* H&M: Hypocrisy & Minimum wage:
Maybe you’ve read it in the news lately. H&M’s CEO, Karl-Johan Persson, started to feel bad that he outsources most of his clothing production to countries where workers are hardly paid the money necessary to eat.
He flew from Stockholm to Bangladesh, sat down with Bangladesh’s Prime Minister, Sheik Hasina, and kindly asked her to raise the minimum wage.
The press is going wild.
What is wrong with this picture? If Persson is really sincere, he has got flawed logic. H&M gets about 25% of its products from Bangladesh. That is a lot of weight to throw around, not just with Bangladesh’s prime minister, but with its producers as well. What does that mean?
A Swedish film crew visited a producer in Hong Kong who said that it is especially hard working for H&M because they can stop placing orders before you can blink your eye. In China this meant that workers were subject to increasingly stressful and unhealthy working conditions. The film crew found children as young as 16 working without safety equipment in factories “dense with chlorine gas”. When they were under pressure to fill and order, they worked 13-14 hours a day, seven days a week.
So you’re trying to tell me that a CEO with that much influence couldn’t have simply asked their producers to raise wages?
Then one day, instead of adjusting your test policies and asking teachers to adjust accordingly, you talk to the governor of your state and ask him/her to sort things out. Not very logical.But that is really just the tip of the iceberg.
In Bangladesh the minimum wage is the lowest in the world, at $36/month. H&M also gets its clothes from Cambodia, where the minimum wage hovers at around $61/month.
In September of 2010, Cambodian garment workers at a factory that produced for H&M were fired for striking for $93/month which they consider a “minimal living wage.”
To the best of my knowledge Persson has neither met with the president of Cambodia nor Indonesia about minimum wage policies. Additionally, it would take nearly doubling the minimum wage in Bangladesh to come close to what is being paid in Cambodia and Indonesia.
Persson is hardly at risk of losing huge profit margins, should the president decide to listen to him. The icing on the cake is that on September 3, 2012, just weeks after Persson met with the president asking for a minimum wage increase, he announced at a BGMEA press conference that H&M plans to double its purchases from Bangladesh in the next five years .
This, apparently, regardless of whether or not the minimum wage is raised.
19:30:15 local time CHINA
* “Made in China” sweeps world in past decade:
Over the past decade, China has extended its dominance in exports of textiles and clothing, shoes, suitcases and other labor-intensive products, while building up new competitive edges in exports of products featuring high technology and added value.
Official figures from China’s commerce authorities show that the country’s foreign trade enjoyed an average annual increase of 21.7 percent from 2002 to 2011. Over the same period, the world average level of foreign trade growth stood at just 10 percent.
Data also show that in the first seven months of this year, 38 percent of the U.S. textile imports came from China. More than 71 percent of Japan’s and 38 percent of the European Union’s textile imports also came from China. read more.
* How The East Is Won: Success in China Requires Multi-Platform Approach:
What once may have seemed like a sure bet is a little less clear now. Hesitant retailers from the U.S. and Europe looking to enter the market might think pure e-commerce is a way to get a foot in the door. But what works in Boise might not translate in Beijing.
Shalendra Sharma, associate professor of political science, University of San Francisco, says given the uncertainty and projected slowdown of the Chinese economy, retailers should exercise caution.
“However, with an estimated 300 million Chinese consumers with much disposable income, it is an opportunity that should not be missed,” says Sharma, also the author of “Global Financial Contagion: Building a Resilient World Economy after the Subprime Crisis.” “I would say a prudent strategy is to combine e-commerce with some brick-and mortar stores in places like Beijing and Shanghai.”
Apparel tops the list of items Chinese consumers prefer to shop for (31%), followed by electronics, (20%), groceries (14%) and shoes (11%), according to the CCI and Cotton Incorporated Global Lifestyle Monitor™ Survey, which interviewed Tier 1 consumers in China. It appeals significantly more to the country”s women than men (39% versus 22%). read more.
* H&M: China is the fastest growing market:
Sept 20 was a big day for H&M, the Swedish multinational retail-clothing company.
While celebrating the opening of its 100th Chinese store in Nanning, capital of the Guangxi Zhuang autonomous region, it opened its first store in Kuala Lumpur, Malaysia.
Established in 1947, H & M Hennes & Mauritz AB (operating as H&M) is known for its range of clothing.
In terms of revenue it ranks second globally behind Spain-based Inditex, parent company of the clothing brand Zara. It is followed by US clothing brand Gap.
18:30:15 local time VIET NAM
* Cotton-field expansion plan fails to meet target as profits remain low:
A Government plan to expand the country’s cotton cultivation area to 30,000ha by 2015 will likely fail to meet targets due to the low economic value of cotton compared with other crops.
Under the government’s plan for the 2010-15 period, the country would have to plant a total of 20,000ha of new cotton.
However, for the 2010-11 period, only 790ha of new cotton were planted, according to a report in carried by Thoi Bao Kinh Te Viet Nam (Viet Nam Economic Times) newspaper.
In the first three-quarters of this year, the country planted only 200ha of new cotton, which did not meet even 10 per cent of the plan for the period.
Experts said that farmers were reluctant to grow cotton because of low profits. Cotton prices are between VND17,000 and 18,000 a kilo (US$0.8-0.85).
In addition, investment in intensive farming and equipment for cotton farming was still low.
The cotton output in the country meets only 2 per cent of the demand of the textile industry. read more.
* Education vital in fighting drug crimes:
Former drug users learn vocational skills at the Treatment, Education and Social Labour Centre in Ha Nam Province. Education is seen as crucial in helping former drug addicts start a new life. — VNA/VNS Photo Anh Tuan
Increased communication and education efforts were key to the success of the fight against drug related crimes, a national meeting in the central province of Da Nang heard yesterday.
The fight, which aimed to prevent drug trafficking and addiction, had brought police, border guards, militia and communities together.
Local people had provided authorities with 1.7 million pieces of information regarding criminal activities as well as drug and human trafficking over the past five years, according to the Ministry of Information and Communications. read more.
18:30:15 local time CAMBODIA
* Strikers claim police abuse:
Garment factory workers who set tyres ablaze during a strike on Friday claimed yesterday they were burned when police pushed them into their own fire.
Snguon Vannary was one of several workers who said his feet had been burned when police broke up the strike at Tae Young factory, in Ang Snuol province.
“[Police and military officers] tried to put out the fire by spraying water,” he said.
“When I tried to stop them, they pushed me and some other workers and we fell back onto the fire.”
“I am not afraid to keep striking to demand justice,” Vannary said. “We’ll keep doing it until they accept our demands.”
About 600 workers had gathered in front of the factory to demand their bosses reinstate 16 representatives and drop legal complaints filed against them. read more.
19:30:15 local time MALAYSIA
* Shadow budget will only burden Malaysians, says Chua:
Pakatan Rakyat’s shadow budget pledging to increase the minimum wage by RM200 will increase the country’s debt and burden Malaysians.
MCA Young Professionals Bureau chairman Datuk Chua Tee Yong refuted the Opposi-tion’s claim that increasing the minimum wage to RM1,100 was the best move for working groups.
Citing an example, Chua said the country currently had three million foreign workers, and if each person received an extra RM200, it would translate to an additional RM600mil monthly or RM7.2bil a year.
“If the RM7.2bil is used to generate more income for Malaysia, that will be fantastic,” he said.
“But, that is not the case here.”
“The RM7.2bil will be an outflow, as the money will be remitted to foreign workers’ home countries,” he said in a statement yesterday. read more.
19:30:15 local time INDONESIA
* Labour Workers Council Threatens One Week Strike If Demand Not Met:
The Indonesian Labour Workers Council (MPBI) has threatened to hold one week nationwide strike if the government does not abolish outsourcing in several areas.
One of MPBI leaders, Andi Gani Nena Wea told Antara news agency on Friday it would ask members to strike in early November if the government did not meet its demand.
“The government has been given 14 days to act accordingly,” said Andi who is also president of Federation of Indonesian Trade Unions (KSPSI). read more.
* Three-way dialogue needed to resolve workers’ issues: Experts:
As labor unions suspend their five-day strike plans, the government needs to play an active role in a three-party dialogue involving employers and labor unions, which will discuss solutions to some labor issues, experts say.
“Instead of issuing counterproductive regulations, the government should facilitate a dialogue. It should empower employers and union leaders to seek solutions to the issues,” economist Payaman Simanjuntak
of the Jakarta-based Krisnadwipayana University who specializes in labor economy, told The Jakarta Post on Friday.
On Wednesday, labor unions launched massive strikes in some major industrial areas in Jakarta and other cities.
Payaman, a former industrial relations and social security affairs director at the Manpower and Transmigration Ministry, criticized the government for focusing on outsourcing rather than improving the welfare of the workers. read more.
* Batam no longer promotes cheap labor to investors:
The Batam municipal administration and the Batam Free Trade Zone Authority (BPK-FTZ) have agreed to no longer promote cheap labor to investors who wish to do business in Batam, but instead to highlight the quality human resources found there as well as available manpower and infrastructure.
Debates on the city’s annual minimum wage always tend to be difficult and favor workers’ demands rather than employers’ needs.
Based on a survey conducted by the Batam Remuneration Council, the Appropriate Living Needs (KHL) in Batam as of September this year were calculated at Rp 1.83 million (US$203) per month, an increase of 28.06 percent compared to last year.
* Indonesian batik exports to cross US$ 1bn next year:
18:00:15 local time BURMA/MYANMAR
* No quick exports boom for Myanmar despite US move:
Myanmar’s garment and agriculture industries could be set for a revival after a US decision to ease an imports ban, but observers warn against hopes of a sudden export boom for the impoverished country.
Garment exports were some of the hardest hit when the US slapped its embargo on Myanmar products in 2003 in response to the brutality of the then ruling junta.
Thursday’s announcement was applauded at the Maple Trading garment factory in Bale on the outskirts of Yangon, where workers described the hardships caused when the industry collapsed, wiping out three in four jobs.
“It would be great to have good business so the female workers can have a safe life here,” she said as the huge strip-lit factory floor rang with the clatter of sewing machines assembling jackets and trousers for Japanese and Korean buyers.
“There used to be around 400,000 workers in garment factories and now there are only about 100,000,” he said. “There will be more factories, unemployment in the country will decrease and purchasing power will go up.”
Aung Win, who is also the vice chairman of Myanmar Garment Manufacturers Association, added the country could tempt back migrants – a millions-strong diaspora – who are working in factories abroad, notably in Thailand.
“Myanmar’s biggest advantage is the very cheap availability of labour, compared to even other low-wage manufacturers such as Bangladesh and Cambodia,” said Arvind Ramakrishnan, an analyst at global risk research Maplecroft. read more.
* EU to enhance cooperation in Myanmar’s garment enterprises:
It is the first four months of 2012-2013 financial year that Myanmar’s garment export has reached nearly half volume of the whole previous financial year, a report of the Ministry of Commerce said.
The United States will begin the process of easing restrictions on imports of Myanmar goods into the US, Secretary of the State Hillary Clinton told President Thein Sein during his visit to the US. The European Union (EU) also lifted economic sanctions last April.
The EU is planning to provide Myanmar with technical assistance in the aspects of trade and investment, especially more job opportunities for garment factories workers.
“The US imposed import ban on goods from Myanmar in 2003. Now, the US officially announced that it will ease import ban on goods from Myanmar. As a result, Myanmar is seeing favorable condition in garment business. GSP was not granted to Myanmar beginning 1997. Now, Norway granted GSP to Myanmar last September,” said Khine Khine New of Myanmar Garment Enterprise.
There are 205 garment enterprises running in Myanmar and the two largest clothing markets are the US and the EU. read more.
17:30:15 local time BANGLA DESH
* US rights groups not convinced- Ready-made garment labour issues:
Labour and human rights organisations in the USA at a meeting with Bangladesh embassy expressed serious concerns on some sensitive issues including impartial and quick investigation on the death of labour leader Aminul Islam.
They also demanded disposal of police case against leaders of BCWS (Bangladesh Centre for Worker Solidarity) initiated in 2010, condemned obstruction created in exercising freedom of association rights in RMG factories and expressed concerns over loss of lives from frequent fire incidents in Bangladesh RMG factories and so on. Concerned officials from Bangladesh who attended the meeting responded to the concerns affirming the sincerity and commitment on part of the government in order to address those issues.
The responses, however, seemed not to have convinced many of the stakeholders.The Bangladesh embassy at Washington organised the exclusive roundtable discussion on “Labour Issue in Bangladesh RMG sector” recently which was attended by almost all US stakeholders.
Four officials from the office of the US Trdae Representative (USTR) including the Deputy Assistant USTR for GSP and Assistant USTR for Labour, four officials from the US Department of Labour including the Acting Deputy Undersecretary, State Department officials, leaders from AFL-CIO, Global Labour and Human Rights (GLHR), Workers Rights Consortium National Fisheries Institute, American Apparel and Footwear Association (AAFA) attended the meeting. read more.
* RMG workers demand salaries before Oct 15:
Workers observed work abstention and staged protests at two garment factories in Gazipur Sadar upazila to press home their demands for production incentive and more Eid holidays.
About 7,000 workers of Intramex Group in Teen Sarak area started a sit-in and agitation programme from 8.30am yesterday, police said.
They also demanded the salary of September and a half month’s salary of October before October 15.
Police later went to the spot and brought the situation under control.
A worker of the factory said the workers had an altercation with some officials on Friday afternoon over the demands.
At one stage, sewing operators Ziaul Haque and Maqbul Hossain were injured as the workers beat them up, he said, requesting not to be named.
Four others, including sewing operator Ramzan Ali, were also assaulted.
Managing Director of the Group ATM Anayet Ullah came to the factory at around 12 noon and held a meeting with the agitating workers.
In the meeting, he assured the workers of giving eight days’ Eid holidays and paying the dues in two instalments.
Meanwhile, the workers of Dody Fashion also started a work abstention programme to press home their demands. read more & read more.
* Unrest in garment sector apprehended:
Many apparel units, doing most of their banking business with Sonali Bank, might be in trouble to pay salaries and wages during the upcoming Eid-ul-Azha due to cash crunch situation in the bank in the wake of the Hall-Mark scam, intelligence sources said yesterday.
“We’re fearing labour unrest as a good number of big garment units are likely to fail payment of salaries and bonus to employees and workers as a result of cash shortage in Sonali Bank Ltd (SBL),” a Director of Industrial Police told The New Nation on Friday, on condition of anonymity.
Usually, these garment units borrow working capital from the SBL, the country’s largest commercial bank, to pay wages and festival allowances.
Sonali Bank sources said around 18 per cent of their loan portfolio support garment and textile industry.
“We have received complaint from more than 50 big apparel units about the fund crunch in Sonali Bank affecting their business. They also said that the bank was showing apathy in providing working capital due to liquidity shortage of the bank,” he added. read more.
* Workers go on strike at 2 apparel factories in Gazipur:
The management of two readymade garments factories in Gazipur assured the workers of resolving their issues after they went on strike on Saturday, pushing for several demands, including payment of wages before Eid.
Witnesses said the workers of Intermax Garments Factory in Tin Sarak area under Sadar upazila began the strike, demanding full salary and overtime for September and 15 days’ salary for October before October 15, ahead of Eid-ul-Azha.
Their other demands are extending Eid holiday to 10 days from present eight days and removal of some management employees.
The police on information went to the spot and brought the situation under control.
A factory worker, on condition of anonymity, said they placed their demands several days ago but received no response from the management.
On Friday afternoon an altercation took place between the workers and the management staff following which ‘musclemen hired by the authorities’ assaulted the workers’ representatives, the worker said. read more.
* Red tape holds up RMG park:
The construction of a garment park at Bausia in Munshiganj is being delayed due to bureaucratic indecision, industry insiders said.
The idea for construction of the garment park under public-private partnership (PPP) to relocate the city’s garment factories was forwarded by the planning ministry to the industries ministry a few years ago.
But the industries ministry, upon recommendation from the commerce ministry on July 25, changed its stance on the grounds that the PPP model would be time-consuming and unfeasible in Bangladesh.
The commerce ministry, instead, suggested constructing the garment park using government funds and then selling the plots on to the entrepreneurs at market rates, said a senior commerce ministry official.
Bangladesh Small and Cottage Industries Corporation (BSCIC), a concern of the industries ministry, is in charge of implementing the project. read more.
* RMG export facing strong competition from India:
Export of ready-made garment (RMG) from Bangladesh is facing strong competition from India, as the latter has been quoting lower prices following depreciation of rupee (Re) against the US dollar, exporters said Friday.
However, local RMG exporters are still attracting buyers from the European Union and the United States, two major destinations of Bangladesh’s garment products.
When RMG export from India fell substantially, Bangladesh was able to maintain an edge in its export by shipping garment products worth $13.84 billion in the first eight months of 2012.
The RMG export from Bangladesh was at a similar level of $13.78 billion during the same period in 2011, according to data with the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). read more.
* Bangladesh emerging as a leader of cotton and textile world:
Quamrul Ahsan and Md. Sarwar Jahan in the first of a two-part article
Despite difficult times in cotton and textile markets in last couple of years, Bangladesh emerged as an undisputed leader of cotton and textile world with a record US $19.6b textile exports in the financial year (FY), 2011-2012.
The towering export figure demonstrates unprecedented growth in the textile sector. It is widely viewed as the fruit of a robust textile industrial-base that has been crafted by millions of hard-working people and scores of visionary entrepreneurs in just a few decades. The current year export of $19.6b represents a two-fold increase in dollar value just in five years. The growth is seen by many textile analysts as robust and unshakeable as Bangladesh managed to manoeuvre through the worst economic and financial crisis the world has seen for decades.
Textile boom: There are three synergic and intrinsic factors that triggered the textile boom in Bangladesh over the last few decades. They are resources, opportunities and policy directions. The resources include abundant skilled labour forces, low cost energy and natural gas. The self-sustained domestic market of 160 million with a growth rate of 3.0 per cent is a great support for the industry. In recent years Bangladesh has shown a significant increase in per capita income and improved lifestyles for the middle class.read more.
* Way forward for Bangladesh textile sector:
Quamrul Ahsan and Md Sarwar Jahan concluding a two-part article
Bangladesh has been facing enormous challenges to sourcing cotton to feed its twenty billion-dollar apparel industry for the last couple of years. For a country considered a rising textile power, the challenges have been the painful reminders of the intractable problems plaguing Bangladesh.
India, for example, has been serving as one of the most important sources of cotton for Bangladesh. However, for the last couple of years, it has been proven to be one of the most unreliable and undependable sources. read more.
* Danish co initiates ‘Bio-wash’ for textile industry:
Novozymes, a leading company of Denmark providing bio-innovation and industrial enzymes in world market, has launched its range of ‘Bio-wash’ enzymes in Bangladesh.
The company announced the plan to further focus on its bio-blast solutions for the Bangladesh market, says a press release.
“The textile industry is extremely fashion driven, especially when it comes to denim,” said Yanxia Jin (Clare), regional marketing manager for the Asia Pacific of Novozyme, while presenting a keynote paper at a seminar at a city hotel on Friday.
Jin said, this innovative product would ensure that Bangladesh’s textile industry has the fashion edge to remain competitive. read more.
17:00:15 local time INDIA
* Power cut: powerloom weavers stop production:
Uninterrupted power essential, they say…
Over two lakh powerlooms in Coimbatore and Tirupur districts stopped production for a day on Friday protesting against long hours of power cut.
While demonstrations were organised at Avanashi, Thekkalur, Palladam, and Kannampalayam, those at Somanur observed a fast.
According to P. Kumarasamy, secretary of the Coimbatore District Job Working Powerloom Unit Owners’ Association, the looms are able to work only for 10 hours a day. “We met the Chief Engineer of Tamil Nadu Generation and Distribution Corporation recently and submitted a memorandum. But, still there is no schedule for the power cut,” he says.
There is no specific time for the power cuts and no reduction is the duration too. The availability of power in a day is less than the duration of power cut. This leads to damage of fabric and loss to the manufacturers. There was some relief from the power cut for the last couple of days and on Friday, it was again worse. The textile manufacturers also supported the one-day strike, he says. The production per loom is 50 meter a day.
A powerloom unit in Tirupur remain idle as powerloom owners and workers strike work and stage demonstrations on Friday.– Photos: M. Balaji
* Textile demand slows down:
The festival season is all set to start and yet the demand for textile fabric has slowed down during the last few days.
P. Kumarasamy, a job-work powerloom unit owner at Somanur, says the demand for unprocessed fabric usually picks up only after Deepavali, ahead of Pongal. Though the market for powerloom fabrics was good for the last six months, the demand has slumped during the last few days. The fabric manufacturers are said to incur loss of Rs. 2 a metre. Labour and power shortage has also hit the powerloom units.
Southern India Mills’ Association chairman S. Dinakaran said yarn prices had declined during the last one week, specifically for the lower count yarns. For instance, while the prices of the widely used 40s count yarn had reduced by Rs. 20 a kg, it was not so high for the higher counts. “The yarn market is dull now and there is no fabric movement. However, the demand is expected to pick up shortly,” he said.
* Ban export of cotton:
The Confederation of Indian Powerloom Industries has urged the Union Government to ban the export of raw cotton and waste cotton in order to stabilise the yarn prices and ensure adequate supply to the domestic industries.
The unrestricted export of cotton resulted in drastic fluctuations in the yarn prices, which in turn affected the powerloom sector. The domestic industries were rendered non-competitive in the world market because of the spiralling prices of yarn, confederation president M.S. Mathivanan told reporters here on Friday.
Tamil Nadu has more than five lakh powerloom units, which provide employment to thousands of people. It consumes more than 55 per cent of the yarn produced in the country. A majority of the fabric produced in the State are being exported. But the Union Government continues to ignore the concerns raised by the powerloom sector, Mr. Mathivanan said.
The State even has a large number of units that consume the yarn spun of the waste cotton extensively to produce home furnishing products. “These home textile units are severely affected as the export of waste cotton led to the increase in the prices of yarn produced from it,” he said. The Union Government should ban the export of cotton and waste cotton and bring the cotton under the Essential Commodities Act, he demanded. read more.
* Weavers’ association defers decision on industry till Oct 13:
Federation of Gujarat Weavers’ Association (FOGWA) has deferred its decision on the extension of Diwali vacation and other key issues like credit and payment terms, increasing prices of yarn etc. till October 13. The decision had to be deferred due to differences of opinion among the weavers’ associations in the city.
Sources said FOGWA office-bearers under the leadership of their president Ashok Jirawala had organized a meeting with 49 weavers’ associations from different areas of the city on Saturday. While a majority of the weavers’ associations had agreed to keep their units closed for two days in a week, there were a few, who opposed extending the Diwali vacation from 10 days to one month.
The weaving sector in the country’s biggest man-made fabric hub in the city is passing through a tough phase due to the dwindling demand of polyester fabrics in the key consuming markets and 20 per cent increase in the yarn prices. Besides, the weavers have been suffering huge losses due to default by textile traders.
* Tirupur survives odds, but workforce feels the pinch:
Four years after an unprecedented recession first hit the western world, India’s garment export hub, its business-owners say, is firmly on the road to recovery. But the changes in the lives of Tirupur’s workers seem to show that the worst of the recession was absorbed by the weakest link in the global supply chain.
Tirupur, a city of six lakh people an hour’s drive from Coimbatore in Tamil Nadu, produces 90% of India’s hosiery and exports hosiery and cotton garments worth Rs 12,000 crore annually. Hosiery is almost exclusively what this city does: from a tea-shop sized unit with three men on sewing machines to factories employing thousands of women, the overwhelming majority of all economic activity in Tirupur centres around the garment trade.
“Over the last three years or so, Tirupur’s exporters have had to face four main challenges: the recession in the US, volatility in the price of cotton yarn, environmental restrictions on dyeing units, and the Euro crisis. Of these, the Euro crisis affected us the most as half our exports go to Europe,” says A Sakthivel, chairman of the ministry of textiles-sponsored Apparel Export Promotion Council, and president of the Tirupur Exporters’ Association. Tirupur’s exports, which had been growing at 10-15% annually, plateaued, says Sakthivel, and 35-40,000 workers lost their jobs. But the sector is now back on its feet and looking at Israel, Africa and Scandinavian countries, he says.
“A substantial portion of the work is now done through sub-contractors who cannot be monitored for labour violations the way large manufacturers can be,” says J Jeyaranjan, a social scientist who has studied labour in the Tirupur region and is director of the Chennai Institute for Development Alternatives. “While jobs exist for workers and they seem to be collectively secure in Tirupur, individually they are insecure,” he says.
* The piecemeal life of Tirupur’s female workers:
On the factory shop-floors, homes and streets of south India’s garment export hub, labour dynamics are changing. As jobs are becoming increasingly atomized and insecure, local labour is looking for better options allowing migrants from the north to fill the void.
Thirty kilometers from Tirupur, 850 women are at work in the Thingallur factory of Maxwell Industries, which produces underwear for its VIP brand.
Industrial towns in Tamil Nadu gained notoriety for their use of a scheme that union leaders say is essentially bonded labour — the “Sumangali Scheme” that kept unmarried women on a three-year contract during which they were housed in hostel on the factory and paid a fraction of their wages, ostensibly to give them a lump-sum at the end of their contracts with which they could pay for their own weddings.
At many other factories like this one, women are not employed on long contracts; in fact, they have no fixed contract at all, and none of the worker benefits like a Provident Fund that goes with a fixed job. read more.
17:00:15 local time SRI LANKA
* EC warns of further depreciation of rupee, trouble in garment sector:
A senior advisor to the European Commission (EC) has said that the exchange rate would stabilize at Rs. 138 per US dollar within the next six months.
The warning was given by Dr. Dilesh Jayantha, economic advisor to the European Chamber of Commerce, at a seminar organized by the EC on Oct 3, evening at Hilton Colombo Residence, to discuss the Euro zone crisis and its impact on the Sri Lankan economy.
Roshan Lyman, head of trade delegation of the European Commission cautioned Sri Lanka that the local garment trade had been affected by the withdrawal of the EU’s GSP plus trade concession. The official said that Sri Lanka didn’t feel the suspension of the facility earlier as European buyers had been compelled to procure Sri Lankan garments due to civil unrest in Bangladesh. The EC official asserted that the absence of GSP plus facility could now badly affect the local industry. read more.
16:30:15 local time PAKISTAN
* APTMA welcomes cut in discount rate:
Chairman, All Pakistan Textile Mills Association (APTMA), Mohsin Aziz has welcomed the decision of the State Bank of Pakistan (SBP) for announcing 0.50 per cent cut in the discount rate.
He termed it very beneficial for textile sector of the country and continuous and consequent reduction in two policies is a very well come sign and be hoped that such policies would continue and further reduction in discount rate in the next monetary policies so as to bring the discount rate to approximately 7-8%.
In a statement issued here Saturday, Mohsin Aziz said that APTMA was persistently persuading the central bank and senior officials of the government functionaries and have brought it into the notice of President of Asif Ali Zardari as well in the annual dinner of the association.
He said that though the cut is still very nominal as compared to their expectations. However, he said that SBP in its last monitory policy have also cut down the discount rate by 1.5%. He termed the decision very important for textile sector and its growth.read more. & read more.
* Chairman APTMA not happy with modest cut in discount rate:
Central Chairman All Pakistan Textile Mills Association (APTMA) Ahsan Bashir expressed dismay over the negligible cut of 50bps in the discount rate by the State Bank of Pakistan (SBP), saying that this sluggish response to APTMA demands of cutting it by 350bps that would cost Pakistan economy heavily.
Reacting to the latest cut of 50bps to 10 percent in the Monetary Policy by the SBP on October 5, Chairman APTMA apprehended that the threat of disinvestment would be looming large to hit badly the GDP growth in the country. According to him, APTMA has been advocating for reduction in the interest rate to 7 percent, in line with the regional competitors to control the growing pace of Non-Performing Loans (NPLs) reaching Rs 652 billion at present. read more.
* ‘APTMA always guards interests of industry’:
The All Pakistan Textile Mills Association (APTMA) has said that it has always guarded the interests of all the backward and forward linkages of the textile industry, including growers and value-added exporters, sources said on Friday.
Responding to the National Assembly Standing Committee on Commerce in its meeting held on October 4 in Islamabad, the official source said that APTMA had strongly contested the case of cotton growers by advocating the implementation of free market mechanism in cotton trading two years ago. It is only this single step on the part of APTMA that has triggered growth in cotton production due to transfer of Rs400 billion to the cotton farm sector.
He also appreciated the support of the Ministry of Textile Industry in enforcing free market mechanism, which has led to record 16 million bales this year and has made Pakistan self-sufficient in cotton production. He said that cotton farmers are getting international prices for their cotton due to this policy and all the credit goes to the Ministry of Textile Industry. read more.
* Spot rate maintains stability at cotton market:
Trading remained brisk amid fine lint in focus with firm spot rate, traders at Karachi Cotton Association (KCA) said on Saturday.
During past week, buyers remained on front foot in buying all grades on back of growing demand by textile sector with grade issue, brokers said.
Spot rate remained firm during trading week and stayed at Rs 5,350 per maund on last trading day on Saturday.
During past week spinners purchased selective grades while sellers with fine grades offered their produce on slightly higher prices around Rs 5,975 per maund, traders said. read more.
* Textile exports:
Pakistan’s textile exports to Saudi Arabia and Bosnia are well below potential in terms of total textile imports of these countries as well as in terms of our export potential according to a Business Recorder exclusive.
Saudi Arabia’s total textile imports are estimated at 3.6 billion dollars while Pakistan’s share is no more than 51.7 million dollars, while Bosnia’s total textile imports are 500 million dollars with Pakistan accounting for no more than 2.6 million dollars.
These statistics tend to belie claims that world textile demand is on the decline due to ongoing global recession which accounts for a decline in our major export item – textiles. The textile industry maintains that there are a number of factors that account for the decline in our textile exports including ongoing massive loadshedding, the law and order problems, and a tariff structure. And their basic recommendation to successive governments, including the incumbent, is to extend subsidies in the form of lower or zero tariffs and to motivate the commercial counsellors of our embassies to proactively seek orders for their products.read more.
* Leather exports stagnant at $1 billion for five years:
Contrary to the huge potential of leather products, exports of the leather industry have remained stagnant at $1 billion for the last five years, says a top industry man, insisting that just a bit of support from the Ministry of Commerce can push exports to $3 billion in three years and make the industry the second biggest after textile.
“Leather quality of Pakistan is second only to Italy, but its exports of leather products are static, in fact they have declined in the financial year 2011-12,” said Pakistan Tanners Association Chairman Agha Saiddain while talking to The Express Tribune.
Citing growth of other countries, he said, exports of India’s leather industry grew to $4.86 billion in 2011–12 from around $1.96 billion per annum in the 1990s. Bangladesh’s exports of leather products have increased by 17% and Ethiopia’s exports have doubled in the last three years.
“All countries including China have recorded growth in exports of leather and its products and the only country lagging behind is Pakistan,” he remarked. read more.
THE KARACHI FIRE:
* Court rejects Bhaila brothers’ interim bail, orders arrest:
A local court on Saturday rejected interim bail of Shahid Bhaila and Arshad Bhaila, the owners of Ali Enterprises, the gutted Baldia Town garments factory, and General Manager Mansoor Ahmed; however, it granted bail confirmation of Abdul Aziz Bhaila, the father of Shahid and Arshad.
Additional District and Session Judge (ADJ), Karachi (West) Abdullah Channa was hearing an application for bail confirmation submitted by owners of gutted garment factory Abdul Aziz Bhaila, Arshad and Shahid Bhaila to confirm them interim bail.
The court granted bail confirmation to Abdul Aziz on the basis of his age and bad health factors, while the ADJ rejected bail confirmation application of his two sons Shahid and Arshad and ordered their arrest.
During the proceeding of the applications, senior superintendent of police Saqib Sultan and investigation officer of the case, applicants’ counsel and government prosecutor were also present in the court.
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* Two of three Ali Enterprises owners sent to jail:
Two of the three owners of the ill-fated garment factory, where 258 people were burnt alive on September 11, have been sent to jail as their police custody ran out.
The judicial magistrate VI, Muhammad Afzal Roshan, turned down the police’s request to grant them more time to question Arshad Bhaila and Shahid Bhaila. The businessmen surrendered in court after their request for bail was dismissed by a district and sessions court. The police were, however, allowed to investigate the suspects inside prison.
The two brothers have been sent to jail until October 16. The police had requested the court for 14 days to interrogate them in order to complete the list of charges, but the Bhaila lawyer, Amir Mansoob Qureshi, argued that the police have already prepared an interim charge sheet and his clients have been held responsible for the fire. read more & read more.