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News Clips 20 June, 2013

[ India: Government sets $50 billion textiles export target ]
[ China: May Textile Exports Rise 5.1% ]
[ Bangladesh approves $154 million for power, textile investments ]
[ Walmart Still Accepting Garments from Blacklisted Factories as Bangladesh Struggles to Change ]

India: Government sets $50 billion textiles export target   [ top ]

INDIAN EXPRESS, ENS Economic Bureau, June 20, 2013
In a bid to curb the widening Current Account Deficit (CAD), recently inducted Union Minister of Textiles K S Rao said on Wednesday that the government had fixed the textiles export target of $50 billion for the financial year, 2013-14.

“CAD is affecting the nation s economy and textiles sector is one sector where we can increase the exports substantially. I am given to understand that our textiles exports is about $34 billion today, which I wish to make at least $50 billion by end of the current fiscal. This will help in containing CAD,” the 69-year-old MP from Andhra Pradesh, said after assuming charge as the new textiles minister.

The huge trade deficit has been one of the biggest problems plaguing the Indian economy. CAD touched a record high of 6.7 per cent of GDP in the December 2012 quarter and expected to be around 5 per cent in 2012-13.

Due to poor demand in the US and European markets which consumes almost 65 per cent of India’s textile supply, exporters are trying to tap emerging economies such as Africa, Japan and Latin America.

Rao urged for better skill development in order to boost the sector’s growth.

“When people are skilled, the production will go up, cost of production will come down, the sector will grow which in turn will help it to compete in the international market,” Rao said.

He added that he would discuss with textile players the reasons that are negatively impacting the sector’s growth. The textiles industry employs about 4.5 crore people.

China: May Textile Exports Rise 5.1%   [ top ]

According to preliminary figures released from China’s General Administration of Customs, the nation’s exports of textiles and apparel increased by 5.1% in May compared to the same of last year to US$22,940 million. Although exports surpassed US$20 billion for two consecutive months, the growth was considerably smaller than the 13.4% growth in April.

May exports of textiles grew by 5.3% to US$9,710 million, and those of apparel rose by 5% to US$13,230 million. Textile exports were at an all-time high surpassing April’s US$9,650 million.

January-May 2013 textile and apparel exports grew by 13.8% year-on-year to US$103,120 million: textiles, US$41,930 million (up 10.2%) and apparel, US$61,190 million (up 16.4%).

Bangladesh approves $154 million for power, textile investments   [ top ]

REUTERS, June 18, 2013
Bangladesh's central bank approved $154 million worth of investment on Tuesday to boost electricity supply and enable a number of textile investments.

The move was made by the Investment Scrutiny Committee dealing with approvals of private sector foreign borrowing at a meeting presided over by bank governor Atiur Rahman, a bank statement said.

The highest interest rate permitted for the approved inverstment is a 6-month LIBOR+4.50 percent per annum, it said. The committee said more foreign financing proposals were being processed for consideration.

Rahman said such foreign financing will help stabilise the dollar exchange rate, reduce Bangladesh's balance of payments deficit and create more job opportunities.

Walmart Still Accepting Garments from Blacklisted Factories as Bangladesh Struggles to Change   [ top ]

BRAND CHANNEL, Sheila Shayon, June 19, 2013
Almost two months after a building collapse in Bangladesh killed 1,127 garment workers, reports have surfaced that claim Walmart has continued to accept shipments from garment factories supposedly on its blacklist over safety and quality concerns, according to ProPublica.

The largest retailer in the world, which was one of several major Western brands that refused to sign on to the Accord on Bangladesh Safety, released a list of rejected garment factories in May that the company says it refuses to do business with due to repeated safety and labor violations. However, according to import and export data, Walmart has been receiving product shipments from two of the factories on the list, Mars Apparels and Simco Dresses.

Mars was supposedly dropped in 2011, although it was still shipping garments to Walmart as recently as last month, while Simco was placed on the list in January, even though it continued to ship to Walmart Canada into March of this year.

Walmart spokesman Kevin Gardner told ProPublica that "Mars shipments were allowed because of confusion over whether Walmart's standards applied. Mars didn't produce garments with a Walmart house brand but instead with a Fruit of the Loom label." So, Gardner said, "it wasn't clear if Mars needed to meet Walmart's standards or Fruit of the Loom's."

The supposed black-listed factories aren't the first questionable outposts that have continued to service the industry. Late last month, US bades VP Corp., the largest apparel maker in the world and parent to brands such as North Face, Timberland and Nautica cleared a factory for work despite inspector reports that cited cracks in the walls. The factory also serviced Walmart and Inditex, the parent company of Zara, though Walmart marked the factory as unsafe after the May audit.

However, VF chose to stay with the factory, saying it wanted to "stay and improve" working conditions, Reuters reported. "We are in daily contact with the facility and VF's leadership is closely monitoring the status in this facility and others in our Bangladesh supply chain."

Still, with only 200 trained building inspectors in Bangladesh, many question whether major brands can accurately monitor their supply chains. For Walmart, the brand has in the past had problems with unapproved outsourcing and in turn a long, unclear paper trail of where their garments are actually coming from. While the brand has has assured that its own Bangladesh improvement plans are far better and more efficient than those proposed and signed by over 30 major retail brands, the ProRebublic report begs to differ.

"It's either a question of Walmart just telling people what they want to hear," said Dan Schlademan, a United Food and Commercial Workers rep who oversees the union’s Make Change at Walmart Campaign, "or it's that Walmart has created a supply chain system that they have no control over."

Tesco, the world's No. 3 retailer, has stopped sourcing clothes from Bangladesh after discovering serious problems with the safety of a factory owned by Liberty Fashions. "We immediately made the owners aware of our findings, and tried to find an alternative to ceasing production of Tesco products on this site. We are disappointed that this was not possible.”

While brands continue to navigate the web of factories and new regulations in Bangladesh, local and international governments are pressing forward. Bangladesh's Cabinet, led by Prime Minister Sheikh Hasina, agreed yesterday to sign the Trade and Investment Cooperation Framework Agreement (TICFA) with the United States. Trade between the two countries totaled $5.4 billion in 2012. Meanwhile, the US House of Representatives has approved a defense authorization bill requiring, “Military-branded garments made for sale at base retail stores operated by the Department of Defense should uphold our nation’s core values and meet international labor standards.” While military uniforms are produced in the US, military-branded apparel can be produced anywhere and garments with US Marines slogans and logos were found in the rubble of the Tazreen factory fire, which killed 112 workers late last year.