24 February 2022, Mumbai:

In 9MFY22, the Indian home textile sector had a robust demand resurgence! Despite shortages and unavailability of shipping containers, higher freight costs, and longer transit times, a better demand scenario is likely to persist in the mid to long term, owing to increased consumption due to hygiene-related factors, as well as a market share shift from China due to the ban on cotton-made products from Xinjiang.

According to research by Motilal Oswal Financial Services Limited (MOFSL), the local and foreign markets have a consistent demand forecast.

Because of the China+1 policy and the US restriction on cotton-made items from Xinjiang, more demand for apparel from the US and Europe (from retailers) is expected, the report's forecast for yarn and garment players is also encouraging.

With price rises, MOFSL anticipates gross margin pressures to ease in the next quarters.

ALSO READ: Cotton Prices to Pick Up 5% y/y in 2022 on Rising Demand and Limited Crops in India and U.S.

It will, however, be under strain until the following cotton season. The forecast for the home textile industry is optimistic, although there is a short-term margin risk. Indian textile companies are in the greatest position to take advantage of this opportunity.

According to OTEXA data, India's market share in US Cotton Sheets imports increased to 57 percent in CY21 (up from 52 percent in CY20), while China lost 2%.

In the Terry Towels segment, India's share increased by 200 basis points to 44% in CY21 (from 42% in CY20), while China's share decreased by 200 basis points.

Due to the ban on Xinjiang cotton-made products and greater captive yarn consumption in Bangladesh and Vietnam, India's spinning sector is facing increased demand.

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*Figures mentioned in the above article have been sourced from Apparel Resources article.

19th February 2022, Mumbai:

The Confederation of Indian Industry (CII) has made proposals to boost India's textile and garment exports. The CII, India's premier business organization, collaborates with Indian industry, government, and civil society to establish and maintain an environment that promotes India's growth.

According to the CII's recent research, Achieving USD 1 Trillion in Merchandise Exports by 2030: A Roadmap, India forecasts an expanding trend of integrated manufacturing hubs, with end-use items accounting for 88 percent of overall trade value growth over the next five years.

ALSO READ: CII x Ministry of Textiles (MoT): The International Conference on Technical Textiles

With garment exports estimated to account for 90% of this increase in trade value, India will need to over-index on apparel exports. According to the research, India could be positioned as a regional fabric hub centered on cotton wovens.

India should aim for a 5% to 6% market share in worldwide woven (natural) commerce.

Other fabric categories (MMF-based wovens and knits) might be added to India's fabric basket as the country's capabilities improve, making it Asia's go-to destination for fabric procurement.

According to the research, a dedicated task force should be established to increase foreign direct investment outreach efforts by reaching out to the relevant investors and promoting India as an excellent investment location.

"Improve factor cost competitiveness in the power sector by policy-driven actions to enhance the amount of renewable energy, such as raising renewable energy subsidies or pushing more states to implement open banking of renewable energy, hence lowering renewable energy consumption limitations."

"Branding all new textile parks as 'green parks,' with the majority of energy coming from renewable sources, maybe a huge step in the right direction," it stated. Continuous investments in sustainability and traceability are becoming critical requirements from global consumers, according to the report, and might be India's most significant differentiators.

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*Figures mentioned in the above article have been sourced from Apparel Resources article.

17 February 2022, Mumbai:

With a 30 per cent drop in production due to rising cotton and raw material prices Gujarat denim mills are being forced to operate at 70 per cent capacity utilization currently.

Production costs have surged 30 per cent due to rising prices of cotton and other raw materials. From 36,000 per candy of cotton in September 2020, prices surged have touched Rs 78,000 per candy in February 2022.

Price rise impacts MSMEs margins

The price rise specifically affected denim MSMEs largely supplying to the domestic market, says Sanjay Jain, Chairman, Indian Chamber of Commerce, National Textile Committee. And mills that have forayed into denim business recently are the worst affected, they have been saddled with mounting debts, Jain explains.

The surge in raw material costs has also raised denim fabric prices by an estimated 30 per cent over the past six months; price of denim apparels have increased 20 per cent, say manufacturers.

During the pandemic, versatility and use in casual wear enabled denim fabric to sustain demand. However, the recent Omicron wave led to a 20 per cent decline in order volumes for summer collection, says Rahul Mehta, Chief Mentor, Clothing Manufacturers Association of India (CMAI).

Festive demand, export orders boost Q3 profits

Increased sales and revenues helped domestic denim manufacturers such as Arvind, Nandan Denim, Jindal Worldwide and Vishal Fabrics post sizable profits in Q3 FY 2021-22. Nandan Denim posted a 584 per cent rise in Q3 FY2021-22 profits while Arvind’s profits grew 287 per cen. Jindal Worldwide also posted a 22 per cent surge in profits during the period.

ALSO READ: Denim fabric exports from India have surpassed pre-pandemic levels

Profits of these manufacturers were triggered by a rise in exports orders that helped sustain production and prevented revenue streams from drying up. Industry players also attribute profit rise to pent-up festive demand in the domestic market and increased export volumes.

Gaurav Davda, Head-Corporate Finance & Strategic initiatives, Jindal Worldwide adds, increased export volumes helped manufacturers command better realization on exports and reduce input costs.

Delayed payments hit manufacturers’ competitiveness

However, the surge affected manufacturers’ competitiveness in the domestic market, adds Thadani. To offset rising costs, manufacturers are delaying supplier payments and cutting down production.

For instance, Sangeet Nahata, an Ahmedabad-based denim fabric manufacturer is utilizing only 65 per cent of 6 million mt. per annum installed capacity.

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24 February 2022, Mumbai:

Correction of the inverted tariff structure in the textiles value chain, according to Finance Minister Nirmala Sitharaman, is critical to attracting investment in the sector.

The Minister told industry and trade leaders at a post-Budget conference in Mumbai that the production-linked incentive system for the sector needs to be corrected, or else investments will not come to specific regions.

Her comment is timely given that the Goods and Services Tax (GST) Council had to abandon a proposal to raise GST rates for most textile items in the man-made fiber (MMF) value chain from 5% to 12% in late December 2021 due to industry concerns; the Government, however, may reconsider the idea shortly.

ALSO READ: Nirmala Sitharaman (FM) dismisses 'Textiles Ministry Proposal' to defer GST rates hike

Correction of the inverted tariff structure in the textiles value chain, according to Finance Minister Nirmala Sitharaman, is critical to attracting investment in the sector.

The Minister told industry and trade leaders at a post-Budget conference in Mumbai that the production-linked incentive system for the sector needs to be corrected, or else investments will not come to specific regions.

Her comment is timely given that the Goods and Services Tax (GST) Council had to abandon a proposal to raise GST rates for most textile items in the man-made fiber (MMF) value chain from 5% to 12% in late December 2021 due to industry concerns; the Government, however, may reconsider the idea shortly.

MMF, yarn, and textiles are now taxed at 18%, 12%, and 5%, respectively. GST rates for mono-ethylene glycol (MEG) and pure terephthalic acid (PTA) are 18% and 12%, respectively, for polyester partly oriented yarn (POY) and 5% for grey textiles, completed fabrics, and garments.

Cotton, silk, and wool are natural fibers that fall under the 5% category.

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*Figures mentioned in the above article have been sourced from Financial Express & Apparel Resources article.

19 February 2022, Mumbai:

The Additional Chief Secretary of Industries Department has asked Bhagalpur DM to provide 1000 acres of undisputed land for this project according to sources.

This was in the making and it is a real case soon after receiving the letter of the Additional Chief Secretary, visibly the land is being searched now in all the 16 circles of the district.

The Revenue Department has asked all the Circle Officers to send the report related to the undisputed land soon. If 1000 acres of land is not received, then there is a danger of returning the project.

ALSO READ: PM Mega Integrated Textile Region and Apparel (PM MITRA) parks scheme: The government releases operational guidelines

The likelihood of opening a textile park in Bhagalpur is quite real on the back of heightened interest.

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17 February 2022, Mumbai:

Intex South Asia is undoubtedly the biggest and most established international textile sourcing show of South Asia having completed 8 successful editions in Sri Lanka, Bangladesh and India and connected over 1,200 global textile suppliers with 25,000+ leading buyers from 30 countries and regions.

It aims to fulfill the growing demand for innovative and trendy fabrics and accessories for one of the biggest apparel manufacturing region in the world.

Intex South Asia is endorsed by major Government bodies, Chambers of Commerce and Industry Associations in South Asia and is the most sought-after annual industry event for the textile and apparel industry.

Show Highlights – Country Pavilions, Interactive Business Forum Series, Panel Discussion

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Exhibitor Profile – Fibres, Yarns, Apparel Fabrics, Denim Fabrics, Clothing Accessories, Dyes & Chemicals, Software & ERP solutions, Testing Equipment; Compliance Solutions, Design Studios, Trends; Fashion Forecasters, Allied Services

Buyer Profile – Apparel Manufacturers & Exporters, Apparel Brands; Fashion Labels, International Sourcing Offices, Buying Houses & Agents, Apparel Retailers; E-tailers, Importers, Distributors & Wholesalers, Intimate & Undergarments Brands, Textile Manufacturers & Exporters.

Govt. Trade Body Representatives, Sales & Marketing Consultants, Textile Trading Houses.

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22 February 2022, Mumbai:

Hit by rising prices of cotton yarn, textile manufacturers in India are making various demands to the government, As per A Narayanamoorty, Senior Professor and Head, Department of Economics and Rural Development, Alagappa University, Karaikudi, farmers are demanding higher taxes on cotton exports, scrapping of the11 percent import duty on cotton and a halt in cotton trade to stabilize prices.

However, these demands are likely to affect 58 lakh Indian farmers engaged in cotton cultivation on almost 134 lakh hectares in the country, says Narayanamoorty. India grows cotton in various states with Maharashtra, Gujarat, Telangana accounting for almost 70 percent of India’s total area under cotton cultivation.

India is also the world’s largest cotton cultivator with cotton being cultivated on around 37 percent of its agricultural land. The area under cotton cultivation increased significantly from 77 lakh hectares in 2002-03 to about 134 lakh hectares in 2019-20. During this period, India’s cotton production also increased from 86 lakh bales to 352 lakh bales.

Rising costs offset production benefits

Cotton cultivation is a complicated process in India. Farmers face various challenges during the process. First, they have to cultivate under a rarified area. Besides, they have to face a low yield and high risks. The high risk of bollworm and other pests attack also increases farmers’ costs on pesticides.

Cotton cultivation in India is mainly a manual process and requires a large labor force. The cost of harvesting is also high. Data from the Commission for Agricultural Costs and Prices (CACP) shows, in Maharashtra, the cost of cotton cultivation per hectare increased from Rs 14,234 in 2000-01 to Rs 84,743 in 2018-19. The cost of cotton cultivation in Gujarat also increased from Rs 10,691 to Rs 75,186 during this period while in Tamil Nadu, it increased from Rs 28,149 to Rs 113,334. The cost of cotton cultivation in these states increase almost seven times during 2000-01 to 2018-19 period.

Besides cultivation costs, the value of production (VOP) of cotton per hectare also increased from 2000-01 to 2018-19. VOP in Maharashtra increased from Rs 12,148 to Rs 85,937, Gujarat from Rs 8,696 to Rs 83,209 and Tamil Nadu from Rs 20,992 to Rs 98,966.

ALSO READ: India's organic cotton production will increase: Year 2020-21

Increased VOP fails to curb prices

However, an increase in VOP failed to protect farmers from huge losses as cultivation costs is increasing rapidly. Rising cultivation costs are forcing farmers to sell cotton at lower than the Minimum Support Price to private traders.

Reports from CACP show, from January 2019-January 2021, farmers sold cotton below the determined MSP. Of the total 119 market days, cotton prices in Maharashtra surged above MSP for just 86 days during the Kharif season, from October 2020 to February 2021. In Gujarat, they surged for just 32 days out of 140 days.

Farmers call for government measures

However, the rise in cotton prices has led to farmers demanding an 11 percent import duty on cotton and a higher tax to restrict cotton exports unjustifiable. Textile manufacturers are also urging the government to halt future trade in cotton. However, their reasoning that cotton prices increase due to futures trade is invalid as India holds a minuscule share of just 0.27 percent in the global cotton futures trade.

Resumption in textile production is also boosting cotton prices in India. However, there is a huge demand-supply mismatch in the country as farmers shy away from cultivating cotton due to rising costs.

Granting remunerative prices can prevent them from importing cotton from other countries.

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18 February 2022, Mumbai:

In Q3 FY2022, denim manufacturer, R&B Denims posted a 19.75 percent growth in net profit to Rs 6.5101 crore against a net profit of Rs 5.4366 posted during the second quarter ended September 30, 2021.

The company’s income during the quarter grew by 24.18 percent to Rs. 81.2630 crore compared to Rs. 65.4417 crore during the period ended September 30, 2021.

ALSO READ: SVP GLOBAL TEXTILES’ Q3 FY22 Results

For the fiscal ended December 2021, R&B denims posted a 22.99 percent growth in net profit to Rs 6.5101 crore against a profit of Rs 5,2932 crore posted in during the fiscal ended December 31, 2020.

The company’s income grew 32.56 percent to 81.2630 crores during the fiscal against an income of Rs 61.3019 crore during the fiscal year ended December 31, 2020.

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17 February 2022, Mumbai:

India’s largest company Reliance Industries (RIL), has launched a new fabric technology that enables activation of the biometric biodegradation process.

Known as R|Elan™ EcoGold with CiCLO®, the technology offers a biological solution to environment-related issues. It reduces the accumulation of textile waste in landfills and other related conditions.

Offering numerous everlasting benefits to customers, the R|Elan™ range of fabrics are infused with latest technologies. They offer consumers next-generation fabrics n sync with the latest fashion trends.

ALSO READ:

The fabrics help reduce the impact of unrecycled textiles on the environment by enabling microbes break down these textiles. These textiles are converted into basic elements like carbon dioxide, water, minerals, etc.

The technology is certified by Oeko-Tex Eco Passport, notes Alastair Drew, Intrinsic Advanced Materials, R|Elan™ EcoGold will give global apparel access to eco-friendly fibers that can be used to make garments that will meet the needs of conscious consumers, he adds.

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19th February 2022, Mumbai:

Odisha is also vying for one of the seven PM Mega Integrated Textile Region and Apparel (PM MITRA) parks to be approved. According to sources, the state government is working on a plan to construct a textile park.

It has chosen 1,000 acres near Dhenkanal's Neulopoi. The Odisha Industrial Infrastructure Development Corporation (Idco) has hired Grant Thornton as a consultant to provide a preliminary project report (PPR) for the park's construction.

The industries department has been appointed as the nodal agency for the project.

ALSO READ: PM MITRA Park: States are working hard

"We have selected a patch of land for the establishment of the textile park," Hemant Sharma, the state's Industries Secretary, told the Times of India, a leading English daily, "considering various aspects like availability of suitable land, water, and power supply to the place, road and rail connectivity, centralized location that should be far from coastal areas in view of natural disasters, particularly cyclones."

He also expressed confidence that the Centre will take Odisha's proposal into consideration because it fits all of the necessary conditions.

According to reports, the state is willing to transfer over 1,000 acres of land for a minimal fee to the special purpose vehicle (SPV) that would be established to build the textile park.

Given Odisha's enormous potential for textile industry expansion, the state government has designated the textile and apparel sector as one of six priority areas for investment.

Odisha, which has few organized garment factories but has a competent workforce in the textile and apparel industries, has suggested setting up cotton processing, spinning, weaving, textile, and garment plants to attract investment.

Gujarat, Tamil Nadu, Uttar Pradesh, Rajasthan, Telangana, and Jharkhand are among the states vying for a park under the ambitious PM MITRA program.

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*Figures mentioned in the above article have been sourced from Apparel Resources article.

18 February 2022, Mumbai:

In its Q3 FY22 ended December 2021, India's leading compact cotton yarn manufacturer, SVP Global Textiles’ net profit grew by 23.87 per cent to 41.23 crore as against a net profit of Rs 33.29 crore recorded in Q3FY21.

The company’s EBITDA for Q3FY22 grew by 11.62 per cent to Rs. 94.66 crore compared to EBITDA of Rs 84.81 crore in Q3FY21. Income from operations grew 9.75 per cent in Q3FY22 to Rs 406.69 crore.

The company is setting up a 4,375 mtpa Greenfield facility for technical textiles at Jhalawar, Rajasthan, with an investment of Rs 100 crore. It recently changed its name to SVP Global Textiles from SVP Global Venture.

ALSO READ: SVP Global Ventures Limited has changed its name to SVP Global Textiles Limited

Foray into technical textiles is also going as planned and it hopes to achieve 25-30 per cent revenue growth post completion of the expansion plans.

Established in 1898 by VallabhPittie, SVP Group manufactures polyester, polyester and cotton blend, and 100 per cent cotton yarn across three state-of-the-art manufacturing facilities in Jhalawar (Rajasthan), Ramnad (Coimbatore) and Sohar (Oman).

The company aims to become a world-leading, fully integrated textile company in manufacturing yarn, fabric and garments.

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16 February 2022, Mumbai:

Cambridge technology innovator Alchemie exports breakthrough textile dyeing solution to Taiwan Energy-efficient EndeavourTM system set to lead a sustainable dyeing revolution in Asia.

Alchemie Technology, the UK innovator of low energy, waterless, textile dyeing technology, ships its EndeavourTM machine to Taiwan to improve the sustainability of the textile dyeing industry and establish a new Asia showcase.

The Endeavour digital dyeing solution, which produces no wastewater and reduces energy consumption by 85 per cent compared to traditional dyeing, will be installed at Alchemie’s Taiwan-based customer JSRTEX Group, a leading textile manufacturing innovator in the region, committed to transforming the industry with sustainable textiles and clean technology.

The Endeavour solution, developed in one of the world’s high technology clusters in Cambridge and manufactured entirely in the UK, will form the centrepiece of an Alchemie demonstration hub and showroom in Asia so international brands and textile producers from across the region can see the technology in action.

ALSO READ:

Alchemie, backed by fashion giant H&M, plans to set up further demonstration hubs at customer sites around the world in the coming months to showcase how Endeavour is more cost-effective to operate and better for the environment than traditional dyeing technology.

The company, which has a vision to clean up textile dyeing and eliminate the environmental impact of these polluting processes, is now inviting other brand and manufacturing partners to participate in its global showcase program.

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