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Garment wastes warehouse catches fire at Khailkoir

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A garment wastes warehouse was gutted by a fire that broke out at Khailkoir in the city on Saturday. Fire service sources said the fire originated from an electric short circuit in the warehouse around 7:00am and spread soon. On information, six fire fighting units rushed in and extinguished the blaze after one hour of frantic efforts. However, none was injured in the incident. The fire burnt valuables, including some machinery, in the warehouse. The affected owner of the warehouse claimed that the loss caused by the fire was about Tk 3 lakh.

Tanners ignore BSCIC notice to move in 72 hours

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Tannery owners flouted the legal notice served to them by the Bangladesh Small and Cottage Industries Corporation to relocate the tanneries to Savar from the city’s Hazaribagh in 72 hours that expired on Saturday. Supreme Court lawyer Shahidul Islam, who served the legal notice to the tanners on behalf of the BSCIS, admitted that no tanner responded to the legal notices as yet. He said he had no further instruction on what to do following the tanners’ failure to respond to the notice. The legal notices stated that BSCIC would forcefully evict the tanners by snapping gas, power and water connections to their industries and cancel the allotment of land given to them to run the tannery, if they failed to relocate in the deadline. Meanwhile, the errant tanners said they could not respond to the notices for relocation as they found the 72-hour deadline ‘unacceptable.’ They said they needed at least two months to complete the task. The tanners alleged the government had failed complete the infrastructure at the new site, especially in setting up the effluent treatment plant. Project director and joint secretary Abdul Qayyum said they had already constructed an effluent treatment plant but could not run it as there was no production in the area which would lead to effluent release. There are about 195 tanneries which are dumping untreated wastes in the River Buriganga causing the destruction of the city’s main river. The BSCIC served legal notices to 28 out of 195 tanners and planned to send legal notices to other tanners phase by phase. The legal notices said the tanners had been buying time with the intent of not relocating, since BSCIC allotted them 10,000 square feet land in Savar on April 29, 2007 following a 2001 High Court verdict to relocate the tanneries. BSCIC has already constructed all infrastructure in Savar to run the tanneries, said the notice. It said that the tanners were yet to relocate their industries in two years although BSCIC reminded them 19 times from February 6, 2014 to December 17, 2015 to shift the tanneries.

Delta Spinners setting up new plant to rise productivity

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Delta Spinners Ltd, one of the biggest spinning mills in Bangladesh, is setting up a new unit, meant for export market, aiming to increase its aggregate output to nearly 15,000 tonnes a year, up by around 67 per cent. The new unit adjacent to the existing mills is being constructed on an area of 117,000 square feet (sq ft) at a cost of Tk 540 million. Installation of state-of-the-art machines to be equipped with nearly 27000 spindles at the new plant will start from April-May next. “Underground infrastructure for spinning is very much important. We’ve already finished underground trenches and ducts for humidification,” said Engineer Azizul Islam Khan, senior consultant of the project. People familiar with the development at the factory told the FE that it would go into commercial production sometime in September or early October this year. “We’ve opened letter of credit for procuring equipment, some will arrive in Chittagong port in April and some will in July; then installation will start and go on for few months,” said Masudur Rahman, Executive Director of Delta Spinners Ltd. Mr Rahman said they have been procuring machinery from the world’s best manufacturers to get optimum output. Machines are being procured from Switzerland, Japan, Spain and Taiwan. It will be a state-of-the-art unit and produce high value-added yarns for exports only in addition to traditional ones,” he added. The spinning mill is set to install the latest equipment with globally repute. The latest innovated machinery having features of easy convertible will produce different types of yarns, senior officials at the spinning mills told the FE. Deputy General Manager of Delta Spinners Ltd Abu Ahamed Sharif said: “We have planned to install the latest machines as they will produce both conventional and non-conventional yarns. This is done considering the present and future trend in yarn consumption in Bangladesh.” Demand for non-conventional yarns is rising in the country, which usually have high-value addition than traditional ones. Bangladesh mainly exports basic clothing but it is now gradually leaping up to another upper segment of clothing market. Demand for jersey, sportswear, suits and other luxury clothing is on the rise in recent years and for this reason, demand for high-end yarns is also growing. To cope with the growing demand for both high-end and traditional yarns, the spinning mill is expanding its plant, senior officials at the plant told the FE. Managing Director of Delta Spinners Ltd Mostafa Jamal Haider said the company’s profitability and other indexes will increase sharply when the export project will start its operations. It is estimated that internal rate of return or IRR might increase by 20 per cent after implementation of the project. The company’s EPS (earnings per share) will jump. It is expected to increase from existing Tk 0.58 to Tk 2.0. “We never deprived our shareholders since our company’s listing in 1995. We’ve given 5.0 per cent cash at a time when our EPS was Tk 0.58 in 2014-15,” the executive director said. The spinning mill is also implementing BMRE (balancing, modernisation, replacement and expansion) for the existing plant aimed at raising its productivity. The new plant is being set up and BMRE of the existing plant being done with money accrued from right shares issued by the company one year back. The executive director said BMRE of the existing plant also included the latest machines at the old and existing plant. Delta Spinners started its journey with financial support from erstwhile Shilpa Bank. The mill was established in early 1994 at Kaltapara in Gouripur of Mymensingh, about 140 kilometres off the capital city. It was listed with the bourses in 1995. After setting up of the new unit, the number of its total employees will stand at 2,100, mostly women. The company from its existing plant usually supplies yarns to the local market i.e. local weaving mills to produce sarees, lungis and other fabrics. The new project will feed RMG sector only. Bangladesh has now 430 spinning mills mostly located in Gazipur, Bhaluka of Mymensingh, Narayanganj and Chittagong. Of them, around 200 are of export-oriented and the remaining for the local market.

Walmart severity may hit garment export to US

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A planned trimming of the leading global retail corporation, Walmart, under ‘portfolio management’ might impact on Bangladeshi apparel export to the US market, trade-insiders said. The company declared Friday its plan to close down 269 stores in the USA and across the globe under its recent cost-cutting move. In October 2015, the company had said an active review of the portfolio was underway to ensure assets were aligned with strategy. The recent action follows a thorough review of Walmart’s nearly 11,600 worldwide stores that took into account a number of factors, including financial performance as well as strategic alignment with long-term plans. “Actively managing our portfolio of assets is essential to maintaining a healthy business,” said Doug McMillon, president and CEO, Wal-Mart Stores, Inc. The Walmart Newsroom further quoted the CEO as saying: “It’s important to remember that we’ll open well more than 300 stores around the world next year. So we are committed to growing, but we are being disciplined about it.” Bangladeshi garment sector-insiders predicted that the cost cutting (portfolio management) of Walmart might cast impact on RMG export to the United States. The USA imports RMG worth US$ 5 billion annually from Bangladesh and Walmart alone accounts for 20 per cent (US$ 1.0 billion). Anwarul Alam Chowdhury Parvez, managing director of Evince Group, a leading exporter, told the FE that the impact of Walmart’s cost-cutting measure would not be felt immediately but in coming days. He said the company has already started expansion of its operations in Vietnam. “They will not minimise orders from Bangladesh immediately but the annual growth might remain static for Bangladeshi products,” he said. He also predicted that prices for Bangladeshi products might face further decline due to Walmart cost cutting. However, the latest report of the US Department of Commerce Office of Textile and Apparel (OTEXA), said Bangladesh exported 1720 million square metres of clothes worth US$5.0 billion in January-November period of the last calendar year to US—an 11.41 per cent growth compared to that of overall income in 2014. The OTEXA data showed that per-unit clothe price was $3.0 in 2014 which declined to $ 2.9 in 2015 -3.34 per cent plunge. When contacted, President of BGMEA Md Siddiqur Rahman told the FE said that the order might increase from Walmart or shift to other countries like Vietnam or Ethiopia and others. “It is depending on how we would tackle the condition,” he pointed out. Another exporter, Mohammed Nasir, Managing Director, Evergreen Sweaters Ltd, told the FE that the company (Walmart) hasn’t made any declaration on cut in imports. When contacted, an official at Walmart Bangladesh, requesting anonymity, said there is no possibility now of cutting order from Bangladesh. “Bangladesh office hasn’t been informed yet on any kind of plunge in orders from here,” he said.

BKMEA rejects TIB report on apparel industry

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Rejecting the Transparency International Bangladesh’s findings on the garment sector, knitwear makers yesterday said the report will encourage “conspiracy” at the local and international levels against the country’s highest export earner. Bangladesh Knitwear Manufacturers and Exporters Association or BKMEA alleged that the TIB report might be part of a conspiracy against the apparel industry. “The TIB report surprises and frustrates us simultaneously,” BKMEA President AKM Selim Osman said in a statement. On Thursday, the TIB released a report that said the supply chain of the garment industry, the country’s biggest export earner, is plagued by irregularities and corruption, for which the international apparel buyers are also responsible. The BKMEA said 70 firms or individuals, who were interviewed by the TIB, did not represent the practical and structural activities of 5,500 industries in the sector. “We doubt whether the report reflects the overall garment industry.” Most surprisingly, it said, the TIB did not discuss with the BKMEA or Bangladesh Garment Manufacturers and Exporters Association at any stage of the preparation of the report. The association categorically stated that it will not endorse the TIB’s study, which is destructive to Bangladesh’s image and will affect the economy and the export-oriented garment industry. In its report, the TIB mentioned that it had detected anomalies at 16 stages — from order placement to shipment — across the apparel supply chain. According to the anti-corruption watchdog, irregularities and corruption at different stages of the chain have become almost a custom in some cases. And various stakeholders, including factory owners, buyers, auditors and inspectors, are involved in it, the TIB said. “We are habituated to blaming our factory owners, exporters and government employees. But buyers, who are buying and making profits, are no less responsible for irregularities,” TIB Executive Director Dr Iftekharuzzaman said at a press conference at the watchdog’s head office in the capital on Thursday. But the BKMEA rejected all the findings and sought the prime minister’s guidance in this regard. “If we take into account the anomalies in the 16 stages detected by the TIB, the efforts of the Alliance and Accord on safety standards will become worthless,” the BKMEA said in the statement. The Alliance, Accord and the International Labour Organisation have so far inspected 3,496 factories, of which only 2 percent of them failed to meet the safety requirements. “It shows that Bangladesh’s garment industry has succeeded in resetting itself in line with the international standards.” Earlier on Friday, the BGMEA also rejected the TIB findings on garment supply chain and said the report is baseless and intends to damage the sector’s image.

INDIA Govt informs ATUFS

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The Government has notified the Amended Technology Upgradation Fund Scheme (ATUFS) which will provide one-time capital subsidy for investments in employment- and technology-intensive segments of the textile sector. The move is aimed at promoting exports and import substitution. But the notification did not mention anything on the committed liabilities of around Rs 3,000 crore falling under cases in the blackout and left-out period, according to an agency report. The scheme, which has been introduced in place of the existing Revised Restructured TUFS (RRTUFS), will be credit linked and projects for technology upgradation covered by a prescribed limit of term loans sanctioned by the lending agencies will only be eligible for grant of benefits under it. It will be effective for a period of seven years, up to March 31, 2022. “In case the applicant has availed of subsidy earlier under RRTUFS, he will be eligible for only the balance amount within the overall ceiling fixed for an individual entity. The maximum subsidy for overall investment by an individual entity under ATUFS will be restricted to Rs 30 crore,” a textile ministry notification said. Moreover, the cases pending for issue of Unique Identification Number (UID) since September 2014 as per records maintained by the Office of the Textile Commissioner shall be covered under the existing RRTUF Scheme. Every individual entity will be eligible for one-time capital subsidy only on the eligible investment, as per the specified rates and the overall subsidy cap. According to Confederation of Indian Textile Industry (CITI) Secretary General Binoy Job, the quantum of liabilities under the blackout and left-out period cases at around Rs 3,000 crore. During 2010-11, the scheme was suspended for 10 months, but it was eventually restored as a close-ended scheme and restricted to future sanctions and committed liabilities reported by banks. The close-ended scheme was introduced without sufficient notice from the government for preparation on part of lending institutions. So, those who had invested in those 10 months in the so-called blackout period of 2010-11 were left out and are still awaiting a decision on the eligibility of TUF scheme on the black-out period. The rate of Capital Investment Subsidy (CIS) for garment and technical textile segments has been kept at 15 per cent of the eligible machines, with CIS per individual entity at Rs 30 crore.

Apparel machinery show Jiam 2016 Osaka begins April 6

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The 11th edition of Japan International Apparel Machinery & Textile Industry Trade Show ‘Jiam 2016 Osaka’, organised by Japan Sewing Machinery Manufacturers Association (JASMA), will be held April 6-9, 2016 at Intex Osaka. “Jiam 2016 to be held under the theme of Innovative Solutions and Advanced Processing Technologies’ will offer wider business solutions,” a press release from JASMA stated. The show which will welcome 209 exhibitors, of which 30 existing exhibitors, of which again 25 are domestic and 5 are from overseas are increasing their booth space. “The number of first time exhibitors is 62, of which 35 are domestic and 27 from overseas, while total exhibition size has grown by 24.3 per cent,” JASMA said. Together with first-time exhibitors from Bangladesh, many companies and organisation from countries including China, Czech Republic, Germany, India, Italy, Korea, Singapore, Taiwan, Thailand, Turkey and US are joining the show. “With a large-scale comeback, the German Pavilion anchored by VDMA Garment and Leather Technology will showcase the latest high-tech products,” the trade body added. At the up-coming edition, there will be a new “Print & Fashion” zone featuring printing, design software, embroidery printer and fashion in Hall 2, in which over 30 companies are participating. According to JASMA, this zone will contribute to offering multiple solutions through good synergy with the latest sewing technology and by responding to the needs for customization. During the show, there will be various events such as seminars and special exhibitions in the theme zones in Zone B of Hall 5, introducing the latest textile processing technologies and trends. A special zone themed “Innovative Solutions and Advanced Processing Technologies” will present solution-offering technologies through exhibition of materials and finished products. The advanced textile technology section “Photovoltaic textiles” and “RFID fibres” will showcase items that will have an impact on people’s lifestyles such solar panel embedded textiles and ultra-small string-like IC tag. The J-Quality section is a unified brand of products, every production process of which, that is, from weaving, knitting, dyeing, processing, sewing, planning to sales, is handled in Japan. With the support of Japan Fashion Industry Council, the latest information on J-Quality Certification System that certifies technology, sense of beauty and safety of all Japan-made products will be exhibited. Future fashion 4.0 is an updated version of the “Age of Digital Fashion at the Advanced Technology and Information Transmission Corner” in the Special Theme Zone at the previous JIAM 2012. Here, one can see Japan’s excellent raw materials, design capability, sewing skills, ability to create and design trends and the latest sales tools to respond to the purchasing behaviour and needs of consumers.

Textile furnishings important for 88% of hotels- Study

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“Textile furnishings are of great importance for 88 per cent of hotels,” a study report titled ‘Textiles in Hotel Design: Hotel Furnishing Success Factors’ released by Messe Frankfurt at Heimtextil 2016 informed. In the study, 200 decision makers from German first-class hotels provided new insights into textile furnishing with details of procurement channels, trends, sources of inspiration and information, and buying criteria. The important findings include that many guests rate the quality of their hotel room in accordance with the quality of the bed. “Therefore, bed linen and mattresses are considered to be particularly important by 84 and 80 per cent of hoteliers, respectively,” the report observed. “In the case of city hotels, the figure for mattresses rises to no less than 95 per cent, while bedding, which 69 per cent rate as being important, is also a significant factor for textile furnishing,” the report explained. However, 78 per cent of respondents perceive towels as being even more important, while rounding off the top-five list of the most important product categories for the hotels polled is table linen with 61 per cent. By contrast, 57 per cent respondents ranked curtains among the five most important products for country hotels. Also, external experts, such as architects of interior-furnishing specialists, play a more important role for country hotels than for city hotels and hotel chains. The report also noted that quality is the most important criterion when it comes to purchasing for 93 per cent of hotels and ease of care and cleaning are highly rated by 82 per cent. Only 49 per cent regard the price as a decisive criterion and certainly less important than sustainability, which is mentioned as one of the five most important criteria by 53 per cent of all respondents. For country hotels, for 54 per cent of respondents, the long-term availability of products is a major factor compared to only 31 per cent for all hotels. Asked about anticipated trends, 42 per cent of hoteliers said that quality was most important, while for 46 per cent, sustainability is a trend in the city. 34 per cent of respondents believe that sustainability will also play a leading role as a future trend and around 28 per cent see a greater design orientation as a trend. The report also divulged that 43 per cent of hoteliers attend fairs and congresses to gain inspiration and gather information, while 40 per cent use the traditional catalogue.

RMG export in non-traditional markets can boost economy

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Country’s export earning from ready-made garment products in the non-traditional markets increased in the first half (July-December) of the current fiscal 2015-16.Bangladesh fetched $2.01 billion from the non-traditional markets by exporting RMG products in the first half, which was $ 1.86 billion during the corresponding period of the last fiscal. Export earning in the non-traditional market increased by 8.13 per cent, according to the latest data of Export Promotion Bureau (EPB). Australia, Brazil, Chile, China, India, Japan, Korea, Mexico, Russia, South Africa and Turkey are considered as the non-traditional markets.Vice-President of the Bangladesh Knitwear Manufacturers and Exporters’ Association (BKMEA) Mohammad told The New Nation that non-traditional markets could be more promising destinations for the Bangladeshi exporters and it could help the sector recover from the bad patch in the traditional markets like the US, Europe and Canada.The BKMEA leader expected a tremendous export growth in non-traditional markets, as Russia, China and Japan were keen to source from Bangladesh. “We are working to grab the non-traditional markets. If we succeed, the whole scenario in this sector would change”, said the business leader.Bangladesh Garments Manufacturers and Exporters’ Association (BGMEA) President Md Siddiqur Rahman said, export growth in non-traditional markets are increasing gradually, contributing to 12 per cent of the total RMG export.He said, the government and the entrepreneurs were working together to increase export volume to non-traditional markets, as there were enormous potential in Russia, China, Japan and Latin America.He urged the government to provide more incentive for the exporters to export in the non-traditional markets. “We will continue to explore the new export destinations and the incentive would be helpful to penetrate the markets”, said the BGMEA leader.The exports to EU increased in volume but earnings remained below expectation due to a depreciation of the euro against the dollar, Faruque Hassan, Senior Vice-President of BGMEA said. The RMG exporters had a plan to give drives in some potential markets including Russia, China and South Korea. Trade delegations from Bangladesh will visit the countries and will select export products studying the markets, the business leader said.The robust growth has been possible mainly because of the all-out efforts made by Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) to explore new destinations for the apparel products, said Faruque Hassan. BGMEA and BKMEA had launched such a move to explore non-traditional markets in 2010 and the move is still on,” he informed.He said, duty-free access to some markets and government cash incentives for searching new destinations for RMG products have finally yielded positive results in the previously unexplored market. “We will continue our drive to reach still untouched and unexplored markets”, he said.

TIB points portion at RMG buyers

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Foreign buyers resort to corruption and malpractice to reap undue advantage by pressuring Bangladeshi readymade garment suppliers, a global corruption watchdog has found in a landmark research. he qualitative study on ways to prevent corruption in the readymade garment (RMG) sector in Bangladesh is also the first of its kind that was jointly conducted by Transparency International’s Bangladesh and German chapters from November 2014 to April 2015. Starting from manipulating inspection and compliance reports, arbitrarily cancelling work orders, pressuring suppliers with unnecessary requirements, forcing factories to purchase materials from incompetent sources, and awarding work orders against bribes are some of the malpractices and corruption that foreign buyers and their local agents resort to. These eventually lead to factories having to make workers work inhuman hours and suffering severe losses and bankruptcy. The study report released yesterday by Transparency International Bangladesh (TIB) in Dhaka is based on interviews with buyers, buying house executives, garment factory owners, factory staff and workers, compliance auditors and inspectors, experts, merchandisers, shipping agents and bankers. One of the 15 case studies that the report cites describes how an American buyer manipulated a local inspector to find flaws in a shipment and cancel an order after realising that the products might not do well in their market. That eventually pushed the Bangladeshi supplier to the verge of bankruptcy. Another case study says: Recently, a local factory manufactured 20,000 sweaters for a German buyer. When the shipment reaches the Chittagong Port after successfully going to all compliance and quality tests, the buyer sends an inspector, who finds problems with the products. Based on this, the buyer threatens to cancel the order unless the supplier gave 20% discount on the contracted price. In scenario 5, the report describes how a merchandiser forced a factory to purchase accessories from certain suppliers instead of the best ones. It said that the merchandiser, appointed by local buying house, took bribe from those accessories suppliers. The study also pointed out buying house merchandisers receiving bribes or commissions from factories to award a work order as another prevalent corruption in the sector. The remaining case studies describe the corruptions and malpractices that local factories, auditors and inspectors resort. Some of these are: bribing compliance auditors and quality inspectors to ensure getting favourable reports for sub-standard products and using low quality materials, importing more raw materials than needed at low tax and then selling the surplus in the open market, producing duplicate or fake documents or tampered records in order to get work orders, and violating minimum wage, work hours and the standards of labour rights. At the report launching programme, TIB Executive Director Iftekharuzzaman said: “More or less everybody is involved with irregularities. It will be unwise to put the responsibilities on the government only. Buyers and agents are responsible too.” He also said that buyers “abuse their business power” to seek opportunities at the expense of the local suppliers. The report also laid out a 27-point recommendation on how to combat corruption and irregularities in the RMG sector, detailing the roles that stakeholders including buyers, BGMEA, the government and the civil society and media can play.

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