Textination Newsline

• Manufacturers rely, among others, on German Machines

Tokyo (GTAI) - When it comes to functional textiles, Taiwan belongs to the international top league. To ensure that this remains the case, industry manufacturers invest in modern equipment and innovations.

Taiwan is an important global supplier of functional textiles. The sector wants to maintain this position and expand it as much as possible. They are therefore investing in new capacities, research and development. There are good sales opportunities for suppliers of pre-products and equipment.

The demand for functional textiles is increasing in the sports, leisure and footwear industries. In other sectors, such as the automotive and medical industries, building materials and agricultural aids, these are also increasingly being used. Functional textiles are usually not recognizable as Taiwan products. Nevertheless, some of them are very visible.

For example, at least 15 out of 32 teams at the 2018 FIFA World Cup wore clothing made with textiles of Taiwanese origin for internationally renowned brand names, according to the Taiwan Industrial Development Bureau (IDB). According to the Taiwan Footwear Manufacturers Association, Taiwanese manufacturers are responsible for approximately 80 percent of all sports shoes produced worldwide.

Textile manufacturers invest
Far Eastern New Century (FENC) is one of the largest textile manufacturers on the island. Its production capacity is nowadays mainly located abroad with productions in China, Japan, the USA and Vietnam. FENC is also expanding its capacity in Taiwan. Polyester spunbonded nonwovens have been produced for the Asian market in a joint venture with Freudenberg in Germany since 1987.

Freudenberg Far Eastern Spunweb has announced that it will set up a third production line for nonwovens at the Tayuan plant, thereby increasing the existing production of 20,000 tons by 11,000 tons per year. Construction of the new production facility, which is scheduled to start operations in 2020, has now begun. The latest automated production technology is to be used. According to the company, the investments amount will approximately be at USD 43 million.

Source: CommonWealth Magazine, Taiwan Stock Exchange

Germany remains an important equipment supplier
Taiwan's textile manufacturers import their equipment mainly from China, Japan and Germany, with some of the machines produced in China coming from companies with Japanese, German, Italian or Taiwanese parent companies. German deliveries declined by 13.7 percent to USD 71.1 compared to 2016 million in 2017. However, Taiwan's imports from Germany increased by 24.3 percent in the first six months of 2018, exceeding deliveries from Japan at USD 42.5 million.

The fact that the import of equipment remains at a high level has to do with the fact that companies in the textile industry in Taiwan are modernizing existing plants and converting them to Industry 4.0. In addition, the number of textile manufacturers in Taiwan has increased in recent years. According to statistics from the Taiwan Federation of Textiles, the number of companies rose from 3,143 to 3,214 between 2014 and 2017.

*) HS-Codes 8444-8453; without 8450
Source: Customs Statistics, Ministry of Finance

Core functions remain in Taiwan
By contrast, the production value of the textile sector fell slightly. In local currency terms, it fell in 2017 compared with 2016 by 1.7 percent. Converted to US dollars, the production value of textiles was USD 9 billion, according to the statistics from the Ministry of Economic Affairs. The production of synthetic fibers stagnated at just under USD 3 billion in 2017.

Taiwan is home to the headquarters of the often family-run textile companies. Purchasing and marketing decisions are mainly made here, and, last but not least, research and development are carried out here too. For example, several manufacturers are currently developing smart textiles with integrated temperature control, heart and location functions.

Foreign activities are diversified
The textile manufacturers are investing predominantly in new capacities outside Taiwan. For example, FENC 2018 is expanding its capacity for PET (polyethylene terephthalate) and terephthalic acid (PTA), which among others are required for the production of synthetic fibers. Together with an Indonesian and a Mexican partner, FENC acquires two new plants of a bankrupt US company in West Virginia and Texas. Among other things, this reduces the risk of possible trade restrictions and, conversely, increases the opportunity to benefit from free trade agreements.

Vietnam is also a focus of investment. Here, most Taiwanese textile companies are in the process of establishing or expanding new capacities. FENC, Formosa Taffeta, Eclat, Makalot and several others invested in the southeast Asian tigerland several years ago. By contrast, new investments in China have become rare, primarily due to rising wage costs.

• Exports increase
• Domestic demand rises

Poland strengthens its position as a major furniture producer. Many companies are expanding their capacities. The industry structure is very fragmented. Among the small to large companies, a certain consolidation trend is noticeable. There are also numerous micro-companies on the market. Furniture exports are expected to increase again in 2018, and the demand for housing, office and shop fittings is also growing in the country itself.

Poland is an important producer of furniture that is heavily exported, especially to Germany. The producers are expanding their capacities: For example, at the end of October 2017 the Austrian company Egger started construction of a large chipboard factory in the south of Biskupiec (Bischofsburg), which is scheduled to start operations in the fourth quarter of 2018. It is being built on 85 hectares of land within the Warmia-Masuria Special Economic Zone (SEZ) and is expected to produce around 650,000 cubic meters of slabs annually.

The value of this investment amounts to almost EUR 240 million. The products are intended for both domestic and foreign customers. They should meet strict environmental standards and be up to 30 percent of recycled wood. 400 new jobs will be created in the new factory itself and another 600 will be created in cooperating companies.

An important buyer of chipboard will be the furniture industry, which also invests by itself. According to the daily Rzeczpospolita, the company Meble Wojcik plans to build a production facility as well as a warehouse and logistics warehouse for a total of EUR 12 million. These are to be equipped with automated production lines and logistic equipment. In addition, the further development of the IT system is planned so that the production can be adapted very fast to individual customer requirements. The investment project will create at least 120 jobs. The sales of Meble Wojcik in 2017 amounted to more than EUR 100 million.

New sawmill planned
A project of comparable value is being undertaken by the manufacturer of upholstery furniture DFM, which wants to produce wood frame elements in Dobre Miasto (Guttstadt). A modern sawmill is being built there, the construction elements of which are not only intended for DFM itself, but for other customers also.

The furniture manufacturer Szynaka Meble wants to raise more than EUR 5.3 million to build a new warehouse in Ilawa (German Eylau). There 30 employees will be employed. Among other things, the procurement of a modern software for material management is planned.

The six plants of Szynaka Meble produced furniture worth around EUR 235 million in 2017 (on a zloty basis) +5 percent compared to 2016. For 2018 the company expects a growth of 15 percent, mainly due to increased exports to North America, where it intends to sell one-fifth of its production.

Location of the Meble Wojcik, DFM and Szynaka Meble projects is also the Warmia-Masuria SEZ, located in a wood rich area. According to press reports, the manufacturer of shop fittings Modern-Expo plans to build a factory in Lublin. In the first three quarters of 2017, the Polish furniture industry invested a total of around EUR 200 million, according to the main office of CIS. On a zloty basis, the amount stagnated compared to the same period of the previous year.

The sector structure is fragmented
The furniture industry plays an important role in the Polish industry. Around 25,800 companies in Poland are involved in the manufacture of furniture and interiors. Nevertheless, elements and components are also imported, including from Germany. More than 90 percent of the companies are micro-companies, which, according to the market research firm B + R Studio, together however account for 10 percent of the domestic sales only. Only about 90 companies are classified as being large. Together with the approximately 320 medium-sized companies, they sell about three quarters (76 percent) of the relevant products. Small businesses account for a part of 14%. According to CIS at the end of 2017 there were around 161,000 employees in the furniture industry, around 6,000 more than the year before - (+4 percent).

1) Estimation; 2) Forecast

Source: B+R Studio

For 2018 B + R Studio expect total domestic sales of more than EUR 11 billion, which represents a 3.1% increase on Zloty basis compared to 2017. For years the market leader has been the Polish subsidiary of the Swedish Ikea Group, with revenues of around EUR 1 billion in 2016. Far off is the domestic group Black Red White, which raised a total of EUR 335 million in 2016. It estimates its turnover in 2017 at around EUR 400 million (on Zloty basis +16 percent); the export share is 35 percent.

The company Nowy Styl, which specializes in office furniture and chairs, comes third, with revenues estimated at EUR 340 million in 2017 (+8 percent compared to 2016). The mattress manufacturer Correct follows with a turnover of EUR 291 million in 2016, ahead of the stock exchange listed company Fabryka Mebli Forte with EUR 252 million, which aims to reach EUR 400 million revenues for 2020. Forte will take its 5th factory in operation in late 2019 / early 2020, increasing its production capacity to 6.5 million pieces of furniture annually.

Of importance is also the manufacturer of upholstery furniture Com.40 Limited. Seating is by far the most important category of furniture produced in Poland, accounting for almost half of the total sales.

Exports revive
According to the B + Studios the furniture exports are expected to rise to EUR 10.6 billion in 2018. On a zloty basis this means an increase of about 2 percent compared to 2017 with an estimated EUR 10.1 billion, when the exports fell by 1 percent. Domestic demand for furniture is also increasing thanks to residential and commercial property construction. The increasing purchasing power of the population also makes it possible to replace old facilities with new ones. Imports complement the offer of domestic industry.

1) Estimation; 2) Forecast

Source: B+R Studio

The industry is suffering from an increasing labor shortage, which leads to higher wages. According to CIS, the average gross wages in 2017 were EUR 833 per month compared to EUR 738 in 2016. On Zloty basis, this corresponds to a nominal growth of 7.3 per cent.

Contact addresses:

Ogolnopolska Izba Gospodarcza Producentow Mebli (OIGPM)
(Polish Chamber of Commerce of Furniture Producers)
Contact: Michal Strzelecki
Al. Stanow Zjednoczonych 51, pok. 614
04-028 Warszawa, Polen
T +48 (0)22 517 78 39
oigpm@oigpm.org.pl
http://www.oigpm.org.pl

B+R Studio Analizy Rynku Meblarskiego
Market research institute for the furniture market:
Head of the Analysis Department: Martin Czyrnia
MD Connect Sp.z o.o.
ul. Oleska 35
46-380 Dobrodzien, Polen
T +48/507 96 66 23
brstudio@brstudio.eu
http://brstudio.eu

• Retail consolidates 
• Market leader LPP continues to expand

Apparel and footwear sales in Poland are rising by around 5 percent annually. An increasing proportion of sales is generated online. The German discounter chain KiK is spreading successfully. There are market niches for high-quality fashion from Germany. The leading domestic retail chain LPP is expanding at home and abroad. It not only invests in new designs but also in the online segment. The retail structure is becoming firmer.

The Polish retail trade in clothing and footwear is consolidating. The number of stores drops by about 1,000 a year. The main reason, according to the daily Rzeczpospolita, is the growing online trade. For large retail chains, active in both local and virtual trading, this trend is not negative: they are even opening up more traditional sales stores and increasing their sales.

*) Estimation

Source: Market research Company PMR

Small businesses do not have these options. They have difficulties to survive in the tough price competition and are in part pushed out of the market. Additional competition is coming d from discount and hypermarkets that are further broadening their apparel range. These include not only large grocery chains such as Biedronka, Tesco and Lidl, but also the specialized textile discounters Pepco with almost 780 and KiK with over 200 clothing stores. They are also pursuing further expansion plans.

*Forecast

Source: Euromonitor International

According to a report by the market research firm Gemius apparel and accessories form the product group that Internet users most frequently order on the net,. By contrast shoes occupy only the seventh place. In Poland, however, only a few percent of the sales of clothing account for the Internet. The growth potential therefor is still considerable. Large companies could double their online sales annually.

Source: Gemius

So far, auction platforms have played the biggest role in online apparel purchases, according to Instytut Badan Rynkowych i Spolecznych (IBRiS, Institute for Market and Society Research) in a survey of Internet users for Rzeczpospolita..

Source: IBRiS

LPP opens 50 sales salons

Notwithstanding the e-commerce boom, the leading retailer LPP, which includes the brands Reserved, Mohito, Cropp, Sinsay and House is continuing to expand its retail space. This contains already a total of just over 1 million square meters. By mid-2017, LPP owned 1,710 stores in just under 20 countries. In September, the company from Gdansk opened the first Reserved boutique in the United Kingdom on London's Oxford Street. LPP revenue increased on a zloty basis in by 17% in 2017 to almost EUR 1.7 billion.

LPP wants to expand further in 2018, according to its Deputy Chairman Przemyslaw Lutkiewicz. The chain plans to open around 50 new sales stores at home and abroad. New markets are to be developed: Kazakhstan, Israel and Slovenia. In the future, LPP wants also to be represented with its most important brand Reserved in Paris and Milan. In addition to an internet shop since mid-2017, the company already operates 19 sales salons in Germany.

LPP is constantly bringing new products to market. According to its chairman, Marek Piechocki, the company aims to have 2,000 people working on its research and development (R & D) projects by the end of 2018. That would be a number of 800 specialists more than in autumn of 2017. The research and development budget should be increased to EUR 48 million and will be used especially for the design of new clothes.

So far, 810 fashion designers have been designing around 40,000 garments annually for LPP. The shops are staffed by 40 architects and coordinators. About 250 programmers introduce new technologies, especially in the field of e-commerce. LPP wants to triple the number of IT experts in a medium term. In fall of 2017 the share of online sales of LPP brands was 4 percent. It should even double by 2020.

Premium brands are increasing

The Spanish company Inditex with its brands Zara, Oysho and Pull & Bear is not missing in any shopping center in Poland. It should therefore continue to expand there as well. The Swedish H & M is developing not only its online business but its retail business as well and will open a new store in Tychy in March 2018.
In view of the increasing employment rate and the purchasing power of the Poles, the sales opportunities for high-quality clothing from Germany are also rising. Among other things the potential can be seen in the domestic Grupa Vistula, which increased the Polish retail space of its elegant brands Vistula, Wolczanka, Deni Cler and W.Kruk in 2017 by 9 percent to almost 33,500 square meters. Additional space is added on a franchise basis. The men's outfit Bytom, whose merger with Vistula persist in persistent rumors, is expanding its trading base.

Footwear company CCC is growing abroad

The Polish shoe group CCC, consisting of the largest domestic shoe manufacturer and the operator of the CCC retail chain, generated revenues of more than EUR 984 million in 2017. This was around EUR 235 million more than in 2016. The stationary CCC stores earned EUR 796 million (+24 percent on a zloty basis).
The group wants to expand accordingly. Among others seven stores should be opened or expanded in Austria in 2018 while three new branches will be set up in Croatia and Slovenia. CCC operates more than 900 shoe stores in 16 countries, including 77 in Germany and 45 in Austria.
In September 2017, CCC secured EUR 127 million from investors for the expansion of its online activities through the issue of new shares at the Warsaw Stock Exchange. In some markets, such as Greece, CCC is exclusively virtual on a customer hunt. In Poland e-commerce is also picking up its speed: the online business of the eObuwie.pl group increased its revenue in 2017 by 111.5 percent over the previous year to more than EUR 142 million.

• Morocco, Ethiopia and South Africa: Network comprises the most important textile regions in Africa
• Emerging continent: positive forecasts in the textile sector

First Ethiopia, then South Africa and shortly Morocco: Messe Frankfurt is expanding its portfolio of textile trade fairs on the African continent. With its forthcoming cooperation with the two trade fairs Maroc in Mode and Maroc Sourcing, the global market leader for textile trade fairs is expanding its presence in North West Africa. ‘In future, our network will extend across important textile regions in Africa and encompass the leading trade fairs on the emerging continent’, explains Olaf Schmidt, Vice President Textiles & Textile Technologies at Messe Frankfurt. ‘With our commitment to Ethiopia, South Africa and, in future, Morocco, we have created excellent conditions to support the positive developments in Africa's textile industry’. Demographic change, increasing urbanisation and shifts in economic forces - these global developments are promoting the growth of the African economy and having a significant impact on the textile industry.

According to the UN Economic Report on Africa 2017, Africa has the fastest growing population. The current population of around 1.2 billion people will more than double by 2050. The number of working people on the African continent is also increasing rapidly. The largest working population (1.1 billion) in the world is predicted to be in Africa by 2034. These demographic changes are causing personal and business consumption to increase sharply, and this will primarily benefit regional economic markets. 

Morocco: Maroc in Mode & Maroc Sourcing

Morocco in particular offers great potential for the clothing trade: Morocco's proximity to important fashion markets such as the EU and the USA, various free trade agreements and a recent economic growth rate of four per cent (between 2010 and 2015, Nachrichten für den Außenhandel, NfA, 19 January 2017) create a secure business climate. The Maroc in Fashion and Maroc Sourcing trade fairs, which have been in existence since 2014, currently showcase around 120 exhibitors from Morocco, Tunisia, Egypt, Turkey, China and a number of Western European countries. The extensive product portfolio inspires with its strong expertise in fashion. The trade fairs are regarded as a hotspot for fast fashion and not only present fashion, denim, lingerie and knitwear, but also sports and casualwear, workwear and accessories. Messe Frankfurt will agree on a cooperation with AMITH (Association Marocaine des Industries du Textile et de l’Habillement), the organiser of the event, for the next edition. The trade fair will take place on 26-27 October 2017 at the Exhibition Park Hassan Circuit in Marrakesh. 

South Africa: Source Africa & ATF Expo

South Africa is the continent's strongest economic power and one of the largest consumer markets. The country has the most powerful retail sector and is the best networked of all African countries. This international networking and its regional free trade agreements make South Africa an important hub for trade with other African countries as well as neighbouring Pacific countries such as the Arabian Peninsula and India.

With the recently approved takeover of the Source Africa and ATF fairs, Messe Frankfurt is driving the exchange between international and regional buyers, manufacturers and suppliers in this region. Source Africa was founded in 2014 as a trade fair for African producers of fabrics, accessories, clothing, shoes and leather items. It appeals not only to African trade buyers but also to international manufacturers of clothing and fashion. The fifth edition of the fair will take place on 20-21 June 2018 at the International Convention Center (CTICC) in Cape Town. ATF Expo will open its doors at the same venue from  21 to 23 November 2017. Ever since 1998, this trade fair has offered an internationally-oriented product range of fabrics, clothing, shoes, leather goods and accessories as well as services for a predominantly local and regional purchasing community.

Ethiopia: successful start for Texworld, Apparel Sourcing and Texprocess

In eastern Africa, Ethiopia has developed into an attractive contract manufacturing country for clothing and leather goods thanks to the government's strategy of focusing on light industry. Ethiopia also benefits from free trade agreements such as AGOA that are aimed at promoting the African economy. With the Africa Sourcing and Fashion Week (ASFW), Messe Frankfurt has had a strong partner at its side ever since the latest edition in October 2017. Offshoots of the three trade fair brands Texworld, Apparel Sourcing and Texprocess were integrated into the Africa Sourcing & Fashion Week for the first time. It is a sourcing platform for mainly European and US fashion companies. The seventh edition brought together around 200 international exhibitors from 25 countries in Addis Ababa's Millennium Hall. Clothing fabrics, contract manufacturing, fashion and accessories were exhibited as well as machinery for contract manufacturing, CAD/CAM systems, printers, printing inks and accessories. In addition, the trade fair also impressed visitors with a fashion show, a series of lectures, a trend section and a matchmaking platform.

Messe Frankfurt: A strong presence in global textile markets

With a portfolio of over 50 international textile trade fairs, Messe Frankfurt is the global market leader in trade fairs for the textile industry. In 2016, around 19,500 exhibitors and approx. 477,000 visitors came to the events in Europe, North America and Asia. With the name Texpertise Network, the textile event offer of Messe Frankfurt covers the entire value creation chain – from apparel fabrics and fashion to home and contract textiles, technical textiles and the processing and care of textiles. The trade fairs include the successful brands Texworld, Apparel Sourcing, Ethical Fashion Show, Greenshowroom, Intertextile, Yarn Expo, Leatherworld, Emitex, Avantex, Avanprint, Heimtextil, Intertextile Home Textiles, Interior Lifestyle, Home Textiles Sourcing, Techtextil, Texprocess, Simatex, Confemaq and Texcare.

Maroc in Mode & Maroc Sourcing: www.marocsourcing.ma
Source Africa & AFT: www.sourceafrica.co.za / www.atfexpo.co.za
Africa Sourcing & Fashion Week: www.asfw-online.com

• Sales are increasing since four years
• Developing of up new markets abroad

Prague (GTAI) - Czech textile and clothing manufacturers are among the winners of the good economic situation. The trend towards domestic products and the rising purchasing power are inspiring the companies. At the same time they benefit from a growing demand from abroad. According to the association ATOK the turnover of the sector rose to Kc 53,5 billion (just under EUR 2 billion) in 2016. It was the fourth year of growth in a row.

An important growth driver of the Czech textile industry is the automotive sector. The largest sales are achieved with technical textiles, and these are mostly used in the over 1.3 million passenger cars, which are rolling in the Czech Republic off the assembly lines every year. The German automotive supplier Borgers is therefore the second largest textile manufacturer in the country. The company produces textile trims for trunks, passenger compartments or underfloor at four locations in the Plzen region. About 200,000 parts leave the factory every day for VW, BMW, Mercedes, Porsche, Bentley and Rolls Royce. The largest textile company in 2016 was the company Juta with productions of geotextiles, insulation materials and packaging material.

The positive dynamism of textile manufacturers is continuing in 2017. According to statistics from January to May the production index rose by 3% and the value of new orders even rose by 5%. On the other hand the garment manufacturers have to announce sales reductions following the strong year before. Future growth could be curbed by rising wages, the appreciation of the national currency and a lack of staff.

Sources: Association of the Textile, Garment and Leather Industry (ATOK), Calculations by Germany Trade & Invest

Even more dynamically than the sector's profits the foreign trade has developed in 2016. Since the Czech Republic is being used as a transit and logistics location by international trading companies, the volume of exports is significantly higher than the total turnover of the domestic manufacturers. According to the ATOK association, in 2016 textiles were exported for Kc 63.8 billion (EUR 2.36 billion) and clothing for Kc 47.2 billion (EUR 1.74 billion). This was an increase of 5% for textiles and 31% for clothing. Import of textiles rose by 6% to Ks 59.3 billion (EUR 2.19 billion), import of garment rose by 20% to Kc 67.9 billion (EUR 2.51 billion).

This has somewhat reduced the trade deficit in clothing. In the major fashion chains however foreign goods still dominate. Czech vendors have little chance of coming to the shelves and taking part in the fast fashion cycles and fast fashion changes. The association ATOK estimates that they have a market share of a maximum of 20% in clothing retailing. As a result, domestic manufacturers are increasingly focusing on direct selling, either via internet shops or through their own sales outlets. They also strengthen the building of their own brands, after having carried out commission work for international fashion groups for many years. Customized products are in the trend also. Some companies that have hitherto mainly served the home market are now looking increasingly at foreign markets. The swimwear and underwear producer Timo from Litomerice, for example, wants to supply to Germany also in the future, reported by the economic newspaper Hospodarske noviny.

Textile companies invest more and more abroad
The East Bohemian specialist for bathroom textiles, Grund, already has a sales company in Lower Saxony. The carpet manufacturer is now planning to build a factory in the south of the USA and intends to invest more than USD 1 million. Silon from South Bohemia, which is one of the largest manufacturers of polyester fibers in Europe, is building a manufacturing plant for plastic compounding in the USA in order to reduce the delivery time for raw materials and to be closer to the customer. There are interesting developments in the research area. The institute VUTS from Liberec, has developed, together with Taiwanese scientists, a pneumatic loom that can produce 3D fabrics made of high-strength polyester silk. The material can be used for boat building or flood protection. The machine should be presented for the first time at a trade fair in 2019. Until then the textile manufacturer Veba from Broumov wants to have developed a new 3D fabric. It is intended to reinforce matrices.

After the extra economy in 2015 due to the last-time levy of EU funds from the old funding period, investments in the textile industry had shrunk in 2016. According to the Ministry of Economic Affairs the manufacturers invested some Kc 2.78 billion (around EUR 100 million), a sixth less than in the previous year. On the other hand, investments in the garment sector were up by a quarter to over Kc 850 million (around EUR 31 million). The development was also reflected in the import figures for textile machines. At the beginning of the year 2017 imports rose again in some product groups, thus opening up sales opportunities for finishing manufacturers. German suppliers account for roughly half of the machinery supply for the textile industry.

In April 2017 the Moravian nonwoven fabric manufacturer Retex had issued a tender for a production plant for over EUR 7 million. In Zatec near Usti nad Labem Unifrax wants to build a production plant for silicate fabrics. Juta is currently investing around EUR 13 million in the production of grids and plans to get the plant expansion at Dvur Kralove into operation in autumn 2017. The Japanese Toray Textiles is expanding its factory for airbag fabrics and printing plates in Prostejov over the next four years. The North Moravian supplier of outdoor clothing, Tilak, is also expanding its production facilities in Sumperk.

Source: Czech Statistical Office

• Foreign companies should adapt their fashion to Chinese needs
• Increasing health awareness strengthens sportwear market

Beijing (GTAI) - The Chinese clothing market is one of the largest in the world and is developing rapidly. From the lower mass volume over the in quality and optic pretty products in a midprice segment to luxury and haute-couture the range of products in the sectors is constantly expanding. In addition to the tendency towards recognized brands an increasing individualization of consumption can be observed. What is needed, what fits well is liked and moreover is somehow "special".

According to the Chinese Statistical Office (NBS), the retail sales of clothing increased in 2016 to more than USD 150 billion (these figures include companies with annual sales of over USD 3 million in their main business). This makes the Chinese clothing market to one of the largest in the world.

The Chinese consumer desires are increasingly demanding, differentiated and personalized. The new possibilities of the Internet, including the booming e-commerce, are changing the purchasing behavior drastically. The level of information has risen significantly, especially as a result of visits abroad. Customers are increasingly aware of prices that have to be paid outside of China. Too high price increases are therefore perceived as discrimination and damage the image of brands.

"The success is not decided by online or offline trading or whether it is a local or international company, but whether the supply meets the demand," Liu Xiaolu, founder of the popular underwear brand Neiwai says.  Essential are the right materials and a quick response to the changing needs of the customers. Finding the right piece online can actually be difficult. A number of hitherto exclusively online offering vendors such as Miss Rhino have recently opened additional conventional stores in order to provide a better advice to customers.   

Fashion must meet Chinese expectations

This makes the sector division representative for the entire Chinese fashion market: the products must be liked and should fit. From the customers' point of view, it is important to find the balance between foreign flair and local characteristics. Not without a reason the 345 yuan (RMB, around 52 $, 1 USD = 6.6442 RMB, as annual average price 2016) for expensive model O2bra "Naja Nina", is one of the bestsellers of the Neiwai brand in Shanghai. It unites Chinese and Western elements: from the outside plain black, decorated inside with erotic motifs from classical Chinese painting.  In general, the underwear sector within the fashion market is considered to be the least saturated and segmented. The Chinese retail trade sold women's underwear at about USD 20.1 billion in 2016. It is estimated to reach USD 25 billion in 2017. For 2020 Euromonitor International predicts sales of USD 33 billion.    

The top ten producers share 13% of the market only. The bulk of this is due to thousands of hardly known companies selling their products at low prices. The prices for a bra range from RMB 50 piece from the Chinese mass producer Cosmo Lady to one hundred times higher Italian brand La Perla. In order to benefit from the more demanding wishes of the Chinese women's world, for example Victoria's Secret from the USA opened its first subsidiary in the People's Republic in Shanghai in March 2017 - a four-storied flagship store.

According to the industry in the long term it hardly will be possible to bring for Western women designed goods to China.  Although in the medium to long term the Chinese ladies statistically seem to become larger and more corpulent, but the purely physical differences will still remain considerable. According to the China Physical Fitness Surveillance Center, women aged 20 to 24 in 2000 were 158.6 cm tall in average, their breast circumference was 82 cm, ten years later they were measured 159 cm respectively still 82 cm. Women of the age of 25 to 29 years measured in 2000 about 158.7 cm / 82.5 cm and in 2010 at 158.2 cm / 83.4 cm. At this background, the companies need not only to develop appropriate fit-sizes. They also have to accept that Chinese women have a more functional or conventional attitude than, for example, women from the USA. This is not least true for swimwear also.

The market for sportswear is growing strongly

According to taobao.com, the largest online platform in the country, more than 21 million bikinis and bathing suits are being sold annually. It is true that every third piece is a bikini, but according to Taobo Chinese women generally prefer to dress more covered than the Western ones. Preference is given to models made with a lot of fabric, looking often much like skirts. Leading are the local companies Hosa, Heatwave and Zoke with prices between RMB 400 and 500. However, many younger Chinese prefer more likely to shop on foreign websites.

Given the strong growth in beach and spa tourism, the demand for swimwear in China will grow at an above-average rate. In general, the sporting goods sector is predicted to get an above-average growth together with increasing health awareness. According to Euromonitor International, sales of sportswear in China are expected to grow to around RMB 281 billion by 2020, of which about RMB 20 to 30 billion will be spent on sports underwear. In total, an estimated value of RMB 170 to 180 billion of sportswear will be sold in the PR China in 2016. The sector is happy and looking forward to a growth of around 10% per annum.

PLANNED ABOLITION OF EU IMPORT QUOTAS ALLOWS MORE FOREIGN COMMITMENTS

Minsk (GTAI) - The textile and clothing industry of the Republic of Belarus faces great challenges. It has to become more efficient, should produce more market-orientated and make greater use of its export potential. The sector has great hopes on the by the European Union planned abolition of quotas for Belarusian textiles and clothing products. There are then more than ever good opportunities for the subcontracting finishing process.

The textile and clothing industry has traditionally been one of the most important sectors of the manufacturing industry in the Republic of Belarus. As a result of the sharp decline of the local purchasing power and of the main export market Russia, the sector has suffered a severe setback in the years 2013 to 2015. Since the second half of 2016 it is on an upswing again. According to preliminary data, the output has risen in 2016 by 4.6% to EUR 1.41 billion compared to 2015. Produced were 146.8 million sqm. of fabrics, 40.4 million pieces of knitwear, 147.0 million pairs of stockings and 19.9 million sqm. of carpet products.

Nevertheless the textile and clothing industry continues to suffer from a weak capacity utilization, an inadequate management and marketing as well as from a considerable backlog in the technological renewal of the equipment park. The implementation of an industry support program for the period from 2016 to 2020 should provide for a remedy. The program comes from the Belarussian State Group for production and sale of goods of the light industry Bellegprom. (http://www.bellegprom.by).

Sector program shows planned projects until 2020

Under the umbrella of the State Group 17 textile, 12 knitting and 21 garment companies are active. With an output of just under USD 0.9 billion, these manufacturers were involved with nearly three-fifths of the total output of the Belarusian textile and clothing industry in 2015. The companies have exported goods for nearly USD 500 million in 2015. The main customer was Russia (USD 357 million). The investments of the Bellegprom companies are expected to reach a volume of at least EUR 250 million in the years 2017 to 2020.

The envisaged projects for this period include:

• the continuation of the comprehensive modernization of the Orschaer linen combine Orscha (production of linen yarn, -fabrics and finished products, processing of imported raw materials);
• technological renewal in the company OAO Mogotex, Mahiljou / Mogilew (spinning and textile finishing);
• the development and production of new competitive wool and wool blended fabrics in the company OAO Kamwol, Minsk;
• the expansion of the production of hosiery, including an enlargement of the assortment of medical hosiery in the company SOOO Conte Spa, Grodno;
• the commencement of production of seamless underwear in the company OAO Kupalinka, Salihorsk and
• Investment in the production of fine thread Ajour-fabrics in OAO Switanak, Shodsina.

1)  Without regard to micro- and other small enterprises; at the end of 2015 225 textile and clothing companies were active in Belarus, the average number of employees in these companies was 58,800 persons per year;
2)  in terms of the national currency of Belarussian Ruble
Source: National Committee for Statistics, calculations by Trade & Invest in Germany.

In order to create complete value chains, it is envisaged to set up joint ventures between manufacturers of fabrics as well as producers of finished products. The Bellegprom Group is keen to focus the expansion potential on the production of linen fabrics and high-quality finished linen products.

Belarus is one of the world's five largest linen producers. For 2017 a volume of 55,000 tons is expected. In the year 2016 29 companies have processed flax straw into fibers. Of the in these factories installed 54 processing lines only ten are considered to be highly productive. According to the administration of the Mahiljou region, a Chinese investor wants to set up a factory in the region for the processing of flax for semi-finished and ready made goods in the near future.

Abolition of EU quotas planed

The EU plans to abolish the since 2010 existing autonomous quotas as well as the contingents for passive finishing processing for Belarus. The restrictions currently apply to a variety of textile products, including cotton and linen yarn as well as garments made out of cotton and woolen fabrics. Market observers agree: the abolition of the quotas with the related bureaucratic procedures would provide a solid basis for stimulating foreign investments in the Belarusian textile and clothing industry.

Belarus has many advantages: geographical proximity to the EU market, a well-developed infrastructure, long-standing industrial traditions, available production capacities, skilled labor and, last but not least, favorable labor costs. In a first phase of cooperation with Belarusian partners, the interest of foreign companies is likely to focus more on subcontracting. There are already successful projects that use the favorable framework conditions for this business model.   

The German Langheinrich Vertriebs GmbH, for example, produces high-quality table cloth and bed linen for the contract area in the small West-Belarussian town of Diwin (Kobryn district, Brest region). According to the director general of Langheinrich Konfektion GmbH, Walentina Paschkewitsch, the company, founded there in 2005, employs now between 90 and 120 employees depending on the order situation. Sales in 2016 amounted to around EUR 1 million. The in the company paid wages and the additional granted social packages are the guarantor of a very low fluctuation of the workforce. Among the companies from neighboring Lithuania, which are producing textiles and clothing in Belarus, the leading Baltic manufacturer of sportswear Audimas stands out.

7 to 9 February 2017 saw the last GDS being held on the premises of Messe Düsseldorf. This was the 123rd edition of the tradition-rich event. Since Tuesday afternoon we have also known something else for sure, too: not only the organiser and venue will change but also the name. The Igedo Company will present its shoe trade show at Areal Böhler as Gallery SHOES.

In keeping with this “passing of the baton” the evening event of GDS was also held at Areal Böhler on the first day of the trade show. Speaking before many representatives of the shoe sector, Werner Matthias Dornscheidt, President & CEO of Messe Düsseldorf, used the opportunity to acknowledge the efforts by the GDS team: “Kirstin Deutelmoser and her team have undertaken extraordinary efforts over the years and introduced innovations into the shoe shows time and again. And even the last event was designed with full professionalism and provided visitors with a comprehensive overview of the market. My thanks also go to the sector: GDS only managed to remain such an outstanding meeting point for decades on end thanks to the support from trade and industry. I wish the Igedo Company the best of success for its new concept.”

During the press conference on the first day of the trade show Kirstin Deutelmoser, Director of GDS and tag it!, referred to GDS’ longstanding tradition on the one hand, and the fundamental changes occurring in the footwear sector, on the other: “Around the turn of the millennium GDS registered most visitors. People came to Düsseldorf to discover the new collections and – just as importantly – to network.
But over the past few years the world started turning faster. New players entered the market. The retailscape experienced constant change. And since trade shows are also always mirror images of the market this extreme dynamism within the footwear sector also impacted GDS.
Its own history proved a burden rather than a benefit: regardless of how much you alter a GDS – it will always be measured by its own most successful edition.
We therefore decided it was time for a complete “re-boot”; and to create something new you have to be free of existing structures and traditions. This is why we will hand over the shoe trade show after this GDS to the Igedo Company thereby enabling a complete re-start with completely new structures and signals.
I thank all of those who have accompanied and supported us over so many decades – especially our customers, exhibitors and visitors alike, the many partners of GDS and my great team.
I wish the Igedo Company and Ulrike Kähler, in particular, great success with the new format. And my particular hope is that the sector will make use of the opportunities that come with the re-launch of a footwear trade show.”

GDS with Powerful Farewell Programme

The last GDS offered visitors a comprehensive range of information. 600 brands presented their new collections and the trade show had prepared all the trends of relevance to the 2017/18 Autumn/Winter season for retailers offering concrete services for purchasing and merchandising with the GDS Trend Talks, Trend Codes and Trend Spots.
A special focus for coming Autumn/Winter are sturdy laced and biker boots. Weather permitting, futurist sneakers will also be determining the look on our streets – either in clean white or with prints, another trend theme displayed by many exhibitors.

The talks delivered by the Innovation and Education Institute SLEM headquartered in the Netherlands revolved around manufacturing rather than design. Visitors learnt which technologies will change the future of footwear production.

Alain-Fabien Delon (22), son of legendary actor Alain Delon, caused one last flurry of camera flashes at GDS, when he strolled through the STUDIO Halls during the Press Walk and browsed the latest men’s styles. The exhibitors befittingly used GDS as a stage to present their brands with catwalk shows or dance performances. 

Fashion bloggers and influencers made sure the new footwear trends were also shared on social media. How this actually works was illustrated in detail to interested retailers and manufacturers at the Social Media Consulting sessions.

The first Gallery SHOES will be held from 27 to 29 August 2017. Relevant details will be published at www.igedo.com.

• Anticrisis Plan provides grants of nearly Ruble 1.5 Billion 

Moscow (GTAI) – In spring 2016 the Russian government has decided a "Strategy for the development of the light industry until 2025" and a "Federal program to support enterprises of the light industry" (anticrisis plan). Hence the Russian textile enterprises should be supported in the crisis. It is the aim of the Ministry of Industry and Trade to double the share of domestic producers on the clothing market from currently 25% to 50% in the year 2025.

According to the Ministry of Industry and Trade 14,000 companies (including 200 large enterprises) of the Russian light industry are producing clothing, textiles, footwear and leather goods. They generate annually a turnover of Ruble 270 billion. Of that 653 large and medium and 4,000 small businesses are operating in the yarn and textile industry. Because the purchasing power and consumer demand fell, the light industry slowed its production in 2015 by 12%.

To give the clothing and textile factories more security, the Russian government adopted in spring 2016 a "Strategy for the development of the light industry until 2025" and a "Federal program to support enterprises of the light industry" (anticrisis plan). It is the aim of the Ministry of Industry and Trade to double the share of domestic producers on the clothing market from currently 25% to 50% in the year 2025.  In this context up to 330,000 additional jobs should be achieved.

Anticrisis plan provides subsidies of Ruble 1.475 billion
In the anticrisis plan Ruble 1.475 billion will be granted. This should especially support manufacturers of school uniforms, children's apparel and textile factories that work on government orders. The financial support includes: subsidies for producers of school uniforms for the lower classes made out of Russian worsted fabrics (Ruble 600 million), subsidies for working capital loans to support purchases of raw materials (Ruble 800 million), subsidies for investment loans for technical modernization of enterprises (Ruble 75 million).

Industrial parks and clusters for the light industry are growing
In addition, two industrial parks for the clothing and textile industry will be set up in the areas of Ivanovo and St. Petersburg. In addition, a regional cluster of the light industry in the Chelyabinsk region of the South Ural is growing. The fund for the development of the Russian industry promotes investments with low interest rates on credits, for example the project of Praimteks (Primetex) in the Ivanovo region for the production of textiles using digital textile printing (credit: Rubles 466 million rubles).

Further, the domestic producers of clothing and footwear should gain access in future to the funding instruments of the federal association for the development of small and medium-sized enterprises. Critics complain, that the subsidies reach mostly large companies only and above all companies working with government contracts.

Capacity building for chemical fibers 
Export opportunities are seen by the Ministry of Industry in synthetic fibers. In the textile cluster Ivanovo (http://invest-ivanovo.ru/data/prog.pdf) a chemical fiber plant is growing with public aid, scheduled to begin production from 2018. With that 250,000 t chemical fibers would additionally annually be available. Until now both manufac-turers Komitex and Wladimirski Polyefir produce together 33,000 t chemical fibers per anno. Viscose is currently not being produced at all in Russia. The import share of polyester is 74%, of polyamide 88%. 

In future the synthetic fibers may be supplied to BTK Textile and other customers. The production complex of BTK Textile in the textile City Shakhty in the Rostov region, was inaugurated in June 2015. The company manufactures high-tech textiles and knitwear made out of synthetic fibers of which work-wear, sport-wear and ski-wear are being sewn. BTK Textile has fabric production capacities of about 12 million square meters per year, General Director Sergey Bazoev says. Up to now BTK Textile has to buy the synthetic fibers and yarns predominantly in Asia. That could change soon. The BTK Group is the largest Russian manufacturer of men's clothing and uniforms.

Source: Rosstat 2016

Source: Rosstat 2016

Contact addresses:
Ministry of Industry and Trade

Department of Light Industry
Denis Klimentewitsch Pak, Director of the Department
109074 Moskau, Kitajgorodskij proesd 7
Tel.: 007 495/632 8004 (Sekretariat), Fax: -632 88 65
E-Mail: dgrvt@minprom.gov.ru, Internet: http://minpromtorg.gov.ru

(Sub) department of Light Industry: Director: Irina Alekseewna Iwanowa,
Tel.: -632 87 31, -346 04 73; E-Mail: ivanovaia@minprom.gov.ru
Internet: http://minpromtorg.gov.ru/ministry/dep/#!9&click_tab_vp_ind=1
"Strategy for the development of Light Industry until 2025."
http://www.kptf.ru/images/company/Presentation.pdf (Presentation of the strategy)
http://minpromtorg.gov.ru/docs/#!strategiya_razvitiya_legkoy_promyshlennosti_rossii_na_period_do_2025_goda (Text of the strategy and action plan)

Russian Union of Entrepreneurs of Textile and Light Industry
107023 Moskau, uliza Malaja Semenowskaja 3
Tel.: 007 495/280 15 48, Fax: -280 10 85
E-Mail: info@souzlegprom.ru, Internet: http://www.souzlegprom.ru

• 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