Archive for March, 2007
Garment exporters eyeing Indian retail sector
Business Standard, India
Tejal A Deshpande / Mumbai March 30, 2007
A growing domestic market and shrinking export margins are prompting Indian apparel and textile exporters to explore the opportunity within.
“Over the next five years, the distinction between the domestic manufacturer and exporter will fade, as the local market will be as big as the export market,†said Premal Udani, managing director, Kaytee Corporation, and former president, Clothing Manufacturers Association of India.
Over the next two years, Gokaldas Exports, India’s largest manufacturer and exporter of readymade garments, estimates its domestic operations to register a turnover of Rs 200 crore, a five-fold jump from its current Rs 30- 40 crore.
Rajendra Hinduja, executive director, Gokaldas Exports said, “The emergence of the organised retail has led to increase demand for the readymade garments in India. In the next two to three years, demand for the readymade garments in India is estimated to touch about $35 billion from $22 billion as of now.â€
The garment exporters believe that their technological expertise and ability to deliver bigger volumes will provide them the crucial edge in the local markets. Also players expect a large business opportunity from private labels.
Udani said, “As big as companies foray into the organised retail, they will look at sourcing from exporters as they would be in a position to offer contemporary styling and an economy of scale to the buyers.â€
Garment exporters have formed new domestic divisions to cater to the increasing local demand. “Though currently the volumes are small, the number is expected to increase significantly in the future. For instance, if we are supplying 500-1,000 pieces of a certain style in the domestic market, internationally the demand is in the range of 10,000-100,000 pieces,†said Udani.
Kaytee Corporation, which manufactures knitted garments already supplies to the local retail chains like Shoppers Stop, Pantaloons, and Globus and has recently completed its first order for Reliance Industries. Gokaldas Exports is also catering to the domestic demands of its international clients. The company supplies merchandise to international brands like Nike, Adidas, Reebok along with retailers like Metro Cash-and-Carry.
The company is also in talks with other big entrants like Aditya Birla group and Reliance Industries.
Analysts see a huge opportunity for exporters in price-sensitive markets like tier-II towns. “The trend of exporters sourcing for the retail chains is likely to benefit tier-II and smaller cities, which are witnessing the emergence of the organised retail. Internationally, the exporters sell products in the range of $2 (Rs 88)-$7 (Rs 308). They can get better margins in the domestic market by offering similar quality of products,†said an analyst.
March 30th, 2007
Saipan: 2 garment factories to close
BusinessWeek
SAIPAN, Northern Mariana Islands
Two more major garment factories say they will close within the next two weeks as manufacturers here continue to struggle against competition from factories in countries where labor is cheaper.
Michigan Inc. has filed a notice with the U.S. Department of Labor announcing it will shut down its operations by March 30. The decision would leave 150 migrant workers, mostly from China, without a job. But the department said it will allow the workers to transfer to other employers.
Grace International Inc. also filed notice with the department saying it would close by April 7. The company’s 100 migrant workers will be paid until April 25.
The latest announcements would bring to 15 the number of garment factories in Saipan that have closed down since the World Trade Organization lifted the quota on garment export products to the U.S. on Jan. 1, 2005.
Thousands of migrant workers, primarily from China, have lost their jobs in the process.
The value of garment exports from Saipan dropped in 2006 by 25.2 percent to $486.5 million — down from $650.8 million in 2005, according to data from the U.S. Commerce Department.
Garment production in Saipan had been a billion-dollar industry in 1999 contributing up to $82 million in taxes to the Northern Mariana Islands government.
China holds the current lead in exporting apparel products to the U.S.
March 29th, 2007
Another garment firm closing
Saipan Tribune, Micronesia
By Ferdie de la Torre
Reporter
Another garment manufacturer, Grace International Inc., is shutting down operations on Saipan by next week.
Grace International submitted Monday its formal notice to the Department of Labor about its intention to close business by April 7. The closure will affect about 100 workers, mostly Chinese.Grace International will be the 14th garment factory to close down on Saipan since January 2005. With the impending closure of garment firm Michigan Inc. this Friday, this will leave Saipan with 19 remaining apparel manufacturers.
The Susupe-based garment manufacturer cited that due to a dramatic decline in garment manufacturing business and orders, “it is impossible for the company to continue its operations.â€
Grace International, through production manager Kam Wing Tam, informed Labor that they are asking all of their employees to continue working until the closure of the factory as there are still final orders to complete.
After the April 7 closure, Tam said employees will not have to report for work but will be paid a regular 40-hour week until April 25, 2007.
Tam said the management in recent months has made significant efforts to try and locate work and find additional orders that would enable the factory to avoid or postpone the closure.
“Unfortunately, it is a difficult time for garment factories on Saipan and, despite its best efforts, Grace’s efforts were unsuccessful,†Tam said.
The production manager explained that the notice is submitted to comply with the 30-day notice due to termination for economic necessity, pursuant to the employment contracts of the workers.
“We are asking that all of our employees will be terminated 30 days from the date of this letter or on April 25, 2007,†Tam said.
The manufacturer assured Labor that the company will provide each terminated employee a return ticket to their place of hire, a paycheck and benefits up through April 25, and cooperation should an employee wish or seek to transfer to another employer.
Tam requested Labor to encourage their workers to remain at work until the factory’s closure.
“If our workers abandon their posts, the final orders will not be completed and it will be even more difficult for Grace to meet its final obligations,†Tam pointed out.
Labor Secretary Gil M. San Nicolas told Saipan Tribune yesterday that he received Grace International’s letter about the closure.
“We would follow the same standard procedures as we had done with the previous garment companies that closed,†San Nicolas said.
San Nicolas said he would ask the Labor director to have their investigator in charge of the garment industry call in the parties-the management and the local resident agent of the company.
“We will discuss the matter with the legal counsel [Dorothy Hill]. We will address the needs of the employees as we do with all the garment [factories]. We will give them due process,†the secretary said.
San Nicolas said that, according to their records, the company was issued 198 valid work permits.
But Labor learned from the company’s resident manager, Ramon P. Crisostimo, they have less than 100 workers on the island.
When asked for comment, Crisostimo said the management formally informed Labor and the employees about the closure Monday.
Crisostimo said they have 85 alien workers and about 30 locals. He refused to comment further, saying they will soon hold a press conference.
Grace International began operations in the mid-’80s. It used to have 300 to 400 employees, a worker told Saipan Tribune.
In January 2005, the World Trade Organization lifted trade quotas, allowing many Third World countries to export their garment products to the U.S. As a result, many garment factories in the CNMI shut down operations.
The CNMI’s garment industry used to contribute some $60 million in direct taxes a year to the local government. For user fee alone, which represents 3.7 percent of total industry sales, the government used to collect an average of $30 million a year.
March 28th, 2007
India : Export garment units in Erode district face paucity of tailors
March 26, 2007
ERODE:
Erode Textile Readymade Garments Exporters Association is planning to start a Common Facility Centre (CFC) in Erode to help readymade woven garment exporters.
Woven readymade garments worth Rs250 crore are exported from Erode every year.
Exporters here get orders worth about Rs1,000 crore annually but are unable to execute the orders due to unavailability of tailors here.
“Within two years, the readymade garment industry in Erode has made rapid developments and till 2004 we used to export readymade goods worth only Rs 100 crore. We now execute orders worth Rs 250 crore. But we cannot meet bulk orders owing to manpower shortage,” said S. Sivanandhan, Secretary Erode Textile Readymade Garments Exporters Association.
The Association has made provision for free training in tailoring and garment industry-oriented programmes to unemployed men and women but after getting trained they leave Erode for better prospects.
Some readymade garment manufacturers get heavy orders but for want of enough machinery execution of orders gets delayed.
The CFC to be set up at a cost of Rs1.25 crore will help readymade garment manufacturers avoid delays.
Sivanandhan said as on date 3,000 tailors were required and many readymade garment manufacturers were now offering attractive salaries, provident fund, daily allowance and other facilities. Collector T. Udhaychandran has been requested to depute SHG members for tailoring training.
The Association will participate in the buyer-seller meet to be held in Tirupur in May.
March 27th, 2007
Export garment units in Erode district require 3,000 tailors
Hindu, India -
R. Sundaram
Bulk orders not executed for want of enough staff
ERODE: Erode Textile Readymade Garments Exporters Association will start a Common Facility Centre (CFC) in Erode to help readymade woven garment exporters.
Woven readymade garments worth Rs 250 crore are exported from Erode every year.
Exporters here get orders worth about Rs 1,000 crore annually. But they cannot execute the orders owing to paucity of tailors. Erode Textile Readymade Garments Exporters Association secretary S. Sivanandhan told The Hindu : “Within two years, the readymade garment industry in Erode has made rapid developments and till 2004 we used to export readymade goods worth only Rs 100 crore. We now execute orders worth Rs 250 crore. But we cannot meet bulk orders owing to manpower shortage.”
The Association is providing free training in tailoring and garment industry-oriented programmes to unemployed men and women.
Training
However,after getting training they leave Erode for greener pastures.
Some readymade garment manufacturers get heavy orders but for want of enough machinery execution of the orders is delayed. The CFC to be set up at a cost of Rs 1.25 crorewill help the readymade garment manufacturers avoid delays.
Mr Sivanandhan said as on date 3,000 tailors were required and many readymade garment manufacturers were now offering attractive salaries, provident fund, daily allowance and other facilities. Collector T. Udhaychandran has been requested to depute SHG members for tailoring training. The Association will participate in the buyer-seller meet to be held in Tirupur in May.
March 26th, 2007
Work on Faisalabad Garment City to start within few months
Associated Press of Pakistan, Pakistan
FAISALABAD, Mar 22 (APP): Physical work on the Faisalabad Garment City (FGC) will start within the next couple of months, while the government will focus on value addition in the textile sector to earn precious foreign exchange.
This was told by Ch Mushtaq Cheema, Federal Minister for Textile Industry, while addressing the ninth Board of Directors (BOD) meeting of the Faisalabad Garment City Company (FGCC) here Wednesday night.
He said garment cities are being established in all major textile producing cities of the country including Faisalabad, to encourage small and medium textile manufacturers to prepare quality garments in consonance with emerging international trends.
“These cities will save the time and money on construction of building and necessary infrastructure by private manufacturers,†he said, adding that the government will construct the buildings and rent these out to garment manufacturers, enabling them to fulfil all mandatory social, environmental and other related compliances.
The minister urged the need to ensure in time completion of the proposed buildings with maximum facilities to suit the needs of different garment manufacturers.
He asked the BOD to start and complete issuance of tenders, and assured that necessary funds for the Rs 600 million project will be released in due course of time.
Lauding Cambodia emergence as a leading, modern garment manufacturing country, he asked the company directors to visit the said country, study the local industry and propose necessary improvements in the national project to develop it according to international trends.
He asked the BOD to immediately establish the company office to ensure proper and speedy execution on this project.
Chief Executive FGCC, Sh Mukhtar Ahmed said that FGC is being established in Value Addition City (VAC) on Khurarianwala-Chak Jhumra Road over 39 acres land. It will consist of 3 blocks with total covered area of 397,223 square feet.
“A 3-storey administration block of 38,620 square feet will house the main offices, a state-of-art laboratory, training center, dispensary and a mosque,†he said, adding that two 6-storey blocks will have covered area of 224,213 and 129,890 square feet respectively.
“These blocks will be rented out to small and medium exporters dealing in garments,†he said, adding that four categories of 10000, 15000, 30000 square feet and above have been proposed to cater to the needs of the small and medium entrepreneurs.
The exporters need to invest only in the machinery to start operation, while some space will also be offered to foreigners for establishing state-of-the-art garment units.
Responding to a question, he said the FGC will create thousands of job opportunities in addition to hopefully adding foreign exchange earnings of about 180 million dollar towards the national kitty.
The BOD members witnessed a multimedia presentation on the project, approved the minutes of the last meeting and also approved the pre-qualification of contractors falling in category C-I.
Secretary of the ministry of textile industry Syed Masood Alam Rizvi, former PTEA chief Ahmed Kamal, Shahid Nazir, Ch Muhammad Sidique chairman Faisalabad Dry Port Trust, Tahir Ishaq Bhararah, Javed Iqbal former president FCCI, Qamar Aftab, Muhammad Mushtaq of Pakistan Hosiery Manufacturers Association and Muhammad Iqbal secretary FGCC were present at the meeting.
March 23rd, 2007
Textile and garment exports to the US to be facilitated
VietNamNet Bridge, Vietnam
VietNamnet Bridge - The Ministry of Trade’s issuance of permits for textile and garment exports to the US beginning on Mar. 15 does not cause any difficulties to businesses or their limit volumes of exported products, according to managers, economists and relevant businesses.
Talking with the Thuong Mai (Commerce) newspaper, Deputy Trade Minister Le Danh Vinh said that the permits are issued online in a simple and transparent manner.
This is a temporary solution pending the network connection between the Ministry of Trade and the General Customs Department to supply data for the supervision and control of textile and garment exports to the US .
Deputy Minister Vinh stressed that the mechanism will help better monitor export growth, ensure stable development and long-term interest for textile and garment exporters, particularly in preventing unplanned exports which could easily lead to anti-dumping suits by the US side.
The supervision aims to increase importers’ confidence, raise the value of export products, and minimise the number of low-price export products, Vinh added.
A survey jointly conducted by the Ministries of Trade and Industry showed that more than 85 percent of textile and garment businesses agreed on the need for export permit issuing and registering delivery plans every quarter.
An executive from the Ho Guom joint stock garment company - a business that has received an export permit and is preparing to ship its first batches of goods in accordance with the new regulations - said that the issuance of permits is necessary because it will help prevent the export of goods transported from other countries into Viet Nam .
Economists said that the state management agencies’ decision received support from relevant businesses which reflects Viet Nam ’s initiatives in improving export products’ quality, ensuring the origin of goods and preventing trade frauds in import-export activities. These moves aim to take advantages of the process to remove textile and garment export quotas while implementing WTO commitments.
Speaking at a seminar on anti-dumping lawsuits against goods imported into the US held in Ha Noi recently, lawyer William H. Barringer from Vinson and Elkins Law Company in the US , said Vietnam ’s implementation of the mechanism to control the textile and garment export is a necessary measure.
However, he said, to ensure the effectiveness of these measures, in addition to carefully studying the developments of the US market, it is necessary to have precise data on specific characters regarding Viet Nam’s textile and garment sector, as well as other foreign producers of similar products in order to have proper inspection measures, so that inspection measures will not affect the development of Vietnam’s textile and garment industry.
Textiles and garments remains Viet Nam ’s largest contributor of export value, and the sector’s earnings have continually grown in recent years. The sector earned an export value of nearly $6 billion in 2006, more than $1 billion in the first two months of this year. The figure is expected to exceed $7 billion this year.
(Source: VNA)
March 22nd, 2007
Big changes on the factory floor
ChronicleHerald.ca, Canada
Management, union officials working together to find ways to ensure garment plant’s survival
By ELLEN SIMON The Associated Press
NEW BEDFORD, Mass. — The two might seem as unlikely together as a hand-stitched double-breasted suit jacket with a pair of work pants: Anthony Sapienza, the son of a factory manager, and Warren Pepicelli, who grew up on the union side, pounding the pavement as a business agent in Boston, walking from one of the city’s 60 women’s garment factories to another.
But Sapienza, president of the Joseph Abboud suit factory, and Pepicelli, who runs its union, are working hand in glove. Union and management are collaborating to revamp timeworn garment-making methods in favour of manufacturing techniques pioneered at Toyota Motor Corp. Their goal: Survival in the face of cheaper foreign competitors.
The U.S. garment manufacturing industry has bled jobs for decades, as work moved first to cheaper labour in Mexico, then to Asia. As Chinese manufacturing becomes increasingly skilled and sophisticated, the few U.S. factories that remain are vulnerable, and their managers know it.
Sapienza and Pepicelli both have about 30 years in the business. Sapienza, who spent his boyhood Saturdays sweeping cuttings in his family’s menswear factory, then wrestling his brother in the pile of scraps, remembers when there were 40,000 U.S. workers making men’s clothing. Now there are 4,000, he said.
For Pepicelli, the days when he could stand on a street corner in Boston and look up at row after row of women sewing in second-floor factories are just a memory. Every one of those factories is closed.
“An industry can go away, it can leave this country,” said Pepicelli, international vice president of the union UNITE HERE. “It can become extinct.”
That’s what everyone at Abboud’s sprawling skylit brick factory, built as a cotton mill around the time of the Civil War, is working to avoid. And if anyone forgets what’s at stake, they need only drive down the street, where the Cliftex menswear mill that used to employ more than 2,000 workers sits, its windows boarded.
Abboud has hired the best workers from its failed neighbors, managers there say. The city lost 67 per cent of its manufacturing jobs during the 40 years ending in 2000, according to the Brookings Institute. For many of the factory’s workers, Sapienza said, “This is the one opportunity they have to continue to work.”
The garmentos
The push for change comes from Marty Staff, president and chief executive officer of JA Apparel Corp. Staff and private equity company J.W. Childs bought the company in 2004; the brand’s founder, Joseph Abboud, left in 2005.
Staff, a burly man with curly blond hair and Bono glasses who switches between two PDAs as he speaks, has worked in the garment business for more than three decades, including long stretches at Bloomingdale’s Inc., Polo Ralph Lauren Corp. and Calvin Klein, Inc.
He’s a storied garmento; one of the stories is that he once said, “In my next life, I’d like to come back as me.”
He loves having the factory. “The factory is really the heart of our company,” he said.
“If you said, ’Let’s create a half-million-square-foot facility in the U.S. and hire 600 skilled workers to make high-quality garments,’ you could never do it,” said Staff. “It would be like building the Holland Tunnel.”
Keeping Abboud’s suit manufacturing in the United States has advantages, such as reduced shipping time, he said. He also believes overseas workers can’t beat the quality and price of the suits Abboud produces in New Bedford, which sell in Nordstrom Inc. and Bloomingdale’s for US$700 to US$1,000.
Abboud says its sales are about US$400 million a year. While the company is doing fine, management says the U.S. factory has to improve constantly to justify the higher salaries its workers make compared to foreign competitors. The average wage in the factory is US$12 an hour, plus union benefits. That’s three or four times what workers in Mexico make, Sapienza said.
But if the workers in New Bedford could make suits faster, the advantages would be even greater. Then the company could restock a successful style at stores in season — it could get fresh winter suits to shoppers in late January, for instance, if a store had run out of a size or a colour. It could introduce the “fast fashions” that stores like H&M and Zara sell — edgier styles that arrive every month, then are swiftly replaced.
Finally, the company could make made-to-measure suits more quickly. The suits currently take 10 working days to manufacture; the goal is to make them in three.
To speed production and cement the factory’s edge over foreign workers, Staff, who spent about two years as acting CEO of Penthouse Brand Management, read up on Toyota, poring over the book The Machine that Changed the World: The Story of Lean Production. He asked Sapienza, his team and the union to embrace Toyota principles, including “kaizen,” a Japanese word meaning continuous improvement.
The union agreed. Pepicelli said, “It’s an answer, but not a total answer.”
The real problem, he said, “is an unlevel playing field; the competition from overseas makes it very difficult to be efficient and competitive.”
The company is asking workers at the factory — half of whom speak only Portuguese or Spanish and many of whom never finished high school — to abandon the piecework method of making suits, in which every worker does only one task, and move to team-based work.
It’s also asking workers to speak up at kaizen meetings, voicing their opinions on how they can do their jobs better. It’s a big change at the factory, whose previous owners were strictly hierarchical.
“I can remember people coming to me and asking for permission to speak,” said Sapienza.
The change to teams
So far, there are only three teams, each with eight to 10 workers, at the 600-person factory. The company hopes to move one-third of its jacket production to teams by August and all trouser production to teams by September. That switch would be enough to keep up with seasonal reorders and custom suits, Sapienza said.
For now, most of the factory’s work is still done on the piecework system, which hasn’t changed since the 19th century. A worker will take a tied-up bundle of, say, 20 sleeves, untie them and perform the same single task on each sleeve, such as pressing the seam. Once she has completed her work on all the sleeves, she will re-bundle them, load them in a cart and roll them to the next worker, who will unbundle the sleeves, complete her one task on each sleeve, re-bundle them and roll them along.
Individuals are paid by the number of pieces they complete, with a guarantee they’ll make minimum wage, plus 25 cents an hour. “Make more, get paid more,” Sapienza said. Most do; hence the average wage of $12 an hour.
Piecework slows production. During the four weeks it takes to make a standard suit, only about 250 minutes of labour is put into the suit. Much of the rest of the time, its components are tied in bundles, sitting on a cart, waiting for the next worker to untie them and work on them.
In the factory’s new teams, it takes 12 days to make a suit. Team members are trained to be proficient at more than one task and are asked to do their jobs standing up, if possible, to add more speed. Workers sit close together and the carts that roll bundles of pieces from one worker to the next are gone. Once a worker finishes a piece, it moves to the next worker.
The average wage on the teams is still $12 an hour, plus benefits, and there are shared bonuses if the team beats its quota, or makes its quota faster. Individuals with additional skills, or those who have trained to do more than one job, are paid a higher wage. The hourly goals are laid out on a chart near the team. A green dot by an hour means the team has hit its goals, a red dot means it’s missed.
The oldest of the Abboud factory’s teams has a sign on its bulletin board summarizing team members’ reasons for changing. No. 1: “Could lose jobs to competition if we don’t make this change.”
Sapienza, a tall, courtly man in an elegant suit, is hopeful.
“It’s one thing to do it in 2007,” he said. “Are we going to be able to do it in 2010? In 2012?. . . In the final analysis, if Toyota can make a car in 13 hours, there’s no reason we shouldn’t be able to make a suit in a much reduced period of time.”
March 21st, 2007
| Bangladesh garment exports could double |
 |
| The News - International, Pakistan
|
| DHAKA: Bangladesh exports of readymade garments could double to $18 billion in the next three years, a business leader said on Monday.
Textiles are Bangladesh’s biggest export, earning the country around $9 billion annually. The sector employs 2.2 million people, mostly women. “It is our target to increase the garment exports from the existing $9 billion a year to $18 billion,†said Anwar-ul-Alam Chowdhury Parvez, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
“It does not look impossible as the country’s interim government is focused to achieve higher economic growth,†he told a news conference. The association has said before that exports could increase sharply if the conditions are right.
But currently the country is under a state of emergency, including a ban on all political activity. A military-backed interim government in charge of holding a free, fair and credible election, postponed a Jan 22 parliamentary vote following weeks of political violence that killed 45 people and injured hundreds.
Disruptive strikes called by rival political parties are common in Bangladesh. The government, which has vowed to restore industrial and social stability to allow greater economic growth, launched an anti-corruption drive which has resulted in more than 160 arrests of senior political figures.
Parvez said the government should make efforts to gain more access to European markets and push for the successful conclusion to a trade bill already under discussion with the United States, the country’s biggest export market.
He said US and European Union demand for garments is rising at 12 per cent a year. “While we continue to concentrate on these two big markets, we also have to look for other regions. Australia, Argentina and Japan are becoming more important to Bangladesh.†he added.
He said exports could also be boosted if the industry enforced agreements on minimum wages and working conditions. “To remain in focus in the export sector we have to ensure social compliance, which is now one of the major criteria for international buyers.“ |
March 20th, 2007
Garment Industry Aiming At $25 Billion Exports By 2010-11
Trading Markets, CA
(RTTNews) - Mr Vijay Agarwal, Chairman, Apparel Export Promotion Council announced Wednesday that there may be an approximate 10% increase in the country’s garment exports during 2006-07 over last year’s performance of $8.2 billion.
Addressing the inaugural function of the second Apparel Training and Design Centre in the Chennai, he said that despite the targeted growth of 30%, only 10% growth might be achieved due to higher interest rate and stronger rupee.
The aim for the garment industry was to achieve an export target. To achieve this, the industry would need an additional 1.5 million people and an investment of Rs 35,000 crores in related infrastructure.He added that over 20,000 personnel have been trained at 21 apparel training and design centres across the country. The centres were set up by the council to upgrade the technical skills of personnel employed in the readymade garment industry.
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March 15th, 2007
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