Cotlook A Index - Cents/lb (Change from previous day)

18-03-2020 67.70 (-0.70)

18-03-2019 84.35

19-03-2018 92.10

New York Cotton Futures (Cents/lb) As on 20.03.2020 (Change from

previous day)

May 2020 54.94 (+0.01)

July 2020 55.23 (-1.96)

Oct 2020 57.86 (-1.19)

20th March

2020

Pilot shopping festival planned in FY21: Irani

Need to bring in a corporate structure in KVIC: Nitin Gadkari

Textile industry worried over stagnation of rayon fabric worth

₹50 crore

Government bans exports of certain masks, ventilators, raw

material for masks, coveralls

The effect of COVID 19 on global textiles and apparel supply chains

Cotton and Yarn Futures

ZCE - Daily Data (Change from previous day)

MCX (Change from previous day)

Mar 2020 17110 (-540)

Cotton 11260 (-300) Apr 2020 17350 (-560)

Yarn 17375 (-555) May 2020 17670 (-510)

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2 CITI-NEWS LETTER

-------------------------------------------------------------------------------------- Pilot shopping festival planned in FY21: Irani

Need to bring in a corporate structure in KVIC: Nitin Gadkari

India’s Textile Industry Seeking Government Relief, as Exports to US, EU Set

to Plummet

Exporters want extension of promotion schemes amid coronavirus spread

COVID-19 to hit apparel exports hard amid lockdowns and lack of footfall

Textile industry worried over stagnation of rayon fabric worth ₹50 crore

Coronavirus pushes city’s textile processing sector into doldrums

Government bans exports of certain masks, ventilators, raw material for

masks, coveralls

Setting Up of National Technical Textile Mission

Cotton Trading Policies

India Inc seeks stimulus to tackle coronavirus

GST needs overhauling: The need now is to shift to a simpler rate structure

Export of MSME Products

----------------------------------------------------------------------------- U.S. Textile And Nonwoven Associations Urge Government To Deem

Manufacturing Facilities “Essential”

The effect of COVID 19 on global textiles and apparel supply chains

3 textile-garment projects to create 2000 jobs in Cambodia

GOTS releases version 6.0 for environmental sustainability

Pakistan: Textile mills demand moratorium on gas, electricity bills

BBB, TJX join growing list of COVID-19 store closures

------------------ --------------------------------------------------

NATIONAL

---------------------

GLOBAL

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3 CITI-NEWS LETTER

NATIONAL:

Pilot shopping festival planned in FY21: Irani

(Source: Kirtika Suneja, Economic Times, March 19, 2020)

Textiles minister Smriti Zubin Irani on Thursday said that a pilot shopping festival at

Bengaluru is proposed to be organized in 2020-21, which will subsequently be organized

in other cities focusing on various sectors including gems & jewellery, textiles,

handicrafts, and Yoga and Ayurvedic products “In addition to above focus sectors, the

products to be showcased will include tribal products/handicrafts, products from Jammu

& Kashmir, North East States and other Hill States,” Irani told the Rajya Sabha in a

written reply.

In a separate reply, she said that in order to promote e-marketing of handloom products,

a policy frame work was designed and under which any willing e-commerce platform with

good track record can participate in online marketing of handloom products. Accordingly,

23 e-commerce entities have been engaged for on-line marketing of handloom products.

A total sales of Rs 80.76 crore has been reported through the online portal, Irani said.

To a question on the Central Cottage Industries Corporation of India, the minister said

that reduced sales, closure of three showrooms of the company in Mumbai due to steep

increase in showroom rentals on account of implementation of The Maharashtra Rent

Control Act, 1999 and resulting excess manpower were the primary reasons for the

corporation incurring losses in 2017-18 and 2018-19. In 2016-17, the corporation’s profit

was Rs 13.87 lakh but it posed losses of Rs 9.49 crore in 2017-18 and Rs 5.45 crore in

2018-19.

Home

Need to bring in a corporate structure in KVIC: Nitin Gadkari

(Source: Nishtha Saluja, Economic Times, March 19, 2020)

The government needs to bring in a commercial, ‘corporatised’ approach to the working

of Khadi and Village Industries Commission (KVIC) to market khadi products and

increase their export, Union minister Nitin Gadkari said in the Parliament on Thursday.

“KVIC is doing good work, but with a renewed vision, we have to commercially bring in a

corporate structure,” Gadkari said in a debate on the workings of the MSME ministry in

Rajya Sabha.

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4 CITI-NEWS LETTER

“Only then will its export rise,” Gadkari said. Gadkari said that KVIC’s turnover in FY 19

was Rs 75,000 crore, and is expected to be Rs 1 lakh crore in FY 20, adding that the

government is looking to increase it to five lakh crore in the next five years. “We have to

think of marketing khadi products, there is huge potential,” he said.

ET had reported on January 19 that the government was looking to corporatise the

marketing wing of KVIC.

Gadkari on Thursday also said that payments of MSMEs should be disbursed within three

months in order to make them successful. "If they get these payments, only then will they

go ahead, otherwise small businesses will suffer," he said. A Reserve Bank of India-led

panel in its report on the MSME sector had recommended such a measure last year. “The

committee recommends KVIC should be corporatised with focus on promotional work.

The marketing function may be hived off and also corporatised to enable private

participation and enabling (the) use of khadi in the private sector,” the recommendations

of the panel had said. The Khadi and Village Industries Commission Act, 1956 allows

KVIC “to promote the sale and marketing of khadi or products of village industries or

handicrafts and for this purpose forge links with established marketing agencies wherever

necessary and feasible”.

Home

India’s Textile Industry Seeking Government Relief, as Exports to US, EU Set

to Plummet

(Source: Arthur Friedman, Sourcing Journal, March 19, 2020)

The Indian textile industry is seeking a relief package to help mitigate the negative impact

of the COVID-19 pandemic. Shri T. Rajkumar, chairman of the Confederation of Indian

Textile Industry (CITI), while complimenting Prime Minister Shri Narendra Modi Ji for

taking strong measures to protect the people of India, requested government action to

support the……

Home

Exporters want extension of promotion schemes amid coronavirus spread

(Source: Subhayan Chakraborty, Business Standard, March 19, 2020)

Collateral free lending up to Rs 2 crore with the collateral requirement capped at 35-40

per cent for lending beyond Rs 2 crore, also feature in the list of demands

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5 CITI-NEWS LETTER

Two months after the coronavirus started decimating the global economy, exporters have

urgently demanded extension of all export promotion schemes, relaxed non-performing

asset (NPAs) norms, and faster, easier credit disbursement by banks.

In their communication to the finance and commerce ministries, the Federation of Indian

Export Organisations (FIEO) has said near a lockdown and quarantine in many advanced

economies has given a jolt to demand for Indian goods. With recession looming in many

countries, exporters fear major cancellation of orders as buyers ask to hold back

shipments till further instructions, said Sharad Kumar Saraf, President, FIEO.

“Even in cases where Indian exporters are adhering to the terms of contract, the force

majeure clause is likely to be invoked by buyers to deny claim/liability raised by exporter,"

he said.

FIEO has requested the government to ensure that banks delay the declaring of

companies’ accounts as NPAs for one year as the lack of business coupled with business

expenses remaining fixed will make many accounts NPAs. It also wants existing working

credit limits of exporters with the banks to be automatically enhanced by 25 per cent.

Collateral free lending up to Rs 2 crore with the collateral requirement capped at 35-40

per cent for lending beyond Rs 2 crore, also feature in the list of demands.

Home

COVID-19 to hit apparel exports hard amid lockdowns and lack of footfall

(Source: Deccan Herald, March 19, 2020)

The coronavirus pandemic has hit the economy at one of the worst times when growth

has slowed to the lowest in a decade, investments are shrinking and a consumption

recovery is sputtering. With almost all countries closing their borders and asking citizens

to stay indoors demand for non essential items such as clothing is going to be worst hit.

According to sources, most of the stores for apparels and leading fashion brands have

closed down temporarily due to lack of footfall and lockdown in most countries. Amit

Goyal, the president of Confederation of Indian Apparel Exporters, said small and

medium size exporters are going to be worst hit as most buyers have asked to hold back

shipments until end of may and even goods which are at port customers are asking not to

ship and this will lead to a huge financial chaos and closure of several factories

Goyal's own company which represents several leading overseas buyers in USA and South

America has received cancellations of orders of over 1,25,000 pieces in the last 2 days.

Expressing similar opinion J B Jain of popular brand, Rupam, said that most of their

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6 CITI-NEWS LETTER

European customers has already since last week asked them to cancel orders as Europe is

the worst hit with this virus.

France is complete lock down for the next 3 weeks and most of them are working form

home making business extremely diicult. Israel is also under partial lock down and this

has completely thrown our planning out of gear and forced us to close our oices in

Mumbai also said, Vishal Thakker, director of Jal Exports. Ready-made garments (RMG)

exports from India stood at US$ 16.27 billion in 2018-19 and US$ 8 billion during April-

September 2019. India is the largest cotton producer in the world at 33.7 million bales of

170 kg each. Fibre exports of the country in 2018-19 were valued at US$ 2.72 billion.

Goyal added that the apparel and textile sector which employs one of the highest number

or workers is facing at glaring situation as there is a huge uncertainty of what will happen

in the next few months. "This seems to be just the beginning and if by mid April things

down improve Exporters should be prepared for mass layo and closures," he added in a

press statement.

Home

Textile industry worried over stagnation of rayon fabric worth ₹50 crore

(Source: The Hindu, March 19, 2020)

The restriction on textile businesses and stopping production at powerlooms and lack of

orders from other places has led to stagnation of rayon fabric worth ₹50 crore.

There are over 30,000 powerlooms in the district and due to the recent restrictions to

prevent the spread of COVID-19 disease, shops in and around Gani market was closed

and this has affected business in the region.

President of Erode Gani Market Weekly Market Traders’ Association P. Selvaraj, said that

business has been severely affected due to the closure of shops in and around the market.

He said that traders from different parts of the country used to visit the place for trade

and their numbers have been dwindling for the past 10 days. Mr. Selvaraj said that trade

close to ₹5 crore has been affected due to this.

Convener of Erode Powerloom Owners’ Association P. Kandhavel said that wholesale

textile markets in North India has been shut to prevent spread of COVID-19 and due to

this ₹50 crore worth rayon fabric produced at various units here are stagnating at

godowns. He added that those who purchased products earlier are yet to make payments

and this has affected their payments to labourers and purchase of raw materials for

production.

Home

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7 CITI-NEWS LETTER

Coronavirus pushes city’s textile processing sector into doldrums

(Source: Times of India, March 20, 2020)

Textile dyeing and printing mills in the country’s largest man-made fabric (MMF) hub in

the city seem to have become casualty of Covid-19 in the country. Faced with weak

demand for polyester fabrics in the domestic market and also dwindling exports,

processing of finished fabrics has come to a grinding halt. Consequently, textile dyeing

and printing mills are now operating at less than 50% of their capacity and most have

chosen to implement closure for three days a week. Most of the migrant workers have no

option, but to leave for their hometown. Textile processing sector in the city employs over

two lakh workers.

There are about 315 textile mills in Pandesara, Sachin, Palsana and Kadodara where about

2.5 crore metres of polyester fabrics are processed every day. Following outbreak of

coronavirus in the country, textile mills now get less than one crore metres of fabrics for

processing due to weak demand in domestic market and sharp decline in export orders

from Europe, the United States and UAE. Industry sources said majority of textile mills

are doing job work for textile traders. About 2.5 crore metres of fabrics are processed on

job work to the tune of Rs80 crore per day. In the last one week, orders have reduced by

almost 50% in textile mills thereby causing them a loss of Rs40 crore.

South Gujarat Textile Processors’ Association (SGTPA) president Jitu Vakharia said, “If

coronavirus epidemic worsens, we will have to shutdown our mills. Textile mills are

processing one crore metres of fabrics per day against 2.5 crore metres. Demand for

polyester fabrics in the country has declined sharply due to coronavirus.”

Kamal Vijay Tulsiyan, a textile mill owner in Pandesara, said, “The situation has turned

from bad to worse in the last few days. Domestic demand for fabrics has gone down and

exports are also declining. Textile mills have become casualty. It is getting difficult for us

to sustain jobs of workers.” Vinod Agarwal, another textile mill owner in Sachin, said, “We

may be forced to shutdown the mills in the coming days if coronavirus situation worsens.

In just few days, the job orders have decreased by almost 50%”

Binay Agarwal, chairman of Swastik Polyprints: When the country is grappling with

coronavirus, fabric purchase will become last priority for people. We are in an

unprecedented situation. Domestic and export demand has decreased and we are forced

to keep our mills shut for three days a week. Pramod Chaudhary, chairman of Pratibha

Group: We will have to shutdown the mills if coronavirus situation worsens in the

country. Traders have almost stopped giving job orders to textile mills as domestic and

export demand has decreased. We are operating at less than 50% of our capacity.

Unsavoury Development

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8 CITI-NEWS LETTER

Total textile mills: 315

Total workers employed: Two lakh

Production loss: 50%

Production of finished fabrics: 2.5 crore metre per day

Total production loss: Rs40 crore

Home

Government bans exports of certain masks, ventilators, raw material for

masks, coveralls

(Source: Kirtika Suneja, Economic Times, March 19, 2020)

The government on Thursday banned the export of certain kinds of masks, ventilators

and textile raw materials for masks and coveralls amid the ongoing coronavirus

pandemic. “The exports of all ventilators, surgical/disposable masks (2/3 ply) masks only

and textile raw materials for masks and coveralls...has been prohibited with immediate

effect,” the Directorate General of Foreign Trade (DGFT) said in a notification.

The exports of these products were free till now. DGFT had on February 25 prohibited the

export of all personal protection equipment including clothing and masks used in

healthcare activities where there is a risk of contamination such as N-95 masks. However,

surgical/ disposable (2/3 ply) masks, surgical blades, gas masks and disposable shoe

covers were freely exportable. In the April-January period, India exported coveralls worth

$100 million, surgical apparatus worth $2.8 billion. The tightened norms are in addition

to the government restricting the exports of 26 active pharmaceutical ingredients (API)

and formulations on March 3 to ensure there is no shortage of drugs in India due to the

lockdown in China’s Hubei’s province, a major source for these raw materials that has

also been the epicentre of the coronavirus outbreak.

The export restrictions are applicable on paracetamol and vitamins B1, B6 and B12,

tinidazole, metronidazole, acyclovir, progesterone, chloramphenicol, erythromycin salts,

neomycin, clindamycin salts and ornidazole.

The pharma industry, meanwhile, is keen to resume exports of these drugs.

Home

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9 CITI-NEWS LETTER

Setting Up of National Technical Textile Mission

(Source: Press Information Bureau, March 19, 2020)

The government has approved the proposal for creation of National Technical Textiles

Mission for a period of 4 years (2020-21 to 2023-24) with an outlay of Rs.1480 crores.

The focus of the Mission is for developing on usage of technical textiles in various flagship

missions, programmes of the country including strategic sectors. The use of technical

textiles in agriculture, aquaculture, dairy, poultry, etc. Jal Jivan Mission; Swachch Bharat

Mission; Ayushman Bharat will bring an overall improvement in cost economy, water and

soil conservation, better agricultural productivity and higher income to farmers per acre

of land holding in addition to promotion of manufacturing and exports activities in India.

The use of geo-textiles in highways, railways and ports will result in robust infrastructure,

reduced maintenance cost and higher life cycle of the infrastructure assets.

Promotion of innovation amongst young engineering /technology/ science standards and

graduates is proposed to be taken up by the Mission along with creation of innovation and

incubation centres and promotion of start-up and Ventures. The research output will be

reposited with a Trust with the Government for easy and assessable proliferation of the

knowledge thus gained through research innovation and development activities.

A sub-component of the research will focus on development of bio degradable technical

textiles materials, particularly for agro-textiles, geo-textiles and medical textiles. It will

also develop suitable equipment for environmentally sustainable disposal of used

technical textiles, with emphasis on safe disposal of medical and hygiene wastes.

There is another important sub-component in the research activity aiming at

development of indigenous machineries and process equipment for technical textiles, in

order to promote Make In India and enable competitiveness of the industry by way of

reduced capital costs.

The mission will work for holistic development of entire technical textile sector on pan-

India basis and aims to generate 2 lakhs jobs in organized/ unorganized sector in the

country.

This information was given by the Minister of Textiles, Smriti Zubin Irani, in written

replies in the Rajya Sabha today.

Home

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10 CITI-NEWS LETTER

Cotton Trading Policies

(Source: Press Information Bureau, March 19, 2020)

A representation was received from Chairman, South Indian Mills Association (SIMA)

requesting to direct Cotton Corporation of India (CCI) Limited to offer cotton at the

prevailing market prices through e-auction on a regular basis and avoid hoarding huge

volume of cotton. In this regard, it is stated that CCI is undertaking Minimum Support

Price (MSP) operations when prices of Fair Average Quality (FAQ) grade kapas fall below

the MSP level and procures entire quantity of FAQ grade kapas offered by the cotton

farmers in various Agricultural Produce Market Committee (APMC) yards at MSP rate.

The FAQ grade cotton procured under MSP operations is superior quality which is of

higher value. The cotton procured by CCI under MSP operations is made available to the

industry on daily basis through e-auction. The system is transparent and CCI’s pricing

policy is value based.

It has always been the endeavour of CCI to ensure availability of good quality cotton at

competitive rates to domestic textile industry including MSME units, Co-operatives and

Institutional buyers. In order to enable the mills to procure cotton at competitive prices,

CCI has introduced bulk discount scheme for 2018-19 stock which is applicable on

purchase of minimum quantity of 500 bales. Micro,Small and Medium Enterprises

(MSME), KVIC and Co-operative mills are entitled to avail discount on buying a minimum

quantity of even 100 bales. Under this scheme, the mills can avail discount of Rs. 3200

per candy to Rs. 5000 per candy depending upon quantity purchased.

This information was given by the Minister of Textiles, Smriti Zubin Irani, in a written

reply in the Rajya Sabha today.

Home

India Inc seeks stimulus to tackle coronavirus

(Source: Nishtha Saluja, Economic Times, March 20, 2020)

India Inc has made a strong pitch for a stimulus to deal with the economic crisis triggered

by the Covid-19 pandemic. Confederation of Indian Industry (CII) president Vikram

Kirloskar told ET that the government should relax the fiscal deficit target and unveil

steps such as extending deadlines for recognition of non-performing assets (NPAs) and

direct transfers to those in low income bracket.

“This is a good time to increase the fiscal deficit… Government should look at direct

payment to people who are not paying income tax, or are in the lower income bracket,"

Kirloskar said. Industry, he said, will push for moratorium on loan repayment especially

for small companies and businesses, and extension in time limit for recognition of non-

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11 CITI-NEWS LETTER

performing assets by banks by another six months. He pointed that some central bankers

had slashed interest rates.

He said direct transfer to people in lower income categories can help boost consumer

spending. Assocham also called for direct cash transfer of Rs. 3,500 per month to up to

three months for the most stressed sections of metros, including street vendors,

construction and temporary workers.

Home

GST needs overhauling: The need now is to shift to a simpler rate structure

(Source: Rahul Renavikar, Financial Express, March 20, 2020)

Bring oil, real estate under GST; the need now is to shift to a simpler rate structure.

The decisions concerning the GST Law and Procedures, taken at the recently concluded

39th GST Council meeting, were on expected lines. The due date for filing FY19 annual

returns was postponed to June 30, 2020. Elsewhere in the world, there is no concept of

annuality in VAT / GST. An annual return is a direct taxes concept where a taxpayer is

assessed for their annual income. For consumption taxes like VAT/GST, each return filed

for a particular tax period is an independent submission summarising the sales &

purchases the tax registrant undertook in that particular tax period. Post-this, the tax

registrant is not required again to file the same information again as part of the annual

return. The annual return for GST is unique to India, given the sheer number of tax

registrants in the country and the need to correct any omissions/errors in filing the

periodic returns during the year. As a first-level assessment, the annual return needs to

be certified by either a practicing chartered or cost accountant. Both, the annual return,

and the accountant’s certificate, are the legacy of the erstwhile state VAT regime, and are

the final touch point overall GST compliance for a fiscal.

Another decision taken at the aforesaid GST Council meeting was to defer the start-date

for e-invoicing, as also for introduction of the simplified GST return to October 1, 2020.

While this brings some relief to the trade and industry, it dilutes the resolve to embrace

best practices at the earliest, and frustrates those who had prepared well in advance. This

has been the case since inception of GST—so much so that, now, trade and industry

assumes the deadline will certainly be pushed!

Nearing three years of the GST in India, rather than tinkering with the existing structure,

it is time the GST system was overhauled for efficiency and efficacy. One objective of

replacing the complex erstwhile indirect tax structure in India with the GST was to boost

economic growth. Due to many reasons, this objective hasn’t been achieved to any great

extent. The key constituents of the economy—viz. oil & gas, electricity, real estate—have

not yet been brought under GST.

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12 CITI-NEWS LETTER

Hence, the cascading effect due to levy of excise duty, VAT, stamp duty, etc, continues to

add to overall costs. This needs to change, so that everything (excluding alcohol for human

consumption) is taxed under a common statute. The government can frame the input tax

credit (ITC) rules in a way that protects revenue.

Further, rationalisation of GST rates must happen at the earliest to reduce complexities

because of multiple rates, and to deal with the inverted duty structure in some cases.

While mobile phones were moved from the 12% slab to the 18% (effective April 1) at the

aforesaid GST meeting, decisions on other products (viz. garments, fertilisers, etc) were

deferred, pending further deliberation.

Industry expected lowering of rates for mobile-manufacturing inputs rather than

increasing of the rate for supply of mobile phones. A two-rate GST structure should be

put in place, with inputs/raw materials taxed at a lower rate, and finished products taxed

at a higher one, thereby completely eliminating any inverted duty structure for business.

With low rates, evasion of taxes would diminish to a very large extent as a smaller

quantum of tax would be involved. This will also result in less working capital blockage

for businesses. The plethora of exemptions can be pruned to do away with the cascading

due to non-availability of ITC.

With lowered tax rates, compliance is expected to rise, resulting in better tax revenues.

India’s GST regime is still a work-in-progress, and timely interventions by the

government have saved taxpayers much hardship. With further simplification of the rates

and compliance requirements, India’s rank in the paying-taxes index can significantly

improve. While its overall 2020 ease of doing business rank has significantly improved to

63rd (out of the 190 countries), the rank for paying taxes is a low 115th. A significant

improvement in this can propel India into the top-50 list!

The writer is Managing Director, Acuris Advisors Pvt Ltd,

Home

Export of MSME Products

(Source: Press Information Bureau, March 19, 2020)

As per the information from Directorate General of Commercial Intelligence & Statistics

(DGCI&S), the share of export of specified MSME related Products in the All India

Exports each of the last 3 years and current year is as follows:

S.No. Year Percentage share of MSME products

to total export

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13 CITI-NEWS LETTER

1. 2019-20 (Upto Dec. 2019) 49.81

2. 2018-19 48.10

3. 2017-18 48.56

4. 2016-17 49.69

In order to support Micro, Small and Medium Enterprises (MSMEs), Government has

initiated various schemes for infrastructure development such as Micro & Small

Enterprises –Cluster Development Programme (MSE-CDP), Scheme for Promotion of

MSMEs in NER & Sikkim, Scheme of Fund for Regeneration of Traditional Industries

(SFURTI), Entrepreneurship & Skill Development Programme (ESDP) and upskilling

through testing/technology centres, support for tooling/technology services etc.

Government has also taken various initiatives to enhance MSME competitiveness by way

of Credit Linked Capital Subsidy, Lean Manufacturing, Design Improvement, Zero Defect

Zero Effect Certification, Support for Incubators, Awareness of Intellectual Property

Rights & Digital Empowerment of MSMEs, Procurement and Marketing Scheme (PMS),

A Scheme for Promoting Innovation, Rural Industry and Entrepreneurship (ASPIRE),

Credit Guarantee Scheme (CGTMSE), Interest Subvention Scheme for MSMEs etc.

This information was given by Shri Nitin Gadkari, Union Minister for Micro, Small and

Medium Enterprises in written reply to a question in Lok Sabha today.

Home

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14 CITI-NEWS LETTER

GLOBAL

U.S. Textile And Nonwoven Associations Urge Government To Deem

Manufacturing Facilities “Essential”

(Source: Textile World, March 19, 2020)

U.S. textile and nonwoven associations issued a joint statement today urging federal, state

and local governments to deem textile and nonwoven manufacturing facilities as

“essential” when drafting “Shelter in Place” orders in response to the COVID-19 crisis.

Our associations recognize the serious challenges our elected officials, health

administrators and others are facing when issuing orders to protect communities across

the country and we understand the necessity for leaders to enforce a ‘Shelter in Place”

order or quarantine orders.

Our members make a broad range of inputs and finished products used in an array of

personal protective equipment (PPE) and medical nonwoven/textile supplies, including

surgical gowns, face masks, antibacterial wipes, lab coats, blood pressure cuffs, cotton

swabs and hazmat suits. These items are vital to the government’s effort to ramp up

emergency production of these critical supplies.

If workers who produce these goods are not granted an “essential” exemption from

“Shelter in Place” and other quarantine orders to go to their manufacturing and

distribution facilities, it will cause major disruptions in the availability of these goods.

This will create significant hardship to healthcare providers and consumers across the

country who depend on steady and stable supplies of these critical items.

We are asking the administration and state and local authorities to provide greater

certainty and clarity for our companies and employees and ask for a clear exclusion of our

manufacturing operations from “Shelter in Place” orders as the textile and nonwoven

products that we make in the U.S. play an essential role in mitigating the shortages of

critical supplies. Such a designation will help us avoid disruptions of vital goods and

services during this challenging time.

Home

The effect of COVID 19 on global textiles and apparel supply chains

(Source: John Kilmurray, Knitting Industry, March 19, 2020)

When a person´s health and livelihood are the most important factors in their day to day

life, their apparel needs may seem of lesser importance.

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15 CITI-NEWS LETTER

That being said, the size and scale of the global apparel industry affects many people in

many countries and needs to be kept in mind as when we ¨hopefully return to normal¨,

the public will expect product availability to meet the technical and fashion/lifestyle

requirements that they require and desire.

This article looks to detail how the world’s production countries are managing, where

their circumstances are not widely reported, and the focus is more placed on the

consumer environment. The following is a reported commentary from active players

engaged in the supply chain from production to shipping.

China

As the country where COVID 19 (also known as the coronavirus) started, China caused

the initial disruption immediately following Chinese New Year closures. As rumours of

the virus were ignited, many Chinese workers opted not to return to work without clarity

on their safety. Added to this was a shift of production volume out of China, mainly for

the US market, due to the imposed tariffs by the Trump administration.

As we now approach the two-month period since Chinese New Year, many workers have

not returned to work as the confidence regarding health and job security is unclear.

However, China has continued to function effectively for the following reasons:

- Production volumes moved been to other key production countries

- A percentage of end customers have cancelled a slight amount due to lack of consumer

confidence, which has relieved some pressure. However, there have been outright

cancellations

- A reliance as a textile hub in favour of finished product, i.e. shipping of yarns and fabrics

to other production countries rather than managing the CMT within the country

Bangladesh

in the last fifteen years, Bangladesh has seriously embraced the vertical needs of its

apparel exports. For the Spring Summer 2020 season, it was more than prepared for both

imports of raw materials and utilizing local options. After detailed discussions, the key

exporters advised that deliveries for Europe were/are ‘business as usual’ and US exports

are managed with the daily challenges and requested changes being addressed.

Vietnam

Despite a massive move of sewing from China, there have been challenges that have been

compounded by the virus impact on labour intensive areas.

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16 CITI-NEWS LETTER

Questions and answers

The following is a straightforward response to industry driven questions – the answers

are the consensus.

John Kilmurray (JK): What’s happening with raw materials supply - local and

overseas?

“Some areas in fabric delivery has been affected but mills are progressing steadily.”

JK: How about factory production, labour and delivery?

“Labour generally is stable. It’s too early to comment on delivery as we have not

experienced any setbacks yet.”

JK: What about customer reaction and sentiment on current and next season orders?

“Lifestyle are cutting orders but only QR’s. Sports, as their product cycle is long, we won’t

see any issues here.”

JK: What are the logistical implications?

“Hold up in land transport, border to border has backlogs (e.g. China-Vietnam). Avoid

transport by land.”

JK: And on customer communications and their understanding of the production

challenges?

“Generally, they are understanding, it’s the trading companies (agents) that are not being

understanding, as they will not bear the airfreight or compromise.”

JK: What short- and medium-term damage to your supply chain do you expect from this

situation?

“Spending has been frozen…”

Other countries

Indonesia & India

Indonesia has certainly seen an increase in volumes, especially as finished product

migrates from China. It continues to build on every element of supply chain needs, be it

trim, labelling or packaging.

India is in a constant situation to expand on its product of distinct fabric offerings to

match China´s core fabric in both knit and wovens. There are no significant call outs for

delays or cancellations from customers.

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17 CITI-NEWS LETTER

Thailand & Cambodia

These countries are pursuing on the path of the focused products that match their skill

set. Light sewing with raw materials ordered well in advance, ensure that intimates,

tailoring and diversified sourcing options are working.

Sri Lanka

Like India in some ways, Sri Lanka has endeavoured to create a dedicated, high value,

engineered product selection including intimates, lingerie and washed product, as well as

embracing eco-production methods. Current production and deliveries are not under

threat.

Italy

News from our yarn and fabric contacts inform us that all placed orders are shipping as

requested. However, forward forecasting is not forthcoming from customers.

Sub-Sahara

Interest has returned to this area, as confidence in China is questioned and as a price

versus lead-time scenario is being examined.

Conclusions

In conclusion, the current seasons are being serviced with a small percentage of delivery

failures. As of today, the greatest concern is the upcoming seasons with a lack of consumer

confidence.

It is fair to expect that some mills, producers and retailers will not come through this

period unscathed. However, by embracing modern communication tools, both suppliers

and customers can support each other through valid and productive measures.

John Kilmurray is a textiles and apparel industry veteran

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3 textile-garment projects to create 2000 jobs in Cambodia

(Source: Fibre2Fashion, March 19, 2020)

The Council for the Development of Cambodia (CDC) recently approved three

textile and garment projects with a total capital of $7 million.

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18 CITI-NEWS LETTER

The projects—of Jin Ming Li Jian One Co Ltd in Kong Pisey of Kampong Speu province;

Suzen (Cambodia) Industrial Co Ltd in Suong city in Thbong Khmum province; and MIL

United Manufacturing Co Ltd in the Kandal Stung district of Kandal province, will create

2,000 jobs.

Jin Ming Li Jian One’s project worth $2.3 million will establish a yarn factory employing

180 workers.

With an investment capital of $2.4 million, the Suzen (Cambodia) Industrial Co project

will employ 726 workers to manufacture clothes. The third one will invest $2.3 million to

construct a garment factory, generating 912 jobs.

Despite concerns over shortage of raw materials, new investments in the garment

sectors continues, giving hope to the youth for employment opportunities, especially

those investments which are in the provinces, according to a report in a Cambodian

newspaper.

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GOTS releases version 6.0 for environmental sustainability

(Source: Fibre2Fashion, March 19, 2020)

GOTS (The Global Organic Textile Standard) has released its version 6.0. The approach

of the revision process, undertaken every three years, is to set stricter ecological and social

criteria while maintaining relevance of the global organic textile standard. GOTS is a

standard for the processing of textiles made from organically produced natural fibres.

International stakeholders with

expertise in the field of organic

production, textile processing, textile

chemistry, and social criteria and

industry representatives, NGOs and

consumers contributed to the new

version 6.0, throughout the last year in

several consultation rounds.

GOTS defines world-wide recognised

requirements that ensure third party

certified organic status of textiles with full traceability from field to finished product. With

this aim in mind, key requirements such as certified organic fibre content, the general ban

on toxic and harmful chemicals, conventional cotton and virgin polyester as well as the

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social compliance management have been maintained, while other criteria became

stricter.

When it comes to GOTS Environmental Criteria, Product Stewardship and

Environmental Health and Safety (EHS) requirements have been introduced for

approved chemical formulators. The newly released test protocol ISO / IWA 32 for GM

screening of cotton serves as the recognised screening method of GMO presence. The new

version withdraws the relaxation for the additional regenerated and virgin synthetic fibre

content for socks, leggings and sportswear, according to GOTS.

Additionally, product quality standards for colourfastness and dimensional stability are

now mandatory. Specific new requirements for tampons and food contact textiles have

been included. Regarding GOTS social criteria GOTS included more dynamic elements;

certified entities will now have to calculate the gap of actually paid wages to living wages

(according to recognised calculations methods). Furthermore, they will be encouraged to

work towards closing this gap. Specific references to OECD due diligence guidance and

good practice guidance for social criteria and risk assessment as well as ethical business

practises have been explicitly included.

The transition period for users of GOTS to fully comply with the new version will be one

year. The standard version and the corresponding implementation manual, as well as the

list of changes, are available on the website and can be downloaded.

“The GOTS version 6 progressively furthers our mission. Pursuant to one of the most

prolific comment periods in its revision history, GOTS continues to mature in scope,

following keen consultations within the GOTS standards committee, external experts, and

inputs from stakeholders. I am delighted with the outcome of these deliberations and am

confident that GOTS will continue to remain in the leading position that it is,” Rahul

Bhajekar, GOTS managing director and coordinator standards committee said.

Home

Pakistan: Textile mills demand moratorium on gas, electricity bills

(Source: The News, March 20, 2020)

Textile mills on Thursday demanded of the government to freeze gas and electricity bills

for the spinning industry for at least two months to help it underpin exports sector amid

coronavirus that holds a potential recession risk.

All Pakistan Textile Mills Association (Aptma) said government should help the textile

spinning industry by freezing gas and electricity bills for at least two months “so that the

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20 CITI-NEWS LETTER

industry may operate without any interruption in these difficult times and also to avoid

mass unemployment of the workers”.

Zahid Mazhar, chairman of Aptma Sindh-Balochistan region urged the government to

take drastic measures to save export-oriented textile industry from the negative economic

impact of novel coronavirus.

“Since its outbreak in mid-December 2019, coronavirus has caused turmoil in the world’s

second-largest economy, China, with a trickle-down effect on nearly all big economies

including European Union, United States, Japan and South Korea,” Mazhar said in a

statement.

Aptma’s representative emphasised the need for immediate steps to address the major

issues of the industry and exporters, especially the liquidity problem “otherwise all the

measures taken by them for reduction in current account deficit would go in vain”.

Mazhar demanded the government to release the backlog of tax refunds, including

deferred sales tax refund and payment of outstanding drawback of local taxes and levies.

“This is the money that belongs to the business and should speedily be returned to help

uninterrupted operation of the industry enabling to sustain employment and exports,” he

said. Aptma official said the present situation needs special attention of the government

to address problems of the trade and industry at least for the period the recession would

sustain due to coronavirus. Mazhar demanded the government to restore zero-rated tax

status for the five export-oriented industries to make them play role in the economic

development through earning much-needed foreign exchange reserves. Aptma leader

said the interest rate cut “was too little and too late”.

“Discount rates in the regional competing countries are between 4 to 8 percent, while

discount rate has been reduced by United States of America to zero percent, Britain to

0.25 percent in sharp contrast with the present discount rate in Pakistan which is 12.5

percent,” he said. He demanded the State Bank to further reduce discount rate by another

300 basis points to help Pakistani exporters compete with regional competitors.

Aptma said availability of export refinance facility is the most important for spinning

industry, which provides yarn on credit to all textile value-addition chains and store

cotton for many months both through domestic buying and import from foreign

suppliers. “Furthermore, due to cotton crop failure for the last five consecutive years,

spinners are compelled to import costlier basic raw materials of textile industry, therefore

the refinance facility (should) be provided also to the spinning industry on priority basis,”

it added.

Home

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21 CITI-NEWS LETTER

BBB, TJX join growing list of COVID-19 store closures

(Source: Home Textiles Today, March 19, 2020)

JCPenney, Burlington also close stores to combat against coronavirus spread

More retail stores are going dark, at least temporarily, to help reduce the spread of

coronavirus. This afternoon, Bed Bath & Beyond announced it will close all non-essential

stores across its banners, which will impact more than 50% of its doors in the U.S. and

Canada. Subject to state and location regulations, the company will continue to operate

stores that sell health care, personal care, infant care, cleaning supplies, or food and

beverages.

Around 800 locations will close tomorrow and remain closed until April 3.

TJX Cos. also announced today that it will close all stores as well as its online businesses

for two weeks. The closures include nameplates in the United States, Canada, Europe, and

Australia as well as distribution and fulfillment centers and offices. Burlington Stores

today announced it will close 100 stores immediately and monitor other stores for

possible closure.

JCPenney stores and distribution centers ceased operation today and are tentatively

scheduled to reopen April 2.

Here is a list of some retailers’ store operations plans amid COVID-19:

Bed Bath & Beyond: Closing approximately 800 locations from March 20 through April

3. Another 700 stores selling healthcare, cleaning, food and beverage essentials will

remain open where permitted by state and local governments.

Belk: All stores temporarily closed through March 30

Big Lots: Regular store hours

Burlington Stores: Closed 100 stores effective March 19 and reduced hours at others.

Costco: Regular store hours; will “modify our operations as necessary”

Crate & Barrel: All stores in the U.S. and Canada temporarily closed for two weeks,

including Crate and Barrel, CB2 and Hudson Grace

Dillard’s: Reduced store hours to 11 a.m.-7 p.m. Monday to Saturday (Sunday hours

remain unchanged at noon to 6 p.m.)

Dollar General: Regular store hours, with some units closing one hour earlier daily;

dedicating first hour of each shopping day to senior-aged customers only

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Home Depot: Store hours reduced to early closing, at 6 p.m. daily Hudson’s Bay: All stores

temporarily closed for two weeks

IKEA U.S.: All stores and Manhattan Planning Studio temporarily closed until further

notice JCPenney: Closing stores and business offices on March 19 in the evening, with

plans to reopen April 2.

Kohl’s Corp.: All stores temporarily closed until further notice

Lowe’s: Regular store hours

Macy’s Inc.: All stores temporarily closed through March 31, including Macy’s,

Bloomingdale’s, Bluemercury, Macy’s Backstage, Bloomingdales the Outlet and Market

by Macy’s locations Nordstrom: All stores temporarily closed for two weeks

Ollie’s Bargain Outlet: Regular store hours

RH (Restoration Hardware): All Galleries, restaurants and outlets temporarily closed

through March 27 Saks Fifth Avenue: All stores in the U.S. and Canada temporarily closed

for two weeks, including Saks Fifth Avenue and Saks Off Fifth

Stein Mart: All stores temporarily closed, and tentatively scheduled to reopen April 1st

Target: Store hours reduced to early closing, at 9 p.m. daily TJX Companies: Reduced

store hours to 11 a.m.-8 p.m. daily, including T.J. Maxx, Marshalls, HomeGoods,

Homesense and Sierra in the U.S., and Winners, Marshalls and HomeSense in Canada

Tuesday Morning: Some locations temporarily closed; some open with reduced hours, 11

a.m.-5 p.m. daily

Urban Outfitters, Inc.: All stores temporarily closed through March 28, including

Anthropologie, BHLDN, Free People, Terrain, Urban Outfitters and Nuuly and its Food

and Beverage division Walmart: Reduced store hours to 6 a.m.-11 p.m. daily Williams-

Sonoma, Inc.: All stores in the U.S. and Canada temporarily closed through April 2,

including Williams Sonoma, Williams Sonoma Home, Pottery Barn, Pottery Barn Kids,

Pottery Barn Teen, West Elm, Rejuvenation, and Mark and Graham

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