Malaysia is mulling over a plan to establish the country’s first textile manufacturing hub as part of an effort to revive the industry. The proposal is being drafted by a team from the international trade and industry ministry, the Malaysian Investment Development Authority (MIDA) and the newly-launched Federation of Malaysian Fashion, Textiles and Apparels (FMFTA). The government is re-industrialising Malaysia’s textile sector and it believes domestic investors are fully capable to develop this hub, international trade and industry minister Datuk Darell Leiking said at the launch of FMFTA in Kuala Lumpur recently. FMFTA pro-tem committee chairman Datuk Seri Tan Thian Poh said the federation has suggested that 600-1,000 hectares of land should be allocated for the hub, according to Malaysian media reports. Tan said the federation has also proposed that the hub be established at the least-developed state that has connected logistics services. The project would in turn enhance the economic development of the chosen state, he said. While it may be difficult to get local players to move their existing operations, Tan said the firms could be compensated by sufficient incentives. This hub could be managed by FMFTA or industry players through a public-private partnership with the government, he added. The textile and apparel industry is Malaysia’s eleventh largest manufacturing sector, employing over 155,000 with an export target of RM24 billion to be achieved by 2020. On the downstream and upstream segments, a total of 1,195 textile and apparel projects worth RM12.6 billion combined were implemented as of December 2018. For the first half of 2019, MIDA approved an additional investment of RM94.4 million for five projects, with RM120 million still in the pipeline.

The China Textile Association in Cambodia (CTAC) was launched recently to boost Cambodia’s garment industry. It will offer legal advice to investors, particularly from China, and those considering investment and liaison in Cambodia. Cambodian minister of industry and handicrafts Cham Prasidh said the association will be a key partner of the government. The government hopes that the association will help attract investment in garments and related industries, Prasidh told attendees at the launch event, according to a Cambodian newspaper report. He urged investors to consider exporting to new markets, including Canada, New Zealand, Australia, Japan and South Korea. Cambodia has 663 factories. Of these, 520 manufacture garments, while 83 make footwear. The rest produce bags. The industry employs about 800,000 Cambodians, 80 per cent of whom are women, according to the ministry of industry and handicrafts. Research by Dezan Shira & Associates shows the garment industry in the country is dominated by foreign companies, particularly from China, Hong Kong, Singapore, Malaysia and South Korea.

New technology, cleaner production methods, judicious use of resources and better training are needed to make Cambodia’s garment industry more competitive, productive and efficient, United Nations Industrial Development Organisation (UNIDO) national project coordinator Hak Sokchea recently told the Textile and Apparel Southeast Asia Summit 2019 in Phnom Penh. “Improving resource efficiency in factories and industries could offset any expense caused by current uncertainty over the withdrawal of the European Union’s Everything-but-arms (EBA) privilege from Cambodia,” Cambodian media reports quoted Sokchea as saying. Apart from manufacturing industries of a certain type or size, cleaner production can also be applied to the provision of services, he said. UNIDO is working this year with 10 garment factories in the country and plans to work with 50 manufacturers. With UNIDO’s support, manufacturers can cut energy consumption by 20-30 per cent and water use by 10 per cent, he said. “We don’t expect to fully offset the cost of losing EBA status through implementing more resource-efficient management, but strengthening resource efficiency will help strengthen the company’s competitiveness as we will see more productive and happy workers,” he added.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) recently demanded that the source tax on export earnings at reduced rate come into effect retrospectively from July 1. BGMEA president Rubana Huq wrote to the National Board of Revenue (NBR) after the board on October 21 slashed the tax for all exporters from 1 per cent to 0.25 per cent. In her letter, Rubana said that apparel exporters would face financial losses as the NBR’s statutory regulatory order (SRO) did not offer the benefit with retrospective effect. Earlier, readymade garment exporters enjoyed the benefit from July 1, she said. Rubana also claimed that the cost of business operation increased by around 30 per cent due to continued fall in prices of export items in the international market, hike in workers’ wages and other adverse situation. The reduced tax rate will remain effective up to June 30, 2020. Income tax wing of the NBR, however, is not in favour of offering the benefit from July 1 as it would cause a huge revenue loss as exporters would be able to adjust the tax paid between July 1 and October 20 at higher rate, according to a Bangladeshi newspaper report. In three months (July-September) of the current fiscal year 2019-20, source tax on export earnings at 1 per cent stood at Tk 517 crore from the apparel sector. Due to the reduction in the export tax, the revenue board will get at least Tk 2,000 crore less in tax from the apparel sector, which accounts for more than 83 per cent of the country’s total export earnings.

Cotton supplier COTTON USA and scientific traceability service Oritain have signed a partnership to provide industry leading, forensic verification of origin for all US cotton. A global first for the cotton industry, this collaboration will give brands and retailers the assurance they need to make responsible sourcing and purchasing decisions. “We’re thrilled that COTTON USA is taking the lead when it comes to traceability,” said Rupert Hodges, Executive Director, Oritain. “We want to support COTTON USA who are making a conscious effort to find real, workable ways of farming more sustainably. The result is an incredibly high-quality crop that not only performs well but supports the environment. Now through Oritain, customers who choose US cotton can have total confidence that they are getting the product that they sourced.” While this level of traceability is new, the US cotton industry has always strived to produce and deliver high quality cotton that is the most sustainable cotton in the world. This ambition is already being realised through improved fiber properties, increased productivity and a shrinking environmental footprint.  All cotton-producing regions in the US are aiming to further reduce greenhouse gas emissions, soil loss, water, energy and land usage. “This partnership with Oritain will provide COTTON USA with a unique selling point in both domestic and export markets,” said Bruce Atherley, Executive Director, Cotton Council International. “Now US cotton will offer the highest level of end-to-end traceability in the industry, combined with a raw material that is leading the way in terms of sustainable practices – two things that global clothing brands now demand from their suppliers.” To achieve the level of traceability that the industry is demanding, Oritain’s unique method applies forensic science to detect trace elements in the cotton itself. Soil composition and other environmental factors give the cotton an inherent ‘fingerprint’ specific to each location – what Oritain calls the Origin Fingerprint.  This is the only way to be absolutely sure of where particular cotton was grown. Cotton can be tested at any stage on its journey from farm to shop floor, giving buyers complete assurance that the product has not been substituted along the way. Guaranteeing origin will address traceability challenges faced by the global cotton industry, including minimising the risk of supply chain partners blending the product with lower quality fibers. “Global supply chains are incredibly complex and the potential for blending and other illegal activity in the production of cotton textile products is large. However, given that Oritain’s Origin Fingerprint cannot be altered or faked, COTTON USA and their customers can be safe in the knowledge that their product is exactly what it says it is,” said Hodges. This new partnership follows a successful pilot program and rigorous blind test for Oritain, during which samples were collected across Arkansas, Mississippi, Oklahoma and Tennessee, and subsequently identified with 100 per cent accuracy.  

Manufacturing activity in India continued to weaken in October, with factory orders and production rising at the weakest rates in two years, according to a recent monthly survey by IHS Markit India, which found job creation softened to a six-month low, while companies were reluctant to hold excess stock and lowered input buying in response. The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) fell to a two-year low of 50.6 in October from 51.4 in September, implying only a marginal improvement in the health of the manufacturing industry, a news agency reported. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction. “Weakening demand had a domino effect in the manufacturing industry, knocking down rates of increase in production, employment and business sentiment,” said Pollyanna De Lima, principal economist at IHS Markit. With quantities of purchases contracting for the third month in a row, Lima pointed out that input costs fell for the first time in over four years during October.