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News Clips 22 May, 2013

[ Export of textile, clothing up 6pc ]
[ Bangladesh: Prospect of GSP very bleak ]
[ H&M looks for alternatives as Walmart blacklists 250 factories ]

Export of textile, clothing up 6pc   [ top ]

DAWN, Mubarak Zeb Khan, May 22, 2013
ISLAMABAD, May 21: Pakistan’s overall export of textile and clothing witnessed a growth of over six per cent in the first 10 months (July-April) of this fiscal year from a year ago.

Export of textile and clothing fell by over 4pc in February 2013, rebounded in March 2013 with an impressive growth of over 13pc. A negative growth of 0.71pc was again witnessed in April 2013 from a year ago.

Export proceeds from these sectors witnessed fluctuation in the past few months owing to energy shortages and contraction in demands from European Union and United States.

Since October 2012, export of textile and clothing rebounded because of a slight rise in demand from recession-hit key markets of Europe and the US, and improvement in domestic production.

Export of textile and clothing surged to $10.749bn in July-April 2013 from $10.127bn over the corresponding period of last year, showed data of Pakistan Bureau of Statistics here on Tuesday.

The products, which witnessed a negative growth, are raw cotton, art, silk and cotton carded.

The growth in exports was mainly driven by knitwear, bed-wear, towels and readymade garments, which are valued-added products. Experts say exports witnessed a double digit growth because of increase in export to the European market owing to preferential market access on selected products.

The European Union preferential package on import of 75 items is in operation since December 2012.

As a result, overall exports rose to $20.146bn in July-April 2013 from $19.329bn over the same months last year, showing an increase of 4.23pc.

A sector-wise analysis showed that export of low value-added products, such as cotton yarn, was up by 26.08pc, cotton cloth 11.31pc, made-up articles 2.45pc and other textile material 31.14pc in 10 months this year over same months last year. Export of knitwear increased by 2.36pc, bed-wear 1.03pc, towels 16.80pc.

Statistics shows that export of raw cotton declined by 68.15pc, and art, silk and synthetic textile by 26.61pc.

Industry sources said that consistent supply of gas during the period under review to textile sector produced the desired results. The growth in yarn and fabric exports was mainly because of improved energy supply. The full capacity utilisation of production caused growth in export of home textile — towels and bed-wear as well.

This shows that in case of uninterrupted supply of energy, export of textile products would increase manifold.

Bangladesh: Prospect of GSP very bleak   [ top ]

DAILY STAR, Refayet Ullah Mirdha, May 21, 2013
The prospects of Bangladesh retaining the generalised system of preferences in the US market are bleak, according to Commerce Minister GM Quader.

“After the Rana Plaza collapse, expecting a positive result from the USTR hearing has become difficult,” Quader told The Daily Star yesterday.

“I cannot exactly say whether the outcome will be positive,” he said.

But US Ambassador Dan W Mozena relayed a “grim” feedback from the United States Trade Representative, according to Quader. Mozena held a meeting with the minister yesterday at the latter’s secretariat in Dhaka.

USTR, the body responsible for developing US’s trade policy, is scheduled to give out the decision on Bangladesh’s GSP status early next month.

Under the GSP scheme, a host of Bangladeshi products enjoy duty-free entry into the US market at present.

Following the Tazreen fire last year that killed 112 workers, American Federation of Labour and Congress of Industrial Organisation, the largest trade union in the US, filed a petition for discontinuation of GSP for Bangladesh.

On the Trade and Investment Cooperation Framework Agreement (Ticfa) with the US, Quader said the commerce ministry placed the issue to the cabinet last week but it was dropped from the agenda for further discussion.

Another high official of the ministry said the government has no plans to sign the Ticfa so soon for political reasons. “The government is stalling on signing the Ticfa as it is observing the situation,” the official said, asking not to be named. The Ticfa is a platform for resolving trade disputes between the two countries through holding dialogues.

Currently, Bangladesh and the US have a platform to hold partnership dialogue, which does not include trade issues.

The second such dialogue will be held in Dhaka on May 26-27, while the first one took place in Washington in September last year.

H&M looks for alternatives as Walmart blacklists 250 factories   [ top ]

NEW AGE, Staff Correspondent, May 21, 2013
A leading European retailer is now searching for alternative sourcing destinations after US-based Walmart blacklisted 250 Bangladeshi garment factories.

H&M, the biggest buyer of Bangladeshi clothes in Europe, is rethinking its sourcing policy in the wake of factory collapse in Bangladesh on April 24 that killed 1,127 people, reports London-based Financial Times.

Quoting Karl-Johan Persson, the chief executive of H&M, the report said that Hennes & Mauritz was exploring sourcing clothes from Latin America and Africa for the first time.

Persson said they had to rethink their sourcing strategy because ‘it’s terrible, what’s happening in the Bangladesh.’

Publishing a ‘blacklist’ of 250 RMG units Walmart said in a statement that it was committed to increase transparency in their supply chain. Transparency helps all stakeholders improve worker standards. In keeping with that commitment, the listed factories in Bangladesh are barred from producing products for Walmart.

The list includes factories like Pacific Jeans Ltd, Frank Apparels Ltd, Onus Apparels Ltd, Pastel Apparels Ltd, Sinha Knitting Ltd, KDS Washing Plant, Mascot Apparel Ltd, Oishi Fashion Pvt Ltd and Sadma Fashion Wear Ltd.

The statement said, ‘In addition to the regular audits that Walmart conducts under its Ethical Sourcing programme, the company recently announced that it would conduct more in-depth inspections in Bangladesh relating to electrical, fire and building safety. These facility audits are conducted by accredited and internationally recognised auditing firms and are based on our Ethical Sourcing scope.’

The garment sector leaders said the sector was now passing through a severe crisis as H&M, the second-largest fashion retailer of the world, was rethinking its sourcing strategy after Walmart, the largest retailer in the world, published the name of 250 garment factories as ‘black listed’.

Persson told the Financial Times that the Swedish brand was looking at countries such as Mexico and Brazil after opening its first store in the southern hemisphere this year in Chile.

‘When that part of the world is growing, which it is, it becomes even more interesting to look at production in South America or Central America. So, we are exploring that opportunity,’ he said in an interview.

Although Persson made no direct link with last month’s Rana Plaza disaster he underlined the importance of sustainability when considering production, pointing to the possibility of production in northern or even southern Africa.

‘We are looking at [Africa] as well,’ he said. ‘Again, it goes back to quality, lead times, capacity, prices, sustainability and where we are present as well.’

H&M was one of the first of some 30 mainly European retailers to sign up last week to a legally binding agreement to pay for factory repairs after independent inspections.

Persson denied that he had promised last year to double H&M’s sourcing in Bangladesh in the next five years but said that if suppliers respected the company’s code of conduct ‘we are willing to stay and we will reward the partners that are working best with these issues’.

He has called on Bangladesh to raise its minimum wage of $38 a month and to revise it annually as the last change was in 2010. Rethinking of the sourcing policy of H&M can be a severe blow for the RMG sector as the EU was the major destination of Bangladeshi apparel, said Siddiqur Rahman, former vice-president of the Bangladesh Garment Manufacturers and Exporters Association.

If the H&M shift its sourcing to Latin America and Africa it will give a negative signal about Bangladesh across the world, he observed.

‘Now we have to perform to regain the image of the garment sector otherwise the buyers will shift their sourcing and country will suffer a lot,’ Siddiqur said.

Former BGMEA president Abdus Salam Murshedy said the apparel sector of Bangladesh was facing continuous threat from the buyers and obviously it was a concern for the exporters.

Walmart has blacklisted 250 factories of Bangladesh but a good number of factories of them are not doing business with the company for two or three years and a number of factories have already informed the retailer that they are not willing to work with it (Walmart), he said.

Salam, also the Exporters Association of Bangladesh president, said, ‘It is not ethical to include the names in the “black list” that are not willing to do business with Walmart.’

He also said that there are many factories in

the ‘Walmart’s black list’ that are highly compliant and working with the more valued brands than Walmart.