06:14:25 local time VIET NAM
* Site clearance delay leaves textile firms in tatters:
Two major Hong Kong-backed foreign textile and garment projects have been bogged down due to site clearance issues in the northern province of Hai Duong’s controversial Lai Vu Industrial Park.
According to Hai Duong People’s Committee’s report, Pacific Vietnam Textile and Crystal Corporation’s projects with combined registered investment capital of $557 million have suffered from painfully slow site clearance.
The report said that nearly 40 households affected by the site clearance have obstructed Lai Vu Industry Park (IP) infrastructure construction everyday since 2012, demanding reasonable compensation costs and employment.
In June 2013, the due-to-be-displaced families also hindered Pacific Vietnam Textile and Crystal Corporation’s test hole drilling operations in IP areas marked for factory buildings.
The two projects received licenses in April 2013 for an area covering 31.17 hectares in Lai Vu IP. Pacific Vietnam Textile’s $425 million project aims to produce cloth and raw materials for the textile and garment industries, with capability to produce 360 million metres of cloth per year for both domestic and overseas markets, while Crystal Group’s $120 million garment project would specialise in producing and trading textile and garment products for exports.
The two projects are expect to provide employment for 20,000 local labourers as well as contribute to the reduction of Vietnam’s trade deficit by meeting local demand for cloth as well as exporting.
read more in BUSINESS IN BRIEF 14/8. (20th item).
07:14:25 local time INDONESIA
* Remuneration board expected to recommend increase of labor wages:
Manpower and Transmigration Minister Muhaimin Iskandar hoped that the Remuneration Board would issue recommendation on the scale of increase in Provincial Minimum Labor Wages (UMP) which were expected to rise by about 20 percent in 2014.
“It is the governors who usually decide the value of labor wage increase without consideration from the Remuneration Board. Now it should be the Remuneration Board which should issue a recommendation to be followed by the governor,” the minister said on the sidelines of a post-fasting gathering here on Tuesday.
However, the minister said that his office had yet to decide any formulation on the increase of the UMP.
“It is still under discussion, it has not yet been finished,” he said.
He expressed hope that the remuneration board would make a decision so that labor-intensive companies would be helped with regard to salary payments.
05:44:25 local time BURMA/MYANMAR
* Burma Not Ready for Asean Economic Community, Businesspeople Say:
Although Burma is moving forward with economic reforms and opening up to the international community, businesspeople say the country is not yet ready to join a planned integrated network of Southeast Asian economies in 2015.
A lack of infrastructure, human resources and technology, along with an unfinished legal framework for businesses, are a concern for Burma as the Association of Southeast Asian Nations (Asean) attempts to form a single market within the next two years.
Burma, which began transitioning from half a century of military dictatorship in 2011, has a largely agricultural economy that depends on rice and bean exports. But rice trader Pyae Sone Oo told The Irrawaddy that he worried the country’s agricultural sector would struggle to meet requirements for the Asean Economic Community (AEC).
Still, Khine Khine Nwe, secretary general of the Myanmar Garment Manufacturers Association, said her industry was ready to take part in the regional economic community in 2015.
“To look at the bright side, we are quite ready to take orders and we have skilled laborers,” she said, adding that she runs a garment factor in the country’s commercial capital, Rangoon.
She said the garment industry had struggled to survive due to international economic sanctions imposed against Burma under the former region, but that she was optimistic now that the country has opened its door to foreign investors.
Her factory, which once received garment orders from the United States, Canada and Europe, was forced to shift its focus to Asian markets—especially in Japan and Korea—due to the sanctions. The garment industry was particularly hard hit by American sanctions, she said.
04:59:25 local time NEPAL
* Industrial strike: Two industries likely to resume:
At least two industries located in the Pathlaiya-Birgunj industrial corridor are resuming production from tomorrow.
Parsa-based Necon Kelly Industries and Simara-based Hama Iron Industries are most likely to resume productions from tomorrow‚ after agitating workers’ unions and the management committee reached agreement to this effect today.
The management agreed to pay the salary structure demanded by the workers.
The workers had been protesting for the past eight days demanding equal increment in salary at all levels.
Beni Timalsina‚ an agitating worker said‚ “Industries where negotiations have succeeded will resume from tomorrow.” However‚ he added that the agitation would continue in other industries where they are yet to reach agreement. As many as 14 industries in the corridor have been shut since August 5 after the workers’ unions resorted to agitation demanding at least Rs 1‚800 salary hike applicable at all levels. A total of nine industries in the corridor will remain closed due to failure to reach agreement between the agitating unions and the management side though attempts are being made to hold talks.
Hulas Steel‚ Hanuman Metal‚ Triveni Spinning‚ Triveni Textile‚ among others‚ have stopped production for the past eight days. The talks between workers and the management committee of Triveni Spinning wasn’t successful yesterday as well.
05:14:25 local time BANGLADESH
* Worker leaders want Tk 8,000 in minimum wage:
Garment worker leaders are likely to submit a proposal for fixing at least Tk 8,000 as the minimum monthly wage to the wage board at its third meeting scheduled for August 18 through the workers’ representative.
The workers representative to the wage board for garment workers, Sirajul Islam Rony, told New Age that he received a number of proposals from several garment worker organisations and federations.
‘A uniform proposal would be prepared considering the proposals of different organisations I have received,’ he said adding that at least Tk 8,000 would be proposed as the minimum monthly wage.
He also said that he would propose six grades instead of the existing seven in the wage structure.
The owners, however, decided to argue that the minimum monthly wage should exceed Tk 5,000, Bangladesh Garment Manufacturers and Exporters Association source said.
The association sources said that the owners of medium and small factories were opposing any major increase in the wages.
* Curb on EPZ workers’ right to strike set to go by yr-end:
Workers in the country’s eight export processing zones (EPZs) are set to enjoy their right to observe strike or lock-out programmes from January next as the government has no plan to extend the existing legal bar in this respect, officials said.
Currently, the country’s eight EPZs under the Bangladesh Export Processing Zones Authority (BEPZA) are administered under a separate law other than the Labour Act 2006, which prohibits any strike or lock-out programme at industrial units in special zones until December 2013.
The EPZ Workers Welfare Association and Industrial Relations Act, 2010 is also applicable to the EPZs, the officials said.
“If the existing provision in the related law is not extended, the workers will automatically be able to avail themselves of the opportunity to observe strike or lock-out programmes,” Commerce Secretary Mahbub Ahmed told the FE recently.
* BGMEA suspends services to 160 factories:
The BGMEA has suspended ‘utilisation declaration’ (UD) certificates—mandatory export documents—of 160 of its members for not sparing adequate space on rooftops of the factories.
To facilitate exit in cases of fire, Bangladesh Garment Manufacturers and Exporters Association stipulates at least 25 percent open space on a building’s rooftop.
“Our inspection teams found zero open space in some of the factories,” said Shahidullah Azim, vice-president of BGMEA.
The factories, however, can have it reinstated if they re-arrange their rooftop layout to leave 25 percent open space.
“At least 12 factories that had their UD suspended got it back after managing the requisite open space on rooftops,” he said, adding that the BGMEA is very strict regarding the issue.
The suspension of UD certificates means the BGMEA will not give these factories a vital export document that gives details about the use of imported fabrics and accessories in garment production.
The move comes after the Obama administration put pressure on Bangladesh to improve factory conditions, a requirement to regain trade privileges from the United States.
* Bangladesh: Will Good Corporate Deeds Go Unpunished? :
In the aftermath of horrific tragedy, you’d think any efforts to lessen the chance of recurrence would be welcome, especially efforts fueled by significant corporate resources.
No doubt the U.S.-based retailers, including Walmart, Target, and Sears, that signed on to the Alliance for Bangladesh Worker Safety were realistic enough to expect some criticism of their binding, five-year undertaking to improve labor conditions after April’s Rana Plaza building collapse in which 1,100 people died. (A fire in another factory killed 112 Bangladeshis in November.)
What they may not have expected, or even currently understand, is that by signing on, these companies have provided their adversaries, spearheaded by organized labor, with a potent weapon to advance a multifaceted anti-corporate strategy of which the situation in Bangladesh is just one part.
Indeed, labor groups like the UNI Global Union went on immediate counterattack, excoriating the agreement as essentially toothless and, for want of third-party monitoring, a “sham.”
Meanwhile, in early July, 80 retail companies (only three of them American) signed the Accord on Fire and Building Safety in Bangladesh to fund substantial safety improvements. The refusal of American companies to join the Accord was likewise excoriated, when, for instance, UNI spokespeople claimed that the provisions would only add two or three pennies to the cost of a tee-shirt.
I am persuaded that both labor and management share a heartfelt concern for the victims at Rana Plaza, and that both sides sincerely hope for effective remediation of the unsafe conditions that led to the tragedy. But that is where the comity ends. Labor seeks a united front to attack virtually all human rights issues across the board and around the world. By their lights, that purpose is disserved when Corporate Social Responsibility (CSR) programs reassure the world that global corporations can be powerful agents of humane systemic change.
* Cotton price likely to rise in international market:
The country’s textile industry is likely to face a tough situation in coming days as prices of raw cotton is likely to increase in the international market in coming day, despite forecasts of a comfortable stocks at the end of the season.
Cotton prices are expected to rise in current fiscal (2013-14), according to new figures released by the International Cotton Advisory Committee (ICAC), which expects a rise in the season average 88 cents per pound in 2012-13 to more than one dollar in 2013-14.
The rise in prices of the staple raw materials will affect the competitiveness of the industry which depends almost entirely on imported cotton. The prices of yarn will also increase as a sequel to increase of the prices of cotton which will ultimately hamper the country’s RMG sector.
The apparel entrepreneurs, however, ruled out the news terming a trick to increase the prices adding that there are good production of crops both in India and China. Meanwhile, the US Department of Agriculture (USDA) on Monday lowered its forecast for US and global cotton production in 2013-14 crop year and reduced its outlook for record global inventories.
The USDA lowered its expectations for global output to 116.38 million bales from a July forecast of 118.02 million bales amid unfavorable weather and reduced output in China.
04:44:25 local time INDIA
* AEPC Chairman expects apparel exports to grow 15-16%:
Dr. A Sakthivel, Chairman AEPC, has expressed optimism on the growth of exports. Exports for the Month of July 2013 have grown by 11.64 % compared to the same period last year.
Chairman AEPC has welcomed the growth in the RMG and Textiles for the month of July 2013. In his statement issued Dr. Sakthivel stated that, “The market is US is gaining strength but EU is still under economic stress.
Though, we have registered a growth of around 16% in the RMG in US and EU markets. Our exports diversification in the non-traditional markets and sustained government help has also helped to boost exports”. At the end of the current financial year as per the estimates we are expecting a growth of around 15 to 16 % if the other factors keep supporting the current rate of export growth,” he added.
* Indian Textiles Ministry begins collecting data on cotton:
04:14:25 local time PAKISTAN
* Walt Disney cancels import orders worth $150 million:
In an alarming development, the Walt Disney Company has decided to cancel import orders worth $150 million after assessing that 16 textile companies handling their orders in Pakistan weren’t meeting international health and safety standards.
Pakistan’s total exports to the US stand at $ 3.6 billion, of which textile exports account for $3.2 billion. To make matters worse for the textile industry, Pakistan has also failed to improve its position in the worldwide governance index (WGI), according to official documents available with The News.
Pakistan scored just 19 points in the WGI, six points below the baseline to avoid cancellation of orders. However, textile ministry officials are of the view that Pakistan has been subjected to sheer injustice during the point awarding process. “Pakistan has been given just 0.5 points in the head of political stability despite the fact that the recent smooth transition of power is simply the result of political stability,” said one official.
The 16 companies, which have been issued the letter of disconnection from Walt Disney, include Younas, Afroze, Lucky, Sadaqat, Kamal, Gohar, Satara and Crescent. However, official sources said textile industry officials fear that the move might have a cascading effect with other US companies importing from Pakistan, such as Wall Mart, Jones Apparel, Nike, Levis Strauss and GAP, also cancelling their import orders.
US companies – Wall Mart, Jones Apparel, Nike, Levis Strauss and GAP – annually import textile products worth $1.2 billion in total from Pakistani companies. In total 34 factories in Pakistan are exporting textile products to these US companies. These factories employ around 25,000 people, who are likely to become jobless in case the above mentioned US companies cancel their import orders. Sources said that US companies have also expressed concern over a factory fire in Karachi in which hundreds of men and women perished.
* Tax returns: extension in date sought:
Pakistan Hosiery Manufacturers and Exporters Association (PHMA) on Tuesday urged Federal Board of Revenue (FBR) to extend period for filing of taxes and duty returns, as a large number of taxpayers are unable to meet the dateline.
In a letter to Chairman FBR, Central Chairman PHMA, Javed Bilwani pleaded to extend the period for filing tax returns by at least one week as continuing holidays left the value added textile exporters unable to meet even the deadline for June.
“A large number of taxpayers have still not been able to file returns for June 2013 owing to four Eid holidays ie from 8 to 11 August, which is followed by Independence Day holiday on August 14,” he says in the letter. Central Chairman PHMA says heavy rains in cities caused power breakdowns at manufacturing units to scale back operations subsequently made difficult for taxpayers to file taxes/duty of sales tax and federal excise duty for financial problems.