PHMA MAGAZINE Pakistan Hosiery Manufacturers and Exporters Association
Vol. No. 025
April, 2012
EDITORIAL
The country as a whole is passing through critical times. Economic activities are always worst hit by crises of every nature whatsoever but Pakistan specific problems are strangely unique in their characteristics. The deadly crises of gas and electric power during the winter had totally crippled our industrial infrastructure. Knitwear garment sector in particular passed through severe painful situation as production could not touch even the boundaries of targets. Exporters remain afraid of meeting their commitments, so they refused to accept attractive business offers. Foreign buyers on the other hand remained away from Pakistan and their long established relations with our companies are gradually losing strength. While a situation of disappointment ruled the overall business atmosphere but it is the hope and determination of our member companies which prompts their constant struggle to survive in these difficult situations. Their strong determination to face challenges is their biggest strength that is helping them survive and maintain their presence in the world market. Let us keep our determination high and alive to find hopes from even very dim rays of light‌...
Mohammad Ayub Secretary PHMA (North Zone)
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How Apparel Industry of Pakistan can Approach Alternative Markets for Growth Part II
Interaction among Apparel Associations Active interaction and exchange among apparel sector associations of Pakistan and alternative markets can play a pivotal role to enhance export. The associations are represented by industry and have better options to understand markets dynamics and buyer preferences. Promotion by Pakistani Embassies
The textile and apparel sector in the world has played a vital role in the survival of countries economics. This sector is backed by agriculture, progressed by modern production practices and facilitated by respective Governments. The apparel import markets are largely captured by fast growing countries, which were able to attract high value markets. Therefore, the secret of success of Pakistan lies in the capturing of markets for apparel export. The current market like USA presents fierce competition, leaving no option but to find alternative markets. The graph indicates that Spain and Italy are leading import countries followed by number of other alternative markets like Germany, France, Canada and Netherlands. Pakistan is advised to enter new markets of apparel before being captured by competitors. The time will not wait nor the competitors for capturing new emerging import markets of apparel. Pakistan can mobilize its agents to help apparel industry to enter into alternative markets. Numbers of measures are suggested below:
Embassies of Pakistan in alternative markets understand local context and mind set of government authorities. They can facilitate in dealing with states laws of importing countries and create favorable approach for Pakistani industry. Relations through Cultural Shows The cultural harmony and values-based sharing has become instrumental in promoting trade and finance. Apparel industry of Pakistan need to build relations at cultural level to understand the people of alternative markets and make apparels accordingly. Promotion through Joint Seminars Apparel industry of Pakistan needs to launch professional gatherings to facilitate experts for exchange. The professional exchange among experts and technocrats through seminars will highlight new opportunities in alternative markets. Propagation through Chambers Business chambers have the mandate to establish linkages between producers and traders of various countries. Pakistani chambers of commerce put apparel export in top agenda and do lobbying accordingly.
The export will grow----the country will grow is to be the slogan by all national players. 2
Factors Behind Closure of Garment Factories Sector Inside Apparel Research Institute-PHMA Pakistan is an agricultural land and has enormous raw martial to supply to local garments industry. Pakistan export and earn a major part of its foreign exchange through garment industry. Unfortunately, in previous years there were certain factors which led to closing of many garment units. This closing of business not only affects the owners but also country and people (stakeholders) at large having businesses associated with them.
Factors Behind the Dilemma:
Less trainings of manpower.
High production cost with less productivity.
Price fluctuation in raw material.
Only two major markets for export.
Global economic crunch and internal issues of Pakistan.
Government having no driving force for the industry.
Less investment on technologies up-gradation.
Around 80% industry of apparel sector is SME and using traditional methodology.
There is more than 14% high mark up rate coupled with 20% inflation resulting in the higher cost of doing business.
Government tight polices for industry while the government of Bangladesh and India having flexibilities for industry.
They are offering industrial loan at special interest rate to support their readymade garment industry .
High involvement of bureaucratic machinery .
Cost of doing business in Pakistan has increased so investors are reluctant
No energy No Energy No Energy ----- made the production impossible in Pakistan “Closing of garments industry is serious issue in Pakistan and need to be addressed”
WE HAVE THE POTENTIALS …. But need to make them utilized meaningfully to stay ahead in the world 3
US: Apparel Market Saw "Marked Recovery" in 2011 Richard Woodard
The US apparel market staged a marked recovery in 2011, rising by 4% to US$199bn, according to market research firm NPD Group. Men’s wear sales rose 4% on the year, with women’s wear increasing by 3% and children’s wear up 6%, the company added. For women’s wear, dresses showed the strongest growth, with sales up 17% on 2010, while tights and sheer hosiery increased 8% and intimate apparel 6%. Growth in men’s apparel was primarily driven by the “dressing-up” trend, with dress shirts revenues rising by 14%, suits up 23%, sports coats up 20% and underwear rising 7%. “This is a marked improvement over the prior years,” said NPD chief industry analyst Marshal Cohen. “I believe this is testament to the use of sales and value pricing by retailers that did in fact get the consumer to respond. “I think this also goes back to the ‘Frugal Fatigue’ phenomenon we have been watching. It seems to have materialized for apparel in 2011 as consumers finally got back to building their wardrobes again.” Among the main retail channels, manufacturer-owned stores recorded a 15% sales increase, off-price and speciality stores were both up 6%, department and national chain stores increased 3% and the mass-merchant channel rose 1%.
The US apparel market
“These channel results demonstrate staged a marked recovery that the consumer’s pursuit of value in 2011, rising by 4% to has become more about ‘brand names US$199bn, according to for less’, and less about getting the market research firm NPD lowest prices,” added Cohen. Group.
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GLOBAL EVENTS APPAREL & TEXTILE Event
Date
Venue
May 1, 2012
2012 Apparel & Textile Conference
New York
CPAs in public accounting and CFOs who serve the apparel and textile industry, senior operational and financial managers from apparel and textile companies, bankers, factors, consultants, and other service providers to the apparel and textile industry. Innovative solutions for sustainable developOradea Romania ment of textiles and leather industry Our conference is organized in order to disseminate the newest scientifically information and ideas among researchers from the fields of textiles, leather, management, marketing, quality, environment and safety standards and techniques. 01 Jun 2012
July 19, 2012
2012 Global Marketing Conference at Seoul
Korea, Republic of
The theme of this year’s conference is, “Globalization and Marketing Performance” This theme emphasizes the need for educators and business leaders to recognize, appreciate, and understand the significance of marketing in the dynamic global world including business practices, as they affect both domestic and multinational marketing strategies. The 2012 Global Marketing Conference at Seoul offers outstanding opportunities for business leaders and academics to share their insights and learn from the research finding and experiences of others. 19 Sep 2012
Textiles and Politics
Washington DC
The Textile Society of America 13th Biennial Symposium Textiles & Politics will explore the ways politics influence the aesthetics, production, materials, uses, and myriad other aspects of textiles.
October 16, 2012
SCM Logistics World 2012
Singapore
SCM Logistics World is Asia’s largest knowledge & networking platform for the region’s most influential supply chain & logistics leaders. SCM Logistics World focuses on manufacturing & retail industries powering the region’s growth, namely retail, apparel & fast moving consumer goods, automotive, chemicals, oil & gas , high-tech & electronics and Industrial. 19 Oct 2012
Fashion: Now & Then
New York New York
Fashion: Now & Then focuses on fashion information including the discussion of the current models for use, collection, dissemination, and preservation of fashion information. 5
duty of apparel. The table presents an opportunity for Pakistan to get some relaxation on import duty by lobbying for their interest. Pakistan must lobby with EU and USA for duty reduction on apparel. There are number of factors which strengthen the argument. Strategizing for Apparel Industry Pakistan- the most suffer by terrorism. Pakistan has suffered a lot in terms of economics and lives loss. The industry is always backed by strong lobby to proThe risk of terrorism has put industry of Pakistan at tect the business interest and secure competitiveness. very losing end finding now way for progress. Apparel This lobby is more exercised in export oriented busiindustry of Pakistan must be given relaxation on imness where products are sold in foreign countries. The port duty as cost of business has increased to terrororganizations and institutions like departments of forism. eign affairs, policy institute, state run export promo- Pakistan- the energy crisis. Apparel industry of Pakition bodies and social stan is facing USA EU Brazil Australia Canada organizations always worse situation 10.85% 9.6% 35% *10% 17.46% strengthen interest of busi- Pakistan due to energy ness community and do China 10.85% 12% 35% 17.5% 17.46% crisis in Pakipositive lobby through Bangladesh 10.85% 0% 35% 0% 0% stan. The short 10.85% 9.6% 35% 17.5% 17.46% Vietnam possible means. The texof energy has tile and apparel sector in Cambodia 10.85% 0% 35% 0% 0% jammed the 10.85% 9.6% 35% 17.5% 17.46% world having worth of India wheel of indus10.85% 0% 35% 17.5% 17.46% $600 billions trade annu- Sri Lanka try a d d in g ally. A large share of ap- Source: ITC, 2011 many fold to parel and garments export Import duties on Cat 6203 (Men's suits, jackets, trousers etc & shorts) . Duty pro duct io n is done by the Asia region. rates shown are total ad valorem equivalent tariff (estimated). cost. The most important factor There must be a lobby by Government and social secof competition among exporting tor to get some relaxation in countries is Import Duties lived import duties on apparel exby importing countries. There is Apparel Industry of Pakistan port. fierce competition to get maxi- needs strong lobbying support to Pakistan – the flood crisis. mum reduction in import duties There are number of flood which make the products eco- get reduction in Import Duties. crisis in Pakistan during last 5 nomical and generates high sale. -10 years. The flood has very The table presented in the text shows different behavdeep impact on the society of Pakistan and particularly iors of importing countries. USA has flat duty of 35% on apparel industry. The agriculture sector is badly on the apparel of all importing countries. EU has levaffected by floods increasing cost of input for the inerage for some countries by imposing zero duty on dustry. Bangladesh, while 9.6% on Pakistan and 15% on There should be an effort to showcase Pakistan as China. Similarly Canada also has variation in import needy for relaxation in import duties There is need for strong support for apparel industry in terms of import duties relaxation. Primarily, relaxation should given by EU and USA. There should be more than one force like political agents, social agents and economic agents to present and persuade the case of Apparel Industry of Pakistan.
Import Duties on Apparel Export of Pakistan
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News of the Month … Sri Lankan Apparel Sector can Gain by Regaining GSP+ Sri Lanka’s apparel industry can further benefit by regaining the EU’s Generalised System of Preferences Plus (GSP+) concession, British High Commissioner John Rankin said while speaking at the 19th Annual General Meeting of Sri Lanka Apparel Sourcing Association. With thanks to: Fibre2fashion News Desk – India March 28, 2012 (Sri Lanka) Online Sporting Apparel Sales in the US Industry (Market Research Report Now Available from IBIS World)
Although growth slowed during the economic recession, industry revenue increased over the past five years due to a growing acceptance of online shopping, access to the internet and participation in sports. As a result, online sales have grown as a proportion of total sporting apparel sales. Rising disposable incomes and consumer sentiment are expected to continue pushing up revenue in the coming years despite increasing competition and potential legislation from states With thanks to: PR Web Wednesday, March 28, 2012 Apparel Chain's Profit Soars Hallenstein Glasson Holdings' first-half earnings rose 27 per cent after a record Christmas and a strong January. Sales rose eight per cent to $109 million. "The sales improvement had been achieved despite a difficult retail environment in both New Zealand and Australia," said CEO Graeme Popplewell. With thank to: Inside Retail 28/03/2012 Apparel Media Apparel Media Launches IMPACT Platform Exclusively for Network Partners Apparel Media's IMPACT platform enables custom apparel decorators to win more business and increase profits by providing sponsorship to customers. The IMPACT™ platform is available exclusively to Apparel Media network partners at http://impact.apparelmedia.com. With thanks to: PRWEB, Chicago, IL March 28, 2012 Pakistan Garment Sector to Lose Some Export Orders Several adversities like energy crisis, withdrawal of incentives and non-release of refund claims has already caused the Pakistani garment industry to lose around US$ 800 million worth of export orders during the current fiscal year which began on July 1, 2011 Fibre2fashion News Desk – India March 23, 2012 1. 2.
http://www.prweb.com/releases/2012/3/prweb9338546.htm http://www.insideretailing.com.au/IR/IRnews/Apparel-chain%27s-profit-soars-4544.aspx 3. http://www.virtual-strategy.com/2012/03/28/apparel-media-launches-impact-platform-exclusively-networkpartnersttp://www.fibre2fashion.com/news/apparel-news/newsdetails.aspx?News_id=109289 7
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