chinese textile companies,” the ministry said in a statement.
China’s textile industry, which was highly export-dependent, is losing global market share to countries such as India, Vietnam and Bangladesh, it said, adding that the widening price gap of cotton between the domestic market and that traded in overseas markets was the main cause for China losing its competitiveness.
23:24:39 local time VIET NAM
* Part 1: Lacking orders became an obsession for garment companies:
After the prosperous year 2011, when garment companies were all very busy with big orders, they are now experiencing dark days with the serious thirst for jobs.
According to the Ministry of Industry and Trade, the world’s economy still has not recovered from difficulties, while consumers still continue cutting down their expenses. Vietnam exported 4412 million dollars worth of products in the first four months of 2012, an increase of 14 percent over the same period of the last year.
Difficulties come from all sides
In general, by the end of May, the garment companies specializing in making products for Asian and East European markets have received enough orders until the end of the third quarter of the year. However, orders have come in dribs and drabs since the beginning of the year.
The garment companies making products for domestic consumption have also bogged down in big difficulties. The representative of a garment company in Hung Yen province said that it does seasonal works.
The company has to import materials in advance in order to get ready to implement any sudden orders. Therefore, it usually lacks capital for the imports. It also has to pay workers monthly, even in the low production season, just in case it receives orders. read more.
23:24:39 local time CAMBODIA
* Strike will continue for thousands:
Thousands of workers from the Tai Yang Enterprise garment factories, which supply major US brands Levis and Gap, have vowed to continue a two-week strike today after negotiations between the company, union and Labour Ministry officials broke down on Friday.
Rong Chhun, president of the Cambodian Confederation Union, said Labour Minister Vong Sauth had promised to resolve the dispute on Thursday, then changed his mind the following day, instead referring the matter to the legal system.
“The minister did not protect the workers’ benefits, but he protected the employer. The employers abused the workers’ rights,” he said.
Work conditions at the factory in Kandal province’s Ang Snuol district were unsatisfactory and the company had changed the name of one of its factories in order to avoid paying seniority bonuses, he said. read more.
* To read in the printed edition of the Phnom Penh Post:
1. Clash thwarts union’s march. read more.
* To read in the printed edition of the Cambodia Daily:
2. Factory owners agree to provide more benefits. read more.
22:24:39 local time BANGLA DESH
* 20 injured as police beat RMG workers at Kaliakoir:
At least 20 apparel workers were injured on Sunday as the police baton-charged them while staging demonstration blocking the Dhaka-Tangail Highway at Kaliakoir upazila in Gazipur.
The protest was triggered by sacking of 19 workers of RS Knit Composite and Dressme, two establishments owned by same people.
Gazipur Industrial Police inspector Abul Kalam Azad said workers of the two establishments began their demonstration about 9:00am in front of the factories in Pallibidyut area to move to the highway about an hour later.
They blocked the highway till the police intervened about 11:00am, demanding reinstatement of the sacked workers and firing of several management officials.
Both the police and the Industrial Police took part in the action against the agitating workers.
The injured were taken to nearby medical facilities.
Some workers of these factories, preferring anonymity, said the management on Thursday evening called the 19 workers to their office rooms, gave them their June wage and told them that they were no longer employed.
They were also threatened to have case filed against them and were forced to sign blank papers. read more.
* Addressing hurdles to export growth:
Low workers’ wage is often cited as an advantage for apparel sector. But such an advantage does not last too long
That the country’s export growth prospects are imperilled by a host of constraints is known to all concerned. A World Bank (WB) study report released late last week in Dhaka listed a few of those and reminded the government and other stakeholders of the urgency of addressing those to stay competitive in the global market and help boost the volume of exports, particularly that of apparels, the mainstay of Bangladesh external trade.
The study report, titled, ‘Consolidating and Accelerating Exports in Bangladesh’ listed factors such as infrastructural deficit, especially that of energy, inadequate skills, weak trade-related strategy and non-compliance with the government’s labour standards as hurdles to the growth of Bangladesh exports. It also highlighted the need for improving the administrative efficiency-level of the Chittagong port, capacity of railway transportation and Benapole land port. read more.
* Power cuts make them loan defaulter:
headlines. The headlines were: “More than 1.22 lac loan defaulters in the country” and “Government’s proposal to hike electricity prices very soon.” Let me give an example of one unintentional loan defaulter whose name might have already been included in the 1.22 lac list. A friend of mine, an experienced businessman, established a textile manufacturing unit about a year back with bank loan. He imported sophisticated textile machinery by opening L/C from abroad. The time between L/C opening date and trial production was more than one year because of delay in getting electricity connection, setting up of machinery etc. By the time he completed setting up the machines at the factory, he failed to pay more than six instalments and became a defaulter according to BB rules. His company became disqualified for getting any further support.
The only way that is open for him is to run his factory at any cost, using full production capacity. But alas, how will he use full capacity? Out of 24 hours a day, he hardly gets electricity supply for 10/12 hours, which means his production has reduced to 50 per cent. Instead of making profit he is losing his capital every month. I believe he has no escape. Hon’ble finance minister, do you have any suggestion for him? He has no other means or land to sell to pay the present dues. to read.
* Thailand to recruit 1 lakh Bangladeshis:
Bangladesh government will send more than one lakh workers to Thailand as its government has shown keen interest to recruit Bangladeshi workers, said officials of the Expatriate Welfare and Overseas Employment Ministry on Sunday.
Meanwhile, Malaysian government also assured to recruit manpower from Bangladesh by next month.
Dr Jafar Ahmed Khan, Secretary of Expatriate Welfare Ministry told The New Nation on Sunday, “We talked with Labour Minister of Thailand in this regard and the Thai government informed us their willingness to recruit a large number of Bangladeshi workers in various sectors including garments, nursing and building construction related activities.” read more. (1 lakh=100.000)
21:54:39 local time INDIA
* We ‘manufactured’ our trade deficit:
India’s burgeoning trade deficit and its impact on the rupee is getting too much media attention these days. A declining rupee leads to increased rupee cost of import and adds to the subsidy burden. Increasing subsidy adversely affects India’s ability to achieve its fiscal targets and poses serious impediments to tackling inflation.
Over the last two decades of liberalisation, the share of merchandise exports in India’s GDP has increased from 6.3 per cent in 1990-91 to 16 per cent in 2010-11. In the same period, import as a proportion of India’s GDP has increased from 8.5 per cent to 23.5 per cent. Consequently, the gap between exports and imports of merchandise has increased from 2.2 per cent to 7.5 per cent of the GDP.
This gap has somewhat been made up by inflows of foreign capital and net export of services. Of late, however, capital inflow has come under pressure primarily because of India’s poor macroeconomic management and slowing economic growth. Exports of services, in particular the IT services and IT-enabled services, , are hit by economic slowdown in the US and the sovereign-debt crisis in the Euro Zone.
Any sensible strategy to address India’s growing trade deficit cannot ignore merchandise exports and among merchandise, export of manufactured goods. Three factors are keeping India’s manufacturing sector from becoming competitive in domestic as well as overseas markets: bad policies, poor supporting infrastructure and autonomous factors. read more.
* RBI nixes textile sector’s plea for debt revamp:
The RBI has rejected a debt restructuring proposal from the textile industry. The industry was hoping for a Rs 35,000-crore package.
However, the Reserve Bank of India said it had no objection to a two-year moratorium on term loans and conversion of working capital into working capital term loan (WCTL) within a timeframe of three-five years.
While this should give some comfort, the industry is disappointed.
The Reserve Bank of India said it does not see the industry’s problems as “severe or catastrophic”. read more.
* Gujarat govt to soon announce integrated textile policy:
* GGMA to focus on innovative garments:
Buoyed by suggestions of Gujarat Chief Minister Narendra Modi, the Gujarat Garment Manufacturers’ Association (GGMA) is set to focus on innovating in garment manufacturing. The association will now look to encourage its members in manufacturing health, weather and profession-based garments in the state.
Speaking at the inaugural ceremony of GGMA’s 19th National Garment Fair (NGF), Modi said, “The state government will offer several benefits to the garment industry through the upcoming integrated textile policy. However, the industry should also focus on incorporating innovation and technology in manufacturing garments. It could look to focus on profession, weather and holistic health-based garments to grab bigger market.” Modi further emphasised on focusing on traditional fashion by bringing innovation in areas like khadi and linen. “The garmenters will face less competition when they will look to innovate in khadi and focus on traditional fashion,” he added. read more.
* Textile, finance ministries to meet on debt recast:
Officials from the ministry of textiles and finance, Reserve Bank of India along with representatives from the banking and textile sector are expected to meet on July 13 to discuss the restructuring of textile loans, said a source in the know of the matter.
The finance ministry had accepted the textile ministry’s proposals on restructuring Rs 35,000 crore of the textile industry’s debt.
According to sources, RBI is not in approval of the asset reclassification of companies who would go in for loan restructuring. The proposal also included a two-year moratorium on repayment of the principal and converting some working capital loans to term loans.
So far, 59 cases from the textile industry have been referred for corporate debt restructuring (CDR) and debt of Rs 11,661 crore have been repackaged. The State Bank of India alone has non-performing assets (NPAs) worth Rs 1,976 crore in the sector. The hope, in the sector, is to secure Rs 25,000 crore for debt restructuring, as some companies are in a position to work with existing resources. read more.
* Indian govt urges textile exporters to expand market reach:
As India’s key textile export markets – the EU and the US – are experiencing slow economic growth, exporters in the country have been urged by the Textile Ministry to expand their reach, particularly to the eastern markets, to decrease their reliance on the two major markets.
Discussing the impact of eurozone crisis on India’s textile exports, Textiles Secretary Kiran Dhingra said she views the slump as an opportunity for Indian exporters to expand their market in the East as well as West, as till now they have mainly been focusing on the EU and US markets. read more.
* Fibre2fashion releases report on Indian cotton trends:
The Indian cotton textile market has an informative cotton report to look forward to. The report titled ‘Cotton’s State of Play in India’ carries vital statistical information on historical market trend and current scenario of cotton industry in India.
This report has been published by Fibre2fashion – one of the world’s largest b2b textile, apparel and fashion portals. Fibre2fashion has the privilege of over 1.5 million visitors visiting the portal every month.
The India-specific cotton report has been published, falling back on the immense resources and information analysed by fibre2fashion experts over the past 12 years.
read more & read more.
* India’s cotton output may fall 20 percent to crops such as guar, corn, soybean:
Cotton output in India is likely to fall as much as a fifth in the year from October, hit by poor monsoon rains, trade and government officials said on Thursday, cutting exports of the fibre from the world’s biggest exporter after the United States.
Patchy rains and better returns on crops such as guar and oilseeds had previously prompted trade officials to forecast a drop of 10 percent in cotton acreage. “There were no rains in the key producing regions of western and northern India. And both cotton acreage and output could fall by around 20 percent,” Arvind Patel, vice-president of industry body the Saurashtra Ginners’ Association, told Reuters.
In 2011/12, higher prices encouraged farmers to plant cotton on a record 12 million hectares, helping India harvest 34.7 million bales of 170 kg each. The monsoon, which is the main source of water for 55 percent of India’s arable land, was 31 percent below average from June 1 to July 2, losing even more momentum in the last week after being 23 percent below average in the week to June 27. read more.
* DRI probing garment exporters, bank men:
The Rs 1,000 crore Ludhiana-based hawala racket unearthed by the Directorate of Revenue Intelligence (DRI), New Delhi, has opened a can of worms back home. The scam, which at present centers around one garment exporter and a hawala operator, may soon prove bad news for some more garment exporters of this city including some bank officials who have been helping these businessmen raise funds.
The hawala operator named by the DRI, as per sources, is just the centrepoint, with many others revolving around him, using his services to bring back home their ill gotten money.
While the case has come to light recently, it has been learnt that these businessmen are being called for questioning by the Directorate of Revenue Intelligence from time to time and have even been barred from leaving the country. read more.
* Campaign to popularise export credit facilities in foreign currencies:
To help apparel exporters reduce the cost of working capital borrowings, the NIFT-TEA Knitwear Institute is all set to roll out a campaign to popularise export credit facilities in foreign currencies in Tirupur knitwear cluster with the participation of bankers.
The decision was following the participation of entrepreneurs in a meeting with the RBI Deputy Governor H.R.Khan, near here, on Saturday.
In the meeting, the official reiterated the need for encouraging more utilisation of pre-shipment and post-shipment credit in foreign currencies extended by the government.
At present, only less than 10 per cent of the garment exporters in Tirupur cluster are using the various export credit in foreign currencies to meet the working capital requirements in the execution of orders from foreign buyers while the majority has still been opting for such credits in rupees. read more.
* Fire in a four-storey building in Burra Bazar:
A major fire broke out on the second floor of a four-storey building housing a textile godown and some offices in the city’s Burrabazar area on Saturday night.
Fire brigade sources said that there was no report of any casualty so far.
read more. & to read
21:24:39 local time PAKISTAN
* Cotton market: mills’ active buying may help rates to stabilise:
Active mills’ buying helped prices to keep firmness on the cotton market on Saturday despite the higher-than-expected phutti arrivals due to favourable weather, dealers said. The official spot rate was unchanged at Rs 6100, they said. In the ready business over 4000 bales of cotton changed hands between Rs 6100-6300, they said.
The prices of seedscotton in Sindh were at Rs 2650-2700 and in Punjab rates were at Rs 2750-2850, they said. Market sources said that prices showed steadier trend due to persisting interest in buying by mills. It was noted that mills and spinners were conveniently procuring quality lint to meet their needs during the increased supplies from the new crop, Naseem Usman said.read more.
* Pakistan’s textile exports slowest growing in the region:
Pakistan’s textiles and clothing exports have grown at the slowest pace when compared with Bangladesh, China and India, according to data available with official websites.
Bangladesh led the textile trade growth, posting an increase of 215 percent between 2004-05 and 2010-11 while Pakistan’s exports grew at 56.52 percent during the same period.
Data retrieved from the official websites of the four countries reveal that in 2004-05, which was the last year of global textile quota regime, Bangladesh’s textiles and clothing exports stood at 6.42 billion dollars that increased in 2010-11 to 20.221 billion dollars. China was exporting textiles worth 95.13 billion dollars in 2004-05, which surged to 206.53 billion dollars in 2010-11.
During the same period, textiles and clothing exports from India increased from 13.51 billion dollars to 23.31 billion dollars. Meanwhile, Pakistan’s exports of the same items went up from 8.82 billion dollars to a mere 13.80 billion dollars.
* APTMA urges govt to reduce gas infrastructure development cess:
Mohsin Aziz, chairman of All Pakistan Textile Mills Association (APTMA) has urged the government to immediately reduce gas infrastructure development cess to Rs50 per million metric British thermal unit (MMBTU), as the industry is unable to pay Rs100 per MMBTU under the prevailing adverse business environment for the industry.
Objecting to the sudden increase in the gas infrastructure development cess from Rs13 per MMBTU to Rs100 per MMBTU, he said, it will have a negative impact on the industry’s viability.
The textile industry is already operating under-capacity due to unavailability of gas, on the one hand, and unbearable interest rates, on the other, he said. read more.
* Tussle over export of crust leather:
The value-added leather industry has suffered a loss of around 30 percent in exports, as the export and smuggling of raw materials continued from Pakistan, said Chairman PLGMEA (Pakistan Leather Garments Manufacturers and Exporters Association) Chaudhry Ahmed Zulfiqar, a top exporter, on Thursday.
Besides, a controversy rages between the leather garments manufacturers and tanners over the export of crust leather, which is termed a raw material by the leather garments manufacturers. The PLGMEA want a ban on the export of crust leather, while the Pakistan Tanners Association has opposed any such move.
The export of leather garments declined by 27.59 percent to $23.406 million in May 2012, compared to the $32.323 million during May last year. During July 2011-May 2012, the export of leather garments was recorded at $306.732 million against $369.295 million in July 2010-May 2011, down nearly by 17 percent.
He observed that there was a shortage of raw materials in the country. “Smuggling is also rife,” he said. “We have demanded a ban on the export of crust leather, which is also a raw material for the value-added industry and there is no value addition between wet blue and crust leather.” read more.
* KSE expels 18 companies on AGM default:
The Karachi Stock Exchange (KSE) has decided to delist 18 listed companies for not holding annual general meetings (AGMs) for more than two years and non-payment of dues despite repeated reminders.
According to KSE announcement here Tuesday, the cases of these companies have also been forwarded to the Securities & Exchange Commission of Pakistan for initiating necessary action against the management/companies under the provisions of the Companies Ordinance, 1984.
At the same time, KSE has decided that in future, no company associated to these defaulted companies, will be allowed listing at the stock exchange.
They are Accord Textiles, Amin Spinning Mills, AMZ Ventures, Dadabhoy Insurance, Fawad Textiles, First Islamic Modaraba, Harum Textiles, Indus Fruit Products, Ittefaq Textile Mills, Kashmir Polytex, MacDonald Layton, Mian Muhammad Sugar Mills, Mubarik Dairies, Sahrish, Textile Mills, Shahpur Textile Mills, The Ittefaq General Insurance, The Union Insurance and Zahur Textile Mills. read more.