Bombay Rayon of India acquires UK- based clothing wholesale company.

Bombay Rayon Fashions Limited, leading manufacturer of fabrics and garments in India, announced that it has acquired UK-based DPJ Clothing Ltd., clothing wholesale and distribution company. This acquisition was proposed by Bombay Rayon at $ 2.9 million. DPJ Clothing has become a foreign subsidiary of Bombay Rayon Fashions Limited.

With this acquisition, Bombay Rayon expects that it will be able to expand its　customer base in the European region for its apparel products and to improve outsourcing and distributing other related products in the region.

Bombay Rayon started as a manufacturer of textile fabrics initially, and is now considered one of the leading manufacturers and active exporters of textiles and apparel in India with facilities for product development, a design studio and marketing systems. Its production is based at factories in New Mumbai, Silvassa, Sonale and Bangalore with state-of-the-art manufacturing facilities.

Synthetic fiber production in India expected to increase at annual rate of 9 % reaching 3.82 million tons in fiscal 2011.

According to the Ministry of Textiles of India, man-made fiber production during the 11th five year plan (April 2007-March 2012) is expected to expand from 2.67 million tons in fiscal 2007 to 3.82 million tons in fiscal 2011 at an annual rate of 9 %. Of this, polyester is expected to increase at an annual rate of 10%, with staple increasing from 830 thousand tons to 1.21 million tons and filament increasing from 1.35 million tons to 1.97 million tons.

Cotton production is expected to expand from 4.82 million tons in 2007 (cotton year) to 6.63 million tons in 2011.

India announces textile industry reform plan.

The finance minister of India, Minister Chidambaram presented the following textile industry reform plan at a deliberation of bills in parliament, revealing its future perspective of active global promotion of India's textile industry.

• Under the Scheme for Integrated Textiles Parks, 26 parks have been approved so far out of 30 sanctioned. Increases in budget provision for these parks have been suggested from Rs.1,890 million in fiscal 2006 (April 2006 - March 2007) to Rs.4,250 million (about $ 96 million) in fiscal 2007 (April 2007- March 2008).
• The Technology Upgradation Fund (TUF) scheme is to be continued. Increases in allocation for TUF have been advocated from Rs.5,350 million in fiscal 2006 to Rs.9,110 million in fiscal 2007. Handlooms will be covered under the TUF scheme.
• It is planned to increase the budget provision for the handloom sector from Rs.2,410 million in fiscal 2006 to Rs.3,210 million. For promotion of the handloom sector, a cluster approach for the development of the handloom sector was introduced in fiscal 2005, and 120 clusters were selected.
• Rs. 225 million a new scheme for the coir industry will be introduced for modernization and technology upgrades. Major areas for production enhancement are Kerala, Karnataka, Tamil Nadu, Andhra Pradesh and Orissa.
• The health insurance scheme has so far covered about 300,000 factory workers and will be extended to more workers. The scheme will be enlarged to include ancillary workers.
• Customs duty on polyester fiber is to be reduced from 10% to 7.5%. Customs duty on raw-materials of polyester fiber such as DMT, PTA and MEG will be reduced from 10% to 7.5% as well.

India reduces customs duty on polyester staple and filament to 7.5%.

India will reduce customs duty on polyester staple fiber and filament yarns from the current 10% to 7.5%.

There are two ways of looking at how Reliance Industries and Indorama Synthetics, one of the major polyester manufactures in India, would react to this reduction of import tax, which are a reduction in price or in operating rates to keep the profit margin.

(Note): The international price for POY is 64,630 rupees ($1,469) against 65,700 rupees ($1,493) for the domestic price and the international price for staple fibers 59,570 rupees ($ 1,354) against 65,500 rupees ($1,489) for the domestic price; the domestic price is relatively high compared to the international price.

Colbond of Netherlands expands non-woven factory in US.

Colbond of the Netherlands will expand its non-woven factory in North Carolina in the U.S. The company has factories in the Netherlands, Germany and the U.S. This expansion is mostly for geotextiles, and it will produce non-wovens for roofing materials and soundproof floor mats for apartments with new equipment.

Cambodia concerns over competition with Vietnam in Europe and US.

According to the Garment Manufacturers Association in Cambodia, Cambodia's garment industry is feeling a new threat from increased competition with Vietnam in the market in Europe and the U.S. posed by the accession of Vietnam to the WTO in January 2007.

Buyers in Europe and the U.S. still place greater importance on costs for their merchandise procurement according to the association, and even though labor costs are lower in Cambodia, Vietnam keeps the upper hand with its better infrastructure and lower total production costs. Since the main exports of Cambodia belong to the same genre as those of that of Vietnam, competition between the two countries is inevitable. On the other hand, Cambodia has the image of complying with labor standards through various programs which is an advantage since there is no need for major buyers from Europe and the U.S. in merchandise procurement from Cambodia to worry about a boycott posed by consumers' anti sweatshop movements.

According to the association, there are currently about 280,000 garment workers employed in about 300 factories in Cambodia, and exports of garments amounted to about $2.2 billion in 2005.

Outlook for slower growth in garment exports from Thailand in 2007 under appreciating baht.

According to the Thai Garment Manufacturer Association, garment exports are expected to turn flat in 2007 because of the appreciating baht. The association is expecting garment exports will amount $ 7.2 billion, up 3 % from the previous year, but it sees the possibility of zero growth if the appreciation of the baht continues. In 2006, the Thai baht appreciated by 14% against the US dollar which resulted in garment exports stopping at a 2.1% increase and suffering from competition with China, India and Bangladesh. Because of this, the association has cautioned private companies to be prudent regarding excessive orders and new investment.

Sharp increase in fabric exports from Vietnam.
Five times as many as previous year for Saudi Arabia.

There is a sharp increase in fabric exports from Vietnam. Fabric exports in 2006 from Vietnam amounted $195.5 million, up 69% from the previous year. Major export destinations for Vietnam fabrics are China, Cambodia and Saudi Arabia. Its biggest customer is China which amounted to $18.70 million, up 144% from the previous year. Exports to Saudi Arabia had the highest percentage gain which amounted to $16.50 million, about five times as much as the previous year (396% increase), and those for Cambodia amounted to $17 million, up 67 % from the previous year. The average unit price (FOB price) was $0.88/yard, up 30% from the previous year. Textile exports from Vietnam in total in 2006 were $5.8 billion (estimated), up 19.3%.