epages News [Cloth Showrooms, December 2003]

Cotton prices inch up, throw mills into a spin

Dec 01, 2003: Coimbatore: Cotton prices again yo-yoed, upsetting the procuring plans of many average mills. After sliding, prices started inching up despite heavy arrivals. All the top varieties, including S6, J34 and Mech, gained anywhere between Rs 200 and Rs 800 a candy (365 Kgs). Spinning mills blamed the knee-jerk reaction of several constituents in the textile sector for the highly volatile cotton scenario. By demanding a ban on raw cotton exports, besides slapping controls on yarn prices, these constituents were, the spinners said, just playing into the hands of speculators.

A cursory view of cotton export pattern reveals that usually less than 10,000 bales would have been earmarked for exports by now. However, with a bumper crop estimated at 176 lakh bales for this season representing a 30% growth over the previous season and a poor global output, Indian cotton could gain some lost ground in the world market. However, mills and cotton merchants believe that domestic production will not be affected since the quality factor could constrain exports to less than 8 lakh bales. Exports have always been high whenever farmers reaped a rich harvest. Spinners believe the resulting scenario is a result of speculation because cotton prices have virtually replicated the New York Cotton Futures Exchange despite India having no hedging mechanism.

Garden Silk Mills as smooth as silk

Dec 01, 2003: Garden Silk Mills is a Western India-based polyester yarn and fabrics manufacturing company, which is forging ahead with higher profits and setting even higher goals for it. The upturn in the petrochemicals cycle will enable the company to post higher profits through the sale of yarn and value added fabric.The company has already established its brand name in sarees and other fabrics. It is now planning a foray into neighbouring countries such as Sri Lanka and Bangladesh in the lucrative dress material and fabrics segments.

It has already tasted significant success in these products in the Middle East and South Africa. The company is now retailing its products through more than 200 franchisee outlets and company shops. It is aggressively marketing dress materials and fabrics, apart from focusing on its core business of polyester yarn manufacturing. Garden Silk Mills is now gearing up to meet the challenges that would be thrown up with the dismantling of the quota system in 2005. The company is aiming to corner a bigger pie of the export market in sarees, fabrics and dress materials. And it appears to be moving well on the growth track. The stock of this Rs 500-crore company is no longer treated as an 'underdog' on the bourses with the scrip price recently touching Rs 60.

I-Sec rolls out an Asia-Pac show for home textiles

Dec 02, 2003: Bangalore: That India ’s textile industry is gaining eyeballs with investment bankers in recent months is not news. But now even a leading investment banking house in India is chipping and doing its bit to promote this industry. ICICI Securities embarks on a textile yatra, where it plans to showcase about six companies, which are considered to be best in their class. This new presentation, which kicked off today, would go on for about three days and cover the Asia-Pacific rims notably Singapore and Hong Kong. Arvind Mills and Raymond besides Welspun India among others to include in the list of companies. While most industry experts believe that such India-centric visits or presentations by leading investment banks have become common, this is perhaps the first time that an old economy sector, the textile industry, is a major beneficiary.

According to studies done by several investment banks, the size of the global apparel market is expected to grow significantly in the post-quota era, with China and India expected to become some of the key beneficiaries. Interestingly enough, a report indicates that India stands to benefit significantly in the global cotton textiles business. Its share of this global market is pegged at less than three % currently. Textiles exports in Financial Year 2002 was placed at nearly $ 11 bn and are projected to rise to $ 50 bn by ‘10, when global trade is pegged to touch $ 600 bn. Close to half of India’s exports in value terms are currently garments and this happens because of value addition which happens in garmenting and processing, says a recent report by Fitch Ratings.

Apparel firms go talent hunting

Dec 06, 2003: Mumbai: Apparel companies have begun talent hunting from fast-moving consumer goods (FMCG) and automobile industries, signalling their appetite for fresh ideas for brand promotion and marketing initiatives, in the wake of the impending abolition of export quotas in ’05. They have already roped in some senior and middle-level executives from Britannia Industries, Ford and Swatch. Arvind Brands, the subsidiary of Arvind Mills, has recruited around 17 executives mainly from FMCG and automobile sectors in the last four months. The company has recruited brand managers from Ford, FCB Ulka, Asian Paints and Hindustan Lever (HLL).

The head of the company’s western zone was previously with Ford. Apparel companies are also looking at professionals who can introduce innovative technical applications to the business. For instance, Mumbai-based Creative Garments has recently recruited technical managers from engineering majors such as Larsen & Toubro. Apparel companies are also poaching a number of experienced people from the real estate business for executing their retail expansion plans. One example of this is Mumbai-based apparel major, Provogue. The industry is divided over the efficacy of bringing in executives with FMCG background to handle crucial operations. There are instances where FMCG executives have proved to be unsuccessful in the textile business.

Arvind Brands with a healthy figure

Dec 11, 2003: New Delhi: The Arvind Brands, Arrow and Wrangler are looking to close the year with ahealthy figure. "Arrow closed close to Rs 54 crore last year and we are confident that we will be Rs 62 crore this year. So we are almost 2-3 the way on our objective of reaching the Rs 100 crore mark," said Janak Dave, business head, Arrow. Domestic jeans market (where both domestic and multinational brands abound) are not available, it is acknowledged that the premium segment is dominated by four brands – Levi’s, Lee, Pepe and Wrangler. Both Arrow and Wrangler have been successfully using the Print and Outdoor for brand building. Arrow comes out with advertising campaigns for each of its collections. The recent campaigns were of the Twinstripes and Highlands Collections. Arrow has also launched a campaign to promote its line of trousers.

But why doesn’t Arrow use the TV medium when its rivals from Madura Garments have managed to make an impact for brands like Peter England. "Our target consumer has very limited TV viewing time. Both Arrow and Wrangler creative accounts are currently serviced by Alok Nanda and Company (Communications) Pvt. Ltd. The Arrow account moved to Alok Nanda and Company this January thereby bringing to an end the company's long-standing association with Grey Worldwide (then called Trikaya Grey), the agency that launched the brand in India in the early nineties. Grey’s specialist media unit, Mediacom, continues to be the Agency on Records (AOR) for Arvind Brands Ltd.

Apparel exporters want govt to push for standard compliance norms

Dec 12, 2003: Mumbai: Faced with stringent and different compliance norms from global retail majors including Wal-Mart, Target and GAP, Indian apparel exporters have approached the government to lobby for standardising these norms. Dedicated apparel suppliers to global firms have recommended to the Union textiles ministry that three or four common audit firms should be appointed for undertaking compliance for overseas companies outsourcing from India. Indian firms are also exploring ways to rope in the services of US-based organisations like WRAP (Worldwide Responsible Apparel Production) and SAP.8000, which are trying to create uniform compliance norms for global retailers.

WRAP executives have already made presentations to the government and to apparel companies. Global retailers, who have stepped up outsourcing from India with textile quotas under the Multi-Fibre Agreement to be phased out from January ’05, are imposing non-tariff barriers in the form of security and social audit norms, according to industry sources. Industry feels that retailers also change their auditors leading to confusion. Global buyers are expected to put up a stiff resistance to the efforts of Indian suppliers. However, some retailers are beginning to accept the uniform compliance norms of certain organisations. These include Ethical Trading Initiative, First labour Association and Workers’ Right.

VF of US weaves India plans

Dec 12, 2003: VF Corporation, the US-based world’s largest jeans maker, is opening a sourcing office in India. A top VF Corporation executive was in New Delhi last week to finalise the formalities. VF joins the growing list of global retailers setting up base in India to explore the outsourcing opportunities. Global majors such as Wal-Mart, JC Penney and Target have already set up sourcing centres in India. VF owns a bevy of jeans brands including Lee, Rustler, Brittania, Chic, Wrangler, Gitano. VF has licensed Lee and Wrangler jeans brands in India to Arvind Brands.

Govt to help textiles benefit from quota-free regime

Dec 16, 2003: New Delhi: With the multi-fibre agreement coming to an end in less than a year’s time, the Union textile ministry is keen to ensure that the textile industry is provided with the necessary support to encash upon the opportunities that could be thrown up by global textile trade liberalisation. Syed Shanawaz Hussain, the Union textile minister, said that the forthcoming budget could also be a textile-industry friendly budget. Besides focusing on the textile industry in general, the focus would be on silk, the ministry had been engaged in dialogue with various segments in the industry to ascertain their views. It maybe recalled that silk rearers, reelers and weavers notably in the country have to confront the problem being posed by cheap imported silk fabric. While the problem had been initially posed by imports of Chinese yarn, the problem assumed a different dimension as the commerce ministry levied an anti-dumping duty on yarn imports. Pant urged the silk industry to focus on exports. “Indian silk exports are around $450m, though the global trade in textile is pegged at about $118bn,” he added. India, he said, had to do a lot of catching up given that while Asia’s share of the global textile pie was 44%, India’s was around 3.7% marginally higher than the three % share being enjoyed currently by Pakistan.

Louis Philippe plans woollens, accessories foray

Dec 16, 2003: Bangalore: Madura Garments plans to extend its premium Louis Philippe formal wear line into accessories and woollen wear segments. It will extend the Gods and Kings collection launched just before Diwali this year to enter these areas. The Gods and Kings range features suits priced from Rs 15,000 to Rs 16,000, trousers priced from Rs 4,000 to Rs 5,000 and shirts at Rs 2,500. The T-shirts in this range would be priced from around Rs 1,000 to Rs 1,300. Louis Philippe would also soon feature a range of accessories such as belts, handkerchiefs and socks. T-shirts made of mercerised cotton have also been recently introduced in the market.

This follows the strategy of several competitors including Arrow from Arvind Brands and Park Avenue, who have looked to get in to the accessories market earlier. This move is part of these apparel makers’ move to provide a complete wardrobe to potential customers starting from shirts and trousers and extending to ties, socks, wallets, tiepins and cuff links. Louis Philippe would look for ways of growing its other segments. In the trouser market, for instance, Louis Philippe faces competition not just from external labels such as Arrow, but also from other Madura Garments’ offerings such as Allen Solly. Louis Philippe would also launch a range of cashmere-based woollen wear in the market. These garments would be priced at Rs 8,000 to Rs 10,000. Louis Philippe officials said at retail price (MRP), this brand’s revenues are around Rs 180 crore and it is expected to increase to Rs 220 crore by the end of this financial year.

Garment exports decline by 3.35% in November

Dec 22, 2003: New Delhi: Exports of readymade garments to quota countries in November declined by 3.35% in quantity terms at 80.8 million pieces but increased in value terms by 12.01% at $329.3 million. However, garment exports during the first eleven months of the calendar year (Jan-Nov), 2003, reported an increase of 3.93% in quantity terms and 12.95% in value terms. Exports for January-November, 2003, amounted to 1084.4 million pieces valued at $4234.6 million, according to the data compiled by the Apparel Export Promotion Council. Garment exports to the US during the 11-month period amounted to 355.2 million pieces, valued at $1832.7 million, a decline of 2.52% in terms of quantity but an increase of 1.97% in value.

Elaborating on the reasons for this shortfall in exports to the US, AEPC said some Least Developing countries and those having Preferential Trading arrangement are getting duty-free treatment on import, affecting Indian exports. Exports to European Union during the period under review stood at 674.7 million pieces valued at $2228.6 million, registering a rise of 9.03% in terms of quantity and 25.46% in value. In EU, exports to Denmark, Spain, Greece, Sweden, Italy, Beneleux, Germany, France, Finland, UK and Austria witnessed an increase while to Ireland and Portugal they showed a decline, compared to the same period last year. Garment exports to Denmark showed the highest increase of 54.90% in terms of value. Exports to Canada registered a decrease of 9.47% in terms of quantity and 1.14% in value at 54.5 million pieces and $173.3 million. During the first eight months of the financial year (April-November, 2003), garment exports plunged by 2.89% in quantity at 684.5 million pieces while witnessed an increase of 3.86% in terms of value at $2746.5 million.

Now, denim-feel fabric from silk

Dec 24, 2003: Bangalore: Perhaps taking a cue from Arvind Mills which has created a blended fabric of denim and lycra, the Bangalore-based Central Sericulture Technology and Research Institute (CSTRI) has innovated and created the first of its kind ’denim feel’ fabric but from eri silk. This new fabric, CSTRI officials opine would be a hit given that the fabric gives a warm feeling and would be ideal for use during the winter months. The optimism of CSTRI is not unfounded given that leading players like Arvind Brands have seen robust off-take of their blended fabric products. The officials said that they would be open to the idea of giving the technology for production of the new denim feel fabric and products from this fabric.

The new development assumes significance in that non-mulberry products notably eri, tasar and muga are being brought under a new marketing initiative by the Central Silk Board (CSB) called ’Vanya’ (Sanskrit for wild). India’s entire non-mulberry silk output is sourced from the wild and collectively account for only about a tenth of the country’s 16,000 tonne of silk production. Eri production in the country is placed around 1,200 tonnes compared to about 250 tonnes of tasar silk. Besides promoting eri cultivation in the traditional strongholds, the board is also eyeing the possibility of encouraging eri farming notably in the castor-cultivating belt of the south. Arvind Mills creates the fabric using T-400 from the American giant Du Pont.

Kankaria group to brand jute products

Dec 26, 2003: Kolkata: The Rs 450-crore Kankaria group with diverse interests in jute, cotton, information technology, construction and real estate is setting up a retail chain of branded jute and diversified jute products called Ballyfabs. The company has already set up its first Ballyfabs store at Foshang in Guangzhao province of China.

Nike's ex-COO to head Madura Garments now

Dec 27, 2003: Mumbai: The Aditya Birla group has appointed Hemchandra Javeri, the country manager Nike, (South East Asia), to head its garment company Madura Garments. Mr Javeri’s appointment comes when Madura Garments has improved its revenues after a long spell of decline. Madura, a division of the group company Indian Rayon, has recently made many changes in its management structure in an attempt to restructure operations. Shoebe Farooqi has been made sales and marketing head of the fashion brands such as Van Heusen, Allen Solly and Louis Philippe. The sales and marketing heads will now report to Mr Javeri. The company, which has combined the manufacturing and supply chain functions, has put a single person in charge of both. The company is also exploring options of foraying into partywear, kidswear and lifestyle segments.

 
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