Archive for February, 2009
Economic Times
It came as a shocker to India’s textile industry which was pitching hard for some additional incentives from the government to tide over the
crisis caused by a sharp decline in export demand.
On February 17, the Centre announced a 5% incentive for exporters of raw cotton through its export promotion programme called Vishesh Krishi & Gramodhyog Yojana. The incentive is available for shipments from April 2008 to June this year. The intended beneficiary is the cotton farmer.
Actually, the grant, which would amount to some Rs 350 crore, would go to a handful of large traders including some multinational corporations who are in the business of exporting raw cotton. Would anyone argue that the dole for past exports would benefit the cotton farmer?
Major cotton exporters are Bhadresh Trading, Khinji Vishram, Gill & Co, Ruchi Worldwide, Mitatex, TT, Alok, Ginners and Others, Noble Exports etc. India’s cotton output has seen dramatic increase in recent years thanks to increased productivity. India has already overtaken the United States to become the second largest cotton producer in the world. We are also the second largest consumer and exporter of cotton at present and hope to pip China from its peak slot.
Cotton output in the 2007-08 season (October-September) was 31.5 million bales (MB) of 170 kg each. That was a record. In the current season (08-09) for which substantial market arrivals have been reported, the official estimate is 29 MB, which is higher than all previous years except last year.
Cotton exports last year was again an all-time high of 8.5 MB and the projection for this year is 5 MB. The consumption of cotton by Indian textile mills last year was slightly above 24 MB and this year’s consumption is projected at 23 MB.
Curiously, the government’s decision to reward raw cotton exporters comes at a time when the textile industry is struggling to be competitive in the rapidly shrinking global export markets (the exports last year was $22 billion) and save lakhs of jobs. For the current cotton year, a hike of more than 40% in MSPs for various varieties of cotton was announced in September 2008.
This despite the fact that cotton prices in the country were ruling at an all-time high. According to textile industry, global cotton prices have crashed in recent months, but the MSPs have prevented market forces from operating in India.
“Since neither Indian mills nor export markets can buy cotton at such uncompetitive prices, around half of the cotton that has arrived in the markets so far in the current season has been bought by procurement agencies, mainly the Cotton Corporation of India and NAFED.
And since the prices are high, the industry is disinclined to lift the stocks, causing huge stockpiling with CCI.
The CCI has recently announced a discount scheme for disposing of the stocks. The discount is being provided only to ‘bulk buyers’ and it increases in tandem with the quantity bought.
The textile industry alleges that this would also cotton traders at the expense of the industry since the industry currently does not have the buying ability. Increase in raw material prices is clearly something the industry can’t afford now.
It may be noted that when India is providing incentives to raw cotton exporters with retrospective effect, China has disallowed export of cotton.
February 27th, 2009
Trading Markets (press release)
SYDNEY, Feb 25, 2009 (AsiaPulse via COMTEX) — PFBDF | Quote | Chart | News | PowerRating — A total of 600 New South Wales (NSW) clothing manufacturing workers will be out of work when Pacific Brands (ASX:PBG) closes its four sites in the state.
ic Brands, which manufactures clothing brands including Bonds, Holeproof and King Gee, on Wednesday announced it would shed 1,850 jobs across Australia.
It follows the company posting a first half year loss of almost $A150 million ($US97.52 million).
Manufacturing will shut down at seven sites across the country, with 1,200 redundancies over the next 18 months.
Four of those sites are in NSW, with 207 jobs to go at Unanderra in the Illawarra, 233 at Wentworthville in Sydney’s west, 83 at Cessnock in the Hunter region and 74 at Bellambi south of Sydney.
Textile, Clothing and Footwear Union (TCFU) assistant secretary Steve Davis said while the falling share price showed the company was in difficulty, the decision to stop manufacturing in Australia came out of the blue.
“Some of the workers have been there for over 25 years, straight out of school, straight off the migrant ship into machinist jobs and that’s all they know,” Mr Davis told AAP.
“Some of them are going to be at that age where its going to be very difficult to get jobs, others who are a bit younger are going to need retraining.”
TCFU officials and delegates were meeting with Pacific Brands on Wednesday afternoon in Sydney to discuss what entitlements workers would receive.
Mr Davis said he expected they would be paid out in full.
He said with three of the plants flagged for closure in regional areas, local economies would also feel the effect of the closures.
“You’re talking millions of dollars a year that will now not flow into the communities,” Mr Davis said.
“It’s going to have an enormous effect on these places.”
February 27th, 2009
Hindu
Sujay Mehdudia
NEW DELHI: In yet another stimulus package aimed at addressing the woes and concerns of exporters, the Union Government on Thursday unveiled sops to exports of leather, textiles, gems and jewellery and food product.
The Government also ‘officially’ scaled down the export target to $175 billion for this fiscal from the earlier target of $200 billion in view of the global slowdown. It also set $200-billion export target for 2009-10..
Unveiling the interim foreign trade policy, Commerce and Industry Minister Kamal Nath said the sops included a Rs. 325-crore special package for leather and textile sectors, removal of import curbs on gems and jewellery, relaxation in export obligations and a five-per cent duty credit for exports of handmade carpet under the Focus Product Scheme against 3.5 per cent given earlier.
Mr. Nath said export incentives had been provided for certain items such as technical textiles, stapling machines, handmade carpets and dried vegetables.
Minister of State for Industry Ashwini Kumar and Commerce Secretary G. K. Pillai were present on the occasion.
EPCG scheme
Mr. Nath said the slab for Premier Trading Houses based on export turnaround had been reduced to Rs. 7,500 crore from Rs. 10,000 crore. Under the Export Promotion Capital Goods scheme, in case of decline of exports of the products by more than five per cent, the export obligation for all exporters of those products would be reduced proportionately.
He said that from now on, for import of precious metals STCL, Diamond India, MSTC, the Gems and Jewellery Export Promotion Council and Star Trading House had been added as official agencies. Import restrictions on worked corals had been removed to address the grievances of gems and jewellery exporters. Authorised persons of gems and jewellery units in export oriented units (EOUs) would be allowed personal carriage of gold in primary form up to 10 kg in a financial year.
The procedural formalities for claiming duty drawback refund and refund of terminal excise duty for deemed exports had been further simplified and reimbursement of additional excise duty levied on fuel would also be admissible for EOUs.
Bhilwara in Rajasthan and Surat in Gujarat had been recognised as towns of export excellence, for textiles and diamonds.
In a measure to improve health infrastructure, Mr. Nath said export of blood samples was now permitted without licence after obtaining the ‘no objection certificate’ from the Director General of Health Services
February 27th, 2009
AllAfrica.com
Juliet Waiswa
Kampala — SOUTHERN Range Nyanza Limited (Nytil) is to inject $35m aabout (sh68b) to revamp the factory and increase production to meet the regional demand, the chairman Picfare Group of Companies, Kishor Jobanputra, has said.
“We will invest in manufacturing quality textile, as we strengthen our distribution networks,” he said.
Nytil has in the last 10 years scrapped over 18,000 tonnes of old machinery and replaced them with new computerised ones for the required international standards.
It currently uses over 10,000 bales of cotton and prints 70,000 metres of cloth annually as compared to 3,000 bales and 35,000 metres it was producing in the past 10 years. The company has a turn-over of 1:2 with a market share of 12 to 15%.
The company’s has contributed to the national economy by adding value to the cotton by 50 to 70%
Although the price of organic cotton is sh650 per kilogramme, Jobanputra says that they buy cotton from ginneries in Lira and Kasese at a cost of sh150 per kilogramme.
February 26th, 2009
www.thejakartapost.com/news
As Indonesia’s traditional icon, batik has shied away from embracing technology for hundreds of years. This has resulted in a slow pace of development of batik, as most craftsmen create batik based on traditional designs.
But batik manufacturing is getting a modern touch through the use of fractal equations and a new technology jointly invented by Muhammad Lukman, Nancy Margried Panjaitan and Yun Hariadi from Pixel People Project Research and Design.
Nancy, head of the company, said that the program was not triggered by a love of batik.
“We love playing with science, visual art and technology. During our exploration, we accidentally found that batik patterns have all the elements. Therefore, batik patterns can be developed by computer technology,” Nancy said.
The trio developed the concept not just on scientific but cultural research too. They conducted experiments to develop new patterns using fractal mathematics and, with the help of two open source programmers, batik fractal software, or “jBatik” was born.
Since its launch, jBatik has received support from the Ministry of Research and Technology. Minister Kusmayanto Kadiman was one of the most prominent figures to wear jBatik designs.
In 2008, jBatik won the first Asia-Pacific Information and Communication Technology Award in the tourism and culture category. It also received an Award of Excellence from UNESCO last November
Working in generative way and using artificial intelligence, “jBatik” can help designers create new patterns from traditional ones. All designers need do is to change the software’s parameters, such as angles, iteration or repetition, length, thickness and colors.
“There will be millions of design variants we can create just by changing one of the parameters,” she said.
According to Nancy, Pixel People has already developed 15 batik patterns. Some are traditional Javanese batik patterns and others are originals made from fractals applied by hand to the fabric.
“The 15 patterns are the basic patterns, which can be developed into unlimited design variants. For example, we had developed the Parang pattern into seven design variants,” she said, adding that her company would develop patterns from other regions in the near future.
The Pixel People Project is cooperating with Rumah Batik Komar, a garment house, to produce the batik. For the production, Nancy said that her company could made batik fractal as fabric or ready-to-wear clothing, depending on the consumer’s request.
Besides cooperating with Rumah Batik Komar, Pixel People Project also cooperates with designer Era Soekamto and Couture Collections for the ready-to-wear collection.
Designer Era Soekamto said that she decided to apply batik fractals in her collection because she wanted to preserve and develop batik as well as give the public and alternative and respond to technology development.
“I made a fractal version on Parang Rusak and Sekar Jagad patterns to show that a familiar pattern can have a whole new look after being developed. We must show that Indonesia can also be a pioneer in technology development,” she said.
She said that there was a controversy surrounding the use of batik fractal; some claim that is not real batik.
“While there are people sticking to the traditional batik, the controversy has made people interested in wearing batik fractals,” she said.
Era markets the batik fractals collection under the XLabel brand, which targets young executives and middle class – Xlabel aims for quantum and dynamic concepts.
“Batik fractals offer the public an alternative and new option on the techniques because people are starting to get bored with the old patterns. Batik is not a trend, but the national identity,” she said.
February 25th, 2009
Greenville News, SC
The textile industry is encouraged by a provision in the economic stimulus package that it says should at least protect many South Carolina jobs and possibly create some.
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An amendment to the package requires that fabric for uniforms for the U.S. Coast Guard and the Transportation Security Administration, which monitors airports and other transportation systems, be made in U.S. plants and that the uniforms, including body armor and holsters, be assembled here as well.
Currently, the fabric for TSA uniforms is made in the United States but the pants and shirts are assembled in Honduras and Mexico.
About 50,000 TSA workers receive $150 a year to replace uniform pieces, according to Christopher White, TSA spokesman.
Another part of the legislation requires that fabrics used in highway and mass transit construction be made in the United States.
Although it might not be obvious, “there are a lot of textile products that go into highway and mass transit construction projects,” said Lloyd Wood, spokesman for the American Manufacturing Trade Association.
He said fabric sleeves used to hold fiber optic cables and various materials are used on construction sites.
No one is yet estimating how many jobs will be created or saved or how much revenue will flow into Upstate textile operations because of the “Buy American” provisions.
But Wood said that for every $1 million spent on textile products, 50 jobs are created, saved or stabilized.
There are currently about 25,300 workers employed in South Carolina textile operations, according to the U.S. Bureau of Labor Statistics.
That number is almost half (47,000) of the textile workers employed in the state four years ago.
“It’s a big deal. It all adds up. People will be rehired or working more hours or they won’t be laid off,” Wood said.
“This is a win for U.S. manufacturing,” said Richard Dillard, spokesman for Spartanburg-based Milliken and Co.
Norman Chapman, president of Inman Mills, said, “It only makes sense if you’re trying to stimulate the economy that you spend the money here. To outsource stimulus is insane.”
Wood agreed.
“If we’re going to spend U.S. taxpayer dollars, we might as well spend them here and keep people at work,” he said.
Selecting manufacturing as a stimulus booster makes sense, the three said.
“Stimulating manufacturing is the fastest way to put people back to work,” Chapman said.
That’s because a manufacturing has a multiplier effect — any job created there requires jobs at suppliers and in other sectors to support it, Dillard said.
“Every job you save or create is income for a person to buy products,” he said, and that’s the basis of the U.S. economy.
Wood said the industry would have no difficulty with increased business.
“We have the capacity,” he said, adding that the current textile and apparel work force nationwide is 450,000 strong. “The companies that have survived the onslaught of foreign competition are the best in the world.”
They’ve had to provide the best product, the most innovation or the fastest time-to-market to be able to survive. Wood said.
“If they couldn’t handle the flood of subsidized goods from China and Korea, they’re not here,” he said.
February 24th, 2009
The Island (subscription), Sri Lanka
Last week a labour union filed a petition with the Human Rights Commission, alleging that a garment factory had closed down after falsely giving reasons that to do so was because of lost orders caused by the global financial crisis.
The union claims the factory took this measure to rid itself of labour unions.
The Free Trade Zones & General Services Employees Union together with their members whose services were terminated by Sinotex Lanka Ltd under the pretext of global economic crisis, filed a petition against the Commissioner General of Labour and other officials about the violation of Human Rights of 2,500 workers.
“This is clear evidence of how the employers in connivance with the Government authorities abused the labour laws and used the global crisis as a pretext to suppress workers’ rights,” Anton Marcus Joint Secretary of the union alledged in a statement.
He said the union had addressed this matter to President Rajapaksa and hoped he would intervene and take appropriate action against the authorities concerned.
February 23rd, 2009
Economic Times, India
MUMBAI: Garment exports from India show little signs of picking up this winter-autumn season, following a gradual shift of international buyers
towards low-cost neighbouring countries. International bookings of garments have dropped sharply, although exporters slashed prices by 11-12%.
“Major global buyers like Wal-Mart, JC Penney, Li & Fung, Gap and Target have indicated plans to cut offtake from India by 12-15% this year, while they are increasing their offtake in neighbouring countries,” said Rahul Mehta, president of the clothing manufacturing association of India. Countries like Vietnam and Bangladesh have lower import duties and cost of production enabling them to offer more competitive prices, said industry officials.
According to the industry analysts, garment exports from India would be lower than Bangladesh, Vietnam, Indonesia and Combodia. It is expected that India would end up exporting garments worth $9 billion this fiscal, down by almost 10% compared with the last year. Bangladesh is expected to export worth $12 billion garments.
Global buyers have also cut down purchases in the wake of a global meltdown and recessionary trends in western economies. Premal Udani, managing director of Kaytee Corporation said that the industry is likely to face further challenges, if the winter-autumn order booking fails to meet expectations.
“Currently, bookings are 20-25% lower than the same period last year and sentiments are weak ahead because of gloomy outlook of textile industry,” said Mr Udani. Two relief packages and a 2% interest rate subvention in pre-and post-shipment credit up to September 2009, seem to offer little relief yet to the industry.
Exports said that they had hoped for sops like scrapping of the fringe benefit tax and higher duty drawback rates. However, any further relief packages have been ruled out before Parliamentary elections, said a government official.
February 20th, 2009
Richmond County Daily Journal, NC
by Philip D. Brown
Textile industry leaders praised the efforts of U.S. Rep. Larry Kissell in advocating the Kissell Amendment of the economic stimulus package signed by President Barack Obama Tuesday during a conference call the same afternoon.
Kissell hosted a 45-minute conference call with leaders of the industry and the members of the press.
Implications of the legislation for the textile industry and the American government were discussed by Tuscarora Yarns President Peter Hegarty and Chairman and CEO Martin Foil; Bruce Raynor, president of UNITE HERE, the nation’s largest textile union and Highland Industries Director of Sales and Marketing Bret Kelley, along with the congressman.
The amendment is an extension of the Berry Amendment of 1941, which required the U.S. Department of Defense to purchase textile products procured and manufactured in the United States. The Kissell Amendment extends this to the Department of Homeland Security.
Apparent during the discourse, the bulk of the impact will be seen in the purchase of uniforms for the Transportation Security Administration (TSA).
“We’re very excited about this opportunity to extend the Berry Act,” Kissell told those on the conference call. “It’s been around for 60 years and worked well during that time.”
He noted help was required to get the amendment included in the bill, due to opposition in Washington, D.C.
Here in Richmond County, the International Textiles Group (ITG) Richmond Plant, formerly known as Burlington Worldwide, in Cordova manufactures wool products for use by the U.S. military, according to Plant Manager Doug Carter.
“Anything that requires the U.S. government to source textile products from the U.S. would be a benefit to us,” he said.
“It is too early to know what implications this could have for us,” said ITG Director of Corporate Communication Delores Sides. “Our plant in Cordova, as well as our plant in Raeford, do supply textiles to the U.S. military. We’re hopeful the expanded requirements to buy American products can benefit us.”
Richmond County Economic Development Director Rick Sago commented on the availability of experienced textile workers and facilities in the county, for industry recruitment.
“Anything Congressman Kissell can do to help our beleaguered textile industry can potentially help our county,” he said. “We support the textile industry, and we’d like to see it thrive.”
Bret Kelley’s company, Highland Industries, has its U.S. headquarters in Greensboro.
“For North Carolina, in particular, I’d like to point out why this is important to us. In the past 12 months we had 14 textile plants close in North Carolina, there have been 44 total across the country,” Kelley said. “Ten thousand three hundred people have lost their jobs in North Carolina in textile facilities over the past 12 months. That’s why this is very important, because it keeps jobs and production flowing in good times and in bad.”
American Manufacturing Trade Action Coalition Executive Director Auggie Tontillo spoke to the number of jobs to be retained and created by the legislation.
“It’s a little bit of an unknown universe, or quantity in terms of all the purchases that DHS makes that would fall under this amendment,” he said.
He explained that last year, $2.8 billion worth of textile products were purchased under the Berry Amendment, equating to 210,000 jobs in the United States.
National Council of Textile Organizations President Cass Johnson said it is unclear where the uniforms to be purchased under the Kissell Amendment have been coming from.
“I can tell you that there was a very sharp response to Mr. Kissell’s Amendment within Homeland Security. They did not want this to happen,” he said. “ … We went in to see Congressman Kissell and his staff on Friday, January 23, and here it is three weeks later, and we have the Kissell Amendment signed into law …
“It’s a real statement to Congressman Kissell’s determination as a freshman Democrat to make sure that the leadership heard his message that he needed this, that his district needed this and the industry needed this. It’s so rare you can get a law passed in your first term, or even in your first several terms as congressman.”
Several arguments were offered during the conference call for why this is a positive, including the collection of funds into the U.S. Treasury by workers and corporate taxpayers, and the desire of terrorists to acquire identical uniforms.
“Opponents of buy American provisions will argue that surely it must equate to some additional costs to the U.S. Treasury, but the opposite is true,” Tontillo said.
First, he noted the Kissell and Berry Amendments can be waived by the officer of the Transportation Security Authority (TSA) if the price of these products isn’t competitive with products manufactured overseas.
He also stated the TSA issues a $250 stipend to buy six pairs of pants and six shirts for new hires to the governmental entity.
“If you take that $250 and use that to buy uniforms made in Mexico, China or Pakistan or wherever, there is no return on that purchase,” Tontillo continued. “If you take that $250 and you buy those uniforms made in Ohio or North Carolina, made from U.S. components, when you take into account the wages that are paid, and the income tax that is paid by those workers and the corporate income tax that is paid by the U.S. companies involved.
“Conservatively, we get a $43.50 return on that $250 purchase to the U.S. Treasury in the form of taxes.”
He also noted the workers employed to make these products are not drawing unemployment benefits, or other aid from the government.
“In addition to getting the financial benefit, you also have a stable and secure production base,” he continued. “… TSA has put out circular after circular stating that al-Qaeda is seeking to get identical uniforms as its employees, and its officers need to be on high alert. It’s just nonsensical for us to say there’s no concern, and we may save 20 cents by buying it offshore - it simply is not the case.”
February 20th, 2009
Times of India, India
SURAT: Undetected leakages in sub-sea pipelines from Panna-Mukta-Tapi (PMT) basin have partially hit the supply of natural gas for the last two
days. Close to 300 textile processing houses depending on this gas have been forced to shut their operations due to this, sources said.
Industry sources told TOI that attempts are being made to detect the leakages. Shut down also for carrying out annual maintenance of pipelines and other installments of PMT basin, it is likely that it would take at least a fortnight for supplies to normalise.
PMT basin produces 17 million metric standard cubic meters (mmscmd) of gas per day and due to current crisis, production has dipped to around 12 mmscm, said a senior official in joint venture (JV) operations group, comprising British Gas, Reliance Group and Oil and Natural Gas Corporation Ltd (ONGC).
As per an agreement with Union ministry of petroleum and natural gas, under JV of British Gas, Reliance Group and ONGC, entire gas from PMT basin is supplied to Gas Authority of India Ltd, for making it available to end-users.
JV operations group general manager OP Gupta told TOI over phone from Mumbai that fault points in pipelines are being assessed and as per initial investigation, the same could be about 15 to 20 km inside sea in Tapi field near Daman.
Gupta said technical assessment was going on and accordingly, materials required would be requisitioned and only after that, a time frame for achieving normal outflow of gas through pipelines, would be chalked out.
Meanwhile, textile processing houses in the city have been hit badly with non-supply of gas. Jitendra Vakharia, proprietor of a textile dying and printing mill in Pandesara, said that with supply of gas stopped, almost all of 300 gas-based processing mills have stopped respective productions. Normally, around three crore meters of fabrics are produced from textiles processing units on a daily basis here.
Supply of gas to textile industries was already short to the tune of about 20 and 25 per cent, forcing gas-based units to stagger for two days a week, said Pramod Chaudhary, president, South Gujarat Textile Processors’ Association. Non-supply of gas has dealt a severe blow to textile sector here, said Chaudhary.
February 20th, 2009
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