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12.01.2021

East German Textile and Clothing Industry recorded a significant Drop in Sales in 2020

  • vti calls on health textiles purchasers to place more orders with domestic manufacturers
  • East German textile and clothing industry faces the Covid-19 crises with new ideas and products
  • Clothing sector more affected than the textile sector

The Association of the North-East German Textile and Clothing Industry (vti) calls on decision-makers in politics and authorities as well as in clinics and long-term care to order far more health protection textiles from local manufacturers than before. "That would be a logical step towards future-oriented, sustainable business - and furthermore in an exceptionally tough crisis situation. We are happy to arrange appropriate contacts with our companies," emphasized Dr.-Ing. Jenz Otto, Managing Director of the Chemnitz-based industry association, during an online press conference on January 8, 2021.

  • vti calls on health textiles purchasers to place more orders with domestic manufacturers
  • East German textile and clothing industry faces the Covid-19 crises with new ideas and products
  • Clothing sector more affected than the textile sector

The Association of the North-East German Textile and Clothing Industry (vti) calls on decision-makers in politics and authorities as well as in clinics and long-term care to order far more health protection textiles from local manufacturers than before. "That would be a logical step towards future-oriented, sustainable business - and furthermore in an exceptionally tough crisis situation. We are happy to arrange appropriate contacts with our companies," emphasized Dr.-Ing. Jenz Otto, Managing Director of the Chemnitz-based industry association, during an online press conference on January 8, 2021. “We don't understand the buying resistance concerning health textiles, even though the demand is huge. It is just as incomprehensible why there are still no noteworthy orders from authorities. In spring, the German federal government had already announced to provide 1 billion Euro with its economic stimulus package for national epidemic reserves for personal protective equipment. The federal states also had to take action in this regard and stock up. We urgently await the long-announced tenders for equipping the pandemic reserve stock. It is important that the purchase price is not the only measure of all things. Rather, criteria such as standard-compliant quality, traceable supply chains, the possibility of needs-based reorders and the multiple use of textiles are decisive for the safety of the population.”

When supply chains worldwide collapsed at the beginning of 2020, both authorities and many care and health facilities turned to textile companies for help. Many manufacturers launched both everyday masks and protective textiles that could be used in healthcare at short notice.
"These include highly effective bacteria and virus-repellent reusable products that enable effective textile management in the healthcare sector and at the same time prevent the piles of single-use waste from growing there," explained vti chairman Thomas Lindner, managing director of Strumpfwerk Lindner GmbH, Hohenstein-Ernstthal: “When the cheap imports from Asia reinstated, however, the interest decreased significantly. Nevertheless, numerous companies have continued to invest in new technology and aligned their production accordingly. For example, completely new production lines of face masks have been set up at several locations. Do not forget: The very expensive test procedures for medical and health textiles are a major challenge for us, the medium-sized businesses. In addition, there are still too few accredited test and certification bodies in Germany.” The fact that the companies were able to adapt to the new requirements at this rapid pace was primarily possible, because around 30 local companies and research institutes have been part of the health textiles network "health.textil", which is controlled by the vti and supported by the Free State of Saxony, for several years now. This alliance cooperates closely with practice partners such as the University Clinic of Dresden and the Elbland Clinics in Meißen. Nowadays it has expanded their activities to their neighbouring industry, research and application partner in Czech Republic. www.healthtextil.de

CO2 taxation puts medium-sized companies at a competitive disadvantage
Concerning the permanently relevant topic energy transition in Germany, vti General Manager Dr.-Ing. Jenz Otto points out that the economic framework conditions for medium-sized producers will continue to worsen with the introduction of the CO2 taxation in the midst of the current crisis. “The financial resources to be used for this will then be lacking for investments in innovative products and environmentally friendly manufacturing processes. Furthermore, our companies suffer significant competitive disadvantages compared to foreign competitors.” Björn-Olaf Dröge, managing director of the textile finishing company pro4tex GmbH, Niederfrohna, with around 100 employees, reported that the tax to be paid by his company for renewable energies adds up to around a quarter of a million euros annually. “Now the CO2 taxation for our natural gas consumption comes on top of that. For 2021 we anticipate an additional burden of almost 70,000 Euros.”

vti about the current situation in the East German industry
The East German textile and clothing industry recorded a significant loss in sales already in 2019. This trend has continued in 2020 being reinforced by the Covid-19 crises. Based on preliminary estimates, the vti assumes that the total turnover of the industry will be more than 11 percent below the previous year at the end of 2020, where the clothing sector is affected far more than the textile sector, with a decline of 35 percent. Exports, which are extremely important for the industry, also decreased in a similar magnitude. The job cuts have so far been relatively moderate, as many companies use the short-time working regulations and try to retain their permanent workforce. For 2021 the vti sees a gleam of hope in technical textiles, which have been in greater demand again in recent weeks - especially from the automotive industry. The employment cuts have so far been relatively moderate, as many companies use short-time working regulations and try to retain their permanent workforce. The vti sees a bright future for technical textiles in 2021, which have been in greater demand – especially in the automobile industry – in the last few weeks.

Of the around 16,000 employees, 12,000 work in Saxony and 2,500 in Thuringia. This makes this region one of the four largest German textile locations, along North Rhine-Westphalia, Baden-Württemberg and Bavaria. It has modern spinning mills, weaving mills, knitting mills, warp knitting mills, nonwovens manufacturers, embroidery mills, finishing companies and clothing manufacturers as well as efficient research and educational institutions. 

Over half of the turnover in the East German textile and clothing industry has so far been attributa-ble to technical textiles, followed by home textiles with around 30 percent and the clothing sector with around 10 percent. The vti acts as a stakeholder at state, federal and EU level, tariff- and so-cial partner, as well as a service provider for its around 160 member companies.

(c) Claudia Bitzer
05.01.2021

Telling good Stories - PR Challenges of the medium-sized Textile Industry

Interview with Claudia Bitzer, Owner Bitzer PR, Albstadt

The past year was not only a big economic challenge for many companies, but also in terms of communication - whether in advertising or in PR topics - new ground had to be broken. Contact restrictions up to a strict lockdown, the cancellation of many trade fairs, congresses or other event formats made it necessary to rethink.

Textination discussed it with Claudia Bitzer, owner of the PR agency of the same name in Albstadt, Baden-Württemberg. Her customers include medium-sized companies from the textile and clothing industry as well as machinery manufacturers, public clients and the media.

Interview with Claudia Bitzer, Owner Bitzer PR, Albstadt

The past year was not only a big economic challenge for many companies, but also in terms of communication - whether in advertising or in PR topics - new ground had to be broken. Contact restrictions up to a strict lockdown, the cancellation of many trade fairs, congresses or other event formats made it necessary to rethink.

Textination discussed it with Claudia Bitzer, owner of the PR agency of the same name in Albstadt, Baden-Württemberg. Her customers include medium-sized companies from the textile and clothing industry as well as machinery manufacturers, public clients and the media.

With your PR agency based in Albstadt, you have also been busy in the textile industry for a good 5 years. If you had to introduce yourself in 100 words to someone who doesn't know you: Why did you decide to become your own boss after working for an agency, and what distinguishes your work?
Actually, self-employment gave me a call: An acquaintance suggested that I take over the communication for his employer, a textile machine manufacturer in the Alb, as a freelancer. When I was on the phone, I had our ten-day-old son in my arms. I was also a PR consultant at Ketchum in Stuttgart. Because I was curious, I got to grips with the matter over the next few months. With success: The textile machines have turned out to be surprisingly tangible products, after all, they make the clothes that we wear on our bodies every day. From this my access to the textile industry developed, which I would call my home base today.

Because I serve various companies along the textile chain, I have an overall view of the industry and can offer overarching stories with different perspectives. I also have a weakness for complex, "dusty" topics, regardless of the industry. I can delve in them with devotion in order to present them vividly. That's why I would call myself a content specialist.

In addition to German, English, Spanish and French, you speak Swabian fluently. Why is it important to have regional roots when you work for export-oriented companies in the textile industry in Baden-Württemberg?
You got that about fluent Swabian from my website, right? (Laughs) But yes, it is very helpful if you can feel whether "gschwind" – Swabian for “pretty fast” - tolerates a delay or has to be dealt with immediately.

I think the Swabian is really important in terms of the mentality behind it. I grew up in the Alb, my father ran a medium-sized company of his own. I understand many things without a customer having to explain them to me.

For example, modesty in relation to one's own person. Especially in long-established family businesses, the owners play an important role. They bear a great responsibility, both in the company and at their location. Nevertheless, the focus is always on the entrepreneurial performance, the product that, manufactured somewhere in the Swabian province, can keep up with the German, European or global competition. That doesn't happen by itself, but requires courage, entrepreneurial spirit and a great deal of openness to new things, and that fascinates me. I also often notice that by the passion, that these leading family businesses bring with them, I am carried away.

Breaking new ground means being willing to make decisions, overcoming fears - and thus also having the courage to fail. Not every project can succeed. In retrospect, which entrepreneurial decision are you particularly glad to have made?
Apart from being self-employed? The first corona lockdown with home schooling and closed daycare centers was a big challenge. On the one hand, I was relieved that it became quieter on the customer side between the end of March and the beginning of June, otherwise it would not have been feasible either professionally or in terms of family. On the other hand, this silence scared me and I often asked myself whether self-employment was the right way to go.

In early summer, when the situation on all sides had stabilized somewhat, I tackled the problem head on: I looked for co-working spaces and took extensive further training in online marketing. Being honest, of course, these were business decisions. Fortunately, they are already paying off, even if I may sit alone in the office for now.

Is there any work you are particularly proud of? Which story moved you beyond normal and which thematic challenges do you love?
One project that I fondly remember is the communication referring to a repdigit anniversary one of my clients was celebrating. For this, I first put 111 years of the company’s history down on paper in weeks, no, months of archive work. Because I had delved so deeply into the subject, I came up with many ideas for the messages of the anniversary celebration. Fortunately, the client was quickly convinced. At some point we had a signet, a slogan and a really good story for the anniversary. Incidentally, we still benefit from the numerous proof points we worked out for the occasion in our product and corporate communications today.

In addition, the project has naturally deepened the relationship with this client. I also work closely with the advertising agency that accompanied the anniversary communication. I consider such long-term partnerships as a great asset.

Have the messages you want or need to communicate for your clients changed in Corona times? And what was the focus of your work in 2020?
Unsurprisingly, the focus of work in 2020 was on online communication. For almost all of my customers we will start planning and implementing new measures in this area in the coming year.

As for the messages, little has altered. This is certainly due to the fact that the meta-topics have remained the same. Take sustainability, definitely a long-running favorite in the textile industry, and the sub-topic regionality. In contrast to previous crises, the Corona pandemic has not sidelined these approaches, but intensified them because it has shown us how dependent we are on production abroad. The same applies to the issues of transparency and quality.

Precisely because the themes have stayed the same, the crucial part for me is to find a unique story within these permanent themes so as not to disappear into the big river. That requires empathy, creativity - and a good portion of diligence.

Moving away from the simple advertising message to storytelling - what recommendation would you give medium-sized companies in general regarding their communication for the coming year? Are there any special features that the textile industry in particular should consider?
I think that will go in the direction of "We are still there, and even stronger than before". After all, the crisis demanded a lot from everyone. But it is always a productive phase, because when it comes to a head, it forces us to develop further that otherwise would not have been initiated or at least would have been initiated later. Therefore, it can represent a turning point, definitely for the better.

Take digitization, which is the most obvious approach: the crisis has given rise to a boost in this area; the online shop was or is to be expanded, the service is to become more digital.

Apart from that, there are certain individual changes in every company that the crisis has brought about. You can have the courage to name and tell them, because these are stories that interest everyone.

Goodbye Facebook - good morning TikTok. Which social media platforms do you recommend to your clients and under what conditions should medium-sized companies get involved?
TikTok has so far been more of a topic that I discuss with my daughter, who is almost 12 years old. But seriously: I recently read in a study published by Hootsuite that at the beginning of 2020, less than ten percent of Germans were using TikTok. On Facebook, the user share is still over 60 percent. For that reason alone, we shouldn't simply dismiss Facebook.

When I discuss the topic of social media with my clients, it is important for me not to think from the channels. Sure, it's tempting, but other questions should be asked at the beginning: What is the long-term goal of the social media activities? What resources are available - and what budgets? By now it is well known that social media is an extensive field of activity in its own right, which ties up corresponding resources. In medium-sized businesses, where I rarely have access to a multi-headed marketing team, a solid strategy is the be-all and end-all. It must be very, very clear which target groups are to be addressed. Then I can talk about channels and choose the most important ones. This almost certainly includes LinkedIn and Xing, as well as Instagram and Facebook, the latter especially in an international environment. By the way, the evaluation is just as important, it tends to fall behind. The relationship between measured values and corporate goals is anything but trivial.

Trade fairs, events, press conferences and meetings - these have almost completely fallen by the wayside in 2020. How important do you consider face-to-face communication to be in the long term, and which channels and measures do you recommend to your customers to compensate for these losses?
Face-to-face contact remains important! Of course, we all realised last year that not every event has to be a face-to-face event. A video conference saves time and money and, with the right discipline, can be just as effective as a face-to-face meeting. Many service cases can also be solved by video telephony, no one has to travel around. I am therefore convinced that we will not return to the meeting in person culture we had before Corona, even if this will be possible again at some point.

That's why I advise my clients to take advantage of the digital opportunities that are opening up everywhere. At the moment, everyone is still a beginner, you can only learn. Take virtual trade fairs: This is a fundamentally different approach than the classic presence fair. There is no need for a large trade fair team that is ready from 6 a.m. to 8 p.m. There are no press appointments either. It is much more important to contact the visitors directly, i.e., to collect leads, to group the visitors and to stay in touch with them after the event by providing them with tailor-made content. Speaking of content: at the latest with such online events, it becomes clear how diverse content must be prepared. To pick up customers in the virtual space, you need graphics, videos, animations and much more.

Nevertheless, it will not work without direct, physical contact. I remain convinced that people buy from people. Video conferences work particularly well when the participants already know each other from real life. And the textile industry in particular thrives on haptics. I can never feel a yarn or a fabric digitally. Nor can I feel the production speed of a machine. With every revolution there is a slight breeze. You can't get that digitally.

 

The interview was conducted by Ines Chucholowius, CEO Textination GmbH

(c) Messe Frankfurt Exhibition GmbH
22.12.2020

Decade of Action: Texpertise Network launches further measures to implement the Sustainable Development Goals

Since 2019, the Messe Frankfurt Texpertise Network has been working with the Conscious Fashion Campaign and the United Nations Office for Partnerships to bring the Sustainable Development Goals to all 58 textile events in the network worldwide. Numerous measures have already been implemented. Others are imminent.

Shortly before the start of the COVID-19 crisis, the UN Secretary-General Antonio Gutérrez hailed the start of the Decade of Action. As of 2020, the international community now has just ten years to achieve the 17 Sustainable Development Goals (SDGs) to which the UN Member States committed themselves in the 2030 Agenda. As part of the collaboration with the Conscious Fashion Campaign and the United Nations Office for Partnerships, the Messe Frankfurt Texpertise Network will put the SDGs on the agenda of additional events in December, thus further supporting their implementation in the fashion and textile industry.

Since 2019, the Messe Frankfurt Texpertise Network has been working with the Conscious Fashion Campaign and the United Nations Office for Partnerships to bring the Sustainable Development Goals to all 58 textile events in the network worldwide. Numerous measures have already been implemented. Others are imminent.

Shortly before the start of the COVID-19 crisis, the UN Secretary-General Antonio Gutérrez hailed the start of the Decade of Action. As of 2020, the international community now has just ten years to achieve the 17 Sustainable Development Goals (SDGs) to which the UN Member States committed themselves in the 2030 Agenda. As part of the collaboration with the Conscious Fashion Campaign and the United Nations Office for Partnerships, the Messe Frankfurt Texpertise Network will put the SDGs on the agenda of additional events in December, thus further supporting their implementation in the fashion and textile industry.

Virtual event “Discover the SDGs – To Power the Decade of Action”
From 1-30 December 2020, the Texpertise Network is taking part in the virtual learning experience “Discover the SDGs”, which was initiated by the Conscious Fashion Campaign in collaboration with the United Nations Office for Partnerships. The aim of the event is to strengthen the knowledge and commitment within the fashion industry that is needed to further support the Decade of Action to deliver the Sustainable Development Goals. One component of the event is a virtual and interactive exhibition on the 17 goals, as well as on-demand discussions with industry leaders, United Nations representatives and advocates of the United Nations, including Detlef Braun, Member of the Executive Board, and Thimo Schwenzfeier, Director Marketing Communications Textiles and Textile Technologies at Messe Frankfurt, as well as from Kering, Lenzing, Allbirds, Arch and Hook, Artistic Milliners, Orta, ITL, Vogue Business, CFDA, Collina Strada and the Swarovski Foundation.

“This is a critical time to accelerate partnerships to address the world's biggest challenges – from eliminating poverty, hunger and inequalities to reversing climate change and unsustainable consumption and production practices,” said Annemarie Hou, acting Executive Director of the United Nations Office for Partnerships. “The fashion industry is an important ally for the United Nations in this Decade of Action to deliver the SDGs by 2030.”

Conscious Fashion Campaign becomes a presenting partner of Frankfurt Fashion Week
Joining forces to improve the fashion industry: Frankfurt Fashion Week is positioning itself as the host of the future of fashion and actively driving forward the transformation towards a future-oriented, more sustainable fashion and textile industry. All decision-makers looking to instigate this change will be coming together in Frankfurt am Main from 5-9 July 2021. The initiators of Frankfurt Fashion Week – Messe Frankfurt and the Premium Group – have achieved a real coup: Conscious Fashion Campaign, working in collaboration with the United Nations Office for Partnerships, will be the presenting partner. Messe Frankfurt will build on its collaboration with the United Nations Office for Partnerships. The Sustainable Development Goals (SDGs) will be a prerequisite for exhibitors by 2023. And the Frankfurt Fashion SDG Summit by CFC is set to become the leading international conference for sustainability in the fashion world.

Expansion of internal sustainability communication
17 goals, 58 textile events worldwide, around 600,000 visitors and 23,000 exhibitors in 2019: with its global events, the Messe Frankfurt Texpertise Network offers unique reach for supporting the SDGs, even during the corona pandemic. The participating subsidiary companies, sales partners and Messe Frankfurt partners abroad who organise the relevant events play an important role in this. To actively expand knowledge about and further commitment to the Sustainable Development Goals, the Texpertise Network is organising several online seminars, including for staff members in Argentina, Ethiopia, China, Hong Kong, India, Japan, Russia, South Africa and the USA and thus expanding its internal sustainability communication.

SDG actions up to now
Ever since the expanded collaboration between the Messe Frankfurt Texpertise Network, the Conscious Fashion Campaign and the United Nations Office for Partnerships was announced at the UN headquarters in New York in December 2019, the international Messe Frankfurt textile events have implemented numerous measures to support the SDGs.

At the Messe Frankfurt textile events in Germany alone, a number of things came to fruition: the most recent physical and digital editions of Heimtextil, the leading trade fair for home and contract textiles and Neonyt, global hub for fashion, sustainability and innovation, offered panel discussions, press conferences and video messages, including with the Conscious Fashion Campaign and United Nations Office for Partnerships. An SDG Lounge in the Green Village at Heimtextil and selfie walls with the SDGs inspired exhibitors, visitors and influencers alike to engage with the 17 goals and share them on their social network channels. Podcasts were produced that can still be listened to on the Neonyt and Heimtextil channels and Neonyt also hosted e.g. the influencer challenge “Let's wear the goals!”.

A great deal has also already been achieved internationally: in March 2019, Neonyt organised a showcase with selected Neonyt brands to mark the foundation of the “UN Alliance for Sustainable Fashion” in Nairobi. Techtextil India launched Techtextil NEXT at its 2019 edition, India’s first hackathon for technical textiles and sustainability. Among those who attended were Shrikar Dhole, founder and CEO of the SDG Foundation and Niharika Gautam, who campaigns for the achievement of the SDGs in the fashion industry and co-leads the fashion section of the All Ladies League Delhi. The Heimtextil Russia 2020 Digital Edition was able to attract a prominent figure to give a message of greeting, namely Vladimir Kuznetsov, head of the UN Information Centre (UNIC) in Moscow. The digital edition of Texworld USA (now Texworld New York City) and Apparel Sourcing USA in summer 2020 offered a talk by the Conscious Fashion Campaign and supported the production of a podcast with Claire Kells from the UN Global Compact.

With its SDG actions to date, Messe Frankfurt Texpertise Network is estimated to have reached around 146,000 visitors, 170,000 followers on social media channels and 65,000 subscribers to newsletters about participating events at home and abroad. Added to this is also the approx. 2.5 million followers of the influencers involved in the actions.

Photo: Wilhelm-Lorch-Foundation.
11.08.2020

Wilhelm Lorch Foundation: Demand and Support - Qualifying young and up-and-coming Talents

  • Interview with Klaus Kottmeier, Elke Giese, Markus Gotta, Prof. Dr.-Ing. habil. Maike Rabe

In June 1988, the shareholders and management of Deutscher Fachverlag announced the Wilhelm Lorch Foundation to the textile and garment industry. Its purpose is to promote vocational training, including student assistance as well as science and research.

Upon its establishment, the Foundation received an initial endowment of DM 300,000 from Deut-scher Fachverlag. Today, the Foundation has assets of approx. 2,85 m. Euro (as at Dec 2019). Since 1988, the foundation has awarded sponsorship prizes of around EUR 1,933,564 (as of June 2020) to date, in order to fund the initial and further training of young people from all areas of the textile industry, with a particular focus on young and up-and-coming talents.

  • Interview with Klaus Kottmeier, Elke Giese, Markus Gotta, Prof. Dr.-Ing. habil. Maike Rabe

In June 1988, the shareholders and management of Deutscher Fachverlag announced the Wilhelm Lorch Foundation to the textile and garment industry. Its purpose is to promote vocational training, including student assistance as well as science and research.

Upon its establishment, the Foundation received an initial endowment of DM 300,000 from Deut-scher Fachverlag. Today, the Foundation has assets of approx. 2,85 m. Euro (as at Dec 2019). Since 1988, the foundation has awarded sponsorship prizes of around EUR 1,933,564 (as of June 2020) to date, in order to fund the initial and further training of young people from all areas of the textile industry, with a particular focus on young and up-and-coming talents.

Textination talked to the former chairman of the supervisory board of Deutscher Fachverlag GmbH, the current member of the executive board and founding member of the foundation, Klaus Kottmeier, as well as three members of the board of trustees: Mrs. Elke Giese - trend analyst and fashion journalist, Markus Gotta, managing director of Deutscher Fachverlag GmbH, and Prof. Dr.-Ing. habil. Maike Rabe, who will take over the chairmanship of the foundation board on September 1, 2020, about the challenging task of continuing successfully the foundation's work in an environment characterized by the pandemic.

The figure 3 seems to play a very special role for the Wilhelm Lorch Foundation (WLS). In 1988 announced on the occasion of the 30th Forum of the TextilWirtschaft, it was endowed with assets of DM 300,000. 2019 marked the 30th anniversary of the award of the sponsorship prizes. If you had to introduce the WLS in 100 words to someone who does not know the foundation: Which 3 aspects have particularly influenced its development and made it unique?

Klaus Kottmeier: In more than 30 years the WLS has been in existence, the foundation has received great support all over the sector from the very beginning. This continues to this day and is not only reflected in the financial support provided by generous grants, but above all in an active commitment of many sector leaders on the foundation board and board of trustees. A second aspect is the unique range in the topics of the support, which extends across design, business and technology, covering young talents in retail as well as university graduates, but also involving educational institutions themselves. And thirdly, the motivation of so many applicants we experience every year, who prepare their applications with incredible diligence and thus impressively demonstrate their willingness to perform.

 

The name of the foundation is a tribute to Wilhelm Lorch, the publisher and founder of the trade journal Textil-Wirtschaft and thus of Deutscher Fachverlag, who died in 1966. Which of his characteristics and traits do you still see as exemplary for the next generation in our industry today?

Klaus Kottmeier: We are a publishing media house where professional journalism based on sound research always forms the basis. This is associated with classic values such as entrepreneurial courage and will, diligence and discipline, but also a sense of responsibility and team spirit, which were exemplified by our founder and which still form the culture of our company today. These all are qualities young people should take to heart and which, coupled with a passion for their profession, encourage them to continue on their path.

 

According to its statutes, the primary purpose of the foundation is the awarding of "... awards and prizes to graduates of continuation schools of the German retail textile trade, textile-technical training institutes and [...] for final degree or doctoral theses from universities, as far as these deal with textile topics.” How nationally and internationally does the WLS work?

Prof. Maike Rabe: The prizes are mainly awarded to graduates and applicants from Germany and German-speaking countries, but there are also always talents from Europe, who have close ties to the German market.

Markus Gotta: The focus is clearly on the core market of Germany or Germany-Austria-Switzerland respectively, which we cover with the TW - accordingly, we do not advertise internationally, but there is no exclusion for foreign applicants, the only requirement is that the submitted works and reports must be written in German or English.

 

Over the past 31 years in which the foundation has been awarding prizes to people, projects and works, you have met many young talents who have moved our industry or will certainly do so. Are there any unusual stories or special award winners that have remained in your memory? And how do you assess the development of the applicants' educational level over the years?

Elke Giese: The applicants come from very different schools and universities, differing significantly in their profiles and focus. The demands on teaching have grown enormously, especially as a result of increasing digitization. Since the job profiles in the fashion business are also constantly changing and will continue to be subject to major changes in the future, the challenges for schools and students remain very high.
From each year, particularly talented and creative personalities remain in one's memory. To name one, Elisa Paulina Herrmann from Pforzheim, who was twice among the prize winners in 2017 and 2019 with her bachelor's and then master's thesis. Her ability and originality were overwhelming for the board of trustees. She now creates exclusive knitwear collections for Gucci. Among the young men is Niels Holger Wien, who received WLS funding in 1995. He has been the specialist for color trends and zeitgeist of the German Fashion Institute for many years and is currently president of the world's most important color committee INTERCOLOR.

Klaus Kottmeier: There are many award winners who have subsequently made a great career, to name just one example, Dr. Oliver Pabst, current CEO of Mammut Sports Group AG and WLS award winner in 1994.

 

Due to its proximity to TextilWirtschaft, the foundation is primarily associated with fashion design and topics related to clothing production or marketing. In 2020 you have put Smart Textiles in the virtual spotlight with two project sponsorships. How do you see future topics in the field of technical textiles? Can you imagine creating a new focus on that field?

Prof. Maike Rabe: First of all, the WLS supports talented young people who, thanks to their training, can take up a career in the entire textile and clothing industry. Of course, this also includes the field of technical textiles, which is of great importance in terms of production in Germany being a technological leader. Here the boundaries to clothing are fluid, just think of outdoor or sports equipment.    „    

Klaus Kottmeier: Our excellently staffed board of trustees is open to all innovative topics in the industry. Innovations in the field of technical textiles in particular are important topics for the future. In 2017, for example, the sponsorship award went to the Anna-Siemsen-School, a vocational school for textile technology and clothing in Hanover, through which we supported the procurement of a pattern design software.

 

The Wilhelm Lorch Foundation has set itself the goal of supporting qualified young people in the textile and fashion industry. However, you preclude the support for business start-ups. In times, in which start-ups receive increasing attention not only through corresponding TV formats but also through industry associations, there must be reasons for this. What are they and how do you assess future prospects?

Klaus Kottmeier: Support for business start-ups is precluded by §2 of our statutes, which defines the purpose of the foundation. The WLS is exclusively dedicated to the charitable purpose. Support for start-ups and business start-ups would contradict this. We therefore concentrate fully on the further education of young professionals in the sector and the promotion of educational institutions, from which the entire sector benefits.

Prof. Maike Rabe: WLS funding is aimed at further developing the skills of graduates and young talents from the sector. They should receive specific further training, possibly reach a further academic degree, and also learn in an interdisciplinary manner. All of this benefits the sector as a whole and this is our strict objective.


          
The foundation also promotes the training and further education of young and up-and-coming talents who are already working in the textile retail trade. Grants are available to cover course or study fees for further qualification. The closure of shops caused by the lockdown  during the pandemic hit the stationary retail trade hard, and even today we are still miles away from regular business operations. Against this background, how do you see focused funding opportunities for further training in the e-commerce sector?

Markus Gotta: The topics of stationary retail and e-commerce can't really be separated, both have long since become part of the basic requirements in fashion sales and thus also of the topics of training and further education in general.
 
Prof. Maike Rabe: E-commerce has become an integral part of our industry and is naturally reflected in many grants and subsidies. The junior staff members are allowed to make their own suggestions as to where and how they would like to train. We support this. But we would also like to strengthen the connection between stationary and digital trade in particular. Our prize winners have come up with wonderful concepts for both sales channels, and of course they can be combined.

 

Breaking new ground means willingness to make decisions, overcoming fears - and thus courage to fail. Not every project can succeed. In retrospect, which decisions in your foundation work are you particularly happy to have made?

Markus Gotta: That we implemented the Summer School project last year. We broke new ground with the foundation, and this - in cooperation with the Niederrhein University of Applied Sciences - was very successful.

Elke Giese: Especially in the field of design and creation, it is important to recognize an applicant's future creative potential from the work at hand and the information provided by the applicant. I am therefore always particularly pleased when the board of trustees makes courageous and progressive decisions.    

 

The Wilhelm Lorch Foundation offers project funding of € 10,000 to universities and educational institutions. They do not make any thematic restrictions here, but simply demand that there must be a clear reference to the sustainable further training of young up-and-coming talents in the textile and fashion industry. According to which criteria do you finally decide which project will be funded?

Elke Giese: One criterion is the relevance for future developments in the textile and fashion industry. Projects in recent years have enabled schools and educational institutions to train on laser cutters and 3D printers, for example, but also to purchase modern knitting machines or software programs.

Prof. Maike Rabe: All the projects submitted are evaluated very strictly by the jury's experts using a points-based system. This results in a shortlist which is presented to the board of trustees and intensively discussed by them. In this way, we ensure that all submitted applications are honored and that we then award the Wilhelm Lorch Prize to the outstanding project submissions in a joint consensus. The most important criteria are sustainable teaching of innovative learning content, practical training and the feasibility of the submitted project.

 

There are many different definitions of sustainability. Customers expect everything under this term - from climate protection to ecology, from on-site production in the region to the exclusion of child labor etc. Public procurement is increasingly switching to sustainable textiles. What does this mean for WLS, and what are you doing to promote sustainable thinking and acting, not only among young professionals?

Prof. Maike Rabe: At the foundation, we base our definition of "sustainability" on the 1987 report of the United Nations World Commission on Environment and Development, the so-called Brundtland Commission: "Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs". The textile and clothing sector plays a pioneering role as a globally enormously connected industry with complex supply chains, which should definitely also play a model role. We therefore make it a priority for all award winners to observe these criteria and at the same time try to provide a platform for people who, through their work and actions, offer suggestions for improvement or even already implement improvements.

 

Virtual instead of red carpet: Usually the awards are presented in the festive setting of the TextilWirtschaft Forum. In 2020, due to the Covid-19, there was only a digital version in the form of a short film. How important do you consider networking opportunities that arise from meeting influential personalities face-to-face? Or has such a format become obsolete in the age of video conferencing?

Prof. Maike Rabe: It is certainly remarkable what digital event formats can achieve. But one thing doesn't work: spontaneity, personal contact and closeness. Therefor it is a real pity that the Forum had to be cancelled this year due to corona. Especially for career starters, the chance for direct networking is of great value.

Markus Gotta: The need for personal exchange and meetings will continue to be of great importance and demand in the future. And I can say at this point: We are already working on the plans for the TW Forum 2021 as a live and meeting event with the top decision-makers in the sector.

 

In which socially relevant areas do you see a particularly great need for innovation and action during the next five years? What is your assessment that funding - for example from the Wilhelm Lorch Foundation - can provide targeted support for solutions? And what role do the experiences from the corona pandemic play in this assessment?

Prof. Maike Rabe: We don't think in five-year periods, today's world requires much greater agility - this applies to the Foundation as well as to the entire industry. With each award we re-orientate ourselves towards current topics. Topics such as aesthetics, function and innovation will certainly continue to play a major role, as will quality instead of quantity, eco-social justice and customer loyalty. It is also important, however, that our economy, which is strongly supported by medium-sized companies, is clearly perceived by the public and in politics; we still have to work on that.

Klaus Kottmeier: I gladly agree with Prof. Rabe's closing statement. Agility is also of great importance in a media company like ours. We live in a constant transformation process with constant changes that have to be faced. The corona pandemic has shown us very impressively how quickly original plans can become waste. Today, and more than ever before in the future, a constant willingness to change is required, and this applies not only to us but also to our hopeful young employees.
 

The interview was conducted by Ines Chucholowius,
CEO Textination GmbH

GOTTFRIED SCHMIDT OHG (c) Weitblick, Gottfried Schmidt OHG
18.02.2020

WE HAVE OUR PRINCIPLES ... WEITBLICK | GOTTFRIED SCHMIDT OHG

WORKWEAR AS A SUSTAINABLE TEXTILE LOOP!

WEITBLICK | Gottfried Schmidt OHG with about 130 members of staff in Bavaria and more than 1,000 employees in European production plants is one of the leading German textile companies in the workwear and corporate fashion segments. Originally founded 1931 in Frankfurt / Main, the traditional family-owned company, now in its fourth generation, achieves a medium sized eight figure turnover.

Quick decision-making processes, a familiar atmosphere, production exclusively in Europe, customer-specific innovations and comprehensive sustainability concepts - what does the workwear professional do differently than others?

Sales Director Philipp Hartmann (Sales Support and Customer Service) and Janine Gonglach, Head of Marketing, together with Managing Director Felix Blumenauer, responsible for Marketing, Sales, Logistics and Controlling faced the questions of Textination.

WORKWEAR AS A SUSTAINABLE TEXTILE LOOP!

WEITBLICK | Gottfried Schmidt OHG with about 130 members of staff in Bavaria and more than 1,000 employees in European production plants is one of the leading German textile companies in the workwear and corporate fashion segments. Originally founded 1931 in Frankfurt / Main, the traditional family-owned company, now in its fourth generation, achieves a medium sized eight figure turnover.

Quick decision-making processes, a familiar atmosphere, production exclusively in Europe, customer-specific innovations and comprehensive sustainability concepts - what does the workwear professional do differently than others?

Sales Director Philipp Hartmann (Sales Support and Customer Service) and Janine Gonglach, Head of Marketing, together with Managing Director Felix Blumenauer, responsible for Marketing, Sales, Logistics and Controlling faced the questions of Textination.

Gottfried Schmidt OHG, a family company that will celebrate its 90th birthday next year, is considered as a professional when it comes to premium workwear. If you had to introduce yourself in 100 words to someone who doesn't know the company: What makes you unique?
Felix Blumenauer – Managing Director
We are a long-established family company that has reinvented itself again and again over the course of history. In the field of workwear, we stand for the highest quality across a wide range of industry segments and attach great importance to sustainability - this is also shown by our long-standing partners who produce our clothing in Europe. With our state-of-the-art logistics center, we prove that digitization and Industry 4.0 are not just buzzwords for us.   

In which markets and by which partners do you feel particularly challenged? And with which product innovations in the workwear sector do you think you can move the most?
Philipp Hartmann – Sales Director
Markets are changing faster and faster and that is a challenge per se. We want to continue to be reliable today and, in the future, that also means continuity for our partners. But how do we deal with ever new requirements from ever faster moving markets?
Focusing on the customer, we cannot remain in rigid structures. We at WEITBLICK achieve this through our corporate culture and our guidelines: courage, strength and confidence.
This culture holds our team together and this enables us to adapt structures more quickly. Due to our personal contact to our partners and our experience as a fourth-generation family business, we enjoy great trust in all markets and this assists us to make quick adjustments and changes without questioning our DNA.
The basis of our products is the quality of the materials used, the processing by a very well-trained staff in our own European production sites and, first and foremost, a team of experts who controls everything in-house from the fiber and the design idea to production and logistics and bring it all together under one roof. So, if you ask me whether all products will be flashing in the near future, the answer is: no. Our strength is the implementation of our customers' wishes and above all we put the brand, the CI of our customers, in the foreground on the product. Because a satisfied employee in the right workwear is the best business card for a company. So, if it should flash in the clothing in the near future, this is not a problem, but we realize ourselves much more concerned with our customer requirements around the products. Based on quality and sustainability we have been driving very well for a long time.

However, services, speed in logistics, controlling, order configurators and budget management as well as interface management are the actual innovations with which we convince our customers and partners today. For some time now, we have been relying on a team of employees who implements precisely these customer requirements across departments. For example, in addition to our own CI Workwear collection, a customer can also receive a protected customer shop from us, where employees can configure the coordinated collection and order according to a defined budget. The customer's purchasing and controlling departments have live insight into costs and inventories. The dispatch including personalization is RFID-controlled in Germany, picked on the carrier and sent all over the world. Does that sound innovative?

Tailor-made or solution for the major customer? The topic of individualization down to batch size 1 is gaining in importance today. How do you manage the balancing act between major customers and individual production - what does this mean for the processes of Gottfried Schmidt OHG? 
Philipp Hartmann – Sales Director
Why not the tailor-made solution for major and small customers? Until a few years ago, and even today in some cases, a customer’s logo in the colors red, green, blue and white was of course displayed by fabrics of the same color combined in a four-colored scheme. This is more or less a thing of the past. Nowadays, requests for different colors are additionally solved by the possibility of combining many articles. In doing so, we fall back on thousands of active articles of our own developments and a large selection of ingredients, fabrics and finishing options. CI collections can be produced very quickly in small quantities in our state-of-the-art production facilities. In one of our six European production plants, for example, we only manufacture made-to-measure orders from piece 1. This happens within very lean processes and just takes a few weeks.

At the same time, we have large capacities for the storage of our raw materials and a warehouse for prefabricated parts, which enables us to place them into stock for the customer. Companies are aware of the great importance of workwear and the partly missing transparency in processes or costs. Therefore, it is desirable to be able to order small quantities. We have access to dozens of wearer profiles and millions of wearers from almost all sectors and are able to combine this experience with today's requirements. I don't prefer the word "standard", but the fact is that we already offer our customers a wide range of articles and colors to choose from, as we are constantly releasing new collections for various industries. The processes, scrutinized with the possibilities of new tools and systems, are consistently adapted - the other way around. This enables us to work very automatically from small to large orders and thus process orders via our customer online shops or via interfaces with our customers' order portals. Order picking and logistics from piece 1 with the shipping method of your choice are no problem for us, because we have been operating the most modern logistics center in the industry since 2018.

With WEITBLICK you have chosen the look-and-feel of a German-language brand. What prompted you to take this step and what are the consequences for your international sales?
Janine Gonglach – Head of Marketing
The decision was made for WEITBLICK (Engl.: vision, foresightedness) because we always possessed it as a company. Not only the founder Gottfried Schmidt himself had shown vision or foresightedness. Each generation that followed also had and still has visions, that developed the company to what it is today. A company with thought leaders, doers, inventors, critics and perfectionists.
Also, in the future, we will meet the challenge of developing our products and our actions with foresightedness - for the continued existence of the company and for the benefit of our customers.

Philipp Hartmann – Sales Director
We serve a wide range of customers, from craft businesses to large global corporations. So, we have already been internationally active in previous generations. And the name has never been a limitation. Our employees in sales and customer service are trained accordingly, our documents and systems are multilingually available and maintained.

In which socially relevant subject areas do you see a particularly great need for innovation and action during the next 5 years? What is your assessment that your company will be able to offer solutions for this with its products?
Felix Blumenauer – Managing Director

We see a further growing importance of the topic of “sharing”. With our strong partners in professional service, we have been living this idea for many decades and see increasing importance in society. Clothing remains available in a cycle of the highest quality for many years - for us this is the sustainable counter trend to "fast fashion". In this context we offer digital solutions that satisfy our customers and our wearers and convince them, that WEITBLICK is the right choice.

We will act on these fields and consciously set the right accents – that’s how we understand corporate responsibility towards our employees and our customers.

For decades, the textile and clothing industry has been growing steadily worldwide. In terms of sustainability, to put it mildly, there is a rather mixed feedback for our industry. What is the Gottfried Schmidt OHG focusing on in order to meet its social responsibility?
Felix Blumenauer – Managing Director
We have long anchored sustainability in our company as one of the most important priorities in our strategy. This becomes apparent e.g. by the use of Fair-Trade cotton, which we bring to the market in large quantities together with other companies and suppliers in the industry. We think sustainability comprehensively. Each area of our company contributes to the fulfillment of corporate responsibility - towards our customers and our own employees.

There are various definitions for sustainability. Customers expect everything under this term - from climate protection to ecology, from local on-site production to the exclusion of child labor etc. What do you do to bring this term to life for your company and what seals or certifications do you rely on?
Felix Blumenauer – Managing Director
We have the highest standards in the entire supply chain, which we implement together with our partners and monitor closely. This includes fair production conditions in Europe with comparatively short distances, which are guaranteed by the internationally recognized SA 8000 seal. The avoidance of unnecessary packaging material, climate-neutral shipping and the reduction of plastic are also a matter of course for us. For example, we are currently working on using recycled polyester in the future. We are looking forward to the Green Button and want to qualify for this state seal of quality.

At WEITBLICK, you have chosen a consciously young form of communication. Whether Facebook, Instagram, YouTube, Pinterest or relevant business platforms - social media clearly take a central position in your media mix. This is not necessarily standard in the textile rental service. Why did you choose this form of addressing?
Janine Gonglach – Head of Marketing
For us, WEITBLICK - far-sightedness - also means “venturing something new”!
From my point of view, in the digital age, the question for companies is no longer whether social networks should be used or not, but only how and to what extent. With more than 3 billion people who are now represented in social media networks worldwide, we no longer speak of zeitgeist, but of a must-have in the marketing mix. Our communication follows the guiding principle: "We do not conduct a monologue, but an open dialogue at eye level." Social media achieve exactly that! 

Breaking new ground means willingness to make decisions, overcoming fears - and thus courage to fail. Not every project can succeed. In retrospect, which entrepreneurial decision are you particularly happy to have made?
Felix Blumenauer – Managing Director
The transformation of our company. With courage, strength and confidence, we managed to reposition our company almost completely within a very short period of time. This includes the modern umbrella brand WEITBLICK, which for us is also an obligation to our actions. But also, the growth that we have achieved in the past four years with around 40 new employees. We have built a new logistics center - with highly modern processes that are largely automated, e.g. with intelligent RFID technology. In doing so, we are trying to take all employees with us on this journey, which is not always easy but the right track. The positive thing about it is that our long-standing as well as our new employees work for us on their own responsibility and with enthusiasm.

The interview was conducted by Ines Chucholowius, CEO Textination GmbH

TECHNICAL TEXTILES CONTINUE STEDAY RISE IN SHARE OF TOTAL EU TEXTILE PRODUCTION Foto: Gerd Altmann, Pixabay
26.11.2019

TECHNICAL TEXTILES CONTINUE STEDAY RISE IN SHARE OF TOTAL EU TEXTILE PRODUCTION

  • European Textile and Clothing Sector consolidates satisfactory evolution in 2018

The EU textile and Clothing industry finished the year 2018 with a consolidation of the positive key figures achieved over the last 5 years. First data published by Eurostat enhanced by EURATEX’s own calculations and estimates show a total industry turnover of € 178 billion, a minimal increase to last year’s € 177.6 billion, but significantly above the 2013 figure of € 163.8 billion. Investments of € 5.0 billion again increased slightly, as they did every year since 2013.

Employment of 1.66 million registered a small dip compared to 2017 but remained essentially unchanged over the last 5 years – a remarkable achievement for a sector that keeps realizing labour efficiencies. As a result, the average turnover per employee has increased from 97,000 € in 2013 to 107,000 € in 2018. Over the last 10 years, turnover and value-added per employee have increased by over 30%.

  • European Textile and Clothing Sector consolidates satisfactory evolution in 2018

The EU textile and Clothing industry finished the year 2018 with a consolidation of the positive key figures achieved over the last 5 years. First data published by Eurostat enhanced by EURATEX’s own calculations and estimates show a total industry turnover of € 178 billion, a minimal increase to last year’s € 177.6 billion, but significantly above the 2013 figure of € 163.8 billion. Investments of € 5.0 billion again increased slightly, as they did every year since 2013.

Employment of 1.66 million registered a small dip compared to 2017 but remained essentially unchanged over the last 5 years – a remarkable achievement for a sector that keeps realizing labour efficiencies. As a result, the average turnover per employee has increased from 97,000 € in 2013 to 107,000 € in 2018. Over the last 10 years, turnover and value-added per employee have increased by over 30%.

The brightest spot again is the export figure, which grew by 7% compared to last year and for the first time reached € 50 billion. The industry’s extra-EU exports which now stand at 28% of annual turnover, up from less than 20% 10 years ago, is the clearest proof of the increasing global competitiveness of Europe’s textile and clothing companies.

European high quality textiles and premium fashion products are in growing demand, both in high income countries such as the United States (our biggest export destination in non-European countries with € 6 billion), Switzerland, Japan or Canada, but also emerging countries such as China and Hong Kong (over € 6.7 billion in combined exports), Russia, Turkey and the Middle-East.

European exports benefit from faster economic growth in many non-European markets, but also from better market access as a result of successful EU trade negotiations with countries such as South Korea, Canada or Japan.

Since 2015, export growth has slightly outpaced import growth, which means that our trade deficit of approximately € 65 billion has stopped widening. Rather than an absolute import growth, recent  years have brought important shifts in the main import countries. While China remains by far the number one import source, lower cost countries such as Bangladesh, Cambodia, Myanmar and Vietnam have gained in relative importance, especially for clothing.

Technical textiles are an undisputed success story of the European industry. Exact figures for this part of the industry are difficult to compute due to the dual use of many yarns and fabrics for both technical and conventional applications. National statistics become available only with a significant time lag or remain unpublished for smaller EU countries. For 2016, EURATEX estimates that EU industry turnover of technical textiles, (including yarn-type, fabric-type and non-woven materials but excluding any made-up articles) reached about € 24 billion or 27% of total textile industry turnover. Over the years this percentage has steadily grown and is expected to continue to do so in the future.

Italy and Germany are Europe’s biggest producers of technical textiles, each producing over € 4.5 billion worth of technical textiles per year. The highest share for technical textiles in national textile turnover is registered in Scandinavian countries such as Sweden and Finland and central European countries such as Germany, the Czech Republic or Slovenia. The fastest growth of technical textiles over the last 10 years has been achieved by Poland, followed by Belgium, Austria and Portugal. This clearly demonstrates that technical textiles are gaining in importance all over Europe.

Labour productivity is much higher in the technical textiles part of the industry. Turnover per employee stands at € 215,000, more than twice the average textile and clothing industry rate. In this regard, EURATEX Innovation & Skills Director Lutz Walter indicates how “innovation and employee expertise are fundamental to reach and defend the strong technical textile position of the EU industry”.

In terms of international trade, both exports and imports of technical textiles have grown continuously over the years, with an almost zero trade balance in Euro terms. However, when looking into the product category types, it is clear that Europe’s trade balance is massively positive in higher added value products such as medical textiles, highly technical finished fabrics and non-wovens, but negative in such categories as bags, sacks, tarpaulins or cleaning cloths.

Again the United States is Europe’s largest technical textiles customer, followed by China, which has registered very fast growth in recent years.

 

More information:
Euratex Technical Textiles
Source:

EURATEX

Photo: pasja1000 Pixabay
19.03.2019

SRI LANKA'S APPAREL AND TEXTILE EXPORTS RECEIVE A BOOST

  • Modernization of production facilities required

Thanks to the reactivated GSP import status of the European Union, Sri Lanka's textile and clothing industry is looking to the future with confidence and expects better sales opportunities abroad.

The textile and clothing industry is of macroeconomic importance for Sri Lanka. The sector accounted for almost 43 per cent of the country's total exports in 2018 and provides employment for nearly 350,000 workers in the formal sector and about twice as many in the informal sector. In total, this is about 33 percent of all jobs in the manufacturing industry. The majority of employees are women.

  • Modernization of production facilities required

Thanks to the reactivated GSP import status of the European Union, Sri Lanka's textile and clothing industry is looking to the future with confidence and expects better sales opportunities abroad.

The textile and clothing industry is of macroeconomic importance for Sri Lanka. The sector accounted for almost 43 per cent of the country's total exports in 2018 and provides employment for nearly 350,000 workers in the formal sector and about twice as many in the informal sector. In total, this is about 33 percent of all jobs in the manufacturing industry. The majority of employees are women.

The textile and clothing industry contribute around 6 percent to the gross domestic product (GDP). "In view of the development of other sectors, it is very unlikely that another industry will reach this level of performance in the short to medium term," Jeevani Siriwardena, head of the Export Development Board (EDB), said in an interview with Germany Trade and Invest. The textile and clothing industry will continue to be an important sector for the Sri Lankan economy.

Short to medium-term prospects are good
On May 18th 2017, the European Union (EU) reactivated the Generalized Scheme of Preferences Plus (GSP+) status for Sri Lanka after a seven-year time-out. This means that when goods are exported to the EU, the island state is exempted from customs duties on more than 66 percent of customs tariff lines. "Without GSP status, Sri Lanka's export losses are said to have cost around 32 billion between 2010 and 2017," stressed Ravindi Ranaraja, Deputy Head of the Export Service Division of EDB, in a GTAI interview. In particular, the strongly export-oriented clothing and textile industry will benefit from the regained GSP status. Sri Lanka's textile and clothing industry is looking to the future with confidence and also expects better sales opportunities abroad.

Sri Lanka's textile and clothing exports to the EU and Germany in 2018
(in USD million; change year-on-year in %)  
HS-Code Definition
 
EU
 
Change
 
Germany *) Change
 
61 Articles of apparel and clothing accessories, knitted or crocheted 1,177 0.7 232.55 9.6
62 Garments and clothing accessories, not knitted or crocheted 874 7.6 151.59 18.1
63 Other made-up textile articles; sets worn clothing and used textile articles 52 18.2 7.8 13.5
Total   2,103 3.9 391.92 12.8

*) Estimation
Sources: Sri Lanka Apparel Exporters Association; press releases; calculations by Germany Trade & Invest; Destatis, February 2019

Positive impulses are already visible. According to the latest foreign trade figures available, Sri Lanka was able to increase its total exports of textiles and clothing (HS codes 61, 62 and 63) by almost 4.8 percent to approximately USD 5 billion in 2018. Exports to the EU increased by 3.9 percent to USD 2.1 billion. Exports to Germany were able to recover a plus of 12.8 percent.

It is not yet certain that Sri Lanka will be able to make up for the losses of the past. In the meantime, countries such as Bangladesh, India and Pakistan, which have already enjoyed tariff concessions in foreign trade with the EU for the entire current decade, have passed by the island state. Bangladesh in particular, recorded a strong increase in its clothing and textile exports compared with Sri Lanka..

Sri Lanka textile and clothing exports 2018 (HS codes 61, 62, 63)
Country In USD million 1)
China 172.4
Vietnam 36.0
Bangladesh 32.9
India 20.9
Indonesia 2) 14.0

1) Estimation; 2) Forecast
Sources: Press Releases; Calculations Germany Trade & Invest, February 2019

Sri Lanka focuses on higher quality products
Numerous domestic textile producers are switching to the production of higher-quality garments in order to maintain their competitiveness. "In Sri Lanka, the focus is not on mass but rather on higher quality products," confirmed M. Raghuram, Chief Executive Officer of Brandix, one of the country's largest clothing companies, in an interview with GTAI. The island state concentrates on the production of just a few product categories such as underwear, sportswear or lounge wear..

Sri Lanka has become a location for the manufacture of high-quality garments. This is also confirmed by the World Bank. In its 2016 study "Stitches to Riches" (website), it found that Sri Lanka outperformed its competitors India, Pakistan and Bangladesh in terms of quality, delivery times, reliability and sustainable social responsibility.

Sri Lanka serves fastidious international companies such as Victoria Secrets, GAP, Nike or Marks and Spencer. According to expert estimates, the production of the top 10 Sri Lankan textile and clothing companies accounts for around 85 percent of the industry's total exports.

The ambitious goal is to increase the garment industry's export revenues to USD 8 billion by 2025, which will require an annual growth of 6 percent. For this Sri Lanka must improve capacity, technology and resource problems. "It is becoming more and more difficult to find suitable personnel. For many young people working in the garment and textile industry in Sri Lanka is simply unattractive”, Nilanthi Sivapragasam, Chief Financial Officer of the conglomerate Aitkence Spence, told GTAI. The training of the workforce is also a major challenge. "Training new employees is very time-consuming and labor-intensive," confirms Sivapragasam.

Imports of German machinery decline
In addition, Sri Lanka's textile companies must modernize their machinery and expand their capacities in order to further increase productivity and added value. Accordingly, there is a great demand for technically sophisticated textile machines in the country. This offers good opportunities and chances for machine suppliers. According to experts, the demand for textile printing and dyeing machines, stenter frames and finishing technology will develop particularly dynamically in the future.
 
In Sri Lanka itself only relatively simple machines are being produced. High-end technology is mainly imported. China is the most important supplier of textile machinery, accounting for about one third of all imports. India has also been able to significantly increase its machine exports to Sri Lanka in recent years. In 2017, India achieved exports of USD 6.3 million, an increase of 46.7 percent, compared with exports of USD 2.6 million in 2010.

German machine exports suffered enormous losses. Sri Lanka's imports of textile machinery from Germany amounted to USD 16.5 million in 2017, a decrease of 54.2 percent. Over the past years, Germany has lost share of its deliveries. According to industry experts, this trend will continue: Made in Germany stands for quality and continues to be very popular in Sri Lanka; however, German machine manufacturers are often unable to keep up with the low-cost products from China or India.

Sri Lanka's imports of textile and clothing machinery
(SITC 724; USD million) 
Country 2016 2017 Change
China 56.3 51.8 -8.0
Japan 26.6 18.3 -31.1
Germany 36.0 16.5 -54.2
Singapore 13.6 14.5 -6.8
India 4.3 6.3 46.7
Total 192.8 155.3 -19.5

Source: UN Comtrade, March 2019

Contact addresses
Title Internet address Remark
Germany Trade & Invest http://www.gtai.de/srilanka Foreign trade information for the German export industry
AHK Sri Lanka http://www.srilanka.ahk.de Contact point for German companies
Sri Lanka Export Development Board http://www.srilankabusiness.com/edb State organization responsible for the development and promotion of exports in Sri Lanka. 

 

More information:
Sri Lanka
Source:

Heena Nazir, Germany Trade & Invest www.gtai.de

CHINA'S TEXTILE AND APPAREL INDUSTRY FEELS US PUNITIVE TARIFFS Photo: Pixabay
05.03.2019

CHINA'S TEXTILE AND APPAREL INDUSTRY FEELS US PUNITIVE TARIFFS

  • Nevertheless - automation, environmental compatibility and energy efficiency increase machine imports

China's textile and clothing industry is modernizing. High-quality textile machines are in demand. But because of the trade dispute with the USA, investments are also postponed.

How the trade dispute between the USA and China affects its business is currently being discussed by China's textile and apparel manufacturers - and in particular by the companies located in the high-quality sector: Of the approximately USD 119 billion, that they sold abroad in 2018, about two thirds went to the United States.

  • Nevertheless - automation, environmental compatibility and energy efficiency increase machine imports

China's textile and clothing industry is modernizing. High-quality textile machines are in demand. But because of the trade dispute with the USA, investments are also postponed.

How the trade dispute between the USA and China affects its business is currently being discussed by China's textile and apparel manufacturers - and in particular by the companies located in the high-quality sector: Of the approximately USD 119 billion, that they sold abroad in 2018, about two thirds went to the United States.

According to the American Apparel & Footwear Association (AAFA), 41 percent of the clothing sold in the USA, 72 percent of the shoes and 84 percent of the accessories come from China. On the other hand, the producers of intermediate products or textiles are less or hardly affected by the punitive tariffs, because here the dependence on the USA is not quite as great. Apparel manufacturers in Vietnam and Bangladesh, for example, generally are also buying in China.

Following previous punitive tariffs on Chinese imported goods, in September 2018 the USA imposed a 10 percent punitive tariff on a wide range of other Chinese imported goods, including goods from the textile and clothing industry. On January 1. 2019, the tariffs should originally be raised to 25 percent, but at the beginning of December 2018 US President Trump and China's President Xi agreed not to increase the tariffs until March 1st 2019.

Companies are reluctant to invest
It is hardly possible to make predictions about the outcome of the conflict. In view of the uncertainty, many of the companies affected are therefore waiting for the time being. German textile machine manufacturers are also feeling the effects of this, whether due to lower demand for machines from Germany or locally. According to a representative of the German Engineering Federation (VDMA) in Beijing, many investments have been stopped.

But apart from the upheavals, the modernization process of the Chinese textile and clothing industry is far from complete. Gone are the days when the numerous street markets in China were flooded with cheap clothes. They're hard to find these days. Their manufacturers either had to modernize or have since disappeared from the market.

Number of Chinese textile and clothing companies down sharply
China's textile and clothing industry has been through tough years of consolidation and modernization. In fact, between 2013 and 2017 alone, the number of predominantly private-sector companies in the sector fell by almost 11 percent to around 33,500.

Chinese customers don't want any more junk - and can usually afford better. According to the Chinese National Bureau of Statistics (NBS), they spent about RMB 1,371 billion; equivalent to about USD 207 billion; (1 USD = about 6.6114 RMB, annual mean rate 2018) on clothing and shoes in 2018. This is 8 percent more than in the previous year.

Rising personnel costs force automation
On the one hand, consumer demand has grown and led companies to invest in better machines, on the other hand, the constant pressure on personnel costs has forced them to automate their processes. Between 2010 and 2017, the number of employees in the sector fell from 10.9 million to 7.8 million.

Many have tried (and are trying) to escape the pressure by relocating their companies - for example to the interior of the country, where the wages are lower, or to cheaper foreign countries. However, the great migration movement did not take place, as most of them see themselves too strongly interwoven with their suppliers. Some are also skeptical about the move to the West, arguing that it would only be a temporary solution - and that sooner or later the wages there would follow.

Traditionally, the industry has concentrated on the provinces of Guangdong, Fujian, Zhejiang and Shandong. There, the average gross monthly wages of urban workers rose between 2013 and 2017 (latest available figures) by between 38.9 per cent (Fujian) and 48.5 per cent (Guangdong) - with significantly lower inflation rates.

Development of the Chinese textile and clothing industry 2013 to 2017
(% change over previous year) *)
  2013 2014 2015 2016 2017 Cjamge
Number of companies 37,376 36,642 36,488 35,197 33,326 -5.3
.Textile industry 21,666 20,821 20,545 19,752 18,726 -5.2
.Clothing industry 15,710 15,821 15,943 15,445 14,600 -5.5
Number of employees in 1,000 persons n.a. n.a. 9,140 8,667 7,784 -10.2
.Textile industry n.a. n.a. 4,645 4,362 3,912 -10.3
.Clothing industry n.a. n.a. 4,495 4,305 3,872 -10.1
Turnover in RMB bn. 5,553 5,934 6,222 6,458 5,700 -11.7
.Textile industry 3,608 3,829 3,999 4,084 3,611 -11.6
.Clothing industry 1,945 2,105 2,223 2,374 2,089 -12.0

*) only companies with an annual turnover of more than RMB 20 million are included.
Source: National Bureau of Statistics (NBS)

Environmental legislation and energy efficiency as additional investment drivers
The industry also has to deal with a generally stricter environmental legislation, which increasingly is being implemented. Added to this is the growing importance of the energy efficiency aspect.

Both are good news for German textile machinery manufacturers, according to VDMA estimates. As a result, the market for high-tech machines is expanding and the resulting demand is still far from being met by local production. China imported USD 4.2 billion worth of textile machinery in 2018, an increase of 6.7 percent over the previous year. A further customer potential arises from the growing importance of technical textiles.

According to Chinese customs statistics, German suppliers supplied textile machinery worth USD 1.1 billion to China in 2017 (latest available data) - a whopping 28.3 percent more than in the previous year. Despite this success, however, they had to cede their previous leading position as the main supplier country to Japan. However, this statistic shows only one side of the medal. Almost all well-known manufacturers are now represented in China with their own production facilities - and no figures are available about their activities.

Imports of textile machinery to China by selected countries
(SITC item 724; in US$ million, change from previous year and percentage share)
  2015 2016 2017 Change Share 2017
Total, thereof from 3,354 2,907 3,897 34.1 100.0
.Japan 728 765 1.169 52.8 30.0
.Germany 1,219 851 1.101 29.4 28.3
.Italy 415 347 448 29.1 11.5
.Taiwan 206 187 203 8.6 5.2
.Belgium 134 124 173 4.0 4.4
.Switzerland 104 111 126 13.5 3.2

Sources: UN-Comtrade; Calculations by Germany Trade & Invest

Environmental model companies point the way ahead

Already today there are manufacturers with ambitious plans in environmental protection. One of them is the Dongrong Group. Based in Chifeng, Inner Mongolia, the Cashmere company has been selected by the government of the Autonomous Region, together with a dairy company, as a model company for environmental protection. This included President and owner Cheng Xudong having his company - by the way inspired by the German Pavilion at the World Expo in Shanghai 2008 - sealed energetically (albeit not with materials "Made in Germany").

The next big step will be the purification of the company's own waste water. "Cheng describes his goal as follows: "Fish, suitable for consumption in our canteen, should be able to swim in it. The company is already now growing vegetables for the canteen itself. In his efforts it is financially supported by the state. But certainly not all entrepreneurs are so ambitious.

And there is still an old Chinese saying for many companies: "The sky is high - and the emperor is far away". In other words, what the central government decides in Beijing does not necessarily have to be implemented in the huge hinterland. But all these efforts show in which direction the journey goes.

 

More information:
China USA Tariffs
Source:

Stefanie Schmitt, Germany Trade & Invest www.gtai.de

Photo: Pixabay
26.02.2019

TURKEY REMAINS AN IMPORTANT MARKET FOR GERMAN TEXTILE MACHINERY

  • Competition from the Far East increases modernization pressure

Turkey is an important market for German manufacturers of textile machinery. However, the textile and clothing industry has a problem: exports have been stagnating for years.

  • Competition from the Far East increases modernization pressure

Turkey is an important market for German manufacturers of textile machinery. However, the textile and clothing industry has a problem: exports have been stagnating for years.

The Turkish textile industry is broadly based: Companies manufacture all intermediate products in the country, including yarns, fibers and fabrics. Production along the entire textile value chain means great sales potential for German suppliers of textile machinery. In fact, Turkey is the second most important export market for German spinning, weaving, textile finishing machines and the like after China, as it can be seen from the figures of the Federal Statistical Office Destatis.Nevertheless, the sector is not a growth market. Apart from a few outliers upwards and downwards, Turkish textile machinery imports have remained at the same level for several years. This is due to the fact that Turkish exports of textiles and clothing are also stagnating. Particularly noticeable: companies benefited only marginally from the weak lira last year.

Textile and apparel industry benefits little from weak lira
Year Turkish exports of clothing and textiles (in US$ billion) Annual change (in %)
2015 26.3 -10.3
2016 26.1 -0.6
2017 26.7 2.1
2018 27.7 3.6

Source: Turkish Statistical Office TÜIK (http://www.tuik.gov.tr)

Increasing pressure from the Far East
Turkish clothing manufacturers are increasingly feeling the effects of competition from the Far East. Despite the high number of informal workers, wages in Turkey have risen to such an extent that they cannot keep up with the low wages of Asian sewing factories. The geographical advantage of Turkish companies over Chinese competitors is at stake because of the new Silk Road and the development of faster transport routes. Free trade agreements that the European Union is currently negotiating with India and South Korea will further increase the pressure on Turkish producers.

Slump in 3rd quarter 2018
In addition, there is the difficult economic situation in the country: the Turkish lira reached a record low, especially in the months of August to October 2018, and commercial banks raised their lending rates. As a result, financing costs for machinery from abroad suddenly increased, orders from Turkey failed to materialize, especially in the third quarter. The German knitting machine manufacturer Mayer & Cie has also noticed this, as Stefan Bühler, who is responsible for the Turkish business, reports: "In the last three months of 2018, the market was virtually dead. In the meantime, however, the industry is gradually recovering.

Akar Textile plans new factory
Announcements about new investments cannot yet be heard at this time. As early as June 2018, Akar Textile (http://www.akartextile.com) announced that it would build a new factory for 47 million Turkish lira (TL) in the municipality of Savur in southeastern Turkey. 3,000 employees are there to become employed. Akar Textile produces for companies such as C&A, Mango and H&M. Only a few months after the announcement of the project, the economic crisis in Turkey deepened in September. The extent to which the turbulence has affected the project implementation is not known.

Technical textiles as a driving force for growth
Far Eastern competition is increasing the pressure to modernize the Turkish textile industry. In the future, industry will have to compete primarily with high-quality products. Growth impulses are currently coming from the sector of technical textiles. According to industry reports, more than 200 small and medium-sized enterprises are already producing technical textiles and nonwovens in Turkey. These textiles and fabrics are being used in the automotive, packaging and cosmetics industries.

In June 2018, the Turkish METYX Group (http://www.metyx.com) invested in its machinery parc. The company is manufacturing technical textiles and has ordered a line of warp knitting machines from the German textile machine manufacturer Karl Mayer. The manufacturer of composite materials is thus increasing its capacity by 12,000 tons of glass and carbon fibers. In recent years, more and more research and development centers have emerged to promote the necessary technology transfer in the industry. The Institute for Technical Textiles at RWTH Aachen University (ITA) founded a research center in Istanbul in October 2016. In the Teknosab industrial zone in Bursa the BUTEKOM research and development center for textile technology was established in 2008. The institute offers training as well as research and development cooperation to and with companies.

However, many medium-sized textile companies often lack the money to invest in modern machinery. The short planning horizon makes an access to research and development more difficult. As a member of the management board of the German-Turkish Chamber of Industry and Commerce, Frank Kaiser has been observing the Turkish business landscape for eight years. He points out that the textile manufacturers, like other medium-sized companies in the country too, often plan in short terms. "In view of the volatile business environment, this is rational," Kaiser explains.

Turkish imports of textile machinery and exchange rate comparison  1)
Year Import from Germany
(in USD million)
Total imports
(in USD million)
Exchange rate
(1 US$ = ?TL)
2009 143 505 1.55
2011 521 1,851 1.67
2013 619 2,211 1.90
2015 382 1,398 2.72
2017 447 1,478 3.65
2018 1) 2) 490 1,774 4.81

1) the slump in the 3rd quarter is not yet visible in the annual figures for 2018; it will not become noticeable until 2019
Sources: UN-Comtrade, TurkStat 2), Bundesbank

 

 

 

 

Foto: PIXABAY
19.02.2019

DOMINICAN REPUBLIC REMAINS DIFFICULT MARKET FOR GERMAN TEXTILE MACHINERY

  • Deliveries have risen sharply recently

Cheap and used technology dominates at the Dominican market for textile machinery. It is some of the country's problems that give German suppliers some hope.

The good news is that in the first eleven months of 2018 German exports of textile and clothing machinery to the Dominican Republic rose by 580 percent year-on-year, and, according to Eurostat, by 2017 German deliveries had tripled. The bad news: German sector exports reached only EUR 1.7 million in absolute terms. This is considerably less than, for example, in Guatemala with its not much larger technology market.

  • Deliveries have risen sharply recently

Cheap and used technology dominates at the Dominican market for textile machinery. It is some of the country's problems that give German suppliers some hope.

The good news is that in the first eleven months of 2018 German exports of textile and clothing machinery to the Dominican Republic rose by 580 percent year-on-year, and, according to Eurostat, by 2017 German deliveries had tripled. The bad news: German sector exports reached only EUR 1.7 million in absolute terms. This is considerably less than, for example, in Guatemala with its not much larger technology market.

Representatives of German providers are not surprised about the figures. Cheap equipment from China and other Asian countries are in demand, but above all mainly used machines. Hugo Clavijo of Texquim, who represents the German suppliers Mayer & Cie. (circular knitting machines) and Groz-Beckert (needles), among others in the Dominican Republic, estimates, that just five out of every hundred machines sold are new. Around the turn of the millennium, the market thus became the residual ramp for the declining US textile industry. According to UN Comtrade, around 60 percent of the value of technology deliveries in recent years came from the USA.

The International Textile Manufacturers Federation also registered hardly any shipments of new machines: for 2010 to 2017, the ITMF shows just ten flat knitting machines and eleven (all in 2017) circular knitting machines. Also, for this period 720 Double Heaters for texturing synthetic filaments for yarn production were listed. The ITMF counts the deliveries of 200 textile machinery manufacturers worldwide and thus a large part of the market, albeit not the entire one.

Electricity and water bottlenecks as arguments for expensive machines
Hugo Clavijo currently sees no great chance of a rapid improvement in the sale of expensive German technology. But ironically, it is some of the country's problems that may transform the potential customer interest into concrete procurements: The energy supply for the textile companies is expensive and unreliable, and the companies have to treat their process water themselves. Economical and less repair-prone machines would come into a closer consideration even if the purchase prices were significantly higher. It would also be helpful to enforce environmental standards, which today are largely on paper only.

There is also a need for technology if the Dominican textile and clothing manufacturers expand their capacities due to possible changes in international trade policy, i.e. if clothing customers in the USA would place orders in the Caribbean country instead of Asia. At the moment, however, the Dominican export industry is not using its factories to capacity.

Installed capacity of the Dominican textile industry in comparison (2016, in units) 1)

Machinery / technology Dominican Republic Guatemala Ethiopia Turkey
Rotor Spinning 2) 1,400 21,000 19,000 800,000
Short Staple Spinning 2) 20,000 150,000 293,852 7,900,000
Shuttle Looms 3) 500 3,000 167 20,000
Shuttleless Looms 3) 150 890 2,200 49,500

1) no data on other machines; 2) spinning machines; 3) weaving machines

Source: International Textile Manufacturers Federation

The Dominican textile and clothing industry, which, according to the central bank, generated 11 percent of the country's total export revenues with clothing from free zones in 2017, is not fully vertically integrated: it mainly imports yarns, which then is mainly being knitted but also woven or otherwise processed and then assembled into finished clothing. It often produces T-shirts and other knitwear with a high cotton content. And this is "the cheap stuff," as Clavijo says.

There is a limited production of synthetic yarn in the Dominican Republic which, according to Hugo Clavijo, is limited to two companies: The Korean company Youm Kwang textures filaments in the country, while the US company A&E (American & Efird) produces sewing thread from imported filaments.

Four export producers as important technology customers
The Dominican textile sector is said to consist of about two equal segments. A dozen medium-sized companies and a large number of garage companies supply the domestic market. In addition, four companies produce for export in the country's free zones: Gildan (Canada), Hanes (USA), Willbes (Korea) and the local Grupo M, which has been working in a 50/50 joint venture with Brandix from Sri Lanka since the beginning of 2017. The procurement of machines in foreign companies is not decided by the local management, but by the corporate headquarters, according to representatives.

The four export producers are said to be vertically integrated from yarn processing onwards. Grupo M supplies about one fifth of its fabrics, knitwear, etc. to processors, while the other three industry giants manufacture these preliminary products completely by themselves. According to Comtrade (SITC chapter 84), three quarters of the clothing exports go to the USA, the remainder predominantly to the neighboring Haiti.

For US clothing customers, the nearby Dominican Republic offers fast and cheap transport routes as well as the advantageous customs regime of the DR-CAFTA trade agreement. According to Hugo Clavijo, however, Dominican clothing exporters must obtain their intermediate products from the USA in order to benefit from all customs relief. Producers for the Dominican domestic market, on the other hand, are using yarns and fabrics from China, Pakistan or other third countries that offer lower production costs.

USA dominate machine deliveries
The Dominican market for textile and clothing machinery has stagnated in recent years: For 2017, UN Comtrade estimated imports - there is no significant domestic production - at USD 36 million. That was as much as 2014 and around USD 10 million more than around 2010.

According to Comtrade, Germany was ranked sixth in the import ranking with an average share of 2.0 percent between 2015 and 2017. Eurostat, whose (export) data deviate considerably in some cases, noted stagnating industry deliveries from the European Union to the Dominican Republic for the first eleven months of 2018 in addition to the high growth for Made in Germany.

Dominican imports of textile machinery (USD thousand *)
ITC-Pos. Supplying country/ Goods Group 2015 2016 2017
  total 33,398 30,817 36,257
724.35, .39 Sewing machines (excluding domestic sewing machines) 12,131 10,350 12,784
7244 Spinn- and texturing machines 2,852 2,102 4,585
7245 Knitting and weaving machines 3,362 2,683 1,543
7246 Auxiliary machines 6,068 5,215 5,384
724.73, .74 Washing machines, stenter frames, etc. (except for housholds and landries), large-dryers 5,135 5,615 7,652
724.92 Parts for items 724.73 and .74 and for dry-cleaning machines (724.72) and domestic tumble dryers 3,850 4,852 4,309
  Supplying countries      
  USA 22,000 17,320 20,743
  China 3,424 3,058 2,380
  Spain 2,176 2,567 2,614
  Japan 973 1,894 2,688
  Italy 923 1,194 496
  Germany 397 724 873

*) SITC 724 without household sewing machines (724,33), household washing machines (724,.71), machines for dry cleaning (724.72), leather processing (7248), parts of household washing machines (724.91).
Source: UN Comtrade.

 

More information:
GTAI
Source:

Ulrich Binkert, Germany Trade & Invest www.gtai.de

PIXABAY
27.11.2018

EGYPT'S TEXTILE AND CLOTHING SECTOR FACING MODERNIZATION

  • State enterprises get better equipment

Cairo (GTAI) - The Egyptian government plans to modernize the textile sector and private companies are investing in new locations. Increasing machine imports and clothing exports are expected.

In the Egyptian textile and clothing industry, the signs are pointing to expansion and modernization. Local media reported on a number of private and public investment projects. According to the newspaper Al Gomhouria, a Chinese producer in the Suez Canal economic zone is planning the world's largest textile factory for USD 6 billion. The Chinese companies TIDA and Shoon Dong Roy want to build a clothing factory for 800 million USD. Sino-Egypt Minkai is planning to build a textile industry complex for around USD 750 million.

  • State enterprises get better equipment

Cairo (GTAI) - The Egyptian government plans to modernize the textile sector and private companies are investing in new locations. Increasing machine imports and clothing exports are expected.

In the Egyptian textile and clothing industry, the signs are pointing to expansion and modernization. Local media reported on a number of private and public investment projects. According to the newspaper Al Gomhouria, a Chinese producer in the Suez Canal economic zone is planning the world's largest textile factory for USD 6 billion. The Chinese companies TIDA and Shoon Dong Roy want to build a clothing factory for 800 million USD. Sino-Egypt Minkai is planning to build a textile industry complex for around USD 750 million.

The Egyptian state also wants to strengthen the textile and clothing production. In November 2018, the Minister of State Enterprise Hisham Tawfiq negotiated an extensive restructuring of the Cotton & Textile Holding Company with Werner International of the USA. According to press reports, the properties of 14 of the 25 cotton ginning plants should be sold. The ministry estimates the value at USD 1.5 billion. This appropriation is intended to cover the repair of machinery and the import of new equipment for the eleven remaining companies.

A free zone for textile production will also be created in Minya on the initiative of the state. This industrial zone is to be built on an area of 2.2 million square metres: The General Authority for Free Zones and Investment intends to launch the project before the end of 2018.

In autumn 2018, the Cotton & Textiles Industries Holding Company and Marubeni of Japan signed a letter of intent. This relates to the construction of a new textile factory in Kafr El Sheikh. A reduced loan from the Japan Bank for International Cooperation secures the financing of the project.

Import demand for textile and clothing machinery expected to increase
The planned projects are expected to lead to a further increase of a demand of imports. Like other types of equipment, the vast majority of textile and clothing machinery is imported into Egypt. In 2017 the German share of deliveries fell by 8.4 percentage points to an year-on-year comparison to 12 percent. However, this reduction is put into a perspective by the fact that the reference year 2016 was a positive outlier. In 2015, the German share was still 15.8 percent.

Imports of textile and clothing machinery to Egypt (in USD 1,000)
HS-Category 2016 Therof from Germany 2017 Therof from Germany
8444 4,481 2,025 5,554 n.v.
8445 26,105 5,429 32,660 4,807
8446 23,591 13,346 26,170 4,493
8447 15,713 3,052 22,032 4,493
8448 20.574 3,365 18,013 2,698
8449 299 0 1,725 0.4
8451 36,512 2,334 37,887 3,511
8452 23,186 1,698 29,633 1,309
8453 3,678 137 9,892 155
Total 154,139 31,386 183,566 22,028.4

n.a. = not available
Source: Comtrade

Egyptian textile and clothing companies often produce with a lot of manual work and partly with very outdated machines. The government's aim is to create as many jobs as possible due to the continued population growth. On the other hand, a more automated and modern production would allow more complex products. These could be sold at a higher profit, but would also require less human labor.

Important role of the sector companies for the Egyptian economy
The textile and clothing companies in Egypt represent a significant and labor-intensive industry. Local and imported fibers are being processed in the country and there is a broad base of spinning mills, weaving mills, dyeing houses and manufacturers of clothing and home textiles. It is estimated that the companies employ between 1 million and 1.2 million people. A regional focus is Mahala El Kubra. State enterprises are strongly represented in the textile sector, while the private sector plays a greater role in the clothing sector. About 90 percent of the spinning and weaving mills are state-owned.

According to the Readymade Garments Export Council (RMGEC), the garment industry accounts for 3 percent of the country's gross domestic product, 15 percent of exports (excluding oil), and one of three industrial jobs in the country. From January to the end of August 2018, clothing exports to the RMGEC totaled USD 1,040 million. In the same period of 2017, exports amounted to only US$ 980 million.

Egyptian exports of textiles and clothing (selection; in USD million;
change in %)
HS-Category 2016 2017 Change 2017 / 2016
57 303.5 313.9 3.4
60 35.7 44.3 24.1
61 388.0 466.0 20.1
62 756.6 910.7 20.4
63 227.2 231.1 1.7
Total 1,711.0 1,966.0 14.9

Source: UN Comtrade

The Qualified Industrial Zones (QIZ) play a special role. These are special zones with Israeli added value, which are fixed during production, and the products enjoy customs advantages when exported to the USA. Since 2005, the QIZ system has provided more private investments in the garment sector. Jeans and other clothing for well-known brands are delivered to the USA from the 25 zones.
Egyptian manufacturers are also generally not always recognizable as such, as they often manufacture for major international brands. Middle East Eye names Calvin Klein, Decathlon, Tommy Hilfiger and Zara as examples. In November 2017 Dice Sport and Casual Wear agreed to supply Levi Strauss & Co. with children's clothing.

The US company Disney even purchases 33 types of products from Egypt. Since 2017, Egypt has been cooperating with the International Labor Organization ILO as part of the Better Work Program. Working conditions are to be improved in 30 clothing factories. According to media reports, for Disney these measures were a reason to extend the licenses of the Egyptian suppliers until December 2019.

Currency effect improves competitiveness
The labor-intensive production benefited from the currency devaluation in 2016. According to a report by the news portal Middle East Eye, Egypt has at least 100 USD monthly salary for workers and is about at the same level as India or Bangladesh and at about 50 of percent Chinese salaries. In addition, prompt and fast deliveries to Europe and the USA are possible.

On the other hand, the companies are dependent on foreign supplies, which became more expensive. In Egypt especially soft and high-quality long staple cotton is cultivated and exported. Domestic producers, on the other hand, mainly use short-staple cotton and other foreign fibers as raw materials. The RMGEC complained about rising production costs in October 2018. Wages, electricity, water, natural gas, transports and more expensive imports of raw materials contributed to this development.


Further information on Egypt can be found at http://www.gtai.de

 

More information:
GTAI Ägypten
Source:

Oliver Idem, Germany Trade & Invest www.gtai.de

20.11.2018

CHINA'S CLOTHING COMPANIESS REPOSITION THEMSELVES

  • AUTOMATION AND STRONGER FOCUS ON THE DOMESTIC MARKET

Beijing (GTAI) - The Chinese apparel industry is repositioning itself. Increased wage costs force more automation, more customers demanding more quality.
Nowhere else in the world so much clothing is being produced as in China. According to the sector portal http://www.ask.com, alone 22.9 billion pairs of socks were being produced in 2017. This was 4.8 percent more than in the previous year, and the production of jeans amounted to more than 0.6 billion pieces according to information from http://www.chyxx.com, an increase of 5.0 percent.

  • AUTOMATION AND STRONGER FOCUS ON THE DOMESTIC MARKET

Beijing (GTAI) - The Chinese apparel industry is repositioning itself. Increased wage costs force more automation, more customers demanding more quality.
Nowhere else in the world so much clothing is being produced as in China. According to the sector portal http://www.ask.com, alone 22.9 billion pairs of socks were being produced in 2017. This was 4.8 percent more than in the previous year, and the production of jeans amounted to more than 0.6 billion pieces according to information from http://www.chyxx.com, an increase of 5.0 percent.
China is not only the world's largest production nation, but also by far the world's largest export nation in the sector. However, countries such as India, Vietnam, Bangladesh and Cambodia are catching up enormously due to lower wages. As a result, China - measured by its share of world clothing exports - has lost around 5.5 percentage points since 2013, down to only 32.4% in 2017.

China's share of world clothing exports 1) (in USD billion; shares in %)
  2008 2013 2015 2017
World Export 380 468 471 486
China Export 120 177 175 157
China's share 31.6 37.9 37.1 32.4

1) SITC Pos.84; 2) Partially estimated on the basis of information provided by the ITC
Source: UN Comtrade, GTAI calculation.

By contrast, Bangladesh (+3.7 points), Vietnam (+2.0 points) and Cambodia (+1.3 points) in particular recorded gains in the period from 2013 to 2017. In absolute terms, Chinese apparel exports fell by 15.6% to USD 157 billion since the record year of 2014 (USD187 billion). No improvement is in sight as exports are stagnating in 2018.

Export of clothing 1) by country (in USD million; shares in %)
  2008 Share 2013 Share 2017 Share
World Export 380,000 100.0 468,000 100.0 486,000 100.0
China 120,405 31.6 177,435 37.9 157,464 32.4
ASEAN3) 29,793 7.8 42,123 9.0 61,441 12.6
Vietnam 8,724 2.3 17,230 3.7 27,930 5.7
Kambodscha 3,014 0.8 4,832 1.0 11,250 2.3
Bangladesch 12,035 3.2 19,679 4.2 38,460 7.9
India 10,968 2.9 16,843 3.6 18,313 4.0
Germany 18,183 4.8 19,178 4.1 22,034 4.6

1) SITC Pos. 84; 2) partly estimated on the basis of ITC data; 3) excluding Laos and Brunei
Sources: UN-Comtrade; ITC; GTAI calculation

Rising wage costs as investment driver
Due to rising personnel costs throughout the country, manufacturers were and are under considerable cost pressure. With an average hourly wage for a Chinese worker of the equivalent of around USD 5.2 (2017), China has not only left classic emerging markets such as Thailand (USD 2.3) or Mexico (USD 3.9) behind - not to mention India with USD 0.8 - but is already approaching individual European countries (e.g. Greece 2016: USD 6.0).


Companies have met and continue to meet this challenge through increased automation. Between 2015 (9.1 million) and 2017 (7.8 million) alone, the workforce of the textile and clothing industry shrank by 14.3 percent - according to the Chinese statistical office. More and better machines make it possible to say goodbye to the previous labor-intensive production - and thus lower cost pressure with more precise and faster execution. Imports of textile machinery are also benefiting from this. These rose in 2017 by a whopping 34.1 percent year-on-year to nearly USD 3.9 billion.


Germany no longer number one textile machinery supplier
Although Germany lost its position as most important supplier country for textile machinery to Japan, it was still able to increase its deliveries by 28.3 percent to USD 1.1 billion. This corresponded to a supply share of 28.3 percent. Japanese manufacturers achieved a ratio of 30.0 percent with just under USD 1.2 billion (+52.8 percent). Competition from Italy came to only 11.5 percent. The good performance is remarkable due to the fact that a number of German textile machine manufacturers have invested heavily in recent years in the region in order to be able to meet the wishes of Chinese customers more effectively.

China's textile machinery imports *) by selected countries (in USD million; year-on-year change and 2017 shares in %)
  2015 2016 2017 Change Shares
Total 3,354 2,907 3,897 34.1 100.0
including          
Japan 728 765 1,169 52.8 30.0
Germany 1,219 851 1,101 29.4 28.3
Italy 415 347 448 29.1 11.5
Taiwan 206 187 203 8.6 5.2
Belgium 134 124 173 4.0 4.4
Switzerland 104 111 126 13.5 3.2

*) SITC-Pos. 724
Source: UN-Comtrade; GTAI calculation

Due to the high pressure to modernization Chinese textile machinery imports in the first seven months of 2018 increased by almost 15 percent compared to the previous period. German machine manufacturers in particular benefited from this development, with deliveries increasing by 30 percent in the same period. As Japanese exports of textile machinery to China stagnated at the same time, German manufacturers are likely to take the lead again in 2018.
As the garment exports come under such severe pressure, the industry is now increasingly geared towards the local market. Whereas ten years ago about half of the value of production was exported, today it is only about a third. In fact, the Chinese spent an average of around 4.8 percent of their disposable income or 1,238 Renminbi (RMB; around 183 US dollars; 1 USD = 6.7531 RMB, annual mean rate of 2017) on clothing in 2017, according to the Chinese Statistical Office. With an average disposable annual income of 25,974 RMB and a population of 1.39 billion, this translates into a market volume of approximately USD 255 billion.

China's consumers demand quality and design
This makes the Chinese clothing market one of the largest in the world - and one that is becoming increasingly diversified. Local offerings range from the cheapest mass-produced goods, qualitatively and visually appealing products in the mid-price segment up to luxury and haute couture. Much has changed in the upper price segment in particular. "In the past, the Chinese exported the best qualities, but today they keep them for themselves," says a British sourcing expert who has been working in the Kashmir business for decades, describing the development.

In general, Chinese consumer demand is becoming increasingly sophisticated and differentiated. In addition to the tendency towards recognized brands, an increasing individualization of consumption can also be observed. The question is what fits well, pleases and is also somehow "special". "People in the North used to buy cashmere clothes because they warmed well," explains Cheng Xudong, president of the private Dongrong Group. The design was of secondary importance - and accordingly most of the pieces were "old-fashioned".

"Today, cashmere clothes also look very good," Cheng adds. "That's why it's bought not only in the north, but also in the more southern parts of the country." In general, the middle class in particular is looking for a high-quality lifestyle - and clothing is a part of it. The entrepreneur is convinced that if the textile and clothing industry succeeds in adapting to the higher quality demands of local customers through a technical upgrade and improved design, then the industry will continue to do well in the future.

Additional information
Further information on the economic situation, the sectors, business practice, law, customs, tenders and development projects in China can be found at http://www.gtai.de/china The website http://www.gtai.de/asien-pazifik provides an overview of various topics in the region.

 

More information:
China Sampe China GTAI
Source:

Stefanie Schmitt, Germany Trade & Invest www.gtai.de

13.11.2018

TUNISIA'S TEXTILE SECTOR RECOVERS

German suppliers can benefit from production expansions
Tunis (GTAI) - After difficult years, Tunisia's textile sector is recovering. Exports and foreign investment are on the rise again. Production is for export, especially to Europe.

At the end of October 2018, the Swiss auditing group SGS reported its expanded testing capacity for textiles in Tunisia. This was in response to the increased demand from producers producing for the world market in Tunisia. The sector has not been doing well in recent years. Even before the revolution in 2011, competitive pressure from Asian producers had left its mark, especially after the expiry of the multi-fiber agreement in 2005. According to the FTTH (Fédération Tunisienne du textile et de l'habillement), more than 400 companies have left the country since 2011 and 40,000 jobs have been lost.

German suppliers can benefit from production expansions
Tunis (GTAI) - After difficult years, Tunisia's textile sector is recovering. Exports and foreign investment are on the rise again. Production is for export, especially to Europe.

At the end of October 2018, the Swiss auditing group SGS reported its expanded testing capacity for textiles in Tunisia. This was in response to the increased demand from producers producing for the world market in Tunisia. The sector has not been doing well in recent years. Even before the revolution in 2011, competitive pressure from Asian producers had left its mark, especially after the expiry of the multi-fiber agreement in 2005. According to the FTTH (Fédération Tunisienne du textile et de l'habillement), more than 400 companies have left the country since 2011 and 40,000 jobs have been lost.

Now positive news are coming: In 2018, for example, the German Gonser Group opened its fifth production facility in Tunisia. In total, foreign direct investments in the first six months of 2018 amounted to Tunisian Dinar (tD) 24.9 million (approx. EUR 7.5 million), 1 tD = approx. EUR 0.301as of 11. 07.), more than twice as high as in the corresponding period of the previous year. The fact, that the number of new created jobs as a result has risen much less, can be seen as confirmation of the structural change: Away from simple mass production to higher-value production.

A high level of employee training is also decisive for this. The Sartex company shows how this can be ensured. In 2014, the Tunisian company opened a training center, in which some 500 Tunisians have already been trained and most of them were hired by Sartex. The company was supported by the Gesellschaft für Internationale Zusammenarbeit (GIZ) and the Centre d'Orientation et de Reconversion Professionnelle (CORP) of the AHK Tunisia.

During the visit of Federal Development Minister Müller in October 2018, an agreement was signed on the establishment of a training center in EL Alia in the Bizerte governorate. Among others the German company van Laack is producing in the region. A total of 180,000 Tunisians now work in the textile sector, which accounts with that for about 40 percent of industrial jobs.

Wage increases in two steps
More than one year after its foundation, FTTH has established itself as the interest representative of textile companies. In 2017 the company split from the employers' association UTICA (Union Tunisians de l'Industrie, du Commerce et de l'Artisanat), not least because the envisaged general wage increases for the company's own industrial sector were considered unworkable. But meanwhile, common ground and cooperation have been emphasized again, or FTTH describes itself as part of UTICA, with a high degree of autonomy.

An agreement has now also been reached with the Union Générale Tunisienne du Travail (UGTT). This provides for wage increases of 6.5 percent as of 1 January 2019 and 2020 respectively. This wage increases are thus likely to be lower than the inflation, provided that the forecasts for the inflation rate of around 7.5 percent for the current year 2018 will be that way. Currently, the minimum wage in Tunisia's textile and clothing industry for unskilled job starters is around EUR 129 (as of 07-11-2018) per 48-hour week.

Of the more than 1,600 textile companies, over 1,400 are producing exclusively for export. The target markets are clearly in Europe. More than 60 percent of exports went to France and Italy in 2016, with Germany in third place with about 11 percent. As the largest non-European customer, the USA was ranked ninth with less than one per cent. By joining the Common Market for Southern and Eastern Africa (COMESA), Tunisia aims to develop new markets. According to the Ministry of Commerce, bilateral talks are underway with several African countries to provide duty-free market access for Tunisian textiles.

Are Chinese investors discovering Tunisia as a location?
In addition to the relations with the African continent, relations with China could also change in the medium term. At the China-Africa Cooperation Forum held in Beijing in September 2018, Chinese textile companies expressed their interest in Tunisia as a production location. As wages have increased in China in the meantime, a relocation of production to certain sectors of the textile industry could prove useful for the European market.

Exports already increased in 2017. The trend seems to continue in 2018. In 2016 exports were USD 2.9 billion, in 2017 USD 3 billion (a significant increase due to the Dinar's decline in exchange rates (7 billion tD against tD 8.4 billion). According to the first announcements, exports to Europe in the first months of 2018 are expected to have increased again by 3.5 percent compared to 2017. Improving transport and customs clearance should be important for the further development of the textile sector. Especially the companies producing purely for export express this again and again. The textile sector in particular is dependent on short delivery times.

Meanwhile, FTTH is also working to improve the competitive position of Tunisian textile companies on their home market. This applies, for example, to the imports of used clothing for which stricter controls are being desired.

Tunisian imports of machinery, apparatus and equipment for the textile and leather industries and parts thereof (SITC 724; in USD million)
Origin 2015 2016 2017
Total 68.8 67.0 67.3
Italy 15.8 13.7 17.9
China 20.5 12.4 10.6
France   6.5   4.0   7.4
Germany   5.0   6.3   7.2

Note: Thailand was the third largest supplier in 2016, but fell behind in 2017. The table shows the four most important suppliers in 2017
Source: UN Comtrade

In addition to production expansions by German companies, German suppliers could also benefit if the recovery and, above all, structural changes will continue. While total imports of textile and leather machinery fell slightly from around USD 70 million to USD 67 million between 2015 and 2017, German deliveries increased from USD 5 million to USD 7.2 million. (JPS)

Further information on the Chinese commitment in Tunisia can be found online (German only): Link

 

More information:
Tunesia GTAI
Source:

Peter Schmitz, Germany Trade & Invest www.gtai.de

INDIA'S GOVERNMENT SUPPORTS TEXTILE INDUSTRY Photo: Pixabay
11.09.2018

INDIA'S GOVERNMENT SUPPORTS TEXTILE INDUSTRY

  • Clothing exports are declining 

New Delhi (GTAI) - Structural weaknesses and fiscal reforms are affecting the Indian textile industry. Modernization and diversification are necessary. For this where support measures will come into force.

  • Clothing exports are declining 

New Delhi (GTAI) - Structural weaknesses and fiscal reforms are affecting the Indian textile industry. Modernization and diversification are necessary. For this where support measures will come into force.

In the 2016/17 fiscal year (April 1st to March 31st), India's government initiated a number of fundamental reforms such as the introduction of the nationwide Goods and Services Tax (GST) and a partial currency devaluation. These measures are intended to advance the economy as a whole in the medium to long term, but have led to uncertainty and difficulties in individual sectors, including the textile industry. Added to this are high cotton prices. The government is now trying to help the industry with individual measures. It remains to be seen whether these will be sufficient and lead to a sustained improvement. Finally, there are structural weaknesses which are also slowing down the growth of the Industry.

"The by the introduction of GST caused dent and monetary depreciation has now been overcome. However, the structural problems remain, so that no fundamental changes in the textile industry are to be expected", according to the assessment of a German supplier with many years of experience in India in talks with Germany Trade & Invest (GTAI).

Government launches aid measures
However, some government measures should provide relief. At the beginning of August 2018, import duties on 328 textile products, especially fabrics and nonwovens, were increased from around 5 to 10 percent to up to 20 percent. Also, at the beginning of the month, the Executive Board introduced four bills to amend the general VAT Act introduced on July 1st 2017. This should make refunds, for example of taxes on intermediate products, easier and faster. The introduction of GST and the delays in reimbursement have put particular pressure on the liquidity of small and medium-sized companies, which make up the bulk of textile companies. For example, the denim industry temporarily had to take 25 to 30 percent of its capacity out of production after the tax introduction.

 Also, the Ministry of Textiles wants to strengthen the to it entrusted weakening industry. At the beginning of August 2018, for example, it added changes to the Technology Upgradation Funds Scheme (TUFS), which has been in existence since 1999. This now expanded technology promotion program allows cooperative banks to provide financing to textile companies for technological improvements. They also become accessible for liability partnerships. Of the approximately USD 1.1 billion, that the central government budget is holding for the textile industry in the fiscal year 2018/19, one third, 14 percent more than in the previous year, are intended for the TUFS. Manufacturers of synthetic fibers and the clothing industry in particular are likely to benefit from this, according to industry sources.

The existence of an own Ministry of Textiles shows how important this industry is for India, not only as a source of foreign exchange, but also as an employer. The entire sector, from spinning mills, weaving mills to clothing and other finished goods, contributed around 14 percent to value creation in the manufacturing industry and 13 percent to foreign exchange revenues in 2017, and employs directly 40 million and indirectly 60 million workers.

As one of the world's leading producers of cotton, jute and silk, India has comparative advantages in the textile sector and can look back on a long tradition in processing. Accordingly, cotton is the main raw material in yarn and fabric production. After all, 5.7 billion tons of yarn were spun in 2016/17, achieving an annual average increase of 3.1 percent between 2011 and 2017. The weaving mills processed 63.5 billion square meters of fabric in 2016/17, after 61.7 billion in 2011. The proportion of cotton fabrics rose from 51 to 61 percent in 2011 to 2017. The remaining part is accounted for approximately equally by synthetic and blended fabrics.

 
Production and export growth come to a halt Based on the previously strong growth the government is optimistic. According to forecasts by the Ministry of Textile, India's textile and clothing industry is expected to more than double its sales between 2015 and 2021. Exports are expected to increase from USD 35 billion to USD 82 billion, after doubling in the period from 2006 to 2014 from USD 17.6 billion to USD 37.6 billion. After that, however, they stagnated and, at USD 35 billion in 2017/18 and missed the by the government set target by USD 10 billion. The production of textiles and clothing declined from 2015 to 2017. It is unlikely to improve in 2018.

Textile and clothing industry in India 1)
  2015/16
 
2016/17 2)  2017/18 2)
Export of textiles and textiles products USD in USD billion 18.1 18.2 18.7
Export of clothing 17.0 17.4 16.7
Import of yarn, fabrics, made-ups in USD billion 1.7 1.5 n.a.
Change of production of textiles in % -0.2 -3.2 n.a.
Change of production of non-knitted clothing in % -3.6 -3.3 n.a.


1) Financial years from 1 April to 31 March; 2) Provisional data for 2016/17 and 2017/18
Source: Statistical Office India
     

Clothing industry needs to modernize 
India's textile industry has cost advantages over industrialized countries and advanced emerging countries such as China. Smaller developing countries, however, have become well-known competitors in the meantime and have partly surpassed India in terms of clothing. So Bangladesh and Vietnam exported more clothing than India. In addition there is growing competition from other low-wage countries such as Cambodia, Sri Lanka and Indonesia. Some of these countries have free trade agreements with the EU, while India has difficulties in negotiating them. The smaller competitors have also geared their clothing industry to exports and modernized it accordingly. After all, they do not have significant local markets. The Indian textile manufacturers are different: If there is not enough quality for export, the domestic market, which has a population of 1.3 billion inhabitants and is growing strongly, is still there, industry representatives explain to GTAI.

India's apparel industry therefore still has a considerable potential for modernization and requires new production technologies, particularly to improve operating efficiency. Other structural weaknesses include strong wage increases with insufficient productivity growth and a shortage of well-trained skilled workers. Other disadvantages are the fragmentation of the clothing industry - many companies lack size - and the lack of adaptation to global fashion trends. While the fashion world is more prone to fiber mixed fabrics, the Indian clothing is not yet following this trend. There is a lack of product diversification.

The spinning and weaving sector looks more modern. Industry experts attest to it a leading international position in terms of size, technology, productivity, quality and price. This is also evident when importing machines. India was the most important export market for German spinning machines to China in 2017 and the fifth largest market for weaving machines, according to the Textile Machinery Association of the German Engineering Federation (VDMA). In textile finishing machinery, India does not rank among the top six export markets, but its competitor Bangladesh does.

Double-digit growth in foreign direct Investment 
Foreign investments in the Indian textile industry are welcome and 100 percent foundations by foreign companies are welcome. On promotional trips to countries such as Japan, Germany, Italy and France, India is actively attracting investors and has not been unsuccessful. The inflow of foreign direct investment into the textile sector, including dyed and printed textiles, amounted to USD 2.7 billion between April 2000 and September 2017. Cumulative investments increased by an annual average of 17.3 percent between 2010 and 2017. However, the bulk of the investment is being stemmed by national Indians. Total investments in India's textile sector from June 2017 to May 2018 amounted to USD 4.2 Billion.

Contact Details
Name Internet Remark
Germany Trade & Invest http://www.gtai.de/indien Foreign information for the German Export Business
AHK Indien http://www.indien.ahk.de Contact for German companies
Ministry of Textiles http://www.texmin.nic.in Ministry
Office of Textile Commissioner http://www.txcindia.gov.in Government 
Confederation of Indian Textile Industry http://www.citiindia.com Textile Association
Textile Association India http://www.textileassociationindia.org Textile Association India
The Clothing Manufacturers Association of India http://www.cmai.in Clothing Association


    

More information:
India Bangladesh(7621)
Source:

Rainer Jaensch, Germany Trade & Invest www.gtai.de

Industry Check in Asia Photo: Pixabay
19.06.2018

TEXTILE AND CLOTHING INDUSTRY IN ASIA: GTAI CHECKING THE SECTOR

Every day, GTAI experts observe and analyze the development of the most important German export industries on the world markets. Here you will find summarized information on the textile and clothing industry in Asian markets.
 
GTAI Industry Check - Vietnam
Textile and clothing industry: Vietnam needs more than sewing

Every day, GTAI experts observe and analyze the development of the most important German export industries on the world markets. Here you will find summarized information on the textile and clothing industry in Asian markets.
 
GTAI Industry Check - Vietnam
Textile and clothing industry: Vietnam needs more than sewing
The textile and clothing industry is one of the most important pillars of the Vietnamese industry and accounted for around 6 percent of total exports in 2017 with exports amounting to USD 26 billion. For 2018, the industry is aiming for growth of 7 to 8 percent and exports are expected to rise to over USD 33 billion. In order to comply with the rules of origin of the free trade agreements concluded by Vietnam, the country must achieve a higher added value. Domestic companies such as the Vinatex Group or Garco10, but also foreign companies are increasingly investing in technical innovations and expanding processes such as spinning, weaving and dyeing upstream of pure sewing. In addition, the first companies are beginning to automate their production processes.

GTAI Industry Check - Uzbekistan
Textile and clothing industry: Investments of more than USD 2 billion planned
The industry program for 2017 to 2020 lists around 130 projects with a total value of USD 2 billion. About half of the planned investments are to be
accounted for foreign commitments. The aim is to double the annual output of finished textile products during this period. With an annual production of more than 3 million tons of raw cotton, Uzbekistan is one of the world's largest producers of the white gold. A second industry programme foresees the implementation of five projects for the production of raw silk, silk wadding and silk fabrics and finished silk products between 2018 and 2021. The minimum investments required are estimated at USD 26 million.
 
GTAI Industry Check – Myanmar
Textile and clothing industry: Export strength through low wages
The lifting of sanctions by the EU and the US has noticeably revived the investment climate in the sector, especially as this was linked to the reactivation of the EU's GSP import status (Generalized System of Preferences). Most investors came from China, Hong Kong, Taiwan or South Korea, and Western brands such as GAP, H & M, Primark or Marks & Spencer were also included. Currently, about 400,000 workers are employed in almost 400 factories, mostly geared to CMP (cut-make-pack), including 171 foreign investors and 22 joint ventures. According to the Myanmar Garment Entrepreneurs Association, exports are expected to have increased by 40 percent to over USD 3 billion by 2017. For the first time the largest customer was the European Union, primarily Germany, ahead of Japan and South Korea.

GTAI Industry Check – Georgian Republic
Textile and clothing industry: Several expansion projects planned
The apparel industry produces garments for up to USD 70 million annually. The main products manufactured are international brands for export. Several new projects in the industry are in preparation. For example, the Turkish jeans manufacturer Baykanlar Textil plans to build a factory for the production of brand jeans in Ozurgeti by the end of 2018. A total of USD 15 million will be invested in the project. The Romanian company MGMtex, a subsidiary of the Swiss company Ottorose, is planning to start production of branded clothing in Kutaisi in cooperation with a local partner. The investments for the first and second project phases amount to more than USD 1.5 million. For the procurement of equipment, the company benefits from subsidies from the state program Produce in Georgia.

GTAI Industry Check - Turkmenistan
Textile and Clothing Industry: Investments of around 300 million US dollars planned
The textile and clothing industry represents 20 percent of Turkmenistan's industrial production and 30 percent of its manufacturing industry. A good USD 300 million will be invested in 2018 to 2020/21. The project list includes the construction of a large textile complex for the annual processing of up to 5,000 tons of fine-fibred cotton into semi-finished and finished products. Start March 2021; contractor: Cotam Enterprises Ltd, British Virgin Islands/Turkey) and a factory for the annual production of 6,000 tons of cotton yarn (2019/20, Hilli yol), the modernization of a textile factory (Daschogus), a cotton spinning mill (Tachtabasar) and a factory for medical wadding and cosmetic cotton (Ashgabat; 2018/2019 each). The potential of medical textiles, cotton fabrics, man-made fibers and the processing of wool and cocoons is still little used.
 
GTAI Industry Check – Azerbaijan
Textile and clothing industry: Light industry business park attracts investors
Azerbaijan launched several projects to revive the industry (output in 2017: USD 100 million). An industrial park for light industry has been under construction in Mingachevir since autumn 2016. Nine new factories are planned for cotton, acrylic and woolen yarn, clothing, hosiery and leather shoes. The project is worth up to USD 150 million. The first factory for the annual production of 20,000 tons of yarn is under construction. Under the umbrella organization for the Azerkhalcha carpet weaving mill founded in 2016, ten further smaller factories will be put into operation in 2018. Gilan Textil Park, Sumqayit, wants to expand its exports of home textiles. In the medium term, the construction of a silk spinning mill with an annual capacity of 3,000 tons of yarn is also planned.
 
GTAI Industry Check - Armenia
Textile and clothing industry: interest from abroad increases
Rising exports of clothing to Russia and western markets lead to expect further investments in the textile and clothing industry in 2018. Italian investors are planning to build a large jersey factory in Kapan (Sjunik region). The company SASSTEX in Artik (Schirak region) invests in two factories for the production of fashion (ZARA brand) and workwear. The Egyptian Wassef Group is considering the production of cotton fabrics and products therefrom. Yerevan-based hosiery and children's apparel manufacturer Alex Textile will continue its USD 28 million investment program in 2018 to expand apparel and hosiery production at several sites in Armenia.

More information:
Asia Export
Source:

Germany Trade & Invest www.gtai.de

German Shopping Miles attract Turkish Merchants Photo: Pixabay
10.04.2018

GERMAN SHOPPING MILES ATTRACT TURKISH MERCHANTS

  • Companies expand branch network

Bonn (GTAI) - Thanks to the constantly good economic situation, the Germans are in best consumer mood. Turkish retailers also want to benefit from this and are expanding their store network in Germany. However, in order to be successful in the country, they have to respect a lot. Turkish investments in production facilities are seldom in Germany. However -the location offers a decisive advantage to the companies.

  • Companies expand branch network

Bonn (GTAI) - Thanks to the constantly good economic situation, the Germans are in best consumer mood. Turkish retailers also want to benefit from this and are expanding their store network in Germany. However, in order to be successful in the country, they have to respect a lot. Turkish investments in production facilities are seldom in Germany. However -the location offers a decisive advantage to the companies.

Modern furnished industrial lofts characterize the picture of the Düsseldorf Schwanenhöfe. Scenery restaurants, studios and companies have recently established themselves on the former chemical site in the district of Flingern. Since September 2017, the Turkish glass manufacturer Pasabahce became represented here with a showroom. On nearly 300 square meters expensive wine glasses, carafes and numerous other glass products are exhibited. After New York, Madrid, Milan, Shanghai and Moscow, it is the sixth outlet outside Turkey for the Istanbul company. Pasabahce is part of the Sisecam Group and one of the largest glass producers in the world.
 
Most Turkish investors come from the clothing industry
Turkish companies are currently focusing on the consumer goods market in Germany and are opening up business like Pasabahce. The investment focus is on the apparel market. Of the 211 projects by Turkish companies listed the Financial Times fDi-intelligence database between 2003 and 2017, every fifth is assigned to the textile and clothing industry. Another 11 percent comes from areas such as the furniture or cosmetics industry. For most traders, the local Turkish community does not play a major role as a target group. The Turkish companies are competing with other international brands in the German market for a broad western consumer group.

Turkish fashion houses are expanding
This includes the newcomer Yargici, which opened  four stores in top location throughout Germany in 2017. It was the first foreign engagement of the Istanbul clothing company. "In this and the coming years, more branches will be added, after all, we did not come to Germany to open just a few stores only", Germany boss Erik Schaap explains confidently.

The Turkish fashion company Sarar has been present here for over 17 years. In the year 2000 it opened its first branch on the Düsseldorf Königsallee. Since then, the company has invested about EUR 15 million in the country and opened eight boutiques. Sarar also wants to continue growing and is planning to reach 20 stores by 2020. However, Turkish retailers in Germany do not find it easy, as Sarar Europe GmbH marketing manager Salim Ünyeli admits: "The competition is very strong due to the ubiquity of Zara, H & M and Co. Most consumers do not know Turkish labels and prefer for the same price known Western brands."
"The tensions between Germany and Turkey have damaged our business, and potential customers are deterred from buying from a Turkish company." (Marketing Manager Salim Üniyeli of Sarar Europe GmbH.

Who thinks Turkish, fails
Turkey expert Suat Bakir knows the typical pitfalls for Turkish companies looking to start a business in Germany. Bakir is the capital representative of the German-Turkish Trade Association (DTW) and was previously managing director of the Turkish-German Chamber of Commerce and Industry for seven years. "Many fail because they do not spend money on professional advice and ask a Turkish acquaintance for advice instead," Bakir said. Gastronomy and clothing chain in particular have a high fluctuation rate, because it is particularly important in these segments to find and use the right location and a suitable marketing. "Anyone who thinks in Germany like a Turk and does not adapt its products to German consumer taste will not succeed on the long term," Bakir says. Because of the strained relations between the two countries, he advises against introducing a Turkish brand on the German market right now: "The German tourist, who is currently avoiding Turkey, will probably not buy from a Turkish company."
 
Deutsche Bogenn opens factory
Although only very few Turkish companies have invested in production facilities in Germany so far, Suat Bakir recognizes potential in this area. Turkish companies could adopt the positively occupied brand made in Germany, if they would manufacture in the country. The most recent example is the company Deutsche Bogenn, which opened a new plant for plastic pipes last year on Rügen. Behind the extra German sounding name the Turkish Dizayn Group is hided. From its new location, the company wants to produce pipes for various infrastructure projects with 100 employees and sell them worldwide.

Low investment volume
Turkey so far has played a minor role as an investor in Germany - despite the many bilateral relations. Turkish companies have invested just EUR 1.8 billion in the Federal Republic. According to Suat Bakir a key reason is the low level of internationalization of Turkish companies. Another obstacle are the visa restrictions for Turkish business people. The DTW estimates that so far 1,300 companies of Turkish origin have settled in Germany, one in three in North Rhine-Westphalia alone. That is a merit of a committed location marketing. Suat Bakir recommends that all federal states should exploit the interest of Turkish companies and promote their state more in Turkey. Mecklenburg-Vorpommern has already recorded a recent success with the establishment of Deutsche Bogenn on Rügen.

More information:
Retail Turkey
Source:

Sofia Hempel, Germany Trade & Invest www.gtai.de

13.03.2018

CONVERSION OF THE CLOTHING INDUSTRY IN BANGLADESH NOT YET COMPLETED

  • Eports grow slowly
  • Industry needs new concepts

Dhaka (GTAI) - The garment industry is the main industry in Bangladesh. The state of the companies has improved since 2013 - when a building with several factories collapsed. Domestic and foreign companies have invested in new processes. Government and associations want to further increase the security. Exports are growing slower. The international competition forces the companies to produce not only more sustainable, but also more efficient and innovative.

On April 24th 2013, north of the Bangladeshi capital Dhaka, the Rana Plaza building collapsed, housing five clothing factories. The disaster claimed 1,138 lives and more injuries. The disaster in-cised deep into the country's largest industrial sector. The massive problems with building and safety as well as violations of workers' rights became internationally visible at once and then vigor-ously tackled.

  • Eports grow slowly
  • Industry needs new concepts

Dhaka (GTAI) - The garment industry is the main industry in Bangladesh. The state of the companies has improved since 2013 - when a building with several factories collapsed. Domestic and foreign companies have invested in new processes. Government and associations want to further increase the security. Exports are growing slower. The international competition forces the companies to produce not only more sustainable, but also more efficient and innovative.

On April 24th 2013, north of the Bangladeshi capital Dhaka, the Rana Plaza building collapsed, housing five clothing factories. The disaster claimed 1,138 lives and more injuries. The disaster in-cised deep into the country's largest industrial sector. The massive problems with building and safety as well as violations of workers' rights became internationally visible at once and then vigor-ously tackled.

Foreign companies have invested heavily in the textile and clothing industry in recent years, with a record high in the year after the disaster. According to the Central Bank, foreign direct investment (FDI) in the textile and clothing industry in June 2017 reached a respectable USD 2.6 billion. Com-panies from South Korea have been the largest contributors with USD 766 million, followed by Hong Kong investors with USD 448 million and the United Kingdom with USD 243 million

FDI inflows into the Bangladeshi textile and clothing industry (in USD millions.)
Financial year 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17
FDI inflows, net 241 412 446 352 396 360

      *) Financial year from July 1st to June 30th

Several successful programs for more security
Government and international organizations responded with many measures and initiatives at Rana Plaza. The International Labor Organization (ILO) launched programs to improve work-ing conditions. Buyers and industry representatives were looking for solutions.

International traders, trade unions and non-governmental organi-zations finally signed a binding agreement for more fire and building safety in 2013 (Accord on Fire and Building Safety). Employees of Accord have since reviewed more than 1,600 tex-tile and garment factories. Approximately 86 percent of the iden-tified deficiencies were eliminated according to an interim report dated January 2018. Accord will expire in November 2018 after five years. Some participants of the alliance have agreed an ex-tension of the program of three years.

In particular North American importers launched the Alliance (Al-liance for Bangladesh Worker Safety) program in 2013. The Al-liance has since reviewed 666 factories that, as of February 2018, have remedied approximately 87 percent of the deficien-cies. The program will expire also after five years in May 2018.
Representatives of industry and government, trade unions, ILO, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and international buyers want to co-ordinate the control and rehabilitation measures together. The BGMEA and the government rely on the NI National Initiative, which they developed together with ILO. The Department of Inspection of Factories and Establishments is responsible for NI controls. Under the NI program 1,500 factories have been inspected which are working for do-mestic customers. The program is to be extended to exporting companies and will replace Accord and Alliance.

Workers demand more rights and higher wages
The government made it easier to found and to engage in trade unions after the Rana Plaza disas-ter. According to observers, the approximately 4 million workers in the textile and clothing industry continue to have little formal organization and went repeatedly on strike for higher wages.

A government commission recently increased the monthly minimum wage in the garment industry from Taka 3,000 to 5,300 in 2013. This amount corresponds currently with EUR 52 only. (1 EU-RO = Taka 102.13, exchange rate of March 5th 2018). Trade unions demanded tripling of the minimum wage at the beginning of 2018, because unskilled workers are given this low pay when they are first employed, which is barely enough to survive. The reward grows only later with the skills and experience.

Employees often change their jobs. According to observers, the fluctuation should average be-tween 5 and 7 percent per month. Fair wages and good working conditions would give a good in-fluence on this issue in the companies concerned.

Bangladesh is the second largest exporter of clothing after China
The globally active clothing retailers are buying in Bangladesh on a large scale. Some have offices with hundreds of employees. Major clients include Inditex (Spain), H & M (Sweden), C & A and Tchibo (Germany).

Clothing exports, however, stagnated in the financial year 2016/17. One reason for the weak growth was the strengthened exchange rate. Taka's national currency increased against the US dollar, making exports more expensive and less competitive.

The government is targeting an export growth of 8.1 percent to USD 30.2 billion in 2017/18. The industry is on track indeed, reaching 7.8 percent in the second half of 2017 compared to the same period of the year before. The most important customers are the USA and Germany.

Bangladesh's Apparel Exports (in USD million) 2014/15 *) 2015/16 *) 2016/17 *)
Total     25,491 28,094   28,150
Thereof           
.Weaving goods             13,065 14,739 14,393
.Knitting goods  12,427  13,355 13,757
Customers        
.USA            5,288 5,625 5,204
.Germany  4,339 4,653 5,135
.Great Britain  2,904  3,524 3,307
.Spain        1,626 1,864 1,879
.France  1,618 1,714 1,765
.Italy       1,243 1,278  1,349
.Canada             929 998 946
.Netherlands  627  660 814
.Belgium   772 835 753
.Japan            653 774  744
Poland         548  616 720

*) Financial year from July 1st to June 30th
Sources: Export Promotion Bureau, Bangladesh Garment Manufacturers and Exporters Association

Exports from this emerging country enjoy exemption from duty in many developed countries. The European Union grants duty-free and quota-free access. Australia and Japan grant preferential access to the Generalized Scheme of Preferences (GSP). , The USA however has suspended the GSP status in 2013 and imposed tariffs and duties on imports from Bangladesh.

Companies want to grow and become more efficient
The Association of Garment Export Companies BGMEA estimates that over 3,000 garment factories work exclusively for international clients. Another 800 to 1,000 companies sew for local retailers who sell clothing to the country's 160 million inhabitants.

There are no data on company sizes or on the companies with the highest turnover. Clothing companies are mostly registered as private companies and do not publish business figures. The larger ones belong to local conglomerates operating in different economic sectors.

The companies are investing in more modern production facilities to process larger orders faster and at lower unit costs. Imports of machinery and equipment for the textile and clothing industry totaled USD 1.4 billion in 2015. The BGMEA believes that the garment industry has increased its purchases of equipment since.

The added value along the local textile chain is expandable. Simple fabrics and materials are produced locally. The production capacities for fabrics however are not sufficient and need to be increased. The clothing industry is also switching to higher quality synthetic fiber products. Producers hope for higher margins, if, for example, they produce clothing made of elastic fibers or functional clothing made from mixed fibers.

Many pre-products are imported from China and South Korea. Imports however are difficult due to the limited handling capacities of seaports and airports. Logistics costs are high. The clothing sector still has some challenges to overcome.

 

 Bangladesh Garment Manufacturers and Exporters Association

http://www.bgmea.com.bd
Vereinigung der Bekleidungsexportfirmen
Bangladesh Textile Mills Association http://www.btmadhaka.com
Accord on Fire and Building Safety in Bangladesh   http://bangladeshaccord.org  
Alliance for Bangladesh Worker Safety  http://www.bangladeshworkersafety.org

 

 

 

Source:

Thomas Hundt, Germany Trade & Invest www.gtai.de

BANGLADESH RESTARTS LEATHER INDUSTRY Photo: Pixabay
20.02.2018

BANGLADESH RESTARTS LEATHER INDUSTRY

  • Production and export on the upswing
  • Environmental problems and other challenges remain

The leather industry in Bangladesh reports rising exports and growing domestic demand. The location scores with low labor costs and the availability of leather. However, too many tanneries still burden the environment. The industry structure of the manufacturers of leather goods and shoes ranges from outdated to modern. International, export-oriented companies are showing the way.

  • Production and export on the upswing
  • Environmental problems and other challenges remain

The leather industry in Bangladesh reports rising exports and growing domestic demand. The location scores with low labor costs and the availability of leather. However, too many tanneries still burden the environment. The industry structure of the manufacturers of leather goods and shoes ranges from outdated to modern. International, export-oriented companies are showing the way.

Bangladesh's leather industry is the second largest exporter of the emerging market after the apparel industry. The majority of exports in the 2016/17 financial year (July 1st 2016 to June 31st 2017) were USD 537 million on leather shoes (USD 495 million in the previous year), followed by leather goods with USD 464 million (388 million). The export of leather footwear rose again by 9 per cent in the second half of 2017, leather goods were at the same level as in the same period of the previous year.

By contrast, leather exports reached USD 233 million in 2016/17 (USD 279 million), down 29 percent in the second half of 2017. The main reason is lower demand for leather in China. Instead, it is increasingly being processed in Bangladesh into finished products for domestic and foreign customers.

Potential not yet exhausted
The Department of Commerce wants to quadruple the total exports to USD 5 billion by 2021. It has mandated this task at the Bangladesh Leather Sector Business Promotion Council. This should increase with suitable measures both the production quantities and the processing depth in the country. Leather production and processing have potential because they could well repeat the successful development of the domestic textile and clothing industry.

International investments are welcome. Foreign investors can find a subsidiary in their own hands and apply for subsidies and tax exemptions. Eight export processing zones and other special economic zones offer many legal and technical advantages, says the investment authority Bangladesh Investment Development Authority.

The Association of Leather Goods and Footwear Manufacturers & Exporters of Bangladesh (LFMEAB) reports that companies from Taiwan, China, South Korea and Japan are increasingly investing in the industry. Among other things they are relocating production from China to Bangladesh.

Foreign direct investments in Bangladesh's leather industry
(inventory June 2016 in USD million)

Country of origin Inventory 2016
Taiwan 76
Netherlands 37
Hongkong 26
Korea (Rep.) 17
Total 192

Source: Central bank

According to the Central Bank in the fiscal year 2016/17 USD 82 million were directly invested in the leather industry (previous year: USD 48 million).  Taiwan was by far the largest investor with USD 50 million (USD 14 million).

Also, former investors show a successful development. As an example the German company Picard Lederwaren has a joint venture in 1997 and produces now  32.000 leather bags per month and 40.000 small leather goods per month.

Certified manufacturer of leather goods
The most important buyers of leather goods and shoes are the EU, Japan and the USA. The EU and Japan generally do not impose quotas or import duties on Bangladeshi imports under their preference systems for developing countries.

The export-oriented leather goods manufacturers usually produce at a technical level required by the customers. These include certifications and exams. The trade association LFMEAB is committed to meeting industry-standard levels among its 150 member companies. The European Union also supports a sustainable, resource-efficient development of the leather sector with its ECOLEBAN project. Several tanneries and leather factories have been proven to adhere to the labor and social standards of the UN organization ILO and the ISO standard 14001 for environmental management systems.

With increasing demands and volumes, leather processing companies will also import more quality materials such as soles and accessories. Their machines and equipment are also from abroad.

Problematic conditions in leather production
However the leather is manufactured under problematic conditions. The agricultural land has a population of about 24 million cattle and thus about 1.7 percent of the world's total. The meat industry also processes buffalo and goats in larger quantities. Animals suffer from improper slaughter. Modern slaughtering processes and advanced processing steps could improve the quality of leather production.

The number of tanneries is estimated at more than 200, producing approximately 29 million square meters of leather per year, two-thirds of it are leather from beef skins. The industry has a poor reputation, the situation in many companies is criticized by independent observers. In most companies processes and equipment for occupational safety and environmental protection are not available. According to various reports children are working in poorly controlled factories.

The situation in Hazaribagh is dramatic. The Supreme Court has ordered already in 2003 that the approximately 150 small tanneries from this residential area in Dhaka should move to an alternative location. The public company Bangladesh Small and Cottage Industries Corp. was commissioned to set up the leather industry park Savar Tannery Park in a northern suburb of Dhaka. The complete relocation to the new leather cluster in Savar has since been delayed again and again.

According to the Bangladesh Tanners Association, the move to the Savar leather-industrial-park should have taken place in the meantime, however the local central sewage treatment plant seems not to work completely. The tanneries pollute the environment there as well. Media also report still tannery activity in Hazaribagh.

More skilled workers needed
In a recent 2013 survey the number of leatherworking companies was estimated at 3.500. The manufacturers develop their own designs for the domestic market and some want to place their own brands internationally.

But the intensity of training of skilled personnel does not keep up with the industrialization of the industry. Tanneries and leather industry employ directly and indirectly about 75.000 people. Their knowledge and skills are often based on old and traditional procedures and short briefings.

The need for skilled personnel is estimated at 60.000 persons. A center of excellence is involved in the training since 2009. The Center of Excellence for Leather Skills Bangladesh (COEL) has trained around 15.000 people in machinery and design since. Two universities train engineers in this field. The University of Dhaka has established an Institute of Leather Engineering and Technology, and the Khulna University of Engineering has a leather technology department.

The Ministry of Commerce and the association LFMEAB has organized in November 2017 the first edition of the trade fair BLLISS (Bangladesh Leatherfootwear & Leathergoods International Sourcing Show). The organizers were able to present the procurement market and want to continue the event annually. The industry event attracted 30 exhibitors and 20.000 visitors. The next edition will take place from  November 24th- 26th 2018 in conjunction with the leather technology fair Leathertech (http://www.leathertechbangladesh.com).

Contacts

Name Internet address
Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh http://www.lfmeab.org
Bangladesh Tanners Association http://www.tannersbd.com
Centre of Excellence for Leather Skill Bangladesh Limited http://coelbd.com
EU-Project ECOLEBAN (2014 until 2018) https://www.ecoleban.com

 

30.01.2018

TEXTILE AND CLOTHING MANUFACTURERS INVEST IN EGYPT

  • Chinese companies are planning several major projects
  • Germany is supplying more textile and clothing machinery

Several Egyptian and Chinese companies have announced some heavy manufacturing investments in textiles and clothing. The government is committed to creating new production priorities for textiles and wants to increase added value. Labor-intensive industries benefit from the low value of the Egyptian pound for their exports. For textile and clothing machinery, Germany achieved a delivery share of around 20 percent in 2016. In the Egyptian textile and clothing industry, the signs point to expansion and modernization. Local media reported on a series of investment plans by Chinese and Egyptian companies. According to the newspaper Al Gomhouria, a Chinese producer is planning the world's largest textile factory for USD 6 billion in the economic zone on the Suez Canal.

  • Chinese companies are planning several major projects
  • Germany is supplying more textile and clothing machinery

Several Egyptian and Chinese companies have announced some heavy manufacturing investments in textiles and clothing. The government is committed to creating new production priorities for textiles and wants to increase added value. Labor-intensive industries benefit from the low value of the Egyptian pound for their exports. For textile and clothing machinery, Germany achieved a delivery share of around 20 percent in 2016. In the Egyptian textile and clothing industry, the signs point to expansion and modernization. Local media reported on a series of investment plans by Chinese and Egyptian companies. According to the newspaper Al Gomhouria, a Chinese producer is planning the world's largest textile factory for USD 6 billion in the economic zone on the Suez Canal. The Chinese companies TIDA and Shoon Dong Roy want to build a clothing factory for USD 800 million. Sino-Egypt Minkai plans to build a textile industry complex for around USD 750 million. The local paper and stationery manufacturer Mintra plans to start the production of sports shoes with an initial investment of USD 50 million. Manufacturing in the 10th of Ramadan City is scheduled to begin in mid-2018, serving both the domestic and overseas markets. Egypt is still importing about 85 percent of the shoes sold in the country.
Oriental Weavers plans to purchase new production lines, machinery and equipment in 2018. For this purpose, EUR 6 million are to be invested. According to the newspaper Al Shorouk, the expansion will be financed by a bank loan.

State relies on new textile cities and more value added
The Egyptian state also wants to strengthen textile and clothing production. The Ministry of Investment and International Cooperation, the Supreme Council for Textile Industries and an unnamed Chinese partner want to set up a free zone for textile production in Minya. The ministry plans to provide part of the funding through international institutions and create specialized training programs for workers. According to media reports, the project value should be at USD 324 million.

In early 2017 the Egyptian Ministry of Industry announced that it would set up new textile production centers at a total of ten locations. In particular, spinning mills and weaving mills are in the spotlight. This perspective is shared by the Ministry of the Public Sector. It is aimed primarily at increasing value adding and therefore carried out a study in 2017.

Import demand for textile and clothing machinery is expected to increase
Egyptian textile and clothing companies often produce with a lot of manual work and partly outdated machines. On the one hand, the government is keen to ensure that as many jobs as possible are created for the approximately 800,000 young people who enter the market each year. On the other hand, a more automated and modern production of textiles and clothing would enable more complex products. These could be sold at a higher profit, but may also require less human labor.

An Indian company has secured a contract to modernize cotton processing. In compliance with a framework agreement with the Cotton and Textile Industries Holding, Bajaj Clothing automates cotton ginning systems. A total of eleven companies in different parts of the country will be equipped with the new machinery until August 2018. In late December 2017, Egypt Today announced that the government wants to modernize the spinning and weaving mills in Northern Egypt. The investment volume will amount to a total of one billion Euro over a period of five years.

The newly announced projects are expected to increase the demand of import machinery in the near future. Like other types of equipment, the vast majority of textile and clothing machinery will be imported into Egypt. Deliveries from Germany were able to improve both in absolute terms and relatively in 2016, despite an overall shrinking of the volume of imports. The German supply share jumped from 15.8 to 20.4 percent compared to 2015.

Import of textile and clothing machinery into Egypt (in USD  1,000)
HS Category 2015 thereof from Germany 2016 thereof from Germany
8444 1,135 0 4,481 2,025
8445 34,550 10,653 26,105 5,429
8446 18,902 984 23,591 13,346
8447 26,040 5,940 15,713 3,052
8448 23,39 5,158 20,574 3,365
8449 440 0 299 0
8451 34,796 3,335 36,512 2,334
8452 30,456 1,264 23,186 1,698
8453 3,087 5 3,678 137
Summe 173,145 27,339 154,139 31,386

Source: UN Comtrade

The consequences of the release of the Egyptian pound in November 2016 will mainly benefit labor-intensive industries and those that are processing mainly local raw materials. After October 2016, the value of the EURO soared from just under 9 to 21 Egyptian pounds and has stabilized at this level. According to various figures the textile and clothing companies in the country employs between 1.0 and 1.2 million workers. It is reported that state-owned enterprises are strongly represented in the textile sector, while the private sector plays a greater role in the clothing sector.

The advantage is dampened by the import requirements for cotton. In Egypt, especially soft and high-quality long-staple cotton is grown and exported. By contrast, domestic textile and clothing companies mainly use short-staple cotton from abroad as a raw material. Their import as become more expensive due to the currency developments. Nevertheless the competitiveness of Egypt's textile and clothing exporters has improved as a result of the new foreign exchange situation. Their exports should have developed better in 2017 than at the peak of the currency liquidity crisis in the previous year. At that time, exports fell by12.6 percent to around USD 1.7 billion.

Egyptian exports of textiles and clothing
(Selection, in USD millions, Change in %)
HS Category 2015 2016 Change 2016/2015
57 339.8 303.5 -10.7
60 2.0 35.7 1,685.0
61 483.6 388.0 -19.9
62 870.4 756.6 -13.1
63 262.2 227.2 -13.3
Summe 1,958.0 1,711.0 -12.6

Source: UN Comtrade

Increasing labor costs at Asian production sites, long transport routes and sometimes dissatisfaction with the product quality make some customers look for new sources of supply for textile and clothing products. According to a report by the news portal Middle East Eye, Egypt lies at least with USD 100 as a monthly salary for workers roughly equivalent on a level with India or Bangladesh and about half of Chinese salaries. In addition, the country at the Suez Canal is capable of fast deliveries to Europe and the United States. Regional competitors include Turkey and Tunisia. Egyptian manufacturers are not always recognizable as such, as they often manufacture for major international brands. Middle East Eye names Calvin Klein, Decathlon, Tommy Hilfiger and Zara as examples. In November 2017, Dice Sport and Casual Wear agreed to supply Levi Strauss & Co. with children's clothing.

Since 2017, Egypt became part of the Better Work Program of the International Labor Organization. The program includes 30 apparel factories in which the working conditions should be improved. Such confirmations could then give Egyptian products competitive advantages in export. However, to stand up to the tough international price warfare and at the same time to meet by the customers expected production standards will be a challenge.

05.12.2017

TURKISH CLOTHING MANUFACTURERS RELY ON DESIGN AND OWN BRANDS

  • Companies want stay away from cheap contract manufacturing

Istanbul (GTAI) - The highly export-oriented Turkish textile and clothing industry wants to increase its competitiveness on world markets by investing in design. The hitherto widespread contract manufacturing for foreign brand manufacturers is losing importance in favor of own collections. With a law from 2016, the Turkish state explicitly promotes investment in design.

  • Companies want stay away from cheap contract manufacturing

Istanbul (GTAI) - The highly export-oriented Turkish textile and clothing industry wants to increase its competitiveness on world markets by investing in design. The hitherto widespread contract manufacturing for foreign brand manufacturers is losing importance in favor of own collections. With a law from 2016, the Turkish state explicitly promotes investment in design.

The Turkish textile and clothing industry is going through a structural change: While the garment industry was once particularly interesting because of the comparatively low labor costs for contract manufacturing orders from Western companies, Turkish manufacturers are increasingly working as designers for international clients. In addition to well-known Turkish fashion manufacturers such as Ipekyol, Vakko and Zorluteks, more and more Turkish textile companies are also manufacturing and marketing their own brands. In parallel, they are expanding their online sales network. For example, Ipekyol intends to close half of its stores in the next 20 years.

In order to meet the changing demand of foreign cooperation partners, Turkish clothing companies are increasingly investing in research and development projects, as the Turkish business magazine Ekonomist reports.

For example, Hassan Tekstil (http://www.hassan.com.tr) based in Istanbul, founded in 2017, has a 45-member R & D department. The company, whose revenues of USD 232 mio in 2016 were generated 35 percent from exports, plans to spend1.5 percent of its revenue on R & D activities.    

Another company that is increasingly investing in R & D and design is TYH Tekstil (http://www.tyh.com.tr) in Istanbul. This purely export-oriented company with a turnover of around USD 100 mio (2016) employs 15 fashion experts. About 1.5 to 2 percent of sales, which will reach around USD 130 mio in 2017, will be used for design projects and the development of collections, according to the Economist's report. In addition to contract manufacturing for well-known international brands such as Gant and COS, TYH Tekstil also developed its own brand Roqa for women's outerwear. Meanwhile, 20 to 25 percent of exports are from the supply of private label products.

Innovative workwear for security forces

According to Economist, another manufacturer with increasing R & D activities is Narkonteks (http://www.narkonteks.com) in Izmir. This company, which does not produces for international companies only, produces also goods under its own brand "Blackspade". Narkonteks also supplies customers in the Netherlands with technical textiles for security personnel. The manufacturer employs 30 engineers for its R & D activities. Of the targeted sales of TL 100 mio in 2017, 1.5 percent will be spent on R & D activities.

In 2016 Narkonteks generated around TL 80 mio. (1 Euro = 4.50 TL). The company Farb Textile (http://www.farbetextile.com) in Izmir, which sews for European fashion companies such as Bestseller, Inditex and Mango, emphasizes increased design activities also, according to Economist. About 60 percent of the production are own brands. The turnover of TL 100 mio (2016), should be increased to TL 130 mio.
 
One of the larger R & D investors is the clothing manufacturer Taypa Tekstil in Istanbul (http://www.taypa.com.tr) with a turnover of EUR 100 million, which exports about 80 percent of its production. The parent company TAy Group, which supplies large fashion houses such as Levis, Inditex and Tommy Hilfiger, uses 5 percent of its revenue for research and innovation projects and employs 25 designers, writes the magazine Ekonomist. The share of own brands in sales of currently 21 percent is to be increased to 50 percent in the foreseeable future.

Taypa invests in major project in Algeria

In addition to the existing production in Egypt Taypa Tekstil manufactures in Serbia and Algeria. In a clothing factory in Kraljevo, Serbia, EUR 35 mio should be invested over the next five years. A large-scale project called "TayalSPA" is being planned in Algeria for the construction of an integrated textile and clothing factory in the Sidi Khetab industrial zone in the province of Relizane. According to Taypa CEO Burak Karaarslan, quoted in the business paper "Dünya", this project, with an support of 50 percent by the Algerian government will receive investments totaling USD 2 billion in three phases until 2023.

USD 800 mio will be invested in the recently started initial construction phase. The company will start with yarn production first. Thereafter, from the end of 2018, the production of denim and other fabrics will commence. After completion of the first phase, the annual production will reach 30 million meters of denim and non-denim fabrics, 14 million meters of fabrics for shirts, 3,200 tons of knitwear and 30 million pieces of ready-made garments.    

Government encourages investment in research and development

The Turkish state has been promoting investments in design since 2016: By Law No. 6676 of February16th 2016 (Government Gazette "Resmi Gazete" No. 29636 of 26.02.16) amending Law No. 5746 of 28.02.08 on the promotion R & D activities, in contrast to the previous practice, investment in design projects were concluded in the government support. Thus, companies that employ at least 15 people (previously 30) in the R & D sector can benefit from tax and customs privileges. Imported products for research projects are exempt from import duties.

Comprehensive support measures in the form of project-based grants for the marketing of Turkish brands abroad also include Regulation No. 2016/1 of the Turkish Monetary Credit and Coordination Council, which was announced in the Official Gazette No. 29898 of November 24th 2016. The implementation of subsidies is the responsibility of the Ministry of Economy.

According to figures from the Ministry of Science, Industry and Technology, there are a total of 38 R & D and 29 design centers nationwide in the textile and clothing industry.

Germany is most important target market

Turkey is a major exporter of textiles and clothing. According to official statistics, the country exported USD 24.3 billion worth of textiles and clothing in 2016 (including USD 16.7 billion in ready-to-wear articles). The export association IHKIB is targeting USD 60 billion in ready-to-wear exports in 2023. In apparel, Germany is the most important customer with a share of 18.8 percent. For textiles and textile raw materials, the country is the fourth largest market for Turkish exporters with 5 percent.     

Turkish foreign trade in confectionery (in USD mio)
Year   Export Import
2014 18,484.6 3,062.4
2015 16,756.3 2,846.9
2016 16,739.3 2,690.7

Source: Export Association IHKIB; Turkish Ministry of Economy

Turkish foreign trade in textiles and textile raw materials (in USD mio.)
Year Export Import
2014 8,535.9 9,172.9
2015 7,590.8 8,270.4
2016 7,568.8 8,171.0

Source: IHKIB; Ministry of Economy

Turkish export of garments by country (in USD mio) 
  2015 2016 Share 2016 (%)
Total    16,756.3 16,739.3 100.0
Germany  3,156.4 3,139.9 18.8
United Kingdom 2,187.2 2,015.1    12.0
Spain 1,666.0  1,738.8    10.4
France 871.3   837.2   5.0
Netherlands 803.1 774.9 4.6
Italy 592.4 610.9 3.6
Irak 741.1 558.9 3.3
Polen 445.6 556.1 3.3
USA 493.2 533.6 3.2
Denmark 401.0 422.3 2.5

Source: IHKIB; Ministry of Economy

Turkish exports of textiles and textile raw materials by country (in USD mio)
  2015 2016 Share 2016 (%)
Total 7,590.8 7,568.8 100
Italy 748.9 729.5 9.6
Bulgaria 309.6 598.1 7.9
Iran 319.2 387.9 5.1
Germany 384.4 380.7 5.0
USA 346.1 313.1 4.1
United Kingdom 330.5 303.7 4.0
Spain 251.2 284.9 3.8
Romania 285.7 278.2 3.7
Polen 269.1 275.1 3.6
Egypt 246.7 225.0 3.0

Source: IHKIB; Ministry of Economy