Gujarat moots new textile policy to ‘protect’ farmers

  •  In a belated move, the Gujarat government on Wednesday announced a new textile policy in order to attract cotton textile entrepreneurs to Gujarat. Once considered Manchester of India, Gujarat today accounts for 7 per cent of cotton textile manufacturing capacity of the country, though it produces 35 per cent of raw cotton. "About 90 per cent of raw cotton produced in the state goes out of the state," said state industries minister Saurabh Patel.
  • Blaming the Centre for 'lack of any consistency' in textile policy, the minister said, "Gujarat's textile policy will protect the state's farmers from the Centre's anti-farmer and anti-cotton-export policy, as a result of which the farmers fail to get the required price." He said that the farmers will be allowed to continue exporting their produce, like before, to get a better price.
  • The state government also plans to have dozen-odd cotton textile clusters around cotton-growing areas, especially in Ahmedabad and Surendranagar districts. According to an official calculation, the total subsidy as a result of the new policy will be to the tune of Rs 2,700 crore.
  • "We will provide interest subsidy for value-addition chain from ginning to spinning, weaving, processing, garment manufacturing and technology upgrades," Patel said. "Power tariff concession will be given for new cotton spinning and weaving units and financial assistance will be extended to skill-development centres." The minister added, "The new textile policy will also increase the state's revenue and growth rate and give impetus to the textile industry." It will create fresh employment opportunities for over 25 lakh people in the next five years, he said. But he evaded questions on why the state government failed to attract investment in the textile sector over the past ten years. "It is not necessary for me to answer all the questions," he said.

Indian firm to build $300m cotton yarn project in Sohar

  • A land lease agreement was signed by an Indian company with Sohar Freezone to build a $300 million cotton yarn plant within the free zone area.
  • The project, which will manufacture a wide range of cotton yarn and it is going to be the first major cotton yarn plant in the region, will be operated as SV Pittie Sohar Textile FZC LLC, which is a wholly-owned subsidiary of Bombay Stock Exchange listed SVP Global Ventures Ltd.
  • Sultan Bin Salim Bin Said Al Habsi, Chairman of Sohar Port and Freezone, led a high-level delegation from Oman to Jaipur, on Saturday. They met with ShriVallabh Pittie Group (SVP), one of the largest manufacturers of cotton yarn in India and a global leader in the sector.
  • The facility will eventually provide over 1,500 jobs and is expected to start commercial operations in late 2019.
  • Abdullah Humaid Al Mamary, Chairman of Bank Sohar, together with Acting-CEO Sasi Kumar and other senior officials from the bank, were also part of the delegation.
  • Bank Sohar has been awarded the syndication mandate to fund the entire project in two phases. An agreement to this effect was entered into with SVP Group. The bank has currently underwritten phase-one debt, to achieve financial closure. On successful completion of phase-one, the bank plans to syndicate a term debt for phase-two, along with a share of phase-one debt, to interested lenders.
  • “We are honoured to be the finance partner for a project of this magnitude that is expected to have a significant impact on the development of the region. It demonstrates our commitment to collaborate as a one-stop financial services provider catering to the diverse needs of individuals and large corporate customers,” said Sasi Kumar.
  • The plant will import 100,000 metric tonnes of cotton fibre annually through Sohar Port, with around 50 per cent coming from the United States and the remainder split between Australia and India. The plant will produce around 75,000 tonnes of finished yarn each year, which will be exported back through the Port to China and other global markets including Bangladesh, Pakistan, Vietnam, Portugal and Turkey.
  • “With over two-hundred years experience in the textile business, our company has a highly skilled and experienced management team with a strong focus on automation and technology. We source best-in-class machinery from leading global companies to ensure the highest levels of productivity and efficiency,” said Chirag Pittie, SVP Group’s Managing Director.
  • The new SVP facility will be the first step in establishing a fully-fledged textile cluster in Sohar Freezone. Downstream investments in knitting, weaving, spinning and fabric manufacturing could create a thriving industrial cluster providing thousands of new jobs for local households.
  • “Today’s agreements showcase the great things we can offer to investors in Sohar Freezone: the safest haven in the Middle East for foreign direct investment combined with high levels of government support; project financing with an Omani bank; 100 per cent foreign ownership; our optimal location and seamless connectivity to key global markets through our adjacent port; highly competitive land and energy rates; and a young, well educated local workforce. Taken together, this is a sure fire recipe for business success,” said Jamal Aziz, CEO of Sohar Freezone.

NGO bemoans dwindling cotton industry in Malawi

  • AICC Chief Executive Officer, Dr Felix Lombe said  despite being the country’s number four forex earner, cotton has over the years experienced low production levels hence the need for government and private sector intervention.
  • “The number of ginning companies has declined significantly from twelve in 2014 to less than six in 2016 due to among others low volume of cotton produced. Increasing production of cotton means that more ginners will be on the market to buy and gin cotton which will in turn create more jobs,” he said.
  • Lombe observed that other value added activities for cotton such as spinning, weaving, knitting and garment manufacturing have also shrunk in the last decade.
  • “Currently, Mapeto David Whitehead and Sons is the only spinning company in the country at the moment and utilize less than five percent of the lint produced domestically,” he said adding the country produced less than 15,000 metric tonnes of seed cotton in 2016.
  • According to Lombe, by increasing cotton production to over 50,000 metric tonnes a year, the country will be able to produce edible oil than import crude oil to supplement domestic cotton seed and again, exporting jobs and draining the much needed forex.
  • Government, during the late Professor Bingu wa Mutharika reign, injected K1.6 billion which resulted in 100,000 metric tonnes of cotton produced the following year and since then, there has not been any meaningful government support towards inputs.
  • He said his organisation is therefore proposing an injection of US$ 4.8 million US Dollars by the government which will be out into a cotton fund.
  • Lombe pointed out, “It is expected that the injection towards the input fund would rejuvenate the sector by generating US$ 60.5 million in exports, US$26.5 million annually accruing to smallholder farmers and over US$50 million accruing to various players engaged in value added services.”
  • AICC is implementing programmes in the agriculture, governance and health sectors in the country.

Cotton Committee approves Rs 690.65mn budget for FY 2017-18

  •  The Board of Pakistan Central Cotton Committee (PCCC) here on Friday approved Rs 690.65 million budget for the financial year 2017-18 in order to meet the financial requirements of the Committee.
  • The 85th meeting of the PCCC held here with Minister for Commerce and Textile Industry Muhammad Pervaiz Malik in the chair to discuss the matters of committee.
  • Federal Secretary Ministry of Textile Industry, All Pakistan Textile Mills Association and Pakistan Cotton Ginners Association, Karachi Cotton Association and representatives of provincial governments attended the meeting.
  • Speaking on the occasion, Muhammad Pervaiz Malik said that it was an important cash crop of the country, providing raw material for the local industrial sector and main source of export earning.
  • The minister asked for restructuring the PCCC in order to enhance its performance in research and development for uplift of cotton crop in the country.
  • He also asked for formulating a committee comprising on the members of All Pakistan Textile Mills Association (APTMA), members of the National Assembly, farmers and other bodies involved in cotton trade and research to formulate a comprehensive policy for research and development of advanced cotton varieties to optimizing the per-acre crop output.
  • Commerce Minister also directed for removing the concerns of APTMA and formulating business plan in order to make the organization more efficient.
  • Meanwhile, Cotton Commissioner Dr Khalid Abdullah informed the meeting that PCCC developed 11 cotton varieties during last year, whereas 291 experiments were made and 68 varieties were tested during the period under review.
  • The committee tested pesticides at 17 location and organized training courses for cotton farmers on pre and post harvest mechanism.
  • He informed the committee that receivables from the 166 local textile mills in terms of cotton cess had reached to Rs 625 million, where as recovery of the cotton cess was also declined.
  • The PCCC was informed that income in terms of cotton cess had also reduced as it was recorded at Rs 209.60 million in 2016-17 as against the receiving of Rs 529.76 million of 2013-14. NNI

APTMA laments high cost of doing business

  • Some 140 textile mills have closed their operations, while another 75 to 80 mills are on the verge of closure due to high cost of doing business. According to All Pakistan Textile Mills Association (APTMA), with the closure of 140 textile mills, about one million workers have lost their jobs and further closures will add to the unemployment figure by another 0.5 million. Due to the closure of about 140 mills with various mills operating below capacity, textile exports are suffering a loss of over $4 billion per annum, he added.
  • Zahid Mazhar, Senior Vice Chairman, All Pakistan Textile Mills Association (APTMA), has said in a statement that the country has already entered an era of de-industrialisation where industries are closing. "In 2005 the share of manufacturing in the GDP stood at 19 percent which has fallen to 13 percent. Large scale closures of textile spinning mills has already taken place resulting in drastic increase in unemployment as well as reduction in consumption of locally produced cotton. This will hurt both manufacturing as well as the agriculture sectors of the economy," he maintained.
  • Pakistan''s textile exports have declined during the last four years because of the cost of doing business which is the highest in the region, he said and added that the textile industry has been hit hard due to high cost of energy, both gas and electricity, leaving Pakistan''s exports uncompetitive in the global market as the cost of production of both gas and electricity is about 30 percent higher than the regionally competitors - Bangladesh, India and Vietnam.
  • Mazhar said both spinning and weaving sectors are the backbone of textile value chain. Both have faced the brunt of high cost of doing business, hence left unviable throughout the country. Today, spinning industry is incurring heavy losses by selling yarn below cost. The production of yarn and fabric is substantially more than the local consumption; therefore, their exports must be encouraged, he added.
  • He said Regional countries are following export-friendly policies to increase their exports. In the last 10 years, Bangladesh textile exports rose from $9.8 billion in 2006 to $35.2 billion in 2016, ie, about 260 percent and China $144 billion to $255 billion, up 77 percent. In addition, India''s textile exports surged from $18.4 billion to $35.4 billion, Vietnam''s $ 6.6 billion to $30.5 billion, while Pakistan''s textile exports have gone down from $ 14 billion to $12 billion. The share of these countries in the global textile trade is increasing while the share of Pakistan has reduced from 2.2 percent to 1.5 percent.
  • He demanded of the government to remove the levy of Gas Infrastructure Development Cess (GIDC) on gas. He further demanded that the government should provide gas at the regionally competitive rate of Rs 400/MMBTU as was earlier announced by the ECC in November 2016 but the decision could not be implemented.
  • Senior Vice Chairman APTMA further requested that the following measures be taken on an urgent basis to improve the efficiency and viability of textile industry: Expeditious payment of outstanding sales tax refunds and other refunds to address the liquidity issue and a check on large scale influx of imported yarn and fabrics in the country to save the domestic industry. He added that Free Trade Agreements and Preferential Trade Agreements must be reviewed and revisited in such a way that the exports to those countries be increased, he maintained.
  • He also demanded of the government to encourage investment in spinning, weaving and finishing sectors in such a manner that maximum cotton be converted into yarn and further downstream value added products because it will not only facilitate farmers and the spinning industry but would also help whole textile chain and the economy.
  • He said that due to the lucrative investment policy in the above referred period the total installed capacity of the textile industry and the production of basic textile products rose by more than 40 percent. The Senior Vice Chairman APTMA said the textile industry of Pakistan is capable enough to bring the economy out of morass. He hoped that the new Prime Minister Shahid Khaqan Abbasi and his cabinet would take immediate steps to arrest the drastic decline in exports during last four years, as any further negligence or delay will take the economy to a point of no return.
  • He urged Prime Minister Shahid Khaqan Abbasi to issue instructions to the authorities concerned to implement textile package of Rs 180 billion, announced earlier this year for the support of exports and the textile industry. Mazhar also demanded that the notification for release of refund under Drawback of Duties and Taxes Order from July 01, 2017 to June 30, 2018 be issued without the precondition of growth in exports of 10 percent in 2017-18 as compared to 2016-17. Payments under this package must also be released without further delay, he maintained.

CCI Opens 83 Cotton Purchase Centres In State

 Minister for Irrigation, Marketing and Legislative Affairs T Harish Rao on Saturday inaugurated a cotton purchase centre in the Agricultural Market at Gajwel.

Speaking on the occasion, Harish said the Cotton Corporation of India (CCI) had opened 83 cotton purchase centres in Telangana State. 

He informed that the unique programme of cotton purchase through cards had been launched in the State in order to put an end to the malicious practice of middlemen purchasing cotton directly from hapless farmers at throwaway prices and make hay. 

Referring to the crop loan waiver issue, the Minister pointed out that the neighbouring Andhra Pradesh had waived only Rs 7,000 crore crop loan out of Rs 28,000 crore, whereas the Telangana government had cleared Rs 8,400 crore crop loan out of a total loan of Rs 17,000 crore. 

Alleging that TDP chief and AP Chief Minister N Chandrababu Naidu was trying to sabotage Telangana’s Dindi and Palamur irrigation projects, Harish said TPCC chief Uttam Kumar Reddy and CLP leader K Jana Reddy owed an explanation to the toiling farmers over their unholy alliance with the anti-Telangana TDP.

The Minister also pointed out that the TRS government had taken up construction of a warehouse to store 17,000 tonnes of food grains at a cost of Rs 1,024 crore after formation of Telangana State.

Indian start-ups can now raise 100% funds from an FVCI

The ministry’s department of industrial policy and promotion (DIPP) has for the first time included start-ups in its FDI policy document.

Ho Chi Minh City to host Cotton Day in September

Ho Chi Minh City will host the Cotton Day 2017 on September 12, which aims to strengthen connection between garment-textile firms and partners, suppliers and experts in the cotton sector.

The event, to be held by the Cotton Council International (CCI) and the Vietnam Textile and Garment Association (VITAS), will be a chance for enterprises to learn about global cotton demand and brands’ consumption trends.

Within the event, a conference and fashion show will be held, introducing the COTTON USA collections of Canifa and John Henry brands, including those designed by five winners of the COTTON USA-Fashion Design contest.

Vu Duc Giang, VITAS President, said that Vietnam has to import a large amount of cotton as the domestic sector meets only 0.04 percent of demand. Among supply sources, cotton from the US is considered the highest quality, accounting for up to 60 percent of total cotton imports.

Giang said that the Cotton Day is expected to enable Vietnamese firm to use the COTTON USA label on their products. Since 2017, the CCI has helped Vietnamese fashion brands use US cotton to enhance their products’ quality.

According to the VITAS, despite challenges facing Vietnam’s garment and textile sector, including pressure from anti-dumping tax on fibre in Turkey and India, the sector still earned 19.8 billion USD from export in the first eight months of 2017, up 9.9 percent year on year.

The Cotton Day is one of the CCI’s biggest events in Asia. The event began in Japan in the early 1990s and has been held in the Republic of Korea, Taiwan (China), China, Thailand, and Bangladesh.

This year, it is held for the first time in Vietnam and Indonesia.-VNA

Textile mills cut cotton purchases from Gujarat by 40%

Faced with contamination in cotton from Gujarat, the largest producer of the crop in the country, textile mills in the south have cut procurement by about 40% or nearly 15 lakh bales (a bale is 170 kgs) from the state during the 2016-17 season (October-September). Textile mills in the south buy around 40 lakh bales of cotton from Gujarat, which produces nearly 95 lakh bales per season. "Some mills have totally stopped buying Gujarat cotton," said P Nataraj, vice president, ICF and MD, KPR Mill, one of the largest integrated textile mills in the country. The contamination results in a fall in the quality of yarn. It also leads to a 5% drop in yarn output. Cotton accounts for about 60% of the total costs in a textile mill. With the increase in textile mills in Gujarat, ginners in the state have started mixing comber waste, ICF officials said. "It is very difficult to identify the contamination as comber waste looks cleaner than cotton,"

Lower GST on job work of textile yarn to help SMEs

Reduction in GST rates on job work of textile yarn and fabric manufacturing to 5 per cent from 18 per cent will give a leg-up to SMEs in power loom, knitting and processing sectors, said CITI. 

According to Chairman of the Confederation of Indian Textile Industry (CITI) J Thulasidharan, reduction of service tax on job work would bring relief to the textile industry from the extra burden as bulk of the work is with SMEs and carried on through job works. 

    Exibitions Dates