Textination Newsline

• German fashion demanded
• Shoe chain CCC is expanding

Warsaw (GTAI) - The demand for textiles, clothing and footwear is developing particularly dynamic in Poland in 2016. These items are also popular Christmas gifts. Despite strong competition, Germany remains the third-largest foreign supplier of clothing and continues to grow. The German online retailer Zalando is building its first huge logistics center in Poland. The Discounter KiK is opening further branches. The domestic shoe chain CCC is expanding.

Retail sales of textiles, clothing and footwear are the fastest growing of all product groups in Poland. According to the Statistical Office (GUS) (http://stat.gov.pl), the real growth rate reached 15.8% in the first three quarters of 2016 compared to January to September 2015. The total retail sales rose by 5.3% in the same time. The forthcoming Christmas business is expected to further stimulate the demand for fashion items. The in the current year introduced children's allowance also will heat the purchase power of the Poles.

¹⁾ Estimation, ²⁾ Forecast
Source: Market research company PMR

First and foremost, growing is the demand for common items in the lower, middle and upper segment. Clothing manufacturers however in the luxury category do not benefit from the rising demand. According to the consulting firm KPMG, the poles spent in 2015 about 14.3 billion Zloty (Zl, about EUR 3.4 billion, 1 EUR = 4.1841, average price 2015) for luxury goods, including Zl 2,065 billion for clothing and accessories. These, however, form an important product group and rank second behind passenger cars (ZI 6.974 billion).

The largest domestic clothing company LPP  also felt the fact that the demand potential in the precious segment is limited. The company is known for its brands for everyone, especially "Reserved", which generates almost half (47%) of its revenues. At the beginning of 2016 LPP launched its new premium brand "Tallinder". After the sales however remained below the expectations, LPP announced the gradual abandonment of this project in September 2016.    

Tallinder was supposed to compete with the established gents brands and suppliers of other high-quality clothing names like Vistula, Bytom and Prochnik. The market leader in men's clothing Vistula, which also includes the jewelry chain "W.Kruk" and the brand of women's wear Deni Cler, expects in 2016 (2015) an increase of ZI 590 (518)  million and of its net profit to ZI 37.0 (28.3) million. Bytom follows far behind with projected revenues of ZI 154 (131) million and a net profit of EUR 14.1 (12.4) million.
 
CCC is aiming abroad

Due to the growing demand, the number of specialist stores for clothing is growing, according to GUS us to around 37,100 until the end of 2015 (2014: 35,900) . At the same time the number of stores for shoes and leather goods, which amounted to 8,200 (8,300) in 2015, fell slightly. One reason for this is the proliferation of relevant trade chains, such as the shoe chain CCC, which contributes to a consolidation, and the increasing online trade.

In 2016 alone CCC opens around 40 new stores in Poland and increases its sales area by 20 to 30% annually. In 2016 this will increase by 105,000 sqm and 2017 by 120,000 sqm (net). The trade chain is looking for additional franchisees in other European countries, now also in Asia and the USA. In the Russian Federation CCC wants to open large salons with about 1,000 square meters. According to the chain founder Dariusz Milek in an announcement of the daily paper Rzeczpospolita the presence in Ukraine, Belarus, Kazakhstan and Central European neighbors should be increased too.

The branch networks in Germany and Austria should not be increased further in the near future; In Austria there are already almost all of the targeted total 70 CCC stores.  Due to the lack of profit in these two countries, their share of the group’s total income, which is expected to reach some ZI 3.2 billion in 2016, should not exceed 10%. CCC also relies on e-commerce. After the trade chain had already acquired the online shop for shoes eobuwie.pl, it wants to start in spring 2017 with its own e-shop.

Polish imports of clothing exceed exports. The two main suppliers of textiles, China and Bangladesh, were able to further increase their deliveries to Poland in 2015. Germany also achieved growth and finished third. Slovakia has multiplied its exports. Among the customer countries Germany was by far the most important player with a further significant increase in its demand. The other ranks were followed by the Netherlands, Czech Republic, Austria, Sweden and other mostly European countries.

Source: Central Statistical Office CIS

Germany is not only characterized by high-quality clothing and well-known brands in Poland. The in Europe leading chain KIK is spreading further in the neighboring country. By the end of 2017 the number of stores should increase to 200. Its first store in Poland KIK opened in March 2012.

E-commerce is likely to give further impetus to the German supply of clothing. The large online retailer Zalando is setting up its first logistics center in Poland in Gryfino in the area of the special economic zone Kostrzyn-Slubice (Küstrin-Frankfurt / O.) for an amount of EUR 150 million. According to the property developer Goodman, it will be the largest logistics area occupied by a single company in Poland. At the same time, it is one of the most extensive BTS (built-to-suit) projects in the country, in which an object is fully built according to the requirements of the future user. Its opening is scheduled for the second half of 2017. Zalando wants to supply from there Poland, the Nordic countries and a part of Germany.

Source: Central Statistical Office CIS

• Visual marketing increases in importance for offline retail in view of e-Commerce competitors
• Display mannequins are in focus for this
• Emotionalising is decisive
• Individuality and flexibility are also demanded
• There is a shift towards semi-abstract mannequins with regional and genre differences
• Proportion of customised mannequins is rising
• Sustainability remains an issue

EuroShop is one of those trade fairs always teeming with visual highlights. Guaranteed to present a special treat here is, of course, the Visual Merchandising Hall, the exhibition place of display mannequins and store window decorations. March 2017 will see Hall 11 of Düsseldorf Exhibition Centre (instead of Hall 4 previously), become a POS experience guaranteed to attract plenty of attention. After all, in view of the e-Commerce competition, visual marketing and the resulting emotional, personalised appearance will become more and more important for bricks-and-mortar retailers. “Consumers’ emotional needs will become the overriding theme for EuroShop,” says Andreas Gesswein, CEO of Genesis Display from Auetal, with conviction.

Display mannequins hold special emotionalising potential. It is not by chance that Düsseldorf visual artist Domagoj Mrsic once presented them as “super heroes” in one of his stagings - as Superman and Wonder Woman, Batman and Catwoman, Spiderman and Spiderwoman. Provided the displays are done well mannequins are in a way real heroes. With their appearance, their posture, gestures and mimics they can really breathe life into shop windows and in-store decorations, serve as sales-promoting tools or arouse empathy, interest and curiosity. And if they are not just headless and very abstract they even give retail stores and brands a profile and signature style. With the power of their poses they send out a clear signal as to which target group is addressed, which degree of fashion and price range is served. Moreover, when arranged in groups, they can serve as story-tellers for passers-by. Unforgettable was the “Ugly’s” line of mannequins by supplier Hans Boodt, which mimicked “real-life” men rather than V-shaped boys with six packs. It included both a long, tall one and a short, fat one dressed in passion-killing underwear. “The new generation of mannequins will say more about the brand. They will participate in communicating more about each brand’s essential values and set them apart from the competition”, says Jean-Marc Mesguich, CEO of Window France headquartered in Carros.

The portfolio offered by the display mannequin industry is wide and varied: in addition to top-model lookalikes it features plus-size beauties, Europeans, Africans and Asians, the afore-mentioned super heroes and funny common people. Kissing couples feature alongside sumo wrestlers. In line with the motto "don't take yourself too seriously", vendors have long also included dogs and cats; and even chameleons since many mannequins prove to be true artists of disguise. “Cameleon”, for example, is a patented concept of Window France: Hundreds of eyes and lips are available to chose from, eye-lashes can be glued on, wigs attached/detached, different make-ups applied or the whole face can be replaced with the help of magnets – in brief, all it takes to ensure a constantly refreshed POS appearance. Add to this what is by now a huge range of colours and materials: surfaces from velvet and rubber are just as common these days as are metallic varnishes or concrete and copper coatings.     

In view of what has been presented over the past few years you may wonder what might come next. Although the majority of fashion retailers and brands have not nearly exploited the full potential already available today. In the past few years abstract mannequins were in highest demand. “They are fit for many applications and easy to handle, since no wigs or make-up have to be styled,” says Andreas Gesswein (Genesis Display) accounting for reasons and adds: “But they are also easier to copy and therefore available in every price segment.” In practice, efficiency sometimes clearly “overrides” emotion. “But when stores do not stand out with the image they project they do not prompt shoppers to enter either,” says Jean-Marc Mesguich (Window France). And for EuroShop 2017 Window France will definitely have far more in store than “exciting variations of the abstract theme”.

Faces are back again

The fact is: just like the fashion they are wearing, display mannequins follow trends. Triggered by a desire to cut a sharper profile and stronger expression, industry insiders have seen a trend towards semi-abstract mannequins. “A face is at least alluded to. Mannequins are less neutral and it becomes visible: Retailers want to make a statement again showing their true colours. There is a trend towards addressing target groups with a more high-profile message,” explains Cornel Klugmann, Country Manager for the D-A-CH region at Hans Boodt from the Dutch city of Zwijndrecht. Monica Ceruti, in charge of PR & Communication at Almax from Mariano Comense/Italy, agrees: “It is true that demand for abstract mannequins continues to be high but there is a clear trend towards more realistic facial characteristics. This includes such details as the application of eyelashes or wigs. And dynamic postures are also getting more popular again.”

Andreas Gesswein (Genesis Display) remarks: “Especially in the luxury segment we are registering stronger demand for more realistic mannequins with faces and emotional facial expressions that brands are looking for to stand out from the rest.” A trend that Jean-Marc Mesguich (Window France) confirms: “The Haute Couture brands have already abandoned the egghead in exchange for something that will have more impact and - more importantly - get people talking about their brand.” He adds: “The growing trend of viewing fashion and fashion windows online is pushing brands to make more attractive windows and to change their displays on a more regular basis.”

The days of faceless “eggheads” seem to be over. And above and beyond this? “The look and feel is becoming more and more high-end. White and grey are replacing darker shades, glossy replaces matt and aspirational looks with more charisma are more in demand,” says Cornel Klugmann (Hans Boodt). Monica Ceruti (Almax) sees great potential in “handcrafted looks”. This means torsos with and without arms with different materials for the individual components – pedestal, torso and head – and wood as well as metallic surfaces all set the tone here. Sabrina Ciofi from Design Office La Rosa from Palazzolo Milanese/Italy summarises the “principal themes of tomorrow” as follows: “Customers demand high product quality, the right price, maximum after-sales service and high product flexibility and/or diversity.” This statement should be valid across national borders. Otherwise she says despite all the globalisation: “There are as many trends as there are markets.” Monica Ceruti (Almax) concretized: “In Europe and the USA the differences are not fundamental. In the Middle East, however, mannequins without realistic traits continue to be in demand for religious and cultural reasons. This applies especially to female display mannequins.”

Customised becomes cheaper

Producers report that the percentage of customised mannequins is generally rising. These display mannequins are individually and exclusively manufactured to customers’ specifications. In this way retail companies and brands can stand out from their competitors and consistently leverage their CI. At Hans Boodt, for example, the proportion of customised mannequins is now said to be as high as 75%. And thanks to cost-cutting process optimisation it is expected to rise even further. Like Window France these Dutch vendors have now discovered 3D printing which can serve their purposes and their buyers. While in the past prototypes used to be elaborately modelled by sculptors in clay, these can now be “printed” in a time and cost-saving manner. “On top of this, the process is even more true to life and detailed,” delights Cornel Klugmann (Hans Boodt). Graphic designers create the desired mannequins with CAD systems where all the details can be freely configured. Then the files are uploaded to the printer that puts them into practice 1:1. “We can respond to trends so much faster and at the end of the day also design more new collections each year”, Klugmann explains further benefits. Jean-Marc Mesguich (Window France) adds: “Thanks to 3D we can create mannequins that really correspond to each and every brand and every brand’s precise image, to be perfectly in-sync with their public. This is an important evolution in the role that mannequins play.”

Alongside process optimisation sustainability remains important for the sector. “The fashion sector is now highly aware of this topic and attaches importance to its suppliers also complying with the relevant criteria,” explains Monica Ceruti (Almax).   The other market players polled also share this view. For La Rosa, whose mannequins are exclusively designed and manufactured in Italy, sustainability is an integral part of quality. By their own accounts, the Italians have analysed the whole life cycle of their mannequins with a view to minimising their ecological footprint. Almost half of the polystyrene used, they say, is recycled which saves substantial amounts of crude oil and carbon dioxide emissions. On top of this, La Rosa takes back its products after use and re-introduces them into the material cycle. Production operations work with a carbon-capture system, the cooling towers use process water, energy is generated by the company’s own PV park. Andreas Gesswein (Genesis Display) also underscores the importance of this topic: “Our customers focus on trust, honesty and partnership-based cooperation. And this includes providing evidence of sustainability rather than copying other peoples’ marketing straplines. In cooperation with Dupont Tate and Lyle BioProducts we have increased the percentage of biomass in our mannequins even further over the past few years, just the same way we constantly check and optimise our materials, packaging and transport routes for sustainability.” Hans Boodt is also opting for an interesting avenue. The company currently studies whether ocean plastics could be used as a raw material for production.

EuroShop as an opportunity of the future

The display mannequin market is and will be in motion – both on the supply and demand sides. “There are customers who buy their mannequins cheaply online and others who are interested in top quality, professional consulting and holistic visual-merchandising concepts,” explain Andreas Gesswein (Genesis Display) and Cornel Klugmann (Hans Boodt). There should be no doubt about who they expect to be more successful. Andreas Gesswein: “The challenges are enormous. 2016 has been especially challenging for fashion retailers, also in Asia and the USA. Companies are faced with changed market and shopper behaviours. EuroShop 2017 will therefore probably be one of the most important ones since the fair's inception.” Jean-Marc Mesguich emphasizes: “I think that it is essential to be present at EuroShop. For both suppliers and clients. It is a sure way of exchanging views and helps pave the way forward for both parties. This year we are at a turning point in the market, so it will be even more useful for everyone.” Cornel Klugmann also recommends retail representatives to visit the trade fair: “Our innovative power is the opportunity for the future.”
 
EuroShop 2017 will be open to visitors daily from Sunday 5 March 2017 to Thursday 9 March 2015, 10:00 am to 6:00 pm. A day ticket is EUR 70 (EUR 50 for an e-ticket, purchased online in advance), 2-day ticket EUR 90 (e-ticket: EUR 70) and a 4-day ticket EUR 150 (e-ticket: EUR 130). Entrance tickets include free trips to and from EuroShop on all trains, buses and trams within the networks of the VRR transport authority (Verkehrsverbund-Rhein-Ruhr).

Nowadays, the office is everywhere: in the car, in the train, at home and in the garden. Life and work flow into each other. This trend can be criticised, but one thing it cannot be is ignored. What can and can't be done with technology increasingly determines our work lives. We are always online and contactable everywhere. New solutions,  unusual ideas  and  innovative products are called for. ORGATEC, which takes place in Cologne from 25 to 29 October 2016, takes up this challenge. Long gone are the days when just desks, filing systems etc. were presented at the leading international trade fair for the modern working world. It is much more to do with work culture, work processes and work environments. And on a 260-square metre, specially dedicated area, design solutions will be presented on the subject of the kitchen and outside areas.

Under the banner "Design meets movement", two extraordinary outdoor solutions for working in the open air await visitors to ORGATEC. The aim is to merge aesthetic design with ergonomic functionality. The trade fair is being supported in this endeavour by Linak, one of the world's leading developers and manufacturers of linear actuator systems for various applications in the hospital and care sector, the furniture industry and in the industrial sector. "It's not about us showing Linak products here: it's exclusively about design ideas", explains Nina Ramberg Mortensen, Corporate Marketing Coordinator at Linak A/S in Denmark and responsible for this special event at ORGATEC 2016 in Cologne.

On show will be clever design solutions from Scandinavia, such as ideas and solutions on the topic "Outdoor". The title of the exhibition - "Design meets movement" - is based on a collaboration with the University of Wuppertal for ORGATEC 2014, when, under the same banner, young design students looked for solutions for the workplace of the future. The results of the Europe-wide contest were then presented at the fair.

The 2016 edition of ORGATEC also aims to think beyond conventional solutions and be inspired by new ideas. "I'm sure that quite a few visitors will be really surprised at the objects on show at the 'Design meets movement' stand", promises Nina Ramberg Mortensen. "The interplay between ergonomically adjustable furniture and modern design, viewed in the context of the shift to the outdoors", might best describe the idea behind the "Design meets movement" special event. The stand can be found on the Boulevard between Halls 10 and 11.

From 26 to 28 July 2016 trade visitors from the shoe sector will be able to learn about the current trends and innovations revolving around shoes and accessories at GDS – Global Destination for Shoes & Accessories in Düsseldorf. Since the awareness of sustainability in the European footwear sector is increasing and seen as a long-lasting trend in business strategies, the European Confederation of the Footwear Industry (CEC) together with the other European partners of the “Step To Sustainability” project call upon footwear companies to participate in the International Footwear Workshop on Sustainability. The workshop entitled “Green Shoes for a Sustainable life” will be organised at the GDS shoe fair on 28 July 2016. During the workshop, companies will learn how they can increase their business value and sales whilst having a positive influence on social and environmental conditions by adopting sustainable strategies.

The workshop is being organised by the EU funded project “Step To Sustainability”, the aim of which is to create and pilot a new occupation and qualification profile and corresponding training course in the area of sustainable manufacturing in footwear. The project addresses the needs of companies wishing to engage in sustainable manufacturing by elaborating a new qualification profile, which will equip students with the necessary skills and competences to deal with sustainability issues and contribute to increasing the competitiveness of footwear manufacturers.

Applying sustainability to industry is also an important step to take. Environmental sustainability is certainly increasing in the European footwear sector. The footwear industry contributes to and is affected by the environmental degradation and social challenges that society is now facing. What initially was considered as an external environmental regulation to comply with, meaning an obligation, is now becoming part of the DNA of some companies. By introducing positive changes in production choices, companies can increase the popularity of their products and brand among consumers and business partners alike.

Carmen Arias Castellano, General Secretary of the CEC - European Confederation of the Footwear Industry stated: “Not only the environment benefits from a sustainable strategy. It also enhances social responsibility and will allow businesses to enjoy numerous advantages such as increasing revenue and cutting costs, increasing employee attraction and retention rates, creating a healthy workplace leading to greater productivity, and enhancing relationships with stakeholders and communities.”

At the workshop, there will be a presentation on the results of the Step To Sustainability project by a Portuguese SME, which participated in the pilot, as well as two panels of relevant industry representatives, who will explain best practices in the footwear sector. The first panel will focus on the manufacturing phase with presentations from El Naturalista and BATA Brands as well as the organisation LeatherNaturally; while the second will present the retailers’ approach to ensuring sustainability with contributions from Deichmann, Zumnorde, and Avocado Store GmbH.: www.cec-footwearindustry.eu

• Functional travel wear for travelling, outdoor adventures and everyday use -meeting the new demanding requirements of travelers in the digital age

The tourist industry is suffering in many traditional destination countries. Yet outdoor companies say that sales of luggage, accessories and travel wear remains unaffected. Independent tourism is thriving. Good news for outdoor manufacturers - as functional clothing offers more crossover potential than any other sector. OutDoor 2016 in Friedrichshafen - the leading international trade show - will be providing an overview of the latest trends and innovations for the travellers of tomorrow from July 13 to 16, 2016.

The German Travel Association (DRV) has reported the impact of geopolitical factors on the tourism industry. For example, summer bookings are down by 40 per cent in Turkey compared to the previous year. Other European travel associations are reporting similar lower-than-usual booking levels for Egypt and Tunisia. However, the outdoor industry appears unaffected. "We‘ve not seen any impact on our market,? says Columbia (Portland, US). "People continue to travel lots, although given the current political situation they are choosing different destinations.? Lonely Planet, the independent traveller’s bible, currently recommends visiting the following countries: Botswana, Japan, Poland, Palau, Latvia, Australia, Uruguay, US, Greenland and Fiji. Not exactly classical, low-cost family destinations, but still potential paradises for outdoor and adventure travel.

Thomas Groeger, country manager Fjällräven Germany is also confident, "More and more people are looking for alternatives to the conventional beach holiday. Outdoor- and sport-related travel is particularly popular.? Gerold Ringsdorf, product trainer Jack Wolfskin sees "interrail travellers and globetrotters? as "important founders of the outdoor movement.” Travel garment manufacturer ExOfficio (Seattle, US) agrees, pointing to a survey where 42 per cent of Europeans describe themselves as adventure travellers. Package tourism might still dominate the market, but it continues to be frowned upon. In contrast, independent travel is seen as an attractive, if complicated option for the masses.

The Future institute “Zukunftsinstitut” (Frankfurt/ Vienna) observes a new phenomenon which it calls the "normtrotter”: vacationer looking for a personalized experience and personalized service, but who still want their bookings arranged in advance. And from America, there’s a newly-coined expression to describe more affluent backpacking for normal travellers: flashpacking. The term refers to traditional backpacking only with flash, or style, i.e. adventure travellers who desire style and comfort. Travelers in this growing segment prefer to sleep in their own hotel room, hire a car instead of using overcrowded coaches and plan ahead using modern communication devices rather than going with the flow and improvising.

"Backpacking used to be the exception, something for adventurers only. Nowadays, it‘s a common way of travelling,“ comments Thomas Groeger. Young people in particular prefer to travel in a simpler manner. "The gap year - young people wanting to work and travel abroad - is a definite trend,“ adds Gerold Ringsdorf.

Modern travel equipment is designed to meet people’s requirements regarding performance and security. Backpacks and bags have anti-theft slashproof straps to stop bag slashers and RFID-blocking pockets to keep personal information and data safe. Travel apparel is often made of insect-repelling fabrics or has UV protection suitable for tropical sun, plus moisture management and odour control. In addition, today‘s travel wear is lightweight, easy-care and takes up little space in your backpack.

Modern travel wear also offers significant crossover potential for outdoor and everyday use. UV protection and protection against mosquitoes or ticks is also useful in central and northern Europe. "Of course urban outdoor, outdoor lifestyle and travel wear styles often look pretty similar,? says Wolfgang Jahn, sales manager Europe Royal Robbins, while Oliver Robens, sales director Europe Craghoppers adds, "it’s possible to look good both in the jungle and about town.? However, real travel apparel sets itself apart through its functional characteristics and extra details. And this is exactly why specialist providers have been so successful over the years.

To find out which new trends and products innovations will be shaping the industry in 2017, visit the international OutDoor trade show in Friedrichshafen. OutDoor 2016 is open to industry visitors only from Wednesday, July 13 to Saturday, July 16 (Wednesday to Friday from 9 a.m. to 6 p.m. and Saturday from 9 a.m. to 5 p.m.). For more information, please visit: www.outdoor-show.com.

• INTERNATIONAL COMPETITION INCREASES
• COMPANIES HAVE TO MODERNIZE PRODUCTION AND INCREASE DEPTH OF PROCESSING

Dubai / Islamabad (GTAI) - Pakistan's textile and clothing industry has urgently to invest. The international competition has intensified. The companies need to modernize their technology and increase their processing depth. The country wants to get away from the production of simple fabrics and yarns. The GSP Plus agreement with the EU and an improvement in the security situation have improved the investment climate. In high-end machines Pakistan is dependent on imports. 

Pakistan's textile and clothing industry expects better sales opportunities abroad in the next few years, particularly with the European Union. Early 2014 Pakistan has received from the EU the GSP Plus status (Generalized System of Preferences) that allows the country to supply goods at a lower rate of duty or even with a completely duty exempt in the EU. Particularly the textile and clothing industry benefits from the agreement, as the sector provides almost 80% of Pakistan's exports to the EU. The government even hopes on additional exports for the sector worth USD 1 billion per year.

Following the latest available trade figures, Pakistan increased in 2014, the year in which the GSP Plus agreement came into force, its total exports of clothing by almost 10% to around USD 5 billion. Official figures of exports to the EU are not available. According to the foreign trade statistics, in any case exports to Germany have increased in clothing by 13% to almost USD 500 million, in textiles by 18% to USD 434 million and in footwear by 27% to USD 34 million.

Source: UN Comtrade

Demand for textile machinery rises
Market observers anticipate increased investments in machinery. A particular dynamic effort is expected in the demand for textile printing machines, dyeing machines, tenter frames and other finishing techniques. Positive for the investment climate will be the effect of the expected increase in textile exports to the EU and the improvement of the security situation. In recent years power shortages and a precarious security situation have inhibited the production and investment activity.

The market for textile machinery (SITC 724) grew significantly since 2014. In the country itself only relatively simple machines are being manufactured. High-end equipment is mostly imported. The import of textile machinery rose to USD 585 million in 2014, an increase of 17% compared to 2013.

*) SITC 724, including pieces
Source: UN Comtrade

*) SITC 724, including pieces

Investments urgently needed
Competition from PR China, Bangladesh, India and Sri Lanka has intensified. Pakistan's textile industry needs to modernize and upgrade, to increase its productivity and the added value. Pakistan covers the entire value chain from fiber preparation from to the end product. Despite this well-position predominantly simple products are being produced. Only an estimated 40 companies are vertically integrated and cover the entire textile processing.
With an annual harvest of about 13 million bales Pakistan is the world's fourth largest cotton producer. In addition about 600.000 tons of synthetic fibers are being manufactured in the country. According to reports there are 21 manufacturers of filament yarn with a capacity of 100.000 t; the production is supported by a PTA plant with a capacity of 500.000 t.

Sources: Pakistan Bureau of Statistics; TMA - Towel Manufacturers Association

Yarn production has lost competitiveness
According to sector experts In the past decade yarn manufacturers made no larger investments to upgrade their production, although money would have been available for such investments.  The reason for that should have been the heavy competition from China, India and Bangladesch.  Ten years ago Pakistan used to be one of the most efficient yarn manufacturers worldwide. Because modernization investments failed to materialize, this technique applies as outdated in Pakistan today.

The companies complain about high production costs and are demanding more favorable electricity tariffs and protectionist measures against import competition. A negative effect on the production and the investment climate in the country also have the electricity shortages and the tense security Situation.

The textile sector in Pakistan is characterized by numerous large textile companies with quite a large number of small businesses opposite which mostly belong to the so-called informal sector. The informal sector, for example, includes small family companies or small productions, which are not taxable. The informal sector produces mainly simple products for the domestic market. It works with discarded equipment of the larger companies, imported used machinery or cheap equipment from China. The official statistics do not take the informal sector into account.

• Fiber Production for the first Time in five Years lower than Consumption

Observers doubt the Success of the planned Measures / Ambitions in the Automotive Industry

Nairobi (gtai) - The countries of the East African Community will prohibit the import of used clothing and used shoes in three years. Long since defunct textile and clothing industries so revived. It is also planned to impede the import of used cars, in order to promote a local car assemblers. In particular, the Ugandan President Yoweri Museveni dreams of building its own car industry.

The East African Community (EAC), who is also Kenya, Tanzania, Rwanda and Burundi belong alongside Uganda, other countries serve as role models. So to have led to building lively textile industries in Ghana, Egypt, Ethiopia, India and Vietnam, such a ban.

Used clothing is very popular East Africa. With luck, you can get hold of well-preserved Western European branded goods or shoe sizes, as they are locally not available for little money. Many teenagers from expensive villas suburbs of capitals makes a kick out, used T-shirts to buy exotic printing at prices equivalent to 0.45 euros. Thanks to the second-hand imports contribute even male slum dwellers naturally a western suit and girls or young women from a wide array chic western clothes.

1) Primarily apparently used clothing, blankets and kitchen linen of textile materials and shoes that are loose presented in bulk or bales. 2) provisionally
Source: Destatis

Politicians promise hundreds of thousands of new jobs
While East African politicians boast of being able to create in this way hundreds of thousands of jobs, incite economists from: "The reasons why people in East Africa are happy to buy used clothes easily enumerated," said Scolastica Odhiambo, an economics professor at the Kenyan Maseno University: "It is less expensive, of good quality and provides diversity." The regional textile industry have meanwhile not have the capacity to meet the demand. In addition, they do not produce quality  in the eyes of the local population. The only local manufacturer of shoes, meanwhile, the company Bata that however mainly produces shoes for students and a local SME. In the upper price segment Bata, however, is dependent on imports.

In a period of three years, it is the opinion of observers simply impossible to expand the local textile industry so that it can meet the demand both quantitatively and qualitatively. This time is also too short to find alternative employment for hundreds of thousands of second-hand clothes dealer who live with their families from the Mitumba business (Mitumba = bales).

Industrial decline since the 1980s
If the East African states really want to try willing to build a powerful textile industry, they would almost from scratch start. The East African cotton production was mid- 1980 even at the height. Tanzania had  then 700,000 bales (à 185 kg) produces cotton, reports the weekly "The East African", Uganda and Kenya 400,000 100,000. Then it was just gone downhill. Kenya had last only 25,000 bales (2014), Uganda 150,000 bales (2015) and Tanzania produced 30,000 bales (2014).

East African textile factories and Entkörnungswerke for cotton (ginneries) have shut down or run down for the most part. The main reasons included industry experts, a lack of organization of the agricultural sector, high production costs, the inadequate use of quality inputs and over-reliance on a rain irrigation. Then in 1991 came yet added the liberalization of the sector: Cheap Used clothes conquered henceforth
the market.

Uniforms instead of fashion chic?
How difficult is the situation, be seen using the example of single Rwandan textile factory L'Usine Textile du Rwanda (UTEXRWA). 1984 began its operation,the 75-million-US $ - Investment. But for an average Rwandans were and are the products simply too expensive. Finally, the utilization was only at 20%, sales fell to an estimated $ 2 million to 3 million US. Almost all substances are already imported: cotton
fabrics from the East African neighbors, polyester materials from South Africa, Taiwan, Korea and Indonesia (Rep.).

To prevent the utter collapse of the company, the Rwandan government will soon raise the import tariffs on clothing gradually from 35% to 100%. Rwandan clothing retailers see the highly critical: UTEXRWA could neither quantity nor quality and certainly not fashionable Chic deliver, not now and not in ten years. Over military and school uniforms are not there, they say.

Prohibitions instead of better frame conditions
Foreign observers speak of a typical East African policy Quick shot: Because the governments want to defuse the ticking time bomb of rapidly rising unemployment, they sat on activism without the  consequences to sufficiently discuss. If East Africa wants to strengthen its industry, it must improve the framework. Bureaucracy, corruption, nepotism and monopolies are the ones that prevent the development of competitive industries for decades.

The winner of the new policy is expected to - be the PRC, which is expected to fill along with other low-cost producers, the expected supply vacuum - again. Clothing stores in the Ethiopian capital Addis Ababa to show where we are headed: The cheapest Chinese commodity, wherever you look. The new Ethiopian textile and footwear industry is meanwhile mainly from Chinese companies which produce exclusively for export. to copy this model to other East African countries, however, is likely to fail, say industry insiders. Kenya and Tanzania are far too expensive, not to mention the landlocked countries of Uganda, Burundi and Rwanda throughout.

*) provisional; Quelle: Destatis

Protectionism to promote motor vehicle industry
Even more questionable than the East African textile policy is rekindled desire to raise its own automotive industry launched. Hopefuls nationalist politicians in Kenya is the "Mobius", an all-terrain vehicle primitive, which is equipped with a small engine from the Nissan NP200 pick-up truck. Students of Uganda Makerere University have meanwhile introduced with the help of the US Massachusetts Institute of
Technology two concept studies, the "Kiira EV Smak Car" and "Kayoola Solar Bus". While the Kenyan "development" is reminiscent of the technical status of the 2nd World War, set the Ugandan vehicles
conscious on renewable energy.

Although these backyard experiments also not likely to have the lowest commercial opportunities, they nevertheless serve currently as an excuse for protectionist import barriers, which resulted in imports are likely to be more difficult in favor of a local assembly of CKD kits.

• Vietnam is largest beneficiary
• Relocation closer to sales markets

Hong Kong (gtai) - For global consumer product manufacturers, Asia has developed an important role as a procurement region. Large parts of production have been displaced in recent decades into the region and here traditionally mainly to China. The rising costs in China however lead to a strategy adjustment. Thus the production moved on to cheaper locations and a shift back closer to the end customer began. Free trade arrangements support this trend.

Labor costs in China will not move down again. Even when the economic growth increasingly weakens, China's coastal regions are already often too expensive for wage-intensive productions. The world's largest location of the manufacturing sector will anyway leave its dependence of exports and will generate more growth through domestic consumption. The remaining companies are therefore increasingly focused on Chinese customers. Has the textile industry heard the signals already several years ago and shifted away, now the electronics companies have started to search.

But – the relocation of production is not so easy, the experts agreed upon at the discussion panel Shifting Supply Chains in Asia on the Asian Financial Forum (AFF) in Hong Kong. Because no country, except India, offers such a workforce. But neither the infrastructure and the investment climate can match, nor the country has any interest in low-production stages. Furthermore China has set up a supply industry without any comparison.

Relocation trends slow down

Even Bangladesh, established for a long time as a cheap location for clothes, is losing its attractiveness - experts say. Besides fundamentally difficult production conditions especially scandals like collapsing factories are responsible. No western clothing manufacturer likes to be associated with that repute today. While Indonesia was generally judged for being rather little investment friendly, the Philippines would provide a better reputation than years ago. So in addition to numerous Japanese producers also German companies have moved from southern China to the special areas of the Philippines.

Due to wage cost increases by an average of 15% per year, China with it’s the low-wage area has catapulted itself in a large extent out of the market. In times of rising productivity this was compensated for a while but at last the model came to its limits. The empire of the middle will therefore make the leap to a consumptionbased growth based on production of high-tech and on the provision of services. It is still
unclear whether this leap across the "middleincome trap" will succeed. Many emerging countries are caught in this trap, and the growth is flagging.

German buyers order less in China

Accordingly German retailers are increasingly reducing their imports from China and buy more and more in other countries. This is the result of a member survey of the Foreign Trade Association of German Retailers (AVE), at which for the most part textile and shoe retailers participated. 80% of the respondents have already reduced their import volume from China in 2015, 90% of the companies said they are
planning to source from other supply regions. The merchants are seeing a shift to countries like Myanmar (78%), Bangladesh (67%) and Vietnam (56%).

Vietnam, which already benefited in recent years from the relocation, was still recommended on the AFF as a top location. The country with the highest economic growth in Southeast Asia in 2015 would have risen in the 1st half of 2015 to the fourth-largest exporter of textiles, the Vietnam National Textile and Garment Group (Vinatex) analyzed. For shoes it is already the third largest supplier worldwide. Based on mega investments from Samsung, now the electronics industry came out of the starting blocks and should attract more activities. Experts cite especially the mixture of young, growing populations with low labor costs as an important locational advantage.

Vietnam benefits from Free Trade Agreements (FTA)

A thrust Vietnam's attractiveness currently receives through free trade agreements which are in a final stage. So a free trade agreement with the European Union was signed in December 2015 which was followed early February 2016 by the Trans Pacific Partnership (TPP). The latter agreement, which includes next to ten other Pacific neighbors the United States, should bring a large benefit for Vietnam. For the Vietnamese consumer goods manufacturers the US is the most important market, the large retailers in the United States can move their procurements very fast.

As an underdeveloped member Vietnam is likely to get larger portions of the value chain in the textile and electronics area at the ratification (and even before). The country is still missing a developed supplier structure. This is just happening to be built in the textile sector, there are investments in capacity for yarns, fabrics and dyeing going on. For Samsung, the largest foreign investor, all components are still coming
from China. And only when a large proportion of the added value comes from TPP member states, the low duty will become applicable.

While the purchasing power is not quite so big in Europe, costs play an important role also there. But next to it the control of the supply chain and the flexibility has developed a greater role, rapid changes of trends and collections are determined by customers and the Internet. Therefore also here a shift back, closer to the markets, has begun. Romania and Bulgaria have established themselves in the middle of
Europe as a "low-wage locations". But even there the population is characterized by aging. Accordingly labor forces will become scare and wages will rise. Ukraine is traded as a new location.

Africa still with small potential

Little potential the experts from the Supply Chain Panels evidence the location of sub-Saharan Africa. This was tested by some buyers or producers, but the results would not be convincing. The views however diverge. Some Chinese companies are already partly on site and American manufacturers are monitoring the further development. So, for example, the VF Corporation, the largest denim retailer in the world, is buying in Africa. Only Ethiopia would have potential - according to a representative. But the infrastructure, investment climate and working morale could not be comparable.

So - basically serious alternatives to the established locations are lacking. Therefore, due to the scarcity of labor, costs and thus the final prices will rise. Even in Vietnam the minimum wage increased by 15% in 2015. But when it will be hardly possible to turn at the purchase screw, the companies need to position themselves better in marketing and sales, so a large clothing buyer. Therefore social media must be used in order to come closer to the customer and, for example, to develop individualization as a selling point.

Source: McKinsey survey of chief purchasing managers

• Creating local branding
• Gradual relocation towards abroad

Beijing (gtai) - Away from cheap mass production or relocation are the alternatives for the Chinese textile and clothing industry. A domestic "Go-West" does probably not pay off in the long term, the migration however to Southeast Asia has already started. At the same time German quality suppliers expect new sales opportunities if the companies strengthen their competitive position through more quality. This became clear at the last "Intertextile" October 2015 in Shanghai.

The Chinese textile and clothing industry is under massive pressure of costs. Away from cheap mass production or relocation is the need of the hour. Until now the industry is primarily located at the Pearl River and the attached Yangtze River Delta, where wages on average are the highest nationwide. According to the China National Garment Association (CNGA) about 70% of the production volume account for the five provinces of Shandong, Jiangsu, Zhejiang, Fujian and Guangdong.

Supported by the policy is the move to the more favorable central and western provinces. This happens not least to the preservation of local jobs and the development of the far less booming regions of the country. In this sense not only the CNGA endorses the relocation of clothing manufacturers to Xinjiang. In the western province 30% of the cotton of the country is grown, which with 6.2 million tons in 2014 is the largest cotton producing area in the world. After association investments the authorities are planning investments amounting to USD 3.2 billion, amongst other things for the establishment of "Textile Industry Parks".

Another attempt to shift the Chinese textile industry from the coast to the west, represents the Ningxia Ecological Rextile Industrial Demonstration Park, which was opened in December 2014. According to China.org.cn by 2020 here about 50,000 people work should be working there in the textile industry.

"Go West" is not attractive for private textile and clothing companies

To which extent these efforts will be successful remains to be seen. However, said by a Chinese businesswoman, "Go West" at best will be a medium-term solution, because also there sooner or later the wages would rise (not to mention the already there noticeable higher logistics and other costs). If to move, then only to permanently cheaper overseas locations. A migration to Vietnam, Bangladesh or Cambodia is already going on. But the fact is that so far a large displacement wave - at home or abroad - has not yet happened.

That Vietnam and Bangladesh have climbed in a few years to the third and fourth place of the main source countries for the PRC in terms of clothing (Vietnam: USD 587.5 million, Bangladesh: USD 364,7 each in the first ten months of 2015 for HS-Pos. 61 and 62), results very predominantly on already shifted production capacities of Chinese manufacturers. They bring their products from there back to China to sell them here.

Vietnam as a manufacturing site should also gain in the course of the in October 2015 successfully completed negotiations for the Trans-Pacific Partnership (TPP) trade agreement between the US and Vietnam in importance for Chinese enterprises. After coming into effect exports from Vietnam to the United States will be duty-free. In November 2015 for example was to read in China Daily, the Huafeng Co. of Shandong would be planning to build a textile mill in the Southeast Asian neighboring country with an investment of 700 million Renminbi (RMB - approximately 110 million USD, 1 USD= 0,157 RMB, the average rate as of November 2015).

Cambodia does not play in the foremost league yet, but pushes with power forward: During the named period, imports of knitted and crocheted clothing rose by 38.1% to USD 124.8 million (HS-Pos. 61) and other clothes (HS-Pos. 62) by 18.4% to USD 32.3 million.

However, for the relocation certain limits are set as the target countries often reach their capacity limits. Considered has to be the in China existing extremely advantageous integration of the various stages from cotton growing over the wide textile processing up to the final cutting and sewing of clothing.

Superiority in quality rather than relocation

Instead on a further relocation innovative companies and designers rely on an upgrading of their products. The aim is to serve more demanding customers in the Chinese market - and to position themselves abroad. To these belongs the fashion designer Ma Ke, who designs clothes for China's First Lady Peng Liyuan, or Guo Pei, who caused stir with her creation for the singer Rihanna at the Met Gala 2015 in New York.

Apart from individual stars of the scene also increasingly large companies such as the down jacket specialist Bosideng or the men’s wear designer Mark Fairwhale and Ningbo PeaceBird move away from pure volume production towards brand building and quality. Bosideng has even opened its own flagship store in London. The awareness of important Chinese brands such Heilan Home or Metersbonwe is still limited to local customers, for the majority of European buyers they are not a concept. But according to sector insiders this is likely to change, step by step.

Source: China Daily based on Euromonitor

For German suppliers in terms of top materials (usually the most expensive materials), accessories (such as interlinings, buttons, thread, packaging) or also in cutting and sewing, China remains interesting. This was demonstrated once again at the last "Intertextile" in October 2015 Shanghai.

Two opposing trends are apparent: On the one hand exhibitors reported about a shift in demand to other countries in the wake of rising wages and ancillary wage costs. On the other hand suppliers of more expensive products can now look and hope beyond of inexpensive mass markets to the emergence of new niches, so a producer of woven-real hair fur materials. A provider of real horn buttons thinks similar.

The next "Intertextile" with a German pavilion takes place from October 11th to 13th 2016 in Shanghai ("Intertextile Shanghai Apparel Fabrics Autumn Edition"; information under www.auma.de or www.intertextile.com.cn).

Generally exhibitors recommend for risk diversification to build a second pillar next to the site in China. "The caravan moves on," is said. Currently the lowest wages for garment workers are being paid in Bangladesh, the country also benefits from duty-free agreements for imports into the EU. The latter also applies for Cambodia. Also very competitive the seamstresses are working in Vietnam and India. Moreover, Africa (specifically for example Ethiopia) will play an important future role, also a production facility in Korea (Dem.) is not outrageous for Chinese textile companies.

In general free trade agreements should get considerably more weight in future, as this is the case today.