Cotlook A Index - Cents/lb (Change from previous day)
21-08-2019 70.50 (Unch)
22-08-2018 93.05
22-08-2017 77.90
New York Cotton Futures (Cents/lb) As on 23.08.2019 (Change from
previous day)
Oct 2019 59.98 (-0.10)
Dec 2019 60.12 (+0.50)
Mar 2020 60.49 (-0.23)
23rd August
2019
WTO reforms must be taken up by all member countries: Piyush Goyal
Niti Aayog has a prescription for ailing economy and it starts with
interest rate cuts
Weak exports, uncompetitive prices to hit cotton spinners, says report
Sri Lanka organises business forum in Gujarat
Indonesian textile companies take hit as China shifts focus to SEA
Cotton and Yarn Futures
ZCE - Daily Data (Change from previous day)
MCX (Change from previous day)
Aug 2019 21280 (+140)
Cotton 12790 (+50) Oct 2019 19920 (+50)
Yarn 20515 (+35) Nov 2019 19440 (+20)
www.citiindia.com
2 CITI-NEWS LETTER
-------------------------------------------------------------------------------------- WTO reforms must be taken up by all member countries: Piyush
Goyal
Niti Aayog has a prescription for ailing economy and it starts with
interest rate cuts
Economic slowdown: Export focus fine, but there’s more to growth
16 retail fashion brands commit to sustainability
SRTEPC’s focus to boost Indian Textile industry as Global players
taking advantage of the US and China trade war
Weak exports, uncompetitive prices to hit cotton spinners,
says report
Sri Lanka organises business forum in Gujarat
Boosting growth in a protectionist world
New Wage Code will reduce litigations under various labour laws:
Experts
Pakistan allows partial trade via Attari ICP
Amit Aggarwal showcases collection made from R|Elan fabric
-------------------------------------------------------------------------------
US-China trade war uncertainty could cost $585 bn by 2021
Indonesian textile companies take hit as China shifts focus to SEA
Made in Vietnam: Draft Regulations on Rules of Origin
Vietnam’s exports keep rising this year
Finding Partners Along the Supply-Chain at Sourcing at MAGIC
---------------------------------------------------------- ----------
NATIONAL
---------------------
GLOBAL
www.citiindia.com
3 CITI-NEWS LETTER
NATIONAL:
WTO reforms must be taken up by all member countries: Piyush Goyal
(Source: Press Information Bureau, August 22, 2019)
The time has come to take on the policies of protectionism and unilateral measures by
some developed countries that are having an adverse effect on global free trade and if
this continues there will be recession in the world and no country will escape it, said
Union Minister of Commerce & Industry and Railways, Piyush Goyal.
He was speaking at an international dialogue on South-South and Triangular
Cooperation today in New Delhi. Commerce and Industry Minister urged that all
member countries must take up reforms of the WTO and not deal with issues in a
piecemeal manner. We cannot afford to walk away from the current system but all
member countries of the WTO must re-engage to ensure that the rule-based,
transparent, and non-discriminatory governance that free-trade requires is taken
forward honestly and in a non-discriminatory manner and keeping in mind the interests
of different member countries with disparate GDP.
Piyush Goyal further stated that the policies of protectionism being followed by some
countries in the developed world are affecting engagement between countries for trade
in goods, services and protection of investments.
The aspirations of people cannot be held back for a better life: for sustainable growth of
the seven billion people of the world and India is committed to the Sustainable
Development Goals (SDGs) and believes that peoples’ aspirations cannot be held back
till 2030, said the Commerce and Industry Minister. India is not going to wait till 2030
to give access to energy, literacy and clean potable water to its people, India is fast-
tracking its efforts to reach the SDGs to the last man at the bottom of the pyramid. India
also desires that this pace of development reaches people in the rest of the world.
South-South cooperation is a broad framework of collaboration among countries of the
South in the political, economic, social, cultural, environmental and technical domains.
Involving two or more developing countries, it can take place on a bilateral, regional,
intraregional, or interregional basis. South-South cooperation is a manifestation of
solidarity among peoples and countries of the South and the attainment of the goals of
Sustainable Development.
Commerce and Industry Minister hoped that the South-South and Triangular
Cooperation will help the developed world become a part of the developing world’s
growth agenda.
Home
www.citiindia.com
4 CITI-NEWS LETTER
Niti Aayog has a prescription for ailing economy and it starts with interest
rate cuts
(Source: CNBC 18, August 22, 2019)
Niti Aayog has suggested a reduction in the interest rate from 8 percent to 5
percent on new small savings in a phased manner spread over 24 months.
It has also suggested a delay in merger of public sector banks at this stage, and
recapitalization of the banks on the basis of performance soon, as announced in
the budget this year.
On the tax front, the think tank has pushed for a rollback of dividend distribution
tax and buyback tax which was levied in the 2019 Union Budget.
Niti Aayog has proposed a multi-pronged strategy to revive the ailing economy. Among
the several measures, the government policy think tank has suggested a reduction in the
interest rate from 8 percent to 5 percent on new small savings in a phased manner
spread over 24 months.
If the government agrees to the proposal, implementation could begin starting October
1, 2019, people aware of the matter told CNBC-TV18.
Niti Aayog has also suggested the creation of a new special purpose vehicle (SPV) based
on Specified Undertaking of the Unit Trust of India (SUUTI) to raise bonds and invest in
preferred equity in non-banking finance companies (NBFCs) in a bid to support the
struggling sector.
SUUTI, like the SPV, could have a net worth of about Rs 38,000 crore.
Niti Aayog has suggested a delay in merger of public sector banks (PSBs) at this stage,
and recapitalization of the banks on the basis of performance soon, as announced in the
annual budget this year.
On the tax front, the think tank has pushed for a rollback of dividend distribution tax
and buyback tax which was levied in the 2019 Union Budget. It believes that capital
gains due to a rise in market value as a consequence of the rollback will more than offset
revenue losses for the government.
Proposal for the automobile sector includes allowing the BS4 buses purchased in the
next six months be allowed to operate for the next 10 years — provided they comply with
pollution emission norms. Niti Aayog estimates a shortage of over 80-90 percent buses
in India and this move will allow for clearance of the inventory.
www.citiindia.com
5 CITI-NEWS LETTER
On the scrappage policy for the sector, the think tank has suggested giving incentive
vouchers for commercial vehicle scrapping at Rs 50,000, passenger vehicles at Rs
20,000 and two- three-wheelers at Rs 5,000 in order to facilitate the purchase of new
vehicles, a step, it believes, will clear pending inventory.
For the textile sector, it has proposed the removal of inverted duty structure on man-
made fibers and abolition of anti-dumping duties on purified terephthalic acid and
viscose staple fiber. India had imposed anti-dumping duty on purified terephthalic acid
in July 2019 and viscose staple fiber in 2016.
Niti Aayog is also of the view that there should be a monitoring mechanism to
implement and fast track the government's decision of 2016 when it was decided that
departments and public sector undertakings (PSUs) should pay up 75 percent of the
arbitral awards in contractual disputes.
Prime Minister Narendra Modi is slated to meet finance ministry and Niti Aayog
officials to take stock of the economy and discuss its revival, people aware of the
development have told CNBC-TV18.
Home
Economic slowdown: Export focus fine, but there’s more to growth
(Source: Financial Express, August 23, 2019)
The statements underscore the government’s discomfiture to loosen its purse strings in a
big way, given the ‘limited fiscal space’ amid subdued tax collection growth.
Nevertheless, it will likely opt for targeted interventions in critical sectors like auto,
MSMEs and infrastructure. Also, it could front-load its spending to spur demand.
Top government officials on Thursday sought to temper expectations of a big-bang
stimulus package to revive sagging economic growth, aiding a slide in the stock markets.
Speaking at the Hero MindMine Summit 2019, chief economic advisor Krishnamurthy
Subramanian said government intervention to bail out the private sector every time it
goes through a “sunset phase” creates a “moral hazard” and is an “anathema” for the
market economy. At the same event, power secretary Subhash Chandra Garg — who was
the finance secretary until late July — held that reduction in interest rates and easier
availability of credit to the private sector are better tools to boost growth than a fiscal
stimulus.
Garg said economic growth in the first quarter could be around 5.5-6% (against a five-
year low of 5.8% in the March quarter) mainly due to subdued government expenditure
on account of elections, and some demand compression. After a slowdown in the
www.citiindia.com
6 CITI-NEWS LETTER
budgeted expenditure in Q1FY20, the Centre may, however, step up spending in Q2 to
reach the spending trend of 53-54% by September (H1).
Separately, in a reply on Twitter, Subramanian asserted that the government was
“identifying the structural constraints faced by industry and working to remove them”.
This will “empower industry to invest and foster the virtuous cycle” of growth led by
investments.
The statements underscore the government’s discomfiture to loosen its purse strings in
a big way, given the ‘limited fiscal space’ amid subdued tax collection growth.
Nevertheless, it will likely opt for targeted interventions in critical sectors like auto,
MSMEs and infrastructure. Also, it could front-load its spending to spur demand.
Already, NITI Aayog has proposed a comprehensive scrappage policy, as part of which
buyers of new vehicles will get incentives in lieu of scrapping their old vehicles. While an
incentive of Rs 50,000 is proposed for 10-year old commercial vehicles, buyers of
passenger vehicles will get Rs 20,000. Buyers of new two and three wheelers will get a
relief of Rs 5,000, a source told FE.
Niti Aayog is also learnt to have suggested that the interest rates on elevated small
savings deposits, a sore point with many banks, be cut over the next two years from 8%
to 5%, the taxes on dividend distribution and buybacks be rolled back and the
government clear its arbitration award dues expeditiously. According to a CNBC-TV18
report, the government has already paid 75% arbitration awards in contractual disputes
in 2016.
While the central bank and India Inc have called for a greater transmission of the RBI’s
repo rate cuts (110 basis points since February), many banks have shied away from
doing so, as the elevated interest rates on small savings, fixed by the government, have
forced them to pay more on their deposit rates.
Speaking at the event, Subramanian said: “I think we expect the government to use tax-
payers’ money to intervene every time there is a sunset phase.” “You introduce possible
moral hazard from too-big-to-fail and possibility of a situation where profits are private
and losses are socialized, which is basically an anathema to the way the market economy
functions.”
Earlier, the CEA had said the government support is required at the time of infancy, and
not when one has grown up. “I would say that the private sector has been in India since
1991 (liberalisation) and is now a 30-year-old kid. A 30-year-old kid, a man, now needs
to start saying that I can stand on my own feet. I don’t need to go to papa.”
www.citiindia.com
7 CITI-NEWS LETTER
The finance ministry is weighing proposals to “ring-fence” foreign portfolio investors
(FPIs) structured as trusts from the higher surcharge and review the dividend
distribution tax (DDT) and the long-term capital gains (LTCG) tax.
While a cut in the corporate tax rate and personal income tax reliefs have been
recommended by the direct tax code panel, analysts say the government will have to
forgo Rs 1.2 lakh crore if all the panel’s suggestions for tax reductions are accepted.
However, this can be done if the government withdraws various exemptions extended to
both companies and individuals.
To boost exports, while the government is considering “full reimbursement” of various
imposts on outbound shipment, the Reserve Bank of India has proposed to ease
priority-sector lending norms for exporters. Currently, exporters with a turnover of up
to Rs 100 crore each are eligible for credit under the priority-sector norms. This limit is
likely to be scrapped or doubled so that more exporters are benefitted.
Even though tepid growth in tax revenue is constraining the fiscal situation, some
experts believe that the fiscal space for a much-needed stimulus could indeed be found.
Over 5% of GDP is lost due to tax exemptions, they point out, adding that some 1.5% of
GDP as spending accounted for is not actually spent.
Home
16 retail fashion brands commit to sustainability
(Source: Outlook India, August 22, 2019)
Sixteen retail fashion brands have signed the Su.Re (sustainability resolution) project
launched by the Textile Ministry, IMG Reliance and Clothing Manufacturers Association
Of India (CMAI).
Textile Minister Smriti Irani launched the project, in association with the UN, on
Thursday at the Lakme Fashion Week Winter/Festive 2019 being held here.
Retail brands like Spykar, Westside, Trends, Shoppers Stop, fbb, House of Anita Dogre
and Lifestyle and Max joined the movement that aims to develop sustainable sourcing
policy for consistent prioritising and utilising certified raw materials that have a positive
impact on the environment.
In her address at the event which was also attended by Renata Lok-Dessallien, UN
Resident Coordinator in India, Irani said: "Never before in a population our size has
voluntarily driven the retail force of India and fashion elite along with the government
to come together at one platform. That this has happened voluntarily makes me proud.
www.citiindia.com
8 CITI-NEWS LETTER
On October 2, we shall step into the 150th year of Mahatma Gandhi''s birthday. Gandhi
said to the world, ''be the change you want to be''. And today, the resolution on
sustainability is a reflective of that very thought of the Mahatma."
She said that sustainability is the fourth criteria for 57 per cent of the consumers of the
apparel and design industry. "This (project) makes it not only responsible business but
also smart business. This project will impact worth Rs 30,000 crore in the market.
Everything that we consume, we must consume responsibly."
Jaspreet Chandok, Vice President and Head of Fashion, IMG Reliance, said: "This is a
true confluence of what we want to stand for in fashion in the country which is a melting
point of ideas that brings transformational change. Today is a major step towards that
change with the launch of Su.Re which is the first and the largest initiative by the
fashion industry.
"This initiative is just a start point. In the next five years, it will reach millions and
millions of garments in the country turning from non-sustainable resources to
sustainable resources."
Home
SRTEPC’s focus to boost Indian Textile industry as Global players taking
advantage of the US and China trade war
(Source: APN News, August 22, 2019)
Textile sector is one of the oldest industries in Indian Economy. It is one of the largest
contributing sectors to India’s export business with approximately 14% of total
merchandise export. The industry is currently pegged at around US$ 140 Billion and is
expected to increase to US$ 350 by 2025. Indian textile industry has tremendous
growth potential and is not only the world but is the largest employer in the
manufacturing sector with 45 million people employing directly.
Looking at the growing opportunity for Man-Made Fibre & Blended Textiles globally
and also to take advantage of the ongoing trade war between US & China, SRTEPC has
inaugurated the 4th edition of “Source India 2019” in Mumbai today.
Speaking at the event, Mr. Ronak Rughani, Chairman, STREPC, said the trade
war has opened up an opportunity, which will help our stagnant exports grow by 5 to 7
per cent in one-and-half years. We are thankful to our Government and particularly to
our Hon’ble Minister of Textiles, Smt. Smriti Zubin Irani ji for extending us continued
support and guidance.
www.citiindia.com
9 CITI-NEWS LETTER
Talking about the event, Smt. Smriti Zubin Irani, Minister of Textiles, said It is
noteworthy to mention that over the years the global trend has been changing and MMF
textiles have been in demand for its versatility and adaptability. Indian MMF textiles is
growing at a rapid pace and the time has come to project it as a reliable source of quality
MMF textile products. “Source India” is an appropriate platform for Indian exhibitors
and overseas buyers to meet under a single roof”.
“Source India 2019”, in Mumbai witnessed contribution from more than 100 leading
Indian textile companies displaying their latest range of Indian textiles items including
fabrics, yarn, made-ups, fibre home textiles, and technical textiles in an area of around
7000 square meters. Around 180 leading buyers from 40 countries and 20 international
buying houses visited to place orders for forthcoming season.
During 3 day Source India 2019, leading textile buyers from Latin America, South Asia,
EU region, Argentina, Colombia, Peru, Brazil, Mexico, USA, Japan, Vietnam, Thailand,
South Africa, Uganda, Kenya, Nigeria, Egypt, Morocco, Turkey, Romania, Uzbekistan,
Czech Republic, Australia, Denmark, Ecuador, Egypt, El Salvador, Guatemala,
Honduras, Iran, Italy, Mauritius, Myanmar, Oman, Panama, Poland, Russia, Slovakia,
Sri Lanka, UAE, etc., participated in Source India 2019 Mumbai.
The aim of the event is to showcase strength to the entire gamut of textile and apparel
value chain to the world and establish India as a global textile sourcing hub and
investment destination. It is an ideal platform for the international buyer to source their
requirements for Indian Man-made Fibre & blended Textile value chain.
Home
Weak exports, uncompetitive prices to hit cotton spinners, says report
(Source: Financial Express, August 20, 2019)
With India exporting roughly one-third of its cotton yarn production every year, trends
in export demand play a crucial role in determining the overall performance of the
domestic spinning sector.
Weak export demand and uncompetitive prices are expected to hit the performance of
domestic cotton spinners in FY20, following a brief recovery in FY19, a report said. The
degrowth in volumes due to lower export demand and a sharper decline in realisations
vis-a-vis cotton prices because of higher minimum support price (MSP)-led floor price
for the crop are expected to result in a decline in turnover and an estimated 100-150 bps
compression in operating profitability of domestic cotton spinners during FY20, said an
Icra report.
www.citiindia.com
10 CITI-NEWS LETTER
A large proportion of spinners have not undertaken capacity expansions in the recent
years, given the unencouraging demand trends during this period, coupled with the
discontinuance of subsidy benefits under the Technology Upgradation Fund Scheme
(TUFS) for the spinning segment. This has resulted in a consistent decline in term
borrowings for such companies in recent years with scheduled debt repayments, due to
which the impact on their debt coverage metrics and liquidity could be lower, despite
industry pressures.
With India exporting roughly one-third of its cotton yarn production every year, trends
in export demand play a crucial role in determining the overall performance of the
domestic spinning sector.
India’s cotton yarn export quantity declined by 33% y-o-y in Q1FY20 (41% in May and
June 2019) and stood at a seven-year low of 59 million kg in June 2019. As a result,
multiple textile associations across the country have reported stock pile-ups and
production cuts by spinning mills in recent months. Whereas markets other than China,
which has been the largest cotton yarn market for India, had supported the demand
during FY17 and FY18 when exports to China fell, the pressure is more broad-based
now.
Compared to a 50% y-o-y decline in cotton yarn exports to China during Q1FY20,
exports to other markets too declined by 20%, the report said. Jayanta Roy, senior vice-
president and group head, Corporate Sector Ratings, Icra, said, “Based on the emerging
trends, we have revised the credit outlook on the Indian cotton spinning industry to
‘Negative’, as the profitability and debt coverage metrics are expected to moderate from
the current levels. The impact is likely to be more pronounced for leveraged companies,
that have undertaken a sizeable debt-funded capital expansion in the recent years and
have higher repayments scheduled in the near term.”
“The pressure is primarily originating from higher cotton prices in the domestic market,
which has made Indian yarn manufacturers uncompetitive in the international markets.
As a result, the near-term outlook on Indian cotton yarn exports is quite weak at
present,” Roy added.
Home
Sri Lanka organises business forum in Gujarat
(Source: Fibre2Fashion, August 22, 2019)
Sri Lankan minister of development strategies and international trade Malik
Samarawickrama recently invited Indian investors to enjoy the nation’s geographical
www.citiindia.com
11 CITI-NEWS LETTER
advantage, port connectivity, preferential tariff access to large markets and competent
human resource pool. He was addressing a business forum organised by Sri Lanka’s
Board of Investment in Gujarat.
The forum was organised at the Chamber of Commerce and Industry (GCCI) in
Ahmedabad.
Over 100 leading Indian businessmen from Gujarat representing diverse sectors
participated in the forum, according to Sri Lankan media reports.
GCCI president Durgash V Buch said Gujarat and Sri Lanka can be partners in
promoting agro-processing Industries, textile, petrochemicals, spices and tea.
Out of GCCI’s total member strength of 6,000, at least 1,000 deal with Sri Lanka on a
regular basis in sectors like refractories, pharmaceuticals, apparel, plastic packaging,
starch, petroleum and petro products, tea and other agro-products, he added.
Home
Boosting growth in a protectionist world
(Source: G Parthasarathy, The Hindu Business Line, August 22, 2019)
Improving ‘ease of doing business’ apart, India needs to develop a vibrant electronics
sector and leverage the FTAs better
The advent of the twenty-first century marked the turning point in India’s economic
growth. The end of US and western sanctions, imposed after our nuclear tests in 1998,
led to an economic boom, in the first decade of the 21st century.
This economic boom was triggered by the economic liberalisation ushered in by Prime
Minister Narasimha Rao. The Indian economy experienced an over 9 per cent rate of
growth, during three consecutive years, of 9.48 per cent in 2005-06, 9.57 per cent in
2006-07 and 9.32 per cent in 2007-08. The rate of growth, thereafter, reached 8.59 per
cent in 2009-10.
The rates of growth in India have, however, been lower in the present decade, varying
between 6.7 per cent and 7.4 per cent, with an unusual fall to a mere 3.2 per cent, in
2013. While these rates of growth are relatively high by global standards, they do not
match the levels China continuously achieved for over two decades, when Deng Xiao
Ping’s reforms began paying rich dividends.
The growth in India’s global merchandise trade during the first decade of the present
century far exceeded the country’s domestic growth figures. Merchandise exports
expanded significantly, rising from $44.2 billion in 2001-02 to $306 billion in 2011-12.
www.citiindia.com
12 CITI-NEWS LETTER
The same cannot be said of our exports of goods in the second decade of the century.
Merchandise exports have remained almost stagnant in this period, at around $300
billion annually, while our annual imports have now gone past $500 billion.
India’s service exports, spearheaded by information technology, however, rose from
$137 billion in 2011-12 to $205 billion in 2018-19. But, continually high deficits in world
trade of goods and services are neither desirable, nor sustainable.
Ambitious goal
Prime Minister Modi has set the country an ambitious goal of building a $5 trillion
economy by 2025. This will necessitate an economic growth of well over 8 per cent per
annum — a target we have achieved for a few years, during the past two decades.
Modi recently alluded to initiatives to boost the capital of public sector banks, promote
productivity and exports of agricultural products, boost industrial production and
incentivise the services sector, while fostering the ease of doing business.
He expressed understanding of concerns of the business community and assured that
honest taxpayers would not be harassed. Foreign investors, however, note that setting
up new industries in India is a daunting and often frustrating task. Some State
Governments, however, recognise the need to be investor-friendly.
Trump effect
The external challenges in promoting trade and industry today are more formidable
than what prevailed a few years ago. Globalisation is now virtually a swear word in the
US and parts of the EU, where industries unable to face foreign competition, especially
from China, are crying foul. India is losing its competitive edge in traditional industries
like textiles, to countries like Bangladesh and Vietnam.
President Trump’s protectionist policies have hurt America’s friends, allies and foes
alike. His moves against globalisation, commenced as soon as he assumed office, by US
withdrawal from participation in the Trans-Pacific Partnership. This grouping linked
major economies across the Asia-Pacific, from the US, Canada and Mexico, to Australia,
Japan and members of ASEAN.
He then unilaterally raised protectionist walls against major partners including Canada,
Mexico, China, Japan and South Korea.
The US has also clamped additional duties on a wide range of products from allies,
ranging from Germany and France, to Japan and South Korea. The most wide-ranging
US Trade sanctions have been imposed on China, though Chinese business and trade
www.citiindia.com
13 CITI-NEWS LETTER
practices have not exactly been ethical. China had a massive trade surplus with the US,
of $420 billion last year.
Trump’s actions have triggered the biggest trade war in contemporary history, with
China retaliating on some US exports, with little, or no impact. While the US trade
deficit has reduced after the imposition of trade sanctions, China is already feeling the
impact of these sanctions on its economic growth.
While the US and China could well reach an agreement, in the course of time, this trade
dispute has global repercussions. India, like many others, has itself been hit hard by
enhanced American duties on a range of products like aluminium and steel, and
measures to end of trade preferences, it enjoyed as a developing country. India has
retaliated, with its own sanctions on a number of US products. Trump has indicated that
like China, India will get no benefits available traditionally to developing countries.
New Delhi also recognises that its own trade practices are now seen as being excessively
protectionist, with a large number of countries prepared to seek remedial measures, by
reference to the WTO. Negotiations have commenced with the US, which remains
concerned by existing and new Indian protectionist tariffs/restrictions, on items like
medical devices, apart from electronics and telecom products.
There is obviously going to be serious bargaining ahead, before we can conclude a
satisfactory trade agreement with the US. India must, however, realise that it cannot
become a significant, modern economic power unless it develops a vibrant electronics
industry, with an indigenous capability for research and development and a substantial
manufacturing capability to produce crucial items like semi-conductors and computer
chips.
‘Act East’ policy
India’s “Act East” policies have included Free Trade Agreements with ASEAN, Japan
and South Korea. These agreements have brought us trade benefits, as our regional
partners have made good use of them. We need to significantly improve our use of these
arrangements.
We face difficult choices in dealing with negotiations, now under way, for an Indo-
Pacific economic community, labelled as the “Regional Comprehensive Economic
Partnership” (RCEP), which includes ASEAN members, together with Japan, China,
South Korea, New Zealand and Australia.
There are understandably serious misgivings about joining the RCEP, given our
concerns about China’s trade practices and our huge trade deficit with Beijing. These
challenges have to be faced and overcome, while moving ahead in building the $5
trillion economy that Prime Minister Modi envisages by 2025.
www.citiindia.com
14 CITI-NEWS LETTER
With enthusiasm for post Cold War style “globalisation” declining in Europe and the US,
India now faces serious choices it has to make, given the security and diplomatic
challenges it faces, from an increasingly assertive China.
While Chinese military and economic power can be balanced by partnerships with like-
minded countries like Japan, Vietnam and Indonesia, India will have little leverage left
with its “Act East” partners, if its economy lacks the strength and competitiveness,
enabling it to become a significant economic partner, in the Indo-Pacific region.
The writer is a former High Commissioner to Pakistan
Home
New Wage Code will reduce litigations under various labour laws: Experts
(Source: Hitvada, August 22, 2019)
THE Union Cabinet on July 26, 2019 approved the New Wage Code Bill, which would
ensure a minimum wage across all sectors by integrating four labour related laws. To
hear the same from eminent panelists, a panel discussion was organised by VIA-HRD
Forum at VIA auditorium recently. Advocate R B Puranik, of Bombay High Court said,
“There are no major changes in the New Wage Code Bill. The Bill may be good on
workers front and may not be good on employer part because in this highly competitive
business world, irrespective of the sector and size, every business is volatile, uncertain,
complex and ambiguous.
The cost of inputs is increasing year-on year whereas the output including attitude,
discipline, skill level, workers loyalty, customer loyalty is decreasing because of various
reasons. This may affect employment, labour turnover on account of downsize,
reduction in manpower, curtailment of manpower costs and other factors”. Sanjay Deo,
Management Consultant said, “Some of the intellectuals from industry are worrying that
this will not promote the ease of doing business. People will close their businesses.
Further, though the prime focus of the Bill is ‘mandatory national minimum wage’ and
the States cannot pay wages below to the mandatory national minimum wage. There is
no guarantee that Central Government will fix the national minimum wage
significantly”. He further said that the employers must settle the full and final payment
within couple of days as per law.
Nishikant Bhore, VP-HR, Indorama said, “The New Wage Code universalises the
provisions of the minimum wages and timely payment of wages to all employees
irrespective of the sector and wage ceiling. Currently there are more than 2,000 rates of
minimums wages prevailing in India. Introduction of Wage Code Bill will rationalise
and reduce the number of minimum wages. Advocate S D Thakur of Bombay High Court
said, “It is one of four codes envisaged by the Government which will subsume 44 labour
www.citiindia.com
15 CITI-NEWS LETTER
laws with certain amendments. Currently, the provisions of both Minimum Wages Act
and Payment of Wages Act apply on workers below a particular wage ceiling working in
Scheduled employments only. Introduction of New Wage Code will bring more clarity
on the definition of ‘Wage’ and reduce litigations under labour laws”.
Assisstant Labour Commissioner Ujwal Loya said, “Employers need not maintain
number of registers/ records/ forms but can maintain/ file the consolidated
templates/records electronically. Because of introduction of web-based inspection, there
will be accountability and transparency in enforcing the labour laws. The penalties on
employers against non-compliance is also significantly high”. “The Code envisages the
States to notify payment of wages to the workers through digital mode. No doubt that
this will improve the ease of doing business and attract investment for spurring growth
and more particularly simplification, uniformity in various labour laws. It also mandates
the minimum wages to be revised every 5-years,” he further stated in the programme.
Earlier, Hemant Lodha, Chairman of VIA-HRD Forum said, “The New Wage Code will
enhance the relationship between employees and employers in general and overall
earning status of employees.
This will also be helpful to industries to forecast their business plans in a smooth way”.
Floral welcome of panelists was performed by Nishikant Bhore,VP-HR, Indorama. Adv
R B Puranik was welcomed by Hemant Lodha. Ujwal Loya, Asstt Labour Commissioner,
Nagpur was welcomed by Pravin Tapadia, Past President of VIA. Adv S D Thakur and
Sanjay Deo, Management Consultant were greeted by Suresh Pandilwar. Suresh
Pandilwar, Co-Chairman of VIA-HRD Forum moderated the session. In the beginning,
he appraised the current labour law scenario of India and how the New Wage Code Bill
2019 evolved. More than 90 participants attended the programme including HR & IR
professionals, industrialists, entrepreneurs and students.
Prashant Mohota, former Vice-President of VIA, Amar Mohile from Zim Lab, Suchita
from Bilt Graphic Paper Products, Arun Pandit from Pee Vee Textiles, Haldiram Foods,
Sri Bhagirath Textiles, Ankur Pulps & Boards Ltd, R C Plasto, Sandeep Metalcrafts, KEC
International; Diffusion Engineers and SMS Group were prominently present.
Home
Pakistan allows partial trade via Attari ICP
(Source: Times of India, August 22, 2019)
Under pressure from its business community, the Pakistan government has allowed
partial import of goods from India. But at the same time, the neighbouring country has
launched a campaign to prevent Indian goods from reaching its markets via third
www.citiindia.com
16 CITI-NEWS LETTER
country. Highly-placed sources said the Pakistan’s ministry of commerce and textile had
issued a notification saying that shipments, which had been issued letter of credit (LC)
or bill of landing (BL) prior to August 9, could be traded and would remain unaffected
by announcement of border trade suspension following the scraping of special status for
Jammu and Kashmir (J&K) under Article 370.
Sources said the notification of Pakistan ministry mentioned that importers and
exporters had been approaching the ministry regarding scope of trade and fate of
shipments in the pipeline.
Following the decision, a truck load of goods had left for Pakistan through the
Integrated Check Post (ICP) at Attari on Tuesday, but was returned owing to some
technical issue. Notably, a day after Lok Sabha had okayed the scrapping of special
status given to J&K, Pakistan had retaliated with suspension of bilateral trade,
downgrading of diplomatic relations and other measures, including expelling Indian
high commissioner and calling back Pakistani envoy. Sources said in view of the high
demand of Indian goods, the Pakistan government had showed concern that suspension
of bilateral trade with India could result in increase in import of Indian goods by
misdeclaration via third countries or smuggling under the Afghan-Pakistan Transit
Trade Agreement (APTTA). In the notification, the Pakistan’s commerce and textile
ministry has urged the Pakistan’s Federal Board of Revenue to take necessary
enforcement measures to prevent misdeclaration and smuggling of Indian goods into
the country. It has also asked the board to initiate a campaign to confiscate Indian goods
that may be available and traded in Pakistani markets.
However, India-Afghanistan trade being carried under APTTA has remained unaffected
as goods from Afghanistan continued to arrive at the ICP, Attari.
Home
Amit Aggarwal showcases collection made from R|Elan fabric
(Source: Fibre2Fashion, August 22, 2019)
Day One at Lakmé Fashion Week (LFW) Winter/Festive 2019 ended with an exciting
high-tech fashion presentation of couturier Amit Aggarwal’s 'Flux' collection, made from
R|Elan FreeFlow fabric by Reliance Industries Limited (RIL). FreeFlow is part of the
unique range offered by R|Elan Fabric 2.0, which defines the next generation of textiles.
Drawing upon its extensive R&D and vast expertise in fibre technologies, RIL has
created the FreeFlow range of sustainable, performance enhancement Fabric 2.0 – a
www.citiindia.com
17 CITI-NEWS LETTER
portfolio of specially engineered fabric innovations that offer a plethora of benefits
ranging from sustainability, high performance to aesthetics. With high fashion brands
choosing R|Elan for designing eco-fashion, activewear, denim, ethnic and western-wear,
casuals and work wear, the brand is on its way to becoming a top fashion favourite, said
RIL in a press release.
The 'Flux' collection is Amit Aggarwal's perfect luxury men's and women's wear offering.
On his association with R|Elan, designer Amit Aggarwal said, R|Elan is making India
into a homegrown space for new age and contemporary textiles. "Working with the
natural fluidity of the R|Elan FreeFlow fabric, paved the way to create the new, modern
and fashionable 'Flux' collection. The fabric not only enhances the aesthetics of the
design through its elegant, fluid drapes but also sparks creative explorations for
beautiful, feminine silhouettes," said Aggarwal.
"Amit Aggarwal's Flux has unveiled the fusion of supreme craftsmanship, aesthetics
with the sustainability and high-performance quotient of R|Elan. We are pleased to see
novel high-tech apparels bringing out the unique features of R|Elan FreeFlow fabric,"
said Hemant D Sharma, head – polyester business, RIL.
Being a forerunner in reusing materials, the brand Amit Aggarwal has strived to find
new life in ‘discard’ with each of his collections. As India becomes the first nation to
recycle 90 per cent of its PET waste, the brand has joined hands with RIL's R|Elan to be
a part of this far-reaching movement. Very noticeable were Amit's distinct signature
recycled polymer strips on the ramp along with the geometric compositions in the form
of sheer sultry wraps, exaggerated sleeve detailing, strong power shoulders and some
feminine billowing skirts.
Bringing in his expert design techniques, Amit had plissé (a near constant for the
creations for men and women) dramatic fine draping and 3D embroidery, which added
to the extreme construction of the ensembles.
Colours were a rich sachet of bright emerald, petrol, purple and plum, which were
impressively balanced with gold, blush, silver and ivory.
Women's wear was opulent with polymer strips for long-sleeved mini, sheer skirt over
body suit, pleated long gown and draped neo sari. The ombré blazer over a draped skirt,
shimmering peplum blouse, grey midi dress and the red plisséd halter maxi were
stunners on the ramp. The draped sari and another shimmering plain/striped sari, as
well as the mini with impressive shoulder trails created a futuristic look for women.
Men's wear was as adventurous and matched the polymer strip detailing also seen on
battle jackets, plisséd one-sleeve shirt, boxy oversized trench coat and waist coat with
www.citiindia.com
18 CITI-NEWS LETTER
shirt. Stopping the show was the very graceful and elegant Lisa Haydon who sashayed
down the ramp in a purple draped sari gown with micro plissé pallav and high slit skirt.
Keeping her dashing company on the ramp was ace cricketer Hardik Pandya who
strutted down in a matching purple neo style, long-line, jacket teamed with narrow
pants and shimmering flap detailing.
R|Elan, the next-gen fabrics have been created from specially engineered fibres and
yarns using the cutting-edge technological expertise, state-of-the-art R&D and the
robust testing systems. These smart fabrics have been designed to enhance comfort and
aesthetics and it is the most sought-after fabric by renowned domestic and global
brands, retailers and apparel manufacturers.
Home
--------------------------
www.citiindia.com
19 CITI-NEWS LETTER
GLOBAL
US-China trade war uncertainty could cost $585 bn by 2021
(Source: Fibre2Fashion, August 22, 2019)
Uncertainty arising out of the US-China trade conflict could lower world gross domestic
product (GDP) by 0.6 per cent in 2021, relative to a no-trade-war scenario, according to
Bloomberg Economics. That is double the direct impact of the tariffs and the equivalent
of $585 billion off the International Monetary Fund’s estimated 2021 world GDP of $97
trillion. The Bloomberg Economics report was drafted by Dan Hanson, Jamie Rush and
Tom Orlik.
The analysis showed China would be hit harder by the uncertainty factor, with its GDP
lower by 1 per cent compared with a 0.6 per cent chunk taken out of the economic
output of the United States, the news agency reported.
A survey released last week by the Federal Reserve Bank of New York found a growing
conviction among businesses that tariffs were hitting their bottom line. The Fed
responded to economic headwinds with a rate cut of 0.25 per cent last month.
The Bloomberg Economics report said that while monetary policy can be used to
mitigate uncertainty shocks, it cannot prevent the damage entirely. If central banks
respond to demand weakness, world GDP will be 0.3 per cent lower in 2021 than it
would be in a no-trade-war scenario.
Home
Indonesian textile companies take hit as China shifts focus to SEA
(Source: SBR, August 22, 2019)
Fiercer competition looms as the influx of Chinese goods may depress prices.
Textile companies in Indonesia might be
hit by depression in prices as Chinese
companies redirect their textile products
to Southeast Asia in light of heightened
tensions with the US, Moody’s Investors
Services reported.
The US hiked tariffs on China to 25% from
10% in May, which could prompt Chinese
www.citiindia.com
20 CITI-NEWS LETTER
companies to dump goods in Southeast Asia. Indonesia is considered a more favorable
destination for Chinese textile products given its tariffs of 10-15%.
Homegrown textile firms Sri Rejeki Isman Tbk (Sritex) and Pan Brothers Tbk may need
to brace for fiercer competition from cheaper Chinese goods, although the two are
expected to maintain stable credit profiles within the next year as they rely more heavily
on exports than on domestic sales and have longstanding relationships with their
customers and value-added products that cannot be easily replaced by imported
manufactures.
The two players export around 60% of its products, and have other business divisions
catering to the fashion as well as military and corporate uniform businesses on a made-
to-order basis. It has also been supplying uniforms to the military and police since 1990.
Sritex’ domestic spinning sales, which contributed around 20% to total revenue, could
be most exposed to competition as it can most easily replaced by Chinese goods and its
sales to textile manufacturers, wholesalers and traders are not bound by long-term
contracts.
Meanwhile, Pan Brothers gets 96% of revenue solely from exports. For the 12 months
ended 30 June 2019, 57% of the company's sales were distributed to its customers' retail
locations within Asia, 26% to the US and 15% to Europe.
Pan Brothers’ top five customers account for 46% of total sales, with its largest customer
Uniqlo making up around 28% of total sales.
Home
Made in Vietnam: Draft Regulations on Rules of Origin
(Source: Pritesh Samuel, Vietnam Briefing, August 22, 2019)
Vietnam’s Ministry of Industry and Trade (MOIT) recently released draft regulation –
Decree No. 31/2018/ ND-CP – on labeling criteria for domestically consumed goods.
The draft and subsequent media reports have caused many in Vietnam’s foreign
investment community to question how the regulation will impact their business.
In particular, many importers who manufacture in Vietnam and export to other
countries are concerned about how the new regulation will impact their business
operations. However, the new regulation will only affect goods produced for the
Vietnamese market.
www.citiindia.com
21 CITI-NEWS LETTER
The Nikkei Asian Review reported that the draft regulations specify that goods must
have a localization ratio of at least 30 percent to be designated as Vietnamese made.
This will primarily impact companies that produce a product in multiple countries for
sale in the Vietnamese market. These companies must now source 30 percent of their
value of input locally to be recognized as Vietnamese in origin and apply the appropriate
Harmonized Commodity (HS) code to qualify.
Which products are affected by the draft regulation?
Dezan Shira & Associates Business Intelligence Manager Maxfield Brown has advised
many foreign-invested manufacturers on rules of origin in Vietnam and more recently
on the Decree No. 31/2018/ ND-CP draft regulation. Brown summarizes the scope of the
regulation as follows:
Production inputs imports from China are not impacted as these goods are
subject to rules under the ASEAN – China Free Trade Agreement;
Finished products exports to the US are not impacted as these goods are subject
to US customs regulations;
Goods manufactured in Vietnam and sold in Vietnam will be impacted by the 30
percent local sourcing requirement.
If the regulations comes into effect, the 30 percent input requirement will not be a
problem for labor-intensive industries, such as textiles and garments, which are able to
source locally.
www.citiindia.com
22 CITI-NEWS LETTER
However, industries that use less labor and source a significant amount of raw material
from abroad may have a re-think of their business plans.
It is also important to note that the regulation affects goods produced for the
Vietnamese market and not applicable for exports to international markets that are
dictated by specific free trade and bilateral agreements.
Why is there a new focus on Made in Vietnam?
The new draft regulations follow a government investigation into Vietnamese electronics
manufacturer Asanzo, which was reported to be importing Chinese products and selling
them as Asanzo- or Vietnam-made. Reports stated that Asanzo would only assemble
electronic products – such as televisions – at its factory using most or all components
from China.
However, on closer look, Asanzo may not have done anything wrong.
Vietnam lacks clear regulations on the labeling of goods as made in Vietnam. Decree
43 tells a manufacturer how to label products in Vietnam and import products, but the
regulation does not stipulate the criteria that products must meet to be labeled as made
in Vietnam.
Further current regulations do not specify the percentage of locally made content to
qualify as made in Vietnam. Due to such vague regulations, manufacturers often have to
decide whether to label goods as made in Vietnam or not.
Current regulations state that the origin of goods is defined as the country where the
goods are wholly produced or where substantial processing is done in case there are
several countries involved in producing the certain product. Manufacturers can use
domestic law or bilateral agreements to determine labeling requirements.
For example, in Asanzo’s case, products that do not originate from Vietnam cannot be
labeled as Vietnamese made under the ASEAN-China FTA. However, as per World
Trade Organization(WTO) regulations effective for both Vietnam and China, Asanzo did
nothing wrong, as the last stage of production took place in Vietnam, while inputs were
sourced from China.
Vietnam Law Magazine reported that Au Anh Tuan, Head of the Customs Control at
the General Department of Customs, said, “we have adopted the rules of origin
applicable to exports, but none for goods sold in the domestic market.”
The draft regulation is currently open to the public for comment.
www.citiindia.com
23 CITI-NEWS LETTER
Some media reports have speculated that the draft is partly a response to US pressure
for scrutiny of Chinese products in Vietnam. However, this new regulation does not take
aim at companies that may be seeking to evade US tariffs on China.
Ultimately, the Vietnamese government wants to protect consumer’s interests. The draft
regulation will help clarify what products qualify as made in Vietnam.
One way it could do this is by using Apple’s example of imprinting the back of its
iPhones with “Designed by Apple in California, Assembled in China.” This gives the
consumer a clearer picture of where the product is coming from.
Home
Vietnam’s exports keep rising this year
(Source: Nhan Dhan Online, August 22, 2019)
With an expected decrease in electronics exports, Vietnam is projected to still secure its
export goal this year on account of an increase in export of traditional items such as
textiles and agricultural products.
Spain-based FocusEconomics, which provides in-depth economic analysis globally, just
released its fresh forecast for Vietnam’s economic prospects, stating that the Vietnamese
economy will expand 6.7% in 2019.
“The economy will be one of the region’s star performers this year, buttressed by strong
tourism, exports and industrial output,” the firm stated in a report.
Last week, Standard Chartered Bank also released its freshest projections that Vietnam
will “remain the fastest-growing ASEAN economy in the near term, with 2019 growth
being projected at 6.9%.”
One of the key drivers of the high economic growth will be high exports.
According to the bank, the country’s export growth is expected to remain steady and
outperform peers. Electronics exports, which make up about a third of the total, are
likely to be less supportive than in recent years due to a reduction in external demand
and lower semiconductor prices. However, improving traditional exports – textiles and
agriculture – should continue to take up some of the slack.
The Ministry of Industry and Trade (MoIT) reported that in 2019, Vietnam’s exports will
be affected by contracted production and exports of the electronics industry led by the
Republic of Korea (RoK)’s Samsungand LG.
www.citiindia.com
24 CITI-NEWS LETTER
Samsung’s business and production activities have shown signs of slowing down due to
the group’s reduced business results globally. This has underminedthe group’s
production and export of mobile phones and their spare parts in Vietnam.
An MoIT report on Vietnam’s seven-month tradereleased two weeks ago cited Samsung
Electronics based in RoK reporting that the group’s profit in the second quarter of 2019
decreased by over 50% on-year due to negative impacts of the US-China trade warwhich
caused a reduction in the global demand for electronics chips and mobile phones.
“Samsung is expected to reduce its annual profit in the third quarter of 2019 due to
slashed prices of chips caused by oversupply and the US’ sanction on China’s
telecommunications manufacturer Huawei Technologies, one of Samsung’s most
important customers,” the report stated.
In July this year, Vietnam raked in US$3.8 billion from shipping mobile phones and
their spare parts, down 1.9% as compared to the same period of last year, when the
figure reached US$3.5 billion, a 5.4% rise from the corresponding period of 2018.
In the first seven months of this year, Vietnam earned about US$27.3 billion from
exporting mobile phones and their spare parts, up 3.1% on-year, and accounting for
18.8% of the nation’s total export turnover. In the first seven months of 2018, the figure
touched US$26.1 billion, a 15.8% climb on-year. Last year, Samsung Vietnam’s export
turnover totalled over US$60 billion, taking up 25% of the country’s total.
At present the 2019 production and business plans of Samsung and LG in Vietnam are
still ensured. However, in the long term, if Samsung and LG in South Korea do not have
sufficient materials for production as planned, their production of semiconductors,
chips and screens will decrease. As a result, this will likely influence the spare part
supplies for their production and assembly of phones and TV in Vietnam. This would
mean the country’s output and exports of electronics will be negatively affected.
An expected reduction in electronics exports is believed by the MoIT to be one of the key
obstacles for Vietnam to reach its export goal of US$262 billion this year, up 7.5% on-
year.
Under the impact of reduced growth in electronics exports, Vietnam’s average monthly
export turnover reached US$20.73 billion in the first seven months of 2019.
“Thus, it will be a very big challenge to hit an average monthly export turnover of
US$23.57 billion for the remaining five months of this year, in the context of the global
market’s uncertainties,” stated the MoIT report.
In the first seven months of 2019, the total export turnover was estimated to be
US$145.13 billion, up 7.5% on-year, but US$1 billion lower than the MoIT’s initial
www.citiindia.com
25 CITI-NEWS LETTER
expectation. The import turnover was estimated to hit US$143.34 billion, up 8.3% on-
year. This resulted in a US$1.8 billion in trade surplus.
Key pillars
The MoIT expect there will be a rise in exportation oftraditional items to keep and even
exceed its export turnover target for 2019.
According to the MoIT, during the remaining months of 2019, Vietnam’s exports are
projected to continue keeping its current growth speed with key drivers being traditional
staple exports, such as textile and garment, footwear, and wood products.
In the first seven months of this year, Vietnam earned US$10.4 billion from exporting
footwear products, up 13.8% on-year. The footwear sector expect that the figure will be
US$21.5 billion for 2019.
Meanwhile, the export turnover of textiles and garments hit US$18.3 billion in the first
seven months of 2019, a10.5% increase from the same period last year. It is forecasted
that the figure will be around US$40 billion this year, up from US$36 billion in 2018.
Nguyen Viet Thang, head of Technical Division under the X26 JSC, told VIR that after
the company reaped VND580 billion (US$25.22 million) last year from exporting
garments and textile, footwear, and wood products, the company is expected to earn
VND600-650 billion (US$26-28.26 million) from exporting these products this year.
In the first seven months of 2019, the figure was about VND420 billion (US$18.26
million), up 10% on-year.
“The world’s demand for these products keep rising, benefiting exporters like our
companies. Besides, Vietnam’s business climate has been significantly improved,
making it more favourable for enterprises to perform and boost exports,” Thang said.
Nguyen Ton Quyen, vice chairman of the Timber and Forest Product Association of
Vietnam, said that many foreign firms currently want to co-operate with domestic
enterprises to swell exports to their home markets.
A slew of foreign enterprises are exporting significant volumes of wood. For example,
Nam Dinh Export Foodstuff and Agricultural Products Processing JSC’s export turnover
is forecasted to climb from US$50 million in 2018 to about US$55 million this year.
Meanwhile, many other businesses such as Dai Thanh, Hiep Long, Tien Dat, Cancia
Pacific, Phu Tai, and Minh Phat are also expected to rake in an export turnover of
US$30-50 million for 2019, up 15% on-year.
“The wood industry’s export turnover has been rising strongly over the past few years
from US$7 billion in 2016 to US$7.66 billion in 2017 and US$8.48 billion last year. The
www.citiindia.com
26 CITI-NEWS LETTER
figure is projected to be US$11 billion this year,” Quyen said.
Last year, Vietnam’s wood export turnover strongly increased from many markets, such
as France (25.5%), Japan (16%), Malaysia (100%), South Korea (48%), and the US
(17.5%).
According to the MoIT, in the time to come, many types of export items from Vietnam
will likely replace Chinese ones in the US market, perhaps because of the ongoing US-
China trade-war. Especially textiles and garments.
Together with this, there has been an investment shift from China to neighbouring
markets including Vietnam. This has led to a rise in foreign direct investment (FDI) in
Vietnam in the first seven months of 2019, laying a firm foundation for Vietnam to boost
its production and exports in this year and beyond.
The Ministry of Planning and Investment reported that in the first seven months of
2019, FDI disbursement for the January – July 20 period reached US$10.6 billion, up
7.1% on-year.
Meanwhile, Standard Chartered Bank also projected that FDI inflows into Vietnam will
stay robust this year, particularly in the manufacturing sector, totaling US$18 billion.
The sector will also become home to the country’s exports that will considerably
contributed to high economic growth this year.
“Vietnam’s growth prospect remains strong, with macro-economic conditions staying
stable in the first half of the year which is likely to continue towards year-end. We expect
growth to accelerate mildly in the second half of 2019 from 6.7% in the first six months
of the year,” said Chidu Narayanan, economist for Asia of Standard Chartered Bank.
Home
Finding Partners Along the Supply-Chain at Sourcing at MAGIC
(Source: Dorothy Crouch, Apparel News, August 22, 2019)
As the major Las Vegas supply-chain show for apparel brands and designers, Sourcing
at MAGIC ran at the Las Vegas Convention Center Aug. 11–14. Bringing together
companies that provide apparel manufacturing, textiles, technology and services with
the businesses that need these partners, options were available from around the globe to
fulfill these needs.
www.citiindia.com
27 CITI-NEWS LETTER
At the booth for Eclat Textile Co., Ltd., Stefan Novak, who manages global sales and
marketing for textiles and full garment packaging mentioned that brands were looking
for an option other than China.
“They are looking out. Eclat is offshore in Vietnam, where we’ve been set up
with Lululemon and Nike for seven or eight years,” he said. “I don’t think a lot of
people are looking toward China as a big player anymore.”
For the Brea, Calif., factory AST Sportswear, Inc., maker of the Bayside label,
workingquickly to meet customer demand was how the company was bringing in
business. Nadir Zulfiqar, who manages strategic accounts and brand development, was
promoting his company’s ability to manufacture pieces quickly within the United States.
“When you go overseas, you are looking at 90 to 120 days, and our minimums are
lower,” he said. “We saw a lot of online retailers this time and military people who are
starting businesses.”
One of these new, emerging online businesses is District 85, an e-commerce brand
that sells pieces that transition easily from office to after-work engagements. Founder
Dominique Jones sees her clientele as professional women ages 25 to 40. Ahead of her
December launch, she was looking for supply-chain partners to create quality blazers
and pump-style footwear for every size woman.
“When it comes to blazers, I like a range of colors and patterns—from black to gray or
polka dots, flowers and animal prints. It’s something you can dress up or down,” she
explained. “I want something that can speak to every woman, whether she is more
conservative and wants the solid power colors or is more fun and freer and prefers to do
something funky with prints.”
Home
--------------------------
Top Related