Textil global: Marktinfos zu Turkmenistan, Pakistan-Thailand, Indonesien, Türkei-Bangladesch, Russland, Äthiopien

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Spinnerei-Investitionen in Turkmenistan +++ Pakistans Textilindustrie besorgt über Freihandelsabkommen mit Thailand +++ Indonesien investiert in technische Textilien +++ Textilexporteure in der Türkei und Bangladesch begrüßen Freihandels-Deal +++ Russland will Ausfuhren von Textilien steigern +++ Äthiopiens Strickereibranche im Aufwind +++ Die Informationen zu den einzelnen Märkten stammen von World Textile Information Network (www.wtin.com) und sind nachfolgend auf Englisch kurz zusammengefasst. Die vollständigen Artikel finden Sie im PDF-Download.

New spinning mill to come up in Turkmenistan
A new cotton spinning mill is set to come up in Saparmyrat Turkmenbasy district, located in Trukmenistan’s Dashoguz region, one of the four inner-most regions of the country where cotton is mainly grown. When operational, the mill will have capacity to produce 6,000 tons of cotton yarn annually, according to Central Asian media reports.

The textile industry is one of the priority industries for the growth of the Turkmen economy. “Big investments, made in textile industry, stimulate the growth of production of high-quality cotton products, which have a huge demand among foreign consumers,” Turkmen President Gurbanguly Berdimuhamedov said.

More than one million tons of cotton is grown annually in Turkmenistan, making it the ninth largest cotton producer in the world. However, not all cotton is processed within the country.

About 20 domestic textile firms that operate predominantly with Turkish partners produce around 120,000 tons of cotton yarn, 178 million square metres of fabric, 11,000 tons of knitted fabric and 7,200 tons of terrycloth.

Pakistan textile industry concerned over Thai free trade deal

The Pakistan textile industry is worried that a potential trade free-trade deal with Thailand may cause more harm than good to Pakistani manufacturers. Thai and Pakistan government negotiators are preparing for what may be the final round of talks to forge a free-trade agreement (FTA) between these two textile-producing countries, with a deal potentially ready for signature in January.

However, with industry representatives on both sides nervous about the deal, it might be an ambitious goal. While the Pakistan government has wanted to liberalise the Thai-Pakistan trade in textiles and clothing, where its strong vertically integrated sector has a competitive advantage, especially in cotton and woven fabrics, Pakistan’s textile industry is far less confident. It is warning that unless the government ensures energy prices are reined in, its exporters will struggle to offer competitive prices to Thai buyers, even if duties are scrapped under an FTA.

A spokesperson for the All Pakistan Textile Mills Association (APTMA) warned that, without structural reform to tackle Pakistan industrial costs, an FTA with Thailand could inflate Pakistan’s trade deficit with this wealthier south-east Asian country.

“Following the signing of an FTA, Pakistan’s imports from Thailand will be elevated to US$1.71bn, whereas Pakistan exports will increase by a mere US$160m, resulting in a trade deficit of US$1.54bn,” states the APTMA.

“Furthermore, Thailand’s high potential exports to Pakistan are not capital goods, but rather consumer goods, making the potential trade deficit that will come about after the FTA harder to justify. Pakistan’s highest growth items are apparel and home textile articles, but their actual export value will grow only from current US$1.4m to US$6.1m.”

And concern is not just limited to Pakistan. Looking ahead to this month’s round of talks, Manus Aree, manager at the Thai Textile Manufacturing Association says: “One of the pressing issues that will be discussed at the meeting is Pakistan’s high tariff rates. The Thai government has proposed that Pakistan reduce regulatory duty on some of the main products that Thailand will export, as the current prices are too high and not suitable to Thailand. Pakistani officials are yet to respond on this.”

If terms can be agreed, Aree thinks that tariffs will be cut through a timetable that will take two to three years to complete.

Synthetic textile producers eye more investment in Indonesia

Speciality textile producers in Indonesia are seeking increased investment as demand in the automotive, construction and furnishings sectors is soaring, according to industry experts.

"There's a lot of demand and more investment is being directed toward that technical textile production," says Redma Wirawasta, secretary general of the Association of Synthetic Fiber Producers (APSyFI).

"Investment is still dominated by textiles for garments but we're seeing a trend towards more investment in home furniture, construction and automotive textiles. The medical textile sector remains untapped."

This year, polyester and filament fibre production in Indonesia is expected to reach 610,000 and 580,000 tonnes, respectively, adds Redma, explaining that technical textiles account for around 10%, or US$1.2bn, of Indonesia's textile exports.

High energy and labour costs make Indonesian technical textile products less competitive than their Chinese and Indian counterparts, says Prama Yudha Amdan, assistant president director at PT Asia Pacific Fibers, a leading polyester producer, which employs 3,600 people.

"Demand is fantastic, but technical textile production requires significant investment. Currently the bulk of funds that are supposed to go to research and development goes to labour costs," he says.

"In terms of quality, domestic products are competitive, even better than China and India in some areas, but price-wise we aren't competitive.

Achmad Sigit Dwiwahjono, the industry ministry's director general for chemical, textile and various sectors, recognises the need for more incentives. "We’re pursuing more incentives for the textile sector in the form of market protection from illegal imports and facilitating better access to the domestic and overseas markets, in addition to gas and electricity incentives," he says.

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Turkey and Bangladesh exporters welcome planned free trade deal
Turkish textile and clothing businesses hope to see increased commerce with Bangladesh buyers as the two Asian countries forge ahead with striking a free trade agreement (FTA).

However, a formal second round of negotiations is still awaited. They were supposed to have been held in August in Bangladesh's capital, Dhaka, but the Turkish team deferred the visit. Bangladesh officials hope the talks will be staged soon, enabling the initiating of a deal for ratification by the Turkish and Bangladesh parliaments.

Last year, trade between Bangladesh and Turkey amounted to US$1.14bn, with the balance favouring Bangladesh, according to figures from Turkey’s ministry of foreign affairs.

Turkey would be a clear beneficiary of an FTA, given it has been growing over the past 20 years and has significant upstream capacity to offer Bangladesh’s clothing sector.

Turkish businesses could benefit from increased investment in Bangladesh following an agreement that is expected to reduce regulatory obstacles to Turkish investors wanting to sink money into Bangladesh. This could include the construction of factories, more inward processing and re-exports. So far, Turkey has signed 23 FTAs and 21 more are under negotiation.

But reducing duties remains a big hurdle to securing an agreement and Bangladesh needs to make an ‘aggressive’ push for the FTA, according to Md Shafiul Islam (Mohiuddin), president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

In 2011, Turkey imposed a 17.5% import tariff on textile products originating from the poorer nations, including Bangladesh, and the government in Dhaka wants this removed under an FTA.

And Bangladesh exporters have been struggling in Turkey, partly as a result. Shipments of textiles and clothing, which dominate Bangladesh’s sales to Turkey, more than halved (by 57%) to US$45m in this first financial-year quarter through to September, year-on-year, the latest data released by the Bangladesh government’s Export Promotion Bureau shows. Annualised exports of apparel to Turkey also fell from US$460.29m in 2016 to US$381.37m in the financial year ending in June.

Bangladesh imports cotton and textile machinery from Turkey, while it exports mostly woven and knitted garments to the Eurasian country.

The next round of discussions will be determined jointly through ‘diplomatic channels’, Murat Yarat, a commercial counsellor at the Turkish Embassy in Dhaka, tells WTiN, without specifying a date for the talks.

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Russia to increase exports of textiles and technical textile products
The Russian government plans to significantly increase Russian exports of textile and technical textile products to foreign markets over the next few years, officials have told WTiN.

Planned export volumes have not yet been disclosed. However, according to some sources close to the ministry of industry and trade, the government is targeting an increase of 100,000-150,000 tonnes in 2017-2018, with the possibility of a three to four-fold increase over the next few years.

To stimulate export levels, the government is considering the possibility of providing subsidies to textile producers that regularly sell to foreign markets, says a spokesman for the minister of industry and trade, Denis Manturov.

Details of any such subsidy scheme have not yet been made public, he adds. But it is anticipated that the allocated subsidies will mainly cover the transport and logistics costs of producers, incurred in connection with the delivery of their products to foreign markets.

Currently the ministry is drawing up the full list of producers that are already in a position to export their products to foreign markets by the end of the current financial year. The list may include some leading Russian textile and technical textile producers, although no names have yet been released.

The potential of the sector to increase exports is mainly due to the ongoing recovery of the Russian economy from the financial crisis, which is stimulating domestic production as well as sales of textile products abroad. World Bank data suggests Russian GDP will increase by 1.327% in 2017, following two years of negative growth.

Also, the recent devaluation of the Russian rouble against major currencies has made the supply of goods to countries such as the US and some in the EU more affordable to overseas buyers, and also more profitable to Russian producers than the domestic market.

The official says the majority of export supplies and related growth in export production will come from a cluster of businesses in the St Petersburg region, as well as some of the country's other leading textile-producing regions, such as Ivanovo.

He says countries of the former Soviet Union will be major export destinations for Russian textile products, along with EU states.

Ethiopia’s knitwear industry on the up
Ethiopia’s knitwear exports grew by an impressive 18% in 2016/17, rising from US$75m in 2015/16 to US$89m in 2016/17, according to data from the Ethiopian Textile and Garment Manufacturing Association (ETGAMA).

All Made In Ethiopia Products Bound For The US Are Exported Duty - And Quota -free Under America ’s African Growth And Opportunity Act (AGOA).All Made in Ethiopia products bound for the US are exported duty- and quota-free under America’s African Growth and Opportunity Act (AGOA).

Out of 58 textile and garment factories serving export markets, 29 are making knitwear products.

“International buyers are beginning to buy knitted clothes from Ethiopia, including Zara, Tesco, H&M and Decathlon,” says Fassil Tadesse, the ETGAMA president.

Domestic demand is also growing as Ethiopia’s consumers start to gain more disposable income. Gross annual national income per capita was US$660 in 2016, compared to US$110 in 2003, according to the World Bank. As a result, local demand for knitted pyjamas, blouses, sweaters and dresses has risen.

Significant flows of foreign investment in recent years from India, Turkey, China, Bangladesh and South Korea has spurred a major expansion in Ethiopia’s textile and clothing industry. In 2016/17, three new integrated textile and garment firms started knitwear production in Ethiopia.

Production is expected to steadily increase as large textile and clothing industrial parks open around the country. The largest textile factory park is Hawassa industrial park, which is under construction in the southern city of Hawassa and is set to have 22 integrated garment factories and 29 knitwear plants.

In 2017, large textile and clothing industrial parks with knitwear manufacturing operations were opened in two other major Ethiopian cities, Kombolcha and Mekelle.

Ethiopia’s burgeoning textile and garment industry consists of 117 garment factories, 19 ginning plants, three spinning mills, 29 knitwear factories and 22 integrated plants, incorporating spinning, garment, knitwear and finishing production.

“Knitwear is still a developing sector – it’s a learning curve for Ethiopia,” says Bantihun Gessesse, communications director at the Ethiopian Textile Industry Development Institute (ETIDI). “Industrial parks are bringing in expertise and giving a dynamic look to the industry.”

He adds that to expand, Ethiopia’s knitwear sector needs to invest in both technology and expertise. “A lack of experienced management and technical capacity is currently an impediment to export growth, particularly a lack of speed and efficiency from manufacturers and poor export quota disciplines, while hard currency shortages present a challenge to companies meeting export targets in the knitwear sector.”

A major attraction for knitwear companies in Ethiopia, however, is the availability of abundant local cotton, with three million hectares of land suitable for cotton cultivation. The quality of such fibre and yarn inputs for the knitwear sector needs improvement though, says Gessesse.

The Ethiopian government offers benefit packages and incentives, including preferential trade deals and land policies, to attract clothing and textile companies looking to relocate their manufacturing base to Africa. The government can give investors profit tax holidays for up to nine years. Duty-free imports of machinery, equipment and construction materials are additional incentives.

All Made in Ethiopia products bound for the US are exported duty- and quota-free under America’s African Growth and Opportunity Act (AGOA). The same benefits are also available for exports to the EU under its Everything but Arms trade access for least developed countries.

Furthermore, Ethiopia offers extremely cheap electricity at US$0.04 cents per kilowatt hour. The country is now the second largest electricity producer in sub-Saharan Africa due to its hydropower dams.

According to Ethiopia’s Investment Commission, more than 130 foreign investors expressed an interest in Ethiopia’s textile and clothing sector over the past six months.

“Rising production costs in Bangladesh, Sri Lanka and China mean that over the next five years we can hope to expect an increasing number of textile and garment companies relocating to Ethiopia,” says Gessesse.

Ethiopia attracted foreign investments of US$1.2bn in the first six months of the 2016/17 fiscal year, dominated by Chinese companies. Investors included Chinese conglomerate the Jiangsu Sunshine Group, which deals in wool textiles and garments. The company has said it will invest close to US$1bn in Ethiopia.

“Ethiopia has many advantages for knitwear production but, when it comes to import charges, it is one of the costliest countries,” says Hassan. “Import banking charges can reach 6%.” However, he welcomed the new Addis Ababa-Djibouti railway, which is now being tested for operational safety. “This will reduce our import costs by as much as half,” he says.

Mohammed Hassan, GM of the Pakistan-based Al-Mehdi Group, a leading knitwear manufacturer in Ethiopia Hassan suggests that Ethiopia seems poised to rival Sri Lanka, Bangladesh and Vietnam as a textile and garment hub. “I can see a good future for Ethiopia’s knitwear industry over the next four to five years,” he says. “As the availability of skilled labour increases, Ethiopia will gain a solid reputation as a centre for fashion garments.”

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