Textination Newsline

• Import from Germany growing / Domestic Chains expanding

Warsaw (GTAI) - The outlook for sales of clothing and footwear in Poland is favorable. Domestic chains such as LPP, Bytom, Vistula and Monnari are opening additional stores. In 2016 the shoe chain CCC is investing around EUR 33 mio in new sales areas, including in Germany. The western neighboring country is by far the biggest buyer of clothing from Poland. Increasingly popular too is fashion from Germany, which occupies the third place among supplying countries.

In Poland the demand for clothing and footwear is steadily growing. The market research firm PMR (http://www.pmrpublications.com) expects in 2016 sales worth of Zloty 35.3 billion (approximately EUR 8.2 billion, 1 Euro = 4.3283 Zl, as of April 22nd  2016). The price war however is very tough due to the higher US dollar exchange rate, the dealers can hardly pass their higher costs on to the customers. This concerns mainly imported commodity goods from the Far East, while the outlook for the upscale segment outfitters is better.

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

The company for classic clothing Bytom (http://www.bytom.com.pl, from the same city (Bytom – Beuthen)) that serves the upper segment, wants to create an offer for the masses. It lowered its prices in March 2016. In order to reach more customers, it plans to increase its sales area of from 10,300 square meters in spring 2016 to 15,000 square meters by the end of 2018. The number of its stores should simultaneously rise from 97 to 120.

Bythom will avoid quality losses through savings in the purchasing of clothing. According to Michal Wojcik, chairman of the company, negotiations with representatives of procurement markets are on the way. In 2019 the retail sales of Bytom should reach around 250 million PLN, double as much as in 2015 (123 million PLN). The company will serve the middle segment between large markets with  
mass-production goods and expensive boutiques with domestic and foreign luxury brands.

The two great rivals Bytom and Vistula (http://vistula.pl) from Krakow (Krakau) are receiving increasing competition by smaller companies. Vistula was able to win in 2016 the soccer star Robert Lewandowski for promotional activities, he will appear in suits of the company.

The stockbroker office of the Bank BZ WBK believes in good opportunities of the smaller chain Monnari  (http://www.emonnari.pl), which could double its sales area until 2019. With the proliferation of the growing clothing and footwear chains a consolidation of the retail structure goes along, and the total numbers of stores will overall decrease.

The chains Vistula, Bytom and Monnari are expanding domestically only, where they expand their retail spaces annually by 10 to 25%. Since only one third of the by Vistula and Bytom sold collections are being settled on a USD basis, they are not hurt as much by the strong upvaluation of the US currency as LPP, the manufacturer of mass-products. This company buys almost its entire collection in the  
Far East in US currency. In the case of the footwear chain CCC, the proportion is 40 to 50%.

Source: Bisnode

CCC strives towards west

The retail chain CCC (http://ccc.eu), which is also represented abroad including in Germany and Austria, has acquired for more than ZL 200 million the online shop for shoes eobuwie.pl (http://www.eobuwie.pl). By 2016 a further strong expansion is planned, for which it wants to raise about PLN 140 million. The sales area should become 27% net bigger with at least 100,000 square meters. This was announced by the deputy chairman of CCC, Mr. Piotr Nowjalis.

The majority of the new area (77,000 square meters) is planned abroad, where 110 stores should be opened. In the focus here are Germany, Austria and Romania. Domestically CCC is planning a new sales area of 23000 square meters for 40 stores. These plans represent an acceleration compared to 2015, when the total sales area had increased by 66,000 square meters net (+ 22%). At the end of 2015 there were at home and abroad 773 CCC stores with a total of 372,000 square meters. 

*) Forecast of the press agency Bloomberg, February 2016
Source: Newspaper Rzeczpospolita

According to a forecast of Bloomberg, the most important apparel and footwear companies will improve their results in 2016. Leader LPP supplies with its brands Reserved, Mohito, Cropp, House and Sinsay a wide audience. To the upscale segment belongs the new brand Tallinder, which is being offered since February 2016 in a first store in Gdansk (Danzig). Beginning in 2019 there should be 30 sales stores for the brand Tallinder, which then will compete with Vistula, Bytom and Prochnik.   

Source: Newspaper Rzeczpospolita

In 2016 LPP wants to increase its retail space at home and abroad by 11 to 13%, that is about 90,000 square meters. End of the year thus 1,716 shops could belong to the company. To date, 23% of the sales area of LPP is in the Russian Federation and Ukraine. The profits there were again impacted by the devaluation of the local currencies against the Zloty.

Foreign trade increases

The Polish imports of clothing exceed the exports. Especially Asian countries could increase their deliveries in 2014, but also Germany belongs to the leading suppliers and attained growth. Among the importing countries Germany plays by far the most important role. The followers are the Netherlands, Czech Republic, Austria, Sweden and other, mostly European countries.

Source: Central Statistical Office GUS

Although Poland supplies clothing to Germany at a large extent, it is not easy for the companies to settle in the western neighboring country with own shops and their own brands. LPP opened its first store in Germany in September 2014, in spring of 2016 there were already twelve. In three years there should be 30 stores. In 2015 the German LPP stores generated approximately 94 million PLN, but probably without profit because of investment costs and advertising.

Source: Central Statistical Office GUS

In 2015 Polish exports of apparel, accessories and other textile products and footwear continued to rise.

Source: Central Statistical Office GUS

• Competition requires Modernization
• Declining Exports due to Energy Shortage and Lack of foreign Currency

Cairo (gtai) – Egypt’s vertically integrated textile and clothing industry has a strong basis. To remain competitive more modern equipment and innovative products are required. Also the cooperation with local suppliers is upgradeable. The government is planning two new textile industrial zones. The import of textile and leather machinery in the first three quarters of 2015 reached USD 135 million. Of this 17% were Ger man deliveries.

The situation of the textile and clothing industry in Egypt provides ample material for both optimists and for doomsayer. Technical modernization of the mills and a focus on products with higher added value offer opportunities. Potential also has a better link between the production stages. These would include installation for spinning, weaving and laundries for denim. As upgradeable product groups like underwear, high quality knitwear and fabrics can be seen. With such the benefits of Egypt could be better accentuated. These include the favorable geographical location, the proximity to major markets and a variety of trade agreements. According to the American Chamber of Commerce Egyptian manufacturers already provide clothing for international brands such as Calvin Klein, Disney, Gap, Timberland and Zara.

The chances however are being opposed by a number of difficulties. Also the textile and clothing sector was hit by the energy crisis and the lack of foreign exchange. Many companies have a limited level of liquidity. Research and development were neglected for years, although there are positive examples of innovative companies also. Many producers were forced to close in recent years. Due to the risks in the sector banks are very reluctant in lending money.

Especially needed would be modern technology and product innovations in the face of the strong competitive pressures from abroad. The comparatively low level of wages in Egypt is higher than at Asian competitors. This lets rise problems in terms of export opportunities, also with regard to the domestic market. Here imported goods cover ground, especially since Egyptian manufacturers have raised their prices in recent years. As intensifier act the high exchange rate of the Egyptian pound and the inflation rate of around permanently 10%.    

The cost pressure makes it difficult for the mills to attract high-skilled workers, which is also reflected in a high fluctuation. Several times since 2008 strikes have paralyzed the production. Industry experts complain about a poor education level and lack of efficiency. As a countermeasure the companies organize courses for their employees.

The local cultivation of cotton does not cover the demand of the textile manufacturers

Despite cotton is grown in Egypt on a large scale, the varieties do not fit the needs of most local spinning mills. The country is famous for its high-quality, soft and durable long-staple cotton, while the factories prefer and demand now short and medium staple cotton qualities. The exports are facing a strong competition from the US Pima cotton quality. The Egyptian textile and garment companies mostly import in contrast their material especially from Greece, the United States, Burkina Faso and Benin. As a result, the high-quality raw cotton is exported and not value adding intensively processed domestically, while scarce foreign exchange flows in the import of foreign cotton.

Unrest in the sector is provided by short-term legislative changes. Thus the import of cotton was prohibited in summer of 2015, however allowed again after one week. Domestic cotton farmers are particularly affected by the reduction of subsidies, which concerns the cultivation itself and the needed fertilizers. Many farmers change to other crops, because cotton does not pay anymore and high inventories have accrued.

Egypt has a vertically integrated textile and clothing industry. It represents about 25% of the industrial production of the country and also provides a quarter of all manufacturing jobs. The largest product group is clothing, also fabrics and filament fiber and yarn play an important role. Approximately 50 to 60% of the spinning, weaving and felt capacities are state owned, while private companies dominate for 90% the garment production. The regional main textile areas are greater Cairo, the Nile Delta and Alexandria. In February 2015 the General Authority for Investment and Free Zones counted 4,594 textile and apparel companies with total investments of nearly USD 6 billion. Of this 4,399 companies where located in normal domestic areas, 196 in special free zones.

Quellen: Invest in Egypt, Research of Germany Trade & Invest

Weaker export results for textiles and clothing in 2015

With a volume of at last nearly USD 2.7 billion in 2014, textiles and clothing were the fourth most important export goods of Egypt. Based on the first nine months of 2015 however, weaker annual results than in 2014 are expected. The by far biggest target markets are still the EU and the USA.

*) January – end of September
Sources: UN Comtrade

Against all odds, the Egyptian textile and clothing companies are about to invest in their facilities. ESW announced in September 2015 to provide eight subsidiaries with approximately USD 19 million for reactivated and new production lines. The Czech Pegas Nonwoven Co. has ordered another manufacturing facility for its Egyptian plant. The imports of textile and leather machines from Germany are more stable than the total imports. After the results of the first three quarters, it is clear that German deliveries in 2015 will be higher than in 2014.

*) January – end of September
Sources: UN Comtrade

The Egyptian government has announced to build two industrial zones for textiles in Borg El Arab and the 6th of October City near Cairo. In August 2015 the Chinese Gondong Group had first talks about a possible investment in Egypt.

Internet addresses

Cotton Research Institute
Internet: http://www.arc.sci.eg
Egyptian Textile Development Association
Internet: http://www.etda-egypt.org
Egy Stitch & Tex (internationale Ausstellung in Kairo)
Internet: http://www.egystitchandtex.com
Industrial Development Authority
Internet: http://www.ida.gov.eg
Industrial Modernisation Centre
Internet: http://www.imc-egypt.org
Industrial Union of Garments - Chamber of Textiles Industries
(im Dachverband Federation of Egyptian Industries)
Internet: http://www.fei.org.eg
Home Textile Export Council
Internet: http://www.egyptianhometextiles.org
National Research Center (mit Textile Industries Division)
Internet: http://www.nrc.sci.eg
Ready Made Garments Export Council
Internet: http://www.rmgec-egypt.com
Textile Export Council
Internet: http://www.textile-egypt.org

• Forgery-safe Branded Fashion via washable Authentification Certificate

In 2014 German customs seized about 1.3 million counterfeit garments and accessories worth EUR 10.94 million. Particularly renowned brands suffer from piracy and try using different measures, such as hologram labels or special sewing yarns to protect their fashion - so far with little success, because professional counterfeiters can copy these marks most convincing.

But that could change now: As the first brand apparel manufacturer the Swiss wederundgut ag recently added on their UNiSONO -Shirts a labeling with a lanthanide-based SARD - safety substance which is completely tamper-proof due to high-covalent and doped crystal lattice. It has a unique, tailored composition with individual emission spectra and can be detected and deciphered only with an especially for this application developed laser measuring instrument. The incorporation in a multi-layer, firmly with the shirt fabric glued label, the marking cannot be destroyed neither by the wash liquor nor by mechanical influences during the washing process.

"Brand counterfeiting is becoming more and more a problem for the fashion industry.  Especially well-known brands are suffering from the proliferation of plagiarism" Ueli Fish, CEO of wederundgut ag, explains. "It is therefore in our own interest as textile manufacturers, to find ways to make our products clearly marked as identifiable originals."

Within the sector many protective measures have already been tried, but without achieving a long term desired effect: One company for example works with holograms on the label. For professional plagiarists a hologram provides no bigger hurdle in these days, stated Dieter Ebert, CTO at the product protection specialist swiss authentication research and development AG (SARD) explains. As another possibility sewing threads will be soaked with safety fluids. "The disadvantage is that all known substances will sooner or later be completely washed out of the fabric in the washing process," the expert said. Several manufacturers of high-quality functional wear labeled their products temporarily with RFID chips. However, they also were destroyed in the washing process sooner or later - partly through the water, partially mechanically, so that this solution has been abandoned. Others prefer to educate their customers trying to explain differences between original and copied patches.

Individual, clearly identifiable marking

For the marking with the by SARD developed safety substance wederundgut ag decided due to the utter counterfeit security and adaptability for different applications. "The substance contains a custom mixture of lanthanides, which form a very complex, high-covalent and doped crystal lattice," the CTO explains. "In the production of a patented process at a defined point some foreign substances in the smallest amounts will be added that changes the emission spectrum significantly." By excitation in the UV or IR range the substance sends the customized optical spectra. These are stored in an associated detector, which has been developed by SARD for this application, and can only be recognized by the latter. All mixtures of the substance are stable at temperatures far above 1,700°C, resistant to acids, bases and radiation, highly resistant to chemicals and toxicologically safe. The particles, which generally have a size of about 1 to 10 microns, also allow no interactions with any other substances.

A decisive advantage of the substance is that the production process is not possible to replicate due to the artificial emission spectra: "Through the endowment spectra will be generated, of which it cannot be determined which elements are involved. Therefor a replica of the substance through reverse engineering is not possible, Ebert says.

Also the laser measuring device cannot be manipulated, since it has its own software and a virus free operating system and uses for algorithm and cryptography the FPGA technology. When evaluating the marking SARD also focuses on the key-lock principle: "The two independent emission spectra of custom substances serve as the key. They are stimulated and measured by the two independent laser systems of the detector”, so the CTO. “Decoding is performed with in the device stored, cryptographically encrypted information. They therefore act as a lock." Only when the correct substance is detected, a protected algorithm shows the customer-specific information on the display of the detector. This feature ensures a highly secure authentication.

Not leachable substance

In addition to the protection against forgery wederundgut is demanding further properties on the marking. "The label should not get an optically negative change, should be completely hypoallergenic and should remain from the cost point on an acceptable level," Fish says. The most important point for the textile manufacturer however was, that even after repeated washing the substance remains detectable: "That was at first a great challenge for us," Ebert says. "If we would have brought he SARD-substance in a conventional manner into the material, for example just with a color - as with solutions of other manufacturers - then there would have been the risk that the substance would be washed out by the surfactants of the detergent. Therefore we had to find at first a suitable carrier material. Together with the Munich label specialists RATHGEBER GmbH & Co. KG SARD finally developed a solution in which the substance will be incorporated into an iron-on label made of plastic composite material from which it cannot be removed. "This label is produced in several layers," Ebert says. "In one of them the SARD-substance will be incorporated and permanently sealed with another layer."

The label corresponds optically with the known company label of UNiSONO, the safety substance is difficult to detect with the bare eye. The final label is, among other things, resistant to alkalis, chemical cleaning agents, UV radiation, mechanical stress, acids, weather influences and keeps temperatures from -30 to 120°C. It will be ironed onto the shirt using a special hot-melt adhesive. This agent is very resistant and does not dissolve from the fabric, even at very frequent washing as is common for example in sports clothing. "At this project together with SARD we achieved great results very fast. With the current result, a very uncomplicated solution for us, we are very satisfied,” Fish explains, who puts the security label directly in the clothing factory on the shirts. “In the future we'd like to get a label that is even more soft and thinner than the current one. We intend to work on it together with SARD," the CEO said. 

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

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

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

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

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

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

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

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

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

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

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

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

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

*) provisional; Quelle: Destatis

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

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

• Vietnam is largest beneficiary
• Relocation closer to sales markets

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

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

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

Relocation trends slow down

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

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

German buyers order less in China

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

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

Vietnam benefits from Free Trade Agreements (FTA)

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

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

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

Africa still with small potential

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

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

Source: McKinsey survey of chief purchasing managers

Trade Development Authority of Pakistan (TDAP), Government of Pakistan is organizing the first ever textile exhibition named TeXpo 2016 from 7-10 April 2016 at Karachi Expo Center.

Objective of this exhibition is to present the potential of textile sector exports, especially value added sectors: readymade garments, knitwear, hosiery, bedsheets, textile madeups, sportswear, towels, textile accessories, etc.

The textile sector of Pakistan

Pakistan is the 4th largest producer and 3rd largest consumer of cotton globally. Textiles is the vital manufacturing sector of Pakistan. It contributes nearly one-fourth of industrial value-added, provides employment to about 40% of industrial labour force, consumes 40% of banking credit to manufacturing sector and accounts for 8% of national GDP. Textile products share in national exports is 54%.

The textile industry consists of 11.3 million spindles, 3 million rotors, 350,000 power looms, 18,000 knitting machines and processing capacity of 5.2 billion sqm. It has 700,000 industrial and domestic stitching machines. In addition, it has a strong fiber base of 13 million bales of cotton and 600,000 tons of manmade fibers including polyester fiber. There are 21 filament yarn units having capacity of 100,000 tons. The filament and yarn industry is supported by PTA plant which has 500,000 tons capacity. Thus a complete textiles value chain exists in the country which is rare in the world, unlike many competitors which have only primary base or the finished base.
Source: Ministry of Textile Industry, GoP

Pakistan’s textile exports to Germany

Pakistan enjoys zero customs duty access to European Union including Germany on textile products under GSP Plus Scheme. The scheme started in 2014 and the duty preference to Pakistan will continue for another 8 years. As a result of this incentive, Pakistan’s exports to European Union have increased by almost US$ 2 Billion in two years and the main beneficiary of the scheme has been the textile sector. This increase in exports shows the European buyers confidence in the manufacturers and exporters from Pakistan.

Especially with Germany, Pakistan’s exports in textile products have been increasing by 20% every year. The table below shows Pakistan’s exports to Germany, in textile products:

Source: TDAP R&D Cell

Texpo – An opportunity to expand sourcing and increase Profits

The exhibition – Texpo provides and a unique opportunity for the buyers from Germany to meet new suppliers of the textile products and visit their manufacturing facilities.

The Government of Pakistan, Trade Development Authority of Pakistan will arrange accommodation for the visitors/ guests from all over the world, in the top hotels in Karachi city. Free accommodation will be provided for the guests registered through Pakistan Embassy at Berlin or the Consulate at Frankfurt am Main. A few select guests will also be offered air ticket subsidy depending on the confirmation from the organisers.

Local transport in Karachi city with complete security for the delegates will be arranged by the Government of Pakistan to further add to the comfort of guests from all over the world.

You can also plan your visit to China and other regional suppliers near Karachi right after Texpo.

For further details, please contact:

1. Mr. Rizwan Tariq
Commercial Counsellor Consulate General of Pakistan, Frankfurt am Main
Ph: +49 69-6976970
Cell: +49 176-31363223
Email: pakcom.frk@tdap.gov.pk

2. Mr. Matthias Theis
Honorary Consul of Pakistan for the state of NRW Dusseldorf
Ph: +49 211 4407227
Email: office@pakistan-nrw.de

3. Mr. Rainer Borch
Trade Development Officer Embassy of Pakistan Berlin
Ph: +49 30-21244145
Cell: +49 163-3736036
Email: tdo@pakemb.de or rainer.borch@aol.de

• Volumes considerably upgradeable
• Italy loses Top Position to North Korea

Beijing (gtai) - Chinese consumers appreciate German goods from cars to saucepan. Fashion "Made in Germany" is only now discovered. German providers benefit from the good image of their country of origin - and from the desire of the growing middle class to afford something "good". Local production usually has a rather bad reputation. However there is a lack of presence, German brand names are hardly known. Despite the high growth rates the sales potential is by far not yet exhausted.

German Fashion in the PRC is coming: according to Chinese custom statistics in the first ten months of 2015  Chinese purchases from Germany of knitted and crocheted clothing and garments (HS-Pos. 61) rose by a whopping 31.8% and by 5.1 % in other apparel and clothing accessories (HS-Pos. 62). This is all the more remarkable because the total imports for clothes grew in the same period by 3.6% only, - and China across all sectors even recorded a stately import reduction by 15.7%.

But a sales volume of USD 5.6 million USD of a total import of products of these HS headings of USD 4.9 billion is rather negligible. In fact, German fashion brands, with a few exceptions such as Hugo Boss and Escada, are yet barely visible in the PRC. A really good positioning was reached by Adidas only.

Luxury purchases are shifted abroad

The Shanghai Daily wrote in October 2015, Chinese luxury purchases have been shifted to abroad at two-thirds since 2012. In Paris, Milan, London, New York or Tokyo one can buy anonymously and also cheaper than on the mainland. In addition, there is a trend away from the "quasi everywhere" available "big names" to new, less known, more individual designers.

At least there seems to be a still unabated propensity abroad: For example, the Financial Services Global Blue reported an increase in tax refunds of Chinese tourists in August 2015 of 65.6% (July: + 73%) compared to the same month of the previous year.

Detached from the top position was Italy in October from Korea (Dem. P.R.) with USD 663.9 million. On the third and fourth place follow Vietnam (USD 587.5 million) and Bangladesh (USD 364.7 million). The success of these three countries is probably due to an already shifted production capacity of Chinese manufacturers, which bring their products back to China to sell them there.

Source: China Customs

As in many other areas of consumer goods in the “Dress-Question” Germany does not utilize its opportunities on the Chinese market. According to sector insiders “here could happen much more" - not least because of the excellent reputation that the label "Made in Germany" enjoys among Chinese consumers.

"Light Luxury" demanded

The "big" Italian or French brands such as Gucci, Armani or Chanel remain inaccessible for the most. Fashion "Made in Germany" can cover a niche in the medium price range that is affordable for the growing urban middle class, that also would like to buy "something international" and has come to appreciate German products from automobiles to saucepan. For them German fashion is not for luxury, but for good execution respectively processing and good material. At the same time other competitors are active in this field. In a similar notch for example, the Dutch men’s wear supplier Suitsupply abuts, which opened in Shanghai in the summer. 

Fake products are not an alternative for this clientele. In fact, the Chinese consumer does not make its decision for a German product due to the low price, but rather by the desire to acquire a piece of excellent quality. This then may cost something and stands out from the mainstream, whether through innovative materials, unusual combinations of materials, individual or humorous cuts or by a special design. Increasingly demanded are accessories such as matching belts, bags or shoes. As a micro-trend in the younger generation applies also wearing hats - and who wants to leave is going to the popular Octoberfest in a real Dirndl.

Sales price at least three times the purchase price

German manufacturers take advantage from the "demographic factor": the Chinese society is aging rapidly. Accordingly the demand is shifting away from "more funky and young" goods towards timeless, trendy-fashionable, quality orientated clothing, which then may be slightly more expensive - and it de facto also is. Experiential German import goods become more expensive due to transportation, customs and usual trading margin up to at least three times the buying price.

However, as successful niche products yes, - for the masses German goods therefore are not suitable. This may apply to lovingly designed eco-slippers as well as for trendy hats or quality handbags in a "Light-luxury segment". Not seldom the one or the other gap in the market can only be detected by local presence - so for example - each country has its own "house shoe culture", with which one must learn to deal with as a provider.

According to the experience of many exhibitors, sometimes Chinese buyers like with high standards masterfully crafted products even more than the Germans themselves. Moreover it is advantageous, to be able to offer customers next to the actual product, "a story". So it absolutely impresses, when a company is family-run by the fourth generation - or high craftsmanship can be documented with a film.

• 80.000 trade visitors from 128 countries
• Significant increase in visitors from Europe
• 1,185 exhibitors from 50 countries
• LivingInteriors dazzles with Smarthome

From 18 to 24 January 2016 at imm cologne and LivingInteriors, a total of 1,185 companies from 50 countries presented the trends in furniture and furnishings for the coming year. Buyers from the trade with decisionmaking authority made for a dynamic trade fair during the first five days. With around 80,000 trade visitors from 128 countries, the event recorded a slight increase (4.8 percent) in trade fair visitor numbers compared to 2014. The proportion of visitors from abroad was 46 percent (based on the trade visitor days). The development in the number of visitors from overseas was positive, while the trade fair duo recorded an especially significant increase in the number of visitors from Europe.

"This outcome shows that imm cologne is unmatched as a business event for the global furniture and furnishings industry", said Gerald Böse, President and Chief Executive Officer of Koelnmesse, summing up the event.

"This is where the world comes together to do business, which offers a lot of new opportunities for export-oriented companies. At the same time, this fair duo has proved once again that business and creative inspiration are not mutually exclusive", Böse continued. "imm cologne was a wonderful furniture show and has got us off to a very successful start to the 2016 furniture year. With so many new products and ideas, innovations and great models in all price ranges, we are confident that the German furniture industry will achieve another increase in sales this year", added Dirk-Uwe Klaas, Managing Director of the Federal Association of the German Furniture Industry (VDM). This was confirmed by Hans Strothoff, President of the Federal Association of German Furniture, Kitchens and Furnishing Retailers (BVDM): "This year's imm cologne really stimulated a keen interest in furniture. Rarely has the mood in industry and trade been so positive as at this fair. Wherever you looked, only smiling faces and great optimism. imm cologne has really catapulted the industry into the new business year with a swing."

The atmosphere among visitors was characterised by business, networking and the search for trends. In the past few years, imm cologne has raised its international profile, not just among exhibitors, but also among visitors. 2016 saw a significant increase in buyers from Europe, primarily from the Netherlands, the United Kingdom, Spain and Austria. The event also registered a clear increase in the number of visitors from overseas, especially from the USA, China and India. Including estimated figures for the last fair day, a total of 120.000 visitors were inspired by the interior design worlds.

In addition to the products on show, the highlights of the 2016 trade fair once again included "Das Haus - Interiors on Stage", a walk-through simulation of a home, which was designed this year by Sebastian Herkner, and the "Smart Home" special exhibition at LivingInteriors, where numerous companies showcased solutions for a cleverly networked home that are already available today.

Trends at imm cologne/LivingInteriors 2016

Homes are becoming homier once again Cosiness and a feeling of security are increasingly important in the home. There is also a clear enthusiasm for new combinations. Along with furniture and decorations, accessories and home textiles that suit people's preferences when used individually are combined freely. The result is homes that are as unique as their inhabitants.

Mid-century design is booming
Across all product sectors, a striking number of furniture designs are reminiscent of those from the 1940s through the 1960s. These designs make efficient use of materials, have delicate features and are lightweight and above all smaller. The trend can be explained by the smaller living spaces available in city homes, though also by a general sense of nostalgia. Like an old friend, sleek mid-century furniture proves its value in uncertain times.

Natural materials are on the rise
Wood, glass, stone and metal: natural materials are particularly popular. In addition to the large proportion of wood used, for example in tabletops, chair and table frames, valuable natural stone is an increasingly common material in tabletops. Popular varieties include the European classic "marble" as well as exotic South American stone with particularly unique veining. The use of tree bark in wall decoration is another trend on the horizon.

The next imm cologne will be held from 16 through 22 January 2017 in Cologne - together with LivingKitchen, the international event for all topics related to the kitchen.

Each year, trainees from Mehler Texnologies engage in a "Social Week". In December 2015 six trainees were released a week to assist the Tafel in Heinsberg and the SPS Foundation, a non-profit association for refugee assistance.

Support for refugees

Many refugee camps lack not only financial resources, but also volunteers who help active locally. For this reason, the trainees of Mehler Texnologies made the clear decision to support refugees. For one week,
they helped in the emergency shelter in Niederheid and in a refugee shared flat in Lindern and won herewith deeper insight into the everyday life of refugees.

Assisting the Tafel

Even before the rise in numbers of refugees there were people in need in our ranks. This often withdraw from society, so that they remain unnoticed in everyday life. To help these financially and often socially disadvantaged, the trainees supported the Tafel in Heinsberg. For this facility, they collected food in supermarkets to make it available for the Tafel.

Positive feedback

As a global employer Mehler Texnologies is aware of its responsibility towards society and proves good intention thanks to the project "Social Week" for three years. Besides social skills, the trainees benefit from the development of professional skills: the independent planning, implementation and taking charge of responsibility of the project are valuable experiences that have a positive impact on the performance of
future tasks in their work environment. In addition, the social engagement is an opportunity to develop personally in a very different work experience.

Mehler Texnologies is one of the leading international companies in coated fabrics market. More than 53 million square metres of material are produced and sold each year under the brand names VALMEX®, POLYMAR® and AIRTEX®. Over 60 years of development and production experience represents the basis for sophisticated products.

http://www.mehler-texnologies.com/