Archive for November, 2008
Bloomberg
By William Bi
Nov. 27 (Bloomberg) — China’s textile producers and cotton traders have reneged on purchase contracts for as much as 20,000 metric tons of overseas cotton after prices plummeted in the past three months, two global trading executives said.
As many as eight Chinese companies have failed to follow through on purchase agreements with merchants, and the trend may widen as the industry struggles with worsening demand and credit, said the executives, who declined to be identified as they are not authorized to speak to the media.
Cotton has plunged 33 percent since the end of August as hedge funds sold commodities to cover losses, while global recession concern cut demand for products from clothing to shoes. The cancellations by China, the biggest buyer, amount to about 1 percent of imports in the first 10 months of the year.
“Some Chinese cotton users initially tried to delay the contracts when prices began to fall,” said Zhu Xuesong, general manager of China operations at merchant Ecom Trading (Shanghai) Corp. “When prices really plunged, they were caught with losses” they found difficult to accept.
Zhu Lanfen, vice president at the China Cotton Textile Association, said she had heard complaints from merchants about some producers. Yet her group, which represents 400 of China’s 2,000 textile companies, is not aware of any members canceling.
“It’s conceivable that some of the less-established companies may default given the difficult financial situation that they face,” she said. “But they are not going to come and tell us that.”
Break-Even
China’s textile producers operated near break-even point this year because of the appreciating currency, falling export rebates and tightening bank credit, Ecom’s Zhu Xuesong said in an interview.
“I can understand the difficulty they face,” said Zhu Xuesong. While none of his customers’ has reneged on contracts yet, and the actual defaulted cotton may be small relative to China’s total purchases, “the defaults are contagious: they have prompted some buyers not to carry out their contracts to go with the crowd,” he said.
China’s cotton imports fell 8 percent in the first 10 months of this year to 1.9 million tons, customs data showed.
Cotton users are halting orders from the U.S., the world’s biggest exporter, at the fastest pace in at least a decade as the economic slowdown erodes demand from China.
Order Delays
Delays, cancellations and order reductions of U.S. upland cotton by foreign buyers rose almost sevenfold from a year earlier to 329,600 running bales (74,752 metric tons) in the first 13 weeks of the marketing year that started in August, data from the U.S. Department of Agriculture show. The level is the highest since at least 1998. A bale weighs 500 pounds.
Some merchants have applied to dispute arbitration bodies, such as the World Cotton Exporters Association, or the International Cotton Association, to seek remedies, the trading executives said.
Jiangsu Zhongheng Textile Co. and Jiangsu Sumec Technology Co. were two Chinese companies added to the so-called default list on the American Cotton Shippers Association Web site this month. The group names the parties if no adequate response is received in 15 days, according to the Web site.
Price Jump
Miao Ying, general manager at Nanjing-based Jiangsu Sumec, said the size of the order was about 500 tons and the company will contest the allegation. “The dispute is not caused by the price changes,” she said in a telephone interview yesterday.
Kuai Dawen, general manager at Jiangsu Zhongheng, couldn’t be reached immediately at a number provided on the Web site of the Ministry of Commerce. Shi Jianwei, executive vice president at the China Cotton Association, declined an interview request.
Cotton jumped 6.4 percent to 46.55 cents per pound on ICE Futures U.S. in New York yesterday.
November 28th, 2008
China Post, Taiwan
TAIPEI, Taiwan — The 2008 Textile International Forum and Exhibition (TIFE), the premier event in Taiwan showcasing the latest developments and technologies of the industry, wrapped up yesterday in Taipei City.
Sponsored by the Department of Industrial Technology under the Ministry of Economic Affairs and organized by the Taiwan Textile Research Institute (TTRI), the three-day event featured an array of keynote speeches, forums, seminars and exhibitions displaying cutting-edge developments around the theme of “New Perspective in Eco-textiles.”
The 2008 TIFE’s exhibition area was divided into three sections: “A New Way of Living,” “Sustainable Environment” and “Certification and Labeling.”
Among this year’s unique products was a “biocellulose costatic mask” and “biocellulose medical dressings,” made with bacterial strain selection technology — essentially, bacterial byproducts. Production of the mask’s material requires a pure culture fermentation process which takes about seven days to achieve the desired thickness, explains Guu Jan-an, a representative of TTRI’s Functional Material Section.
Another innovation featured at this year’s TIFE are TTRI’s precise filters developed with nanofiber electrospinning process technology, including a membrane bioreactor (MBR) for wastewater management system, and a high-efficiency particulate air filter (HEPA).
The filters are produced with TTRI’s all-in-one electrospinning unit, a complete, energy-saving device that forms ultra-fine fibers such as those used for wastewater, oil, and air filtration, explains Ryan Huang, a researcher with TTRI’s Technical Textiles Section.
Yet another main attraction of the 2008 TIFE was the REACH exhibition stand. The European Union’s REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) environmental regulation came into force last June and deals mainly with chemicals and their safe use, explained Lu Juhng-shu, chief of TTRI’s Dyeing, Finishing and Environmental Protection Section.
The colorful REACH display aimed to raise awareness of SVHCs (substances of very high concern) that might be emitted during the textile manufacturing process.
“The goal is to reach a healthy compromise for Taiwanese textile vendors in terms of manufacturing cost and environmental protection without having to sacrifice product quality and efficiency,” notes Lu.
Established in 2001 by the Department of Industrial Technology under the Ministry of Economic Affairs, TIFE serves as a platform for exchanges between local and international textile industry members and for resource integration aimed at speeding up enhancements and transformations in the industry.
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November 28th, 2008
Hindu Business Line, India
NEW DELHI: India is likely to miss the $12-billion garment export target this fiscal as the overseas sales are expected to fall below last year’s level, an exporters’ body today said.
Apparel Export Promotion Council (AEPC) said the industry was facing huge losses on account of drying up of orders from the US and European markets in the backdrop of financial crisis.
Exports may drop to $8.78 billion in this fiscal, 24 per cent below the target set for 2008-09. Last fiscal, India had exported garments worth $9.69 billion.
But the global financial meltdown, particularly in the US and European Union, is impacting the Indian garment industry, with lakhs of workers being laid off, AEPC Chairman, Mr Rakesh Vaid said.
Last week, Commerce Secretary, Mr G K Pillai had said there would be about five lakhs job losses in the textile industry in the next five months.
AEPC has asked the government for a hike in duty drawback rates, research and development assistance and income tax exemption for five years.
It has also sought interest-free loans for investment in machinery with zero-duty import of capital goods scheme and lower fringe benefit tax to offset losses.
“Many importers have cancelled orders or postponed their delivery schedules. The market sentiment is very weak,” Mr Vaid said adding overseas buyers are now renegotiating contracts.
Several foreign retailers like Steeve and Barry’s along with Mervyns have filed for bankruptcy and more are expected. Pacific Sunwear has closed 150 stores, while Lane Bryant, Fashion Bug and Catherines are closing 150 outlets. - PTI
November 28th, 2008
NCR Conversation Cafe, MO
By JOHN L. ALLEN JR.
The late Cardinal Joseph Bernardin of Chicago used the Biblical image of a “seamless garment” to refer to what he described as a “consistent ethic of life” – beginning with abortion, the family, and other traditional “life issues,” and extending into peace and economic justice. The idea was to unify the church’s “pro-life” and “social justice” constituencies.
To date, the “seamless garment” has struggled to take hold in the American church, which still tends to be fractured at the grassroots between pro-life Catholics (who stress issues such as opposition to abortion, gay marriage and embryonic stem cell research) and peace and justice Catholics (who focus more on poverty, war, the death penalty, and the environment). That divide seemed visible in the Catholic vote during the 2008 elections.
If there is a future for the “seamless garment” in 21st century Catholicism, it may well come not from the United States, but from Africa – where a highly traditional approach to sexual morality, both in the broader culture and in the church, often blends with a progressive attitude towards key social justice concerns.
A recent parliamentary vote in favor of a new penal code in Burundi, a war-torn nation of 8.7 million where Catholics represent more than two-thirds of the population, offers an illustration of the point.
The new code was endorsed on Nov. 22 by a vote of 90-0 in Burundi’s parliament, with ten abstentions. On the one hand, it abolishes the death penalty, a move which has been hailed by progressive human rights groups around the world. It came in part after Burundi’s Minister of Justice joined a late September meeting of African ministers of justice organized by the Catholic Community of Sant’Egidio, which has been a global leader in efforts to abolish capital punishment.
Under the new law, all prisoners currently on death row will see their sentences commuted to life terms in prison. The code also incorporates provisions of international law against genocide, crimes against humanity, and torture, as well as strong penalties against rape and the abuse of children.
On the other hand, the new penal code also criminalizes homosexuality for the first time, making same-sex acts punishable by anywhere from three months to two years in prison and a substantial fine. The law comes atop already-existing legislation in Burundi banning gay marriage, even though analysts say no serious advocacy for such arrangements exists in the country.
To be sure, neither move was uncontroversial.
Given the country’s recent history of ethnic violence and genocide, which has left an estimated 300,000 dead since 1993, some Burundians have charged that abolition of the death penalty amounts to a way for perpetrators to save their own necks. Others have argued that the measure reflected external pressure, noting that abolition of the death penalty was set as a condition by the United Nations for the creation of a truth and reconciliation commission and a special tribunal in the country.
Meanwhile, gay rights groups such as the International Gay and Lesbian Human Rights Commission and the local Association pour le Respect et les Droits des Homosexuels protested the criminalization of homosexuality, arguing among other things that it will complicate anti-AIDS efforts by driving the homosexual community further underground.
While the new penal code still has to be adopted by the senate and signed into law by the president, local analysts say the 90-0 parliamentary vote suggests that it’s likely to be adopted in its present form.
Abolishing capital punishment and criminalizing homosexuality in one fell swoop may seem schizophrenic by Western ideological standards, since anti-death penalty advocacy tends to be a cause of the political left, while a negative view of homosexuality is associated with the right. In both cases, however, Burundi’s new penal code appears to represent a growing African consensus.
In 1990, according to Amnesty International, Cape Verde was the lone African nation that had no provision for capital punishment. Today, 15 African nations have formally abolished the death penalty for all crimes, and 22 countries are considered “de facto” abolitionist in that they have not executed anyone for at least ten years. By way of contrast, only 14 African nations retain the death penalty as a matter of law, and in 2007, executions were carried out only in Botswana, Equatorial Guinea, Somalia and Sudan.
Meanwhile, according to an African news agency, two-thirds of African nations currently have criminal penalties for same-sex behavior. In recent years several countries, including Nigeria, Zimbabwe and Uganda, have strengthened laws against homosexuality, and others have adopted bans on same-sex marriage.
The legal climate toward homosexuality in much of Africa is, if anything, more restrictive than Catholic teaching would suggest. While a 1992 document from the Vatican’s doctrinal office asserted that “no one has any conceivable right” to engage in homosexual behavior, the Catechism of the Catholic Church also states that “every sign of unjust discrimination” against homosexuals “should be avoided.” In general, Catholic officials typically do not campaign in favor of criminalizing homosexuality, but rather against attempts to “normalize” it, especially with regard to marriage.
The attitude towards homosexuality in Africa is of a piece, however, with a generally conservative approach to sexual morality across the continent, at least as a matter of civil law. At present, for example, there are only four African nations where abortion is legal in cases beyond rape, fetal defects, or threats to the mother’s health: Cape Verde, Guinea-Bissau, South Africa, and Tunisia. (This is not to say, of course, that abortions in other circumstances do not occur in the rest of Africa, merely that they are not sanctioned by law.)
These cultural mores are clearly reflected at the leadership levels of African Catholicism.
Archbishop John Onayiekan, for example, is a past president of the Symposium of Episcopal Conferences of Africa and Madagascar (SECAM) and the current president of the Christian Association of Nigeria (CAN), the country’s main ecumenical alliance. In a 2006 interview, he explained the African view of sexual morality.
“The virulent and strong currents [in the West] that have tried, and almost succeeded, to push a non-traditional view of sexuality – on homosexuality, abortion, and so on – are actually quite circumscribed, even if they’re in circles that are very powerful,” he said. “It’s not only the Africans who are complaining, but it’s the Asians too, and the Latin Americans. We are the mainstream, not them. The onus lies upon them to explain why they are doing something new. It’s a very heavy onus to explain how it is that for 2,000 years the Church somehow did not understand what Jesus meant.”
Even on the question of contraception, where one might expect the African Church to take a more liberal stance because of HIV/AIDS, the moral line is often strikingly traditional. For example, in 2006, then-Archbishop Raphael Nzeki of Nairobi urged the Kenyan government to reject condoms in AIDS prevention efforts.
“When condoms are provided, chances of promiscuity increase since a majority of our people end up engaging in casual sex,” Nzeki said. In the same year, the bishops’ conference of Tanzania called a school science syllabus “sinful” because it included condoms as one way to prevent HIV/AIDS.
Yet African prelates are also often outspoken proponents of peace and social justice. Onaiyekan was a leading critic, for example, of the U.S.-led war in Iraq, and expressed frustration that American Christian leaders were not sharper in their own protest.
“As Africans, we are often surprised by the extent to which our brothers and sisters in the North will sometimes follow only half of the gospel,” Onaiyekan said in a 2007 interview in Abuja, the capital of Nigeria. “Some Christians will oppose abortion but support war. How can you say no to the killing of a fetus, but yes to the killing of an adult?”
In an October 2008 interview in Rome, Onaiyekan stated unambiguously that if he had a vote in the American elections, he would have cast it for Barak Obama.
“The fact that you oppose abortion doesn’t necessarily mean that you are pro-life,” Onaiyekan said. “You can be anti-abortion and still be killing people by the millions through war, through poverty, and so on.”
One reason that African Catholic positions on these matters have been less visible in the West is that church doctrine regards abortion and homosexuality as moral absolutes, whereas other matters leave room for prudential judgment. This distinction, however, is one to which many African Catholics are less sensitive.
The bishops of Zimbabwe, for example, unambiguously told their country’s aging dictator, Robert Mugabe, in Easter 2007 that he either had to step down or face “open revolt.” The bishops did not say they wished to offer some considerations to illuminate public debate, which is the formula that might have been used in the United States or Europe. They simply told Mugabe, “Pack your bags and go.”
All this points to a distinctively African version of the “seamless garment” approach – one that will alternately delight and confound the various ideological factions in the West, depending upon which issue is under consideration.
In that regard, Burundi’s new penal code may be a harbinger of things to come in the 21st century, especially, perhaps, for the Catholic church. Catholicism is growing more rapidly in Africa than anywhere else on earth, and 2009 is shaping up as an “African year,” with a planned papal trip to Cameroon and Angola in March and a Synod for Africa in Rome in October.
It will be fascinating to watch how the African version of the “seamless garment” plays out in Catholic debate, especially as African Catholics play a more influential role in setting the tone for the global church.
November 27th, 2008
Fibre2fashion.com, India
Excerpts from the Chairman’s speech:
These have been testing times for the global apparel industry as well as our company. The world economy faces a slowdown. Our main customer base in the US is confronting a financial crisis and it is apparent this trend might continue at least in the next 6 – 12 months.
Additionally the domestic inflation is around 24% adding to high costs and squeezing the margins of our company. Despite these issues our company has reduced losses by 7.5% this quarter in comparison to first quarter in year 2008/09.
The Group Posted a turnover of Rs. 1.43 billion which is an increase of 7.3% compared to the corresponding quarter of the previous financial year. This improvement was possible mainly due to increased sales volumes. However the Increase in cost of sales by 10.5% resulted in an operating loss for the second quarter.
The increase in cost of sales was due to a 55% increase in utility costs, 6% increase in material costs and a 27% increase in the labour costs. Globally the Oil prices have reduced, however locally the prices were adjusted only during the 3rd quarter, thus our utility costs remained high during the quarter under review.
Keeping costs low and managing the cash-flow remains a critical success factor in our industry. The company has reduced its gearing by 4.47% in comparison to the previous financial year. The management has taken steps to reduce its long term borrowings by 35% thus reducing its finance cost by 27%. Our company remains relatively liquid having a current ratio of 1.16 times. This enables us to weather the negative effects of high interest rates prevailing in the country.
The management has identified and established a liaison office in Pakistan and are considering similar ones in India and China to source cheaper raw material. We believe this will improve material management across the supply chain as material contributes to around 72% of the cost of sales, these will have a significant impact on our operating profits.
The management wishes to close the operations of our joint venture company Vibrant Tex in the next quarter and all new purchase will be channeled through our liaison office. This decision has been taken as a step to improve our profitability.
The management has taken steps to revise its pricing with the customers as well as negotiating better prices with the suppliers. In addition we have recently won business from a new customer Tema and Increased penetration to GAP and Old Navy.
Also, the management is looking into ways of improving efficiency and reducing waste. These proactive steps are likely to offer much better returns in the last two quarters of the FY2008/09, compared to the 1st two quarters.
Kuruwita Textiles
November 26th, 2008
Alibaba News Channel, NEW YORK
Editor: Zhou Luying
American Apparel Inc announced its financial results for the third quarter of 2008 and for the nine month period ended September 30, 2008.
American Apparel reported net sales for the quarter ended September 30, 2008 of $154.8 million, a 45.2% increase over net sales of $106.6 million for the quarter ended September 30, 2007. Total retail sales increased 65.3% to $97.4 million from $58.9 million for the prior year third quarter, with comparable store sales for stores open at least 12 months rising 24%.
American Apparel ended the third quarter of 2008 with 228 stores, having opened 33 stores in the period. The Company operated 163 stores at the end of the third quarter of 2007. Total wholesale sales increased to $46.4 million for the third quarter of 2008, as compared to $41.3 million for the third quarter of 2007, an increase of 12.3%. Online consumer sales increased to $11.0 million from $6.4 million for the prior year third quarter, an increase of 72.0%.
In the third quarter of 2008, American Apparel awarded approximately 1.9 million shares of common stock to eligible manufacturing employees, which shares were granted pursuant to the merger agreement between American Apparel Inc. (formerly Endeavor Acquisition Corp.) and American Apparel Inc., a California corporation.
To provide greater clarity about the Company’s operating performance for the third quarter of 2008, the impact of the related $13.2 million stock based compensation expense on the results is discussed in the paragraphs below and in Table A. This stock award resulted in the recording of $12.1 million of stock based compensation expense and $1.1 million of employer related payroll taxes in the Company’s financial statements for the third quarter of 2008.
Gross margin for the third quarter of 2008 was 50.1% versus 55.2% for the prior year third quarter, including the impact of the merger related stock based compensation expense. The stock based compensation expense of $13.2 million negatively impacted gross margin by 850 basis points. The gross margin was favorably impacted by a reduction in inventory obsolescence reserves of $1.1 million, for an improvement of 70 basis points. Gross margin was also favorably impacted by the growth in retail sales from the expansion of the U.S. Retail, Canada and International business segments, which generate a higher gross margin than the company’s U.S. Wholesale business segment.
Operating expenses for the third quarter of 2008 increased to 45.7% of net sales, versus 44.2% for the third quarter of 2007. Operating expenses increased due to higher payroll, rent and occupancy expense related to the growth in the number of retail stores from 163 as of September 30, 2007 to 228 as of September 30, 2008. Pre-opening expenses for retail stores were $4.4 million in the third quarter of 2008, versus $0.9 million in the prior year third quarter. Operating expenses were also higher due to an increasein corporate expense of approximately $2.9 million versus the year ago period, related primarily to an increase in accounting and professional fees as a result of American Apparel operating as a public company in 2008.
Operating income for the third quarter of 2008 was $6.8 million, after the impact of the $13.2 million stock based compensation expense, versus $11.7 million in the prior year third quarter Operating margin for the third quarter of 2008 was 4.4%, versus 11.0% in the quarter a year ago. The impact of the share based compensation expense reduced the third quarter 2008 operating margin by 850 basis points.
Interest expense for the third quarter of 2008 decreased to $3.2 million from $4.4 million in the third quarter of 2007. The decrease in interest expense was due to a decrease in the LIBOR rate on which the company’s floating rate debt is based.
The company’s effective tax rate in the third quarter declined to 26.9%, reflecting the benefit of federal and state enterprise zone tax credits related to the company’s expanded hiring and manufacturing activity in the downtown Los Angeles area. The effective tax rate for the nine months ended September 30, 2008 was 33.5%.
Net income for the third quarter of 2008 was $2.3 million, or $0.03 per diluted share. Excluding the impact of the merger related stock compensation expense, net income would have been $11.1 million, or $0.16 per share. This compares to $6.0 million in net income, or $0.10 per share, for the third quarter of 2007.
The company continues to expect diluted earnings per share in the range of $0.32 to $0.36 for 2008, before giving effect to the stock based compensation expense resulting from the 2.71 million share employee stock grant pursuant to the merger agreement between Endeavor Acquisition Corp. and American Apparel, Inc. The company has approximately 800,000 shares remaining pursuant to the merger which it expects to grant in the fourth quarter of 2008 to eligible retail and administrative employees.
As of October 31, 2008, American Apparel had opened 55 new store locations since the beginning of the year and closed 3 locations. The company had 40 signed leases for retail stores in its pipeline, including stores in new markets such as Yokohama, Japan; Toulouse, France; and Adelaide, Australia. The company plans to have opened approximately 80 stores by the end of 2008, up from its previously stated guidance of 50 to 55 stores.
Dov Charney, Chairman and Chief Executive Officer, stated: “We are very pleased with our financial performance in the third quarter, and the momentum our business has had while we have expanded in so many new markets this year. While we are cognizant of the economic difficulties worldwide, particularly in retail, we remain cautiously optimistic that our products represent a unique value to consumers even in a weak economy.”
“As we look at 2009, having already experienced so much growth in 2008, we plan to tailor our expansion plans accordingly with an eye on the overall economic environment and our goal to generate significant free cash next year.”
November 25th, 2008
Alibaba News Channel, NEW YORK
Editor: Zhou Luying
Arkema developed the minicoat process in the 70’s and designed a special range of Rilsan Minicoat powders for this highly efficient powder coating process.
Since the 80’s, Rilsan Minicoat White 1452 MAC nylon powder, also simply known as 1452, has been the industrial standard for nylon coating powders used in the minicoat process, especially for the coating of brassiere and undergarment adjusters..
Over the years, Arkema has invested in research, development, manufacturing and supply chain management in order to fulfill the needs of its customers. Rilsan Techline brings various benefits throughout the manufacturing process of nylon-coated adjusters, thus enabling a significant cost reduction:
Le Rilsan Techline offre plusieurs avantages dans le procédé de revêtement des ajusteurs, permettant ainsi une importante réduction des coûts de production :
Excellent powder pick-up during the coating process, enabling higher belt speed and lower preheat oven temperature. Industrial trials have shown that belt speed could be increased by over 10%. These benefits can be translated into greater energy efficiency and productivity, hence a reduction in variable and fixed costs.
Excellent leveling during the post-fusion process, enabling higher belt speed, lower power input, and low reject rate due to pinholes. Industrial trials have demonstrated that it was possible to increase both upper and lower belt speed by over 20%, and to reduce pinholes by over 90%. This new product again ensures higher energy efficiency and productivity, and a reduction in the cost of quality control and of handling complaints, with higher customer satisfaction.
Exceptional dyeing consistency despite varying post-fuse conditions and weather conditions, hence a low reject rate due to uneven, non-homogeneous color. Industrial trials have demonstrated that it was possible to have NO rejects due to defects in dyeing. Rilsan Techline is a robust coating that will save quality control time and will offer consistent quality at a high productivity rate.
Rilsan Techline chemistry has been designed to meet customer demands in adjuster coating. In addition to its unique combination of performances, Rilsanâ Techline is a durable material, made of renewable raw materials, therefore providing a reduction in environmental impact and a sustainable solution for your market.
With global brands like Rilsan, Pebax, Platamid and Rilsan Fine Powders, unique products like Rilsan biobased PA11, and leading capacities in Rilsan PA11 and 12, Arkema’s Technical Polymers business unit provides its customers with global coverage and superior regional service from production facilities and research sites in Europe, Asia, and the USA.
November 24th, 2008
Alibaba News Channel, NEW YOR
Editor: Zhou Luying
China is raising tax rebates for certain exports to help producers cope with smaller profit margins as a result of slacking market demand, the yuan’s appreciation and rising production costs.
Those rebates will start from Nov. 1, according to a circular on the website of the Ministry of Finance (MOF) on Tuesday.
The adjustment involves 3,486 items from labor intensive industries such as textile, garment, toy, hi-tech and high added value sectors like anti-AIDS drugs and tempered glass. Those items account for 25.8 percent of what’s covered by the country’s Customs Tariffs.
The new rebates are classified into six categories: five, nine, 11, 13, 14 and 17 percent.
For example, the export tax rebate for some toys, textiles and garments will be raised to 14 percent. There will be a nine percent rebate for certain plastic products, 11 percent for daily necessities and porcelain artifacts, 11 and 13 percent for some furniture.
According to an unnamed MOF official, the rebates will ease operation pressure for export enterprises and enhance their competitiveness. He added the adjustment would also have a positive impact on the development of the national economy.
Because export industries will have more money as a result of the rebate increase, China is hoping they will be able to withstand the world’s financial crisis.
The MOF official also said the additional money could be used to accelerate industrial upgrades at hi-tech enterprises.
The world’s financial situation, rising production costs and a stronger Renminbi dented export growth of China’s enterprises. From January to September export growth was down 4.8 percent from the corresponding period of last year.
Garment and accessory exports in the same period were US$87.1 billion , up 1.8 percent year-on-year. However, the growth rate was down 21.2 percent from the same period last year.
From January to July, toy exports stood at US$4.18 billion, up 2.1 percent from the same period last year but the growth rate fell 22.7 percent, according to the latest statistics from China Customs.
November 21st, 2008
Business Standard, India
About 4,000 cotton ginners across the country may go on an indefinite strike to protest against high cotton minimum support prices for 2008-09 (October-September), Dilip Patel, president, All Gujarat Cotton Ginners Association said On Thursday.
On September 1, government had announced minimum support price of cotton for 2008-09 at Rs 2,500 a quintal for medium staple variety and Rs 3,000 for long staple variety. Both rates are about 40 per cent higher than the MSPs for the previous year.
About 1,000 ginners from Gujarat have been on a go-slow stir since November 10 to protest against higher MSPs.
Leaders of seven ginners associations from cotton growing states are slated to meet on Friday at Kadi in Gujarat to discuss a proposal to form a nation-wide ginners’ association and further course of action, he said.
On November 5, farm minister Sharad Pawar had assured ginners of raw cotton supply through Cotton Corporation of India at Rs 200 a quintal cheaper than the open market price. “Nothing has been done so far in this regard,” said Patel.
November 21st, 2008
China Daily, China
By Wang Bo (China Daily)
China is set to raise export tax rebates on textile products to 17 percent after the government unveiled six measures to shore up flagging exports on Wednesday, analysts said.
Although the move hasn’t been officially announced, there has been much speculation among industry insiders and experts that higher tax rebates are on the way.
The 21st Century Business Herald newspaper reported that the proposal to increase tax rebates had been agreed to at the State Council’s latest executive meeting.
“If it is true, the tax rebates would be lifted to an all-time high, which demonstrates the government’s determination to take forceful measures to support the industry,” said Ou Zhihang, an analyst with Pingan Securities Research.
The government also decided at Wednesday’s meeting to scrap a number of charges on the textile sector and give more credit support to textile exporters’ technological upgrading.
From January to October, China’s textile and garment exports reached $153.71 billion, up 8.6 percent year-on-year, according to Customs figures.
China has raised export tax rebates three times this year, pushing the rebate level up from 11 to 14 percent. However, analysts worry that the stimulus efforts may not be enough to prevent textile exports from sliding further.
“The toughest time for textile exporters has yet to come. As the global financial crisis unfolds, China’s textile exports may not maintain their previous vigorous growth momentum for a long time,” said Li Wei, an economist with the Standard Chartered Bank.
“With the economies of China’s biggest export destinations - the US, Europe and Japan - falling into technical recession, China’s export sector is doomed to take a beating from worsening overseas demand,” Ou said.
At the recently concluded China Import and Export Fair, orders received by textile and clothing exhibitors dropped more than 30 percent, according to Ou. He warned this indicates a big contraction in China’s export growth next year.
The weakening domestic demand may also cast a shadow over the industry, with textile product retail sales growth slowing to 20.3 percent in October, down from the 32.6 percent a year ago.
November 21st, 2008
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