Cotlook A Index - Cents/lb (Change from previous day) 20-09-2018 88.30 (+0.15) 20-09-2017 79.35 20-09-2016 77.50 New York Cotton Futures (Cents/lb) As on 23.09.2018 (Change from previous day) October 2018 79.28 (+0.21) December 2018 79.30 (+0.17) March 2019 79.65 (+0.14) 24th SEPTEMBER 2018 6 ways in which a falling dollar-rupee will impact the Indian economy More rate cuts likely at GST Council meet Industry pins hope on textile revival US-China trade talks stall amid tariff standoff China might avoid Trump tariffs by exporting via Vietnam The future is in Africa, China already knows it Cotton and Yarn Futures ZCE - Daily Data (Change from previous day) MCX (Change from previous day) Oct 2018 22270 (0) Cotton 15580 (-155) Nov 2018 22260 (+20) Yarn 26135 (+175) Dec 2018 22310 (-20)
Transcript
Cotlook A Index - Cents/lb (Change from previous day)
20-09-2018 88.30 (+0.15)
20-09-2017 79.35
20-09-2016 77.50
New York Cotton Futures (Cents/lb) As on 23.09.2018 (Change from
previous day) October 2018 79.28 (+0.21)
December 2018 79.30 (+0.17)
March 2019 79.65 (+0.14)
24th SEPTEMBER
2018
6 ways in which a falling dollar-rupee will impact the Indian economy
More rate cuts likely at GST Council meet
Industry pins hope on textile revival
US-China trade talks stall amid tariff standoff
China might avoid Trump tariffs by exporting via Vietnam
The future is in Africa, China already knows it
Cotton and Yarn Futures ZCE - Daily Data
(Change from previous day)
MCX (Change from previous day) Oct 2018 22270 (0)
Cotton 15580 (-155) Nov 2018 22260 (+20)
Yarn 26135 (+175) Dec 2018 22310 (-20)
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------------------------------------------------------------------------------------------------- 6 ways in which a falling dollar-rupee will impact the Indian economy
Curb on imports to bring rupee to 68-70 level: Department of Economic Affairs
More rate cuts likely at GST Council meet
Industry pins hope on textile revival
Indian fabric makers eye Bangladesh
Focus on quality of cotton, stakeholders told
In 2 days, all downhill for Punjab’s cotton farmers
HNSS to boost cotton farming
Inquiry into funds of 2 garment units: One unit shifted project site without govt approval
Kakatiya textile park to come up in 2019 -------------------------------------------------------------------------------------------------
US-China trade talks stall amid tariff standoff
Sri Lanka : VAT reduction hailed by textile and fabric industry
AmCham Cambodia cautions US against possible sanctions
Myanmar : Greenback appreciation costs textile industry
China might avoid Trump tariffs by exporting via Vietnam
The future is in Africa, China already knows it
Malaysia : Economist - An ageing nation needs GST
Bangladesh : Green garment factory owners left frustrated
USA : More change ahead for New York’s shrinking garment district
Cambodia : Labour Ministry issues directives to address wages and indemnity
6 ways in which a falling dollar-rupee will impact the Indian economy Hareesh V of Geojit Financial Services said the rupee turned strongly bearish versus the dollar since March as the US and China started imposing tariffs on each other
Source: Hareesh V, moneycontrol.com, September 23, 2018)
Geojit Financial Services
The Indian economy has posted the fastest growth among all other major economies since the beginning of this year. A sense of confidence in the economy among investors has reflected in the stock market too, with the benchmark Nifty rallying about 9 percent since January. However, despite a strong growth rate, the rupee has plunged to record lows, shedding more than 12 percent during the year. At present, the rupee is the worst performing Asian currency. A strong greenback, coupled with a collapse in emerging market currencies and escalation in the global trade war, affected the Indian currency. The dollar has risen more than 7 percent since the country started imposing tariffs on imports, pressurising other global currencies. The economic crisis in Turkey and Argentina too worsened sentiment. The impact of the trade standoff between the world’s top two economies and its implications on the Indian economy are still unclear, but it has evidently hit the domestic currency. The rupee started the year at a two-and-half year high of Rs 63.28 versus the dollar, but thereon it traded with a mild negative bias. However, the trend had turned strongly bearish since March as US and China started imposing tariffs on each other.
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Since then, the rupee has weakened more than 11 percent so far. Investors sought safety in the dollar and pulled out of emerging market currencies ahead of a worsening global trade war. A weak currency impacts an economy in multiple ways:
Higher landing cost for commodities
Currency weakness leads to higher landed cost for commodities imported into the country. Crude oil and gold are instances of such commodities which are traded higher in the domestic market in comparison with their international counterparts. Impact on current account deficit A weak currency is likely to widen India's current account deficit further (CAD). A falling rupee versus the dollar increases the cost of imports and increases export revenues in rupee terms. The current weakness in the rupee is mostly attributed to widening CAD, which is higher due to the crude oil import bill. As per government data, India's oil import bill rose over 50 percent in the first four months of this fiscal as against the same period last year. Since India imports more than 80 percent of its crude requirement, it is resulting in huge dollar outflows. Impact on flows Foreign capital inflows help in bridging the gap between imports and exports. Since our imports are more than exports, there is potential for an increase in the trade deficit. Adds to inflationary pressure Currency weakness is likely to result in inflationary pressure as well. Higher costs of commodities would exert pressure on overall economic activity and may force the central bank to tweak its monetary policy to tackle inflation.
Impact on GDP
Higher inflation is likely to hit short term growth prospect of the economy as well. Increased input cost due to weak currency may impact the profit margin of companies.
Rise in interest costs for India Inc
Corporates may also face an additional burden on interest costs when the central bank lifts rates. This may impact sentiment of foreign investors in the stock market. However, a weak rupee versus the dollar usually benefits exporters and people who are remitting currency into the country.
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Disclaimer: The author is Head Commodity Research at Geojit Financial Services. The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Home Curb on imports to bring rupee to 68-70 level: Department of Economic Affairs (SOURCE: PTI
, The Hindu, September 23, 2018)
The government is concerned about the rupee’s slump and its adverse impact on the Current Account Deficit The government will “very soon” implement the second set of measures including curb on imports of non-essential items to shore up rupee to 68-70 level against the U.S. dollar, Economic Affairs Secretary Subhash Chandra Garg said, terming the about 12 per cent slide in the currency as a temporary phenomenon. The government had earlier this month announced easing of overseas borrowing norms for manufacturing companies, removal of restrictions on foreign portfolio investors (FPI) investment in corporate bonds and tax benefits on Masala bonds to shore up rupee and check widening of current account deficit. Now, the Centre has prepared a list of non-essential items whose imports can be curbed and also drawn up a separate list of goods whose exports can be boosted with a little policy intervention, Mr. Garg told PTI
in an interview here.
On the rupee continuing to fall despite the first set of measures, he said “full components of the steps have not been implemented as yet, especially curb on import of non-essential items and boosting some of the exports etc. Those are still to come. These measures are at the final stage. Very soon, these should be announced,” he said. A group headed by the Commerce Secretary has “more or less” completed its task on finalising the list, the DEA secretary said. “Once it gets the nod from higher-ups, it will be announced...It will happen very early,” he added. The rupee has been battered for over a month now amid sell-offs sweeping emerging markets following a rout in the currencies of Argentina and Turkey. The Indian currency has set a string of record lows, dampening some of the optimism about India’s world-beating economic growth. The rupee on last Friday closed at 72.20 to the U.S. dollar, higher than the record low of 72.91 it had hit earlier this month. The government, Mr. Garg said, is concerned about the rupee’s slump and its adverse impact on the Current Account Deficit (CAD). The CAD, difference between inflow and outflow of foreign exchange, widened to 2.4 per cent of GDP in the first quarter. The fall in rupee has shot up oil import bill for the world’s fastest-growing oil user by 76 per cent
to USD 10.2 billion in July. Mr. Garg said the appropriate level for the rupee is 68-70 per dollar, with 72 being the reasonable outer limit for depreciation. With first round of measures not having any desired impact, he said there is no question of government being helpless as there are more measures to be taken to rein in falling rupee. Mr. Garg further said that in view of present circumstances, CAD and present capital flows, 68-70 range appears to be a reasonable level. “When it suddenly went down from 69 to 72, the government rightly got concerned that this kind of sudden depreciation is not justified,” he said. Mr. Garg added that the Indian economy recorded an excellent growth of 8.2 per cent in the first quarter, inflation is low, macroeconomic fundamentals are good, the government is strictly maintaining fiscal deficit and expenditure programme is going on well. “So why on earth should there be such a depreciation of 10-12 per cent in 6 months or 6-9 per cent in two months. That’s why the Prime Minister took a meeting (on September 14). The Finance Minister got into the act and several decisions were taken and some of them are under implementation,” he said. He expressed confidence that with the measures announced and those in works, the rupee will regain comfortable levels. “I am sure this is temporary and this will come back (to the comfortable level),” he said.
Home More rate cuts likely at GST Council meet (Source: Annapurna Singh, Deccan Herald, September 24, 2018)
The 30th meeting of the GST Council will be held on Friday, September 28. A dip in revenues notwithstanding, the GST Council may decide to cut rates on more items this week to keep the consumption story going which typically slows in an election year despite a rise in government spending. The 30th meeting of the GST Council will be held on Friday, September 28. Finance Minister Arun Jaitley, who will chair the meeting through video-conferencing, is expected to announce a further pruning of the peak 28% rate structure. Jaitley has promised to remove all items from that, barring a few super luxury and sin goods.
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Goods expected to see their way out of the 28% tax bracket include cement, certain automobile parts, digital cameras and certain categories of television sets, sources close to the development told DH. These may be placed under 18% or 12% slabs. Cement is the only item of construction which remains under the 28% slab. Its removal from the highest bracket makes sense as construction activity, which slows during monsoon, is expected to pick up from next month. After all, Jaitley believes GST has given a lot of purchasing power to consumers. “There is no better opportunity for consumers to make purchases than in the environment which the GST has created. It is an opportunity to celebrate the biggest tax reform since Independence,” the minister said recently. In the last last 14 months since GST was implemented, the council has slashed rates on 191 items from the 28% category. Originally, it consisted of 226 goods. Apart from cement and automobile parts, tyres, automobile equipment, motor vehicles, yachts, aircraft, aerated drinks, betting and demerit items like tobacco, cigarette and pan masala remain in the 28% slab. Even though the Centre has suffered a loss of about Rs 70,000 crore on account of reduction in tax on goods and services, the move has reduced the cost to consumers, increased purchasing capacity and added to the economy, Jaitley said. The budgetary estimates of GST collections were more than Rs 1 lakh crore per month but the revenues have not met the target barring in April when collections topped Rs 1 lakh crore. However, the finance minister expects that the forthcoming festive season will give a boost to GST revenues.
Home Industry pins hope on textile revival (Source: Shenoy Karun, The Times of India, September 24, 2018) KOCHI: Kerala should try to build textile industry hubs as it creates higher number of jobs in the local economy than any other industry, said industry leaders. With government implementing a single-window clearance system for industries, chances of developing a hub is a realistic target, they said. “Other states are aggressively promoting textile industry and setting up hubs. This is because they have understood this industry’s job creation potential. Jharkhand is setting up a hub in 500 acres, where Aravind Mills and Page Industries are starting manufacturing facilities,” said Kitex Garments MD Sabu M Jacob.
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He added that Odisha is also promoting the industry in a big way that they have termed it an essential service, where flash strikes will not be permitted. “Many states are setting up multiple hubs; there are states with five or six hubs,” Jacob said. Kitex has serious expansion plans. “We will be investing Rs 2,000 crore by 2025 to set up new manufacturing facilities. Our board of directors have passed the plans for Rs 920 crore investments,” he said, adding that the new investment destination has not been chosen and Kerala's single-window clearance is an attractive proposition. Maryan Apparel MD Thomas Olickal believes that there is a huge opportunity in providing uniforms to schools and companies in India, which Kerala should tap. “Kerala’s domestic market for uniforms could alone sustain 20 companies like that of mine,” he said. There is an increased demand for workwear in India, which is a result of growing awareness among corporates regarding the benefits of workwear, said a report from Technopark, a management consultancy. “Indian hospitals, for instance, have understood that when adopted, uniforms not only assist patients in identifying the hospital staff, but also create an atmosphere of professionalism and team spirit among staff. Other sectors are now realizing these benefits,” it stated. Workers in manufacturing and allied sectors such as automobile, oil and gas are becoming aware of occupational hazards, and hence companies are enforcing a safer work environment, added the report. “Vendor companies that have tie ups with MNCs are often required to comply with international safety standards. Furthermore, having workwear assists in creating a better corporate identity. These drivers are fuelling growth in India’s workwear market,” said the report titled ‘Work Apparel Uniform and Non-Uniform’. Jacob said that small export oriented units of Kerala could tap the Middle Eastern markets, easily. “There are small markets in GCC countries which could be individually serviced by Kerala companies,” he said.
Home Indian fabric makers eye Bangladesh (Source: Jagaran Chakma, The Daily Star, September 23, 2018) Indian manufacturers look to capture a bigger share of the fabric market in Bangladesh as the country has already shown its strength in the global readymade garment supply chain, India’s textile raw material exporters said.
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Bangladesh, the second largest garment exporter worldwide, largely relies on India, apart from China, for garments raw materials. Currently, Bangladesh imports fabric worth $7 billion a year to run its garment sector. Of them, fabric worth more than $2 billion come from India and $5 billion from China, according to industry people. “Bangladesh is a better garments manufacturer than India and the garment sector is dependent on fabric import, which has created an opportunity for Indian fabric manufacturers,” said Rahul Kaviya, director of Ayma Creations Pvt Ltd, India. Kaviya spoke while taking part in the 19th Textech Bangladesh International Expo 2018, at International Convention City Bashundhara in Dhaka. Around 1,200 foreign companies, including some 92 textiles related firms, took part in the four-day fair. Ayma Creations is a Gujarat-based manufacturer of suiting fabric and exporter to Gulf countries. Kaviya said he would not have known about the demand of fabric in Bangladesh had he not taken part in the event. “I discussed with a number of garment manufacturers in Bangladesh and they showed interest to purchase our products,” he said. Ayma Creations is also thinking about importing a huge volume of garment items from Bangladesh as prices are cheap compared to those in Vietnam and Indonesia, he said. “The quality is also very good,” Kaviya told The Daily Star. He said another advantage of importing garment items from Bangladesh is that Ayma Creations will not have to pay duty as Bangladesh has duty-free access to Indian market. This offers a good chance to garment manufacturers to boost their exports to India, Kaviya said. Rajesh Kumar Somani, director of Ramkumar Textiles Pvt Ltd, sees a good future for the Indian fabric manufacturers in Bangladesh thanks to increasing demand for Indian fabric. He lauded the entrepreneurs of Bangladesh for developing the garment sector. Somani said the fabric manufacturing sector is yet to develop in Bangladesh compared to India largely because of non-availability of raw materials. Ramkumar Textiles exports to Latin American and Gulf countries. The fair has opened the door to export its products to Bangladesh, Somani said.
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Hanish Vikmani of AM Industries Ltd, an exporter of premium shirting and suiting fabric, said he is hopeful to start exporting products to Bangladesh as a number of customers have shown interest. Rawalwasia Yarn Dyeing Pvt Ltd, a manufacturer and exporter of woven and knitting fabrics, is trying to enter the market in Bangladesh. And Pradip Marathe, head of customer service of the company, believes that Rawalwasia Yarn will get a good market share as it manufactures high quality products. Babita Singh, proprietor of Ashok Vatika, a Kolkata-based fashion house, said she is looking for partners to set up joint venture in Bangladesh. Ashok Vatika will provide technical support along with fabric. “Our products have big demand among the fashion-lovers in Bangladesh. During Eid-ul-Fitr, a huge quantity of our products is imported to Bangladesh. So, I am confident about capturing a share of the market.”
Home Focus on quality of cotton, stakeholders told (Source: The Hindu, September 24, 2018) The Indian Cotton Federation has stressed on the need for all stakeholders to focus on quality of cotton. J, Thulasidharan, president of the federation, said at its annual meeting on Sunday that grading of cotton needs a closer look. “Only when quality is assured we can move to the next stage of branding of Indian cotton. Contamination needs to be controlled at every stage,” he said. Further, packing of cotton needs to be standardised. Ginners use different kinds of packing, he pointed out. The Government should look at the possibility of bar coding cotton bales. Cotton farmers need to adopt better irrigation systems to conserve water. The Government and banks should come forward to fund cotton purchase. Mr. Thulasidharan said the Cotton Advisory Board had estimated the cotton production this cotton season from October 2017 to September 2018 to be 370 lakh bales. For the next season (2018-2019), farmers have shown more interest in cotton. However, due to pink bollworm and pest attacks, the volume of the crop is expected to be between 360 lakh bales and 380 lakh bales. “As of now, the supply position will be able to meet the demand for cotton at the current spindleage. Regarding prices, they were on steady to firm levels,” he said.
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In 2 days, all downhill for Punjab’s cotton farmers Even paddy growers stare at huge losses
(Source: Perneet Singh, The Tribune, September 24, 2018)
Bathinda : With rains lashing several parts of the region over the past couple of days, cotton and paddy farmers are at the receiving end of nature’s fury, apprehending a considerable crop loss.
The Tribune team visited various villages and found the farmers worried while praying for the rain to stop. Cotton farmers are the worst hit as the rainfall has arrived just when they were close to harvesting what could have been a bumper crop.
Meeha Singh of Gobindpura village, a small farmer who had sown cotton on his 1-acre land, said, “Had the weather remained dry for another week, I would have reaped a rich harvest, but all my hopes are dashed. I had a tough time rearing the cotton crop, protecting it from threats such as white fly. However, the rain has now led to moisture in blooming cotton bolls, a majority of which have also blackened.”
Jarnail Singh, another cotton farmer from Dhelwan village, said he apprehends losing at least 25 per cent of the yield due to an unexpected spell of rainfall at the fag-end of the season. He said he had been hoping for good returns from the crop cultivated on his 1.75 acres, but it didn’t turn out the way he desired. PAU’s senior farm economist Dr GS Romana said, “The rains could not have come at a worse time for the cotton farmers, as they were about to reap a rich harvest. However, the rainfall will now lead to discolouration of cotton, affecting its quality, besides taking a toll on its productivity. In case of paddy too, the lodging of crop will adversely affect its quality and yield.” Incidentally, experts were anticipating a good cotton crop this year in terms of yield, as weather conditions had remained conducive for it till now. This, despite the fact that the area under cotton cultivation in Punjab has declined by almost 1 lakh hectares compared to last year. The cotton had started arriving in the market in areas like Fazilka and the farmers were upbeat, as their produce was already fetching a price of above Rs 5,800 per quintal. Earlier, the government had raised the MSP of cotton from Rs 4,020 to Rs 5,150 per quintal.
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Meanwhile, the paddy farmers are equally dejected, particularly the ones who had opted for early varieties. Lachhman Singh from Gobindpura village said, “I have sown paddy on 15 acres, which I had taken on lease at a rate of Rs 53,000 per acre. The rainfall, accompanied by strong winds, has led to flattening of crop and now I fear whether I would be able to take home some money after shelling out the hefty lease amount.” Kaur Singh, another farmer with 5 acres, said the lodging of paddy will result in discolouration of grain. Apart from it, the harvesting of crop will cost the farmers more now, he added. BKU Ekta Ugrahan leader Shangara Singh Mann said the state government should step in and extend a helping hand to the farmers in this hour of crisis. He said the government should carry out a survey of the crop loss and follow it up with awarding adequate compensation to the farmers.
Home HNSS to boost cotton farming (Source: The Hans India, September 24, 2018)
HNSS to boost cotton farming Anantapur:
Cotton production and acreage is now on a downward trend due to a pink bollworm plague striking and damaging the crop and adversely affecting its yield. In the past, the extent of cotton cultivation was in a mere 2,000 hectares in the district.
After the introduction of BT cotton, cultivation of cotton saw a revolution and the acreage gradually increased in the district increased to 70,976 hectares in 2014-15 year. The highest cotton production in the state is in Guntur and Krishna districts. Cotton farmers feel that good days for cotton would come after the completion of the HNSS Project. The district will get assured water for the various crops and is expected to change the landscape of the district. Assured water can boost cotton crop prospects as well. Agriculture scientist John Sudheer told ‘The Hans India’ that 2015-16 and 2016-17 year was very bad for cotton due to the severe drought conditions on one hand and the pest called as bollworm which struck the plants on the other hand. The acreage dwindled to 22,000 hectares.
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The best year for cotton was in 2014-15 when farmers went for the drought resistant crop in both red and black soils and registering the highest coverage of 70,976 hectares in Anantapur and 2.78 lakh hectares in Kurnool. The farmers earned handsomely at the rate of Rs 5,000 per quintal and even if a minimum four quintals were produced in a single acre, they would earn Rs 20,000 per acre. However, the decline started from 2015-16 year when the acreage dropped down to 66,000 hectares and in the subsequent year to 22,000 hectares in Anantapur, which is a steep fall from the 2014-15 figures. In a double crop system also, cotton is being preferred due to uncertain monsoon conditions. Crop can withstand the dry spell for 30-40 days with less post-harvest operations. Compared to chillies and tobacco, cotton cultivation is less risky and more remunerative. Distinct variation in productivity levels are also observed in different regions like coastal area recording high productivity levels compared to Rayalaseema and Telangana. The adverse factors for the crop include vagaries of monsoon, increased cost of cultivation, cultivation of cotton in red soils and lack of high yielding and multiple insect and disease resistant varieties besides lack of location specific agri-techniques, imbalanced use of fertilisers and heavy incidence of suckling pests mainly leafhopper. Development of resistance in sucking pests, lack of antibiotic tolerant BT cotton hybrids and increased cost of cultivation due to high picking cost are the major problems dogging farmers particularly in Anantapur and other parts of Rayalaseema. Farmers feel that emphasis should be on the development of BT cotton varieties and hybrids and on the establishment of a cotton research institute in Rayalaseema.
Home Inquiry into funds of 2 garment units: One unit shifted project site without govt approval The inquiry report reveals that Tararani Mahila garment co-operative society, on November 24, 2017, purchased land in Akharwai village in Latur district, claiming that it was not possible to build the project on the existing land in Kadaknathwadi village in Osmanabad. (Source: Vishwas Waghmode, The Indian Express, September 23, 2018)
An inquiry ordered by Chief Minister Devendra Fadnavis into how two garment units in Osmanabad allegedly attempted to cheat the government and still managed to get state funds has revealed further violation by one of the units. The unit has shifted the project site and even started construction without the government approval. On March 20, The Indian Express reported that two cooperative textile units — Tararani and Sai Mahila garment co-operative societies — based in the Kadaknathwadi village of Osmanabad’s Vashi taluka, were granted funds despite a 2014 inquiry report that concluded that the two had committed “serious irregularities in depositing their own members’ share capital for the proposed units as required under the National Cooperative Development Corporation (NCDC) scheme”. Over seven years, the two companies withdrew money multiple times from what was stated to be the members’ share capital for the projects. Also, one of the companies also transferred almost its entire share capital by cheque to the other, which the latter then presented to officials as evidence of its share capital. Following the report in The Indian Express, Fadnavis had directed secretary, Textile Department, to probe the matter and submit a report within a month. The inquiry, conducted by Atul Patne, textile secretary, has found that the two garment units withdrew the members’ share capital multiple times. They justified this by saying that “the two units deposited 10 per cent members’ share capital into the bank accounts before the funds were granted to them”. However, the inquiry has not probed the other issue of how one unit transferred almost its entire share capital by cheque to the other unit. Besides, the inquiry report reveals that Tararani Mahila garment co-operative society, on November 24, 2017, purchased land in Akharwai village in Latur district, claiming that it was not possible to build the project on the existing land in Kadaknathwadi village in Osmanabad. The society, on February 8, 2018, submitted a proposal to the Textile Director, seeking approval for a change of site. The proposal is still pending for approval at the state government level, says the inquiry report. “The society, however, has already commenced the construction of project on the proposed site, submitted for approval, and the construction is completed up to plinth level as the per the photographs made available by society,” notes the report. It further says that the Sai Mahila garment co-operative society has completed 55 per cent construction of project as per the certificate submitted by the society’s architect. The report, which has suggested no action against the two units, was submitted by Patne in June 8, 2018 and was approved by Fadnavis on August 9.
Officials from the Textile Department admitted that as per norms, Tararani Mahila garment co-operative society should have taken approval before commencement of construction. “It seems the society has assumed that the government will give approval to a change of site and has gone ahead with starting the construction. Normally, a project site is finalised by government that verifies a proposal submitted by a society mentioning business prospects,” said an official requesting anonymity, adding that the post-facto approval is likely to be given for the change.
Home Kakatiya textile park to come up in 2019 The TSIIC has decided to commence online allotment of plots in the Mega Textile Park within a week and entrepreneurs can submit their applications for the land. (Source: Telangana Today
, September 23, 2018)
Telangana State Industrial Infrastructure Corporation (TSIIC) logo. Hyderabad:
The much-awaited Kakatiya Mega Textile Park at Warangal is getting ready to be inaugurated by April-May. The officials of Telangana State Industrial Infrastructure Corporation (TSIIC) have geared up to commence online allotment of plots within a week and is expecting investments worth about Rs 1,075 crore in the first phase of the park spread over 1,190 acres.
A team of TSIIC officials led by its Chairman Gyadari Balamallu and Managing Director E Narasimha Reddy held a meeting with entrepreneurs from Telangana who are operating units at Sholapur, Surat, Bhiwandi and other textile hubs in the country on Saturday. These entrepreneurs were popular for manufacturing Turkey towels, bedsheets, sarees, suitings and shirtings among other textiles which are also being exported abroad. The team of entreprenuers expressed happiness over the Textile Policy of Telangana government and stated that they were ready to open their units if land and other incentives were offered. They sought plots of 1,000 sq.m size for setting up small and medium units with an investment of Rs 1.8 crore each, providing employment to about
1,000 persons directly and indirectly. The TSIIC authorities responded positively to their requests and assured to provide necessary lands in the upcoming Kakatiya Mega Textile Park which will house major textile industries. The TSIIC has decided to commence online allotment of plots in the Mega Textile Park within a week and entrepreneurs can submit their applications for the land. Industrialists should pay 10 per cent of the land cost at the time of registration and pay the remaining amount in installments. “In case of setting up the units within prescribed time, the industrialists will get 50 per cent subsidy in land cost, 25 per cent subsidy on capital and equipment, besides supplying power at subsidised rate,” Balamallu said. The Kakatiya Mega Texile Park is envisaged to attract investments worth Rs 9,000 crore over the next five years. Around 14 major textile companies have signed memoranda of understanding with the State government for setting up their industries with an investment of Rs 3,400 crore immediately after the foundation laying ceremony. TSIIC managing director Narsimha Reddy informed that works pertaining to approach road, internal roads, and railway over bridge are being completed at a brisk pace. Similarly, laying of pipelines for supply of 30 MLD to the Textile Park and construction of a 133 KV sub-station for power supply, also will begun shortly. He said that the Textile Park will be ready by April-May.
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GLOBAL:
US-China trade talks stall amid tariff standoff (Source: Kevin Liptak
, CNN, September 22, 2018)
Kevin Liptak
(CNN)
Negotiations between the United States and China have stalled after President Donald Trump ordered new tariffs on Chinese goods.
Senior US officials, led by Treasury Secretary Steven Mnuchin, have been working to end the trade standoff through diplomacy. A new round of talks was in the works for the coming weeks, but Trump's decision to slap tariffs on an additional $200 billion worth of Chinese imports appears to have forestalled the negotiations for now. On Friday, a senior White House official said no new meetings are currently planned. "There is no scheduled US-China negotiation at the moment," the official said. "That doesn't mean it wouldn't happen." While no meetings between US and Chinese officials had been formally scheduled ahead of the tariff announcement, officials had been laying the groundwork for a new round of talks at the end of September that now appear to be off. "There is no meeting that is on the books," the senior White House official said. The tariffs Trump announced on Monday marked an escalation in a growing trade war between Washington and Beijing. Trump's aides are divided on a best strategy. Mnuchin has led diplomatic efforts to convince China to alter its trade practices. Meanwhile, hardliners within the administration have advocated a tougher approach. Despite warnings of political fallout, Trump has sided with the hardliners, at least for now. He remains convinced that a trade battle with China is winnable and is bolstered by polls showing his tariffs are popular among his base of Republican voters. But analysts and even some of Trump's aides worry the fallout from his trade war will not fade quickly, even if a deal is struck. A number of businesses, including Target,
Apple, and Walmart, the country's largest retailer, warned the administration in a letter that new tariffs on Chinese goods would result in price hikes. And Jack Ma, the billionaire Alibaba chief, said this week the budding trade war has undermined his promise to bring 1 million jobs to the US. "This promise was on the basis of friendly China-US cooperation and reasonable bilateral trade relations, but the current situation has already destroyed that basis," Ma said. "This promise can't be completed." Beijing has vowed to retaliate and is poised to slap $60 billion worth of tariffs on US goods starting next week. Even as he was announcing new tariffs this week, Trump threatened an additional round on $267 billion worth of Chinese imports if Beijing retaliates against US farmers or industrial workers. That would mean essentially all Chinese imports to the US would be subject to tariffs. At the same time, Trump has not ruled out further negotiations with China, including a possible meeting with Chinese President Xi Jinping, perhaps on the sidelines of the G20 summit set for November in Argentina. Some officials have said talks may have a greater chance of success after November's midterm elections, though deep Republican losses could drive Trump to stake out a harder line on an issue he believes is politically advantageous. Trump has hailed his good relationship with Xi as a reason to believe the trade standoff can be resolved. "They want to make a deal, and let's see if we can make a deal," he said on Friday evening during a campaign rally in Missouri. Trump has also questioned whether his tough trade stance has pushed China to be less cooperative in applying sanctions pressure on North Korea. "I hope they're still helpful," he said during an East Room press conference this week. "There's a question about that." CNN's Cristina Alesci, Jeremy Diamond, Matt Rivers and Donna Borak contributed to this report.
Home Sri Lanka : VAT reduction hailed by textile and fabric industry (Source: Sanjeevi Jayasurya, September 23, 2018) The stakeholders of the fabric and textile industry hailed the government decision to reduce Value Added Tax (VAT) to support the sector.
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“We have no issue with regard to the tax reduction. However, we were worried about the cess been removed. The government considered our request and the cess is in place. This will support the industrialists in the long term,” President Local Textile Manufacturing Association Nimal Perera said. Recalling the past, he said that Sri Lanka had a vibrant textile industry. “We lost our way due to the removal of duties and the whole industry collapsed. We faced difficulties. However, with the re-imposition of cess in 2006-7 the industry started moving on. The main reason for the re-introduction of cess was to prevent the under-invoicing that was going on. The industry was revived and heavy investments were coming in to the industry which include textile, power loom, knitting, yarn manufacturing, dyeing and finishing,” he said. The textile imports to the country increased by five folds during the last few years. This was more than the requirement. This disparity and the falling rupee value have a negative impact on the textile imports, he said. Minister of Finance and Mass Media Mangala Samaraweera considering the request made by the stakeholders in the fabric industry reduced the VAT on imported fabric to 5 percent. Minister Samaraweera signed the gazette notification last week. Earlier fabric was subjected to Rs. 100/kg cess at the time of imports. The budget 2018 has proposed to impose a 15 percent VAT on goods and the Value Added Tax Act No 14 of 2002 was amended accordingly. The new VAT scheme came in to effect from August 16 2018. As fabric was also subjected to this 15 percent VAT, the importers, traders and industrialists using fabric as raw material for making ready-made garments appealed to the Minister of Finance to provide them some relief as small scale traders and industrialists who are not covered under VAT Act have been adversely affected. The Minister made the decision to amend the VAT Act further to reduce the VAT on imported fabric to 5 percent considering the possibility of giving a helping hand to proposed small scale industrialists under the Enterprise Sri Lankan scheme. The Enterprise Sri Lanka, the subsidised loan scheme by the Ministry of Finance and Mass Media has introduced an interest subsidised loan scheme for medium and small scale manufacturing industrialists and they can obtain fabric as raw material at a low cost.
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AmCham Cambodia cautions US against possible sanctions (Source: Fibre2Fashion, September 22, 2018)
In a letter to US lawmakers, the American Chamber of Commerce Cambodia (AmCham) representing US businesses there has cautioned that any US Government sanctions against the country
’s garment industry would result in ‘dire consequences’, harming most at the bottom of the socioeconomic pyramid and pushing the southeast Asian nation further into Chinese arms.
The US House of Representatives passed the ‘Cambodia Democracy Act of 2018’ on July 25 that could pave the way for sanctions against the country. This was after former opposition leader Kem Sokha was charged with treason and his party was dissolved by the supreme court last year.
The chamber observed that despite significantly increased levels of investment from China, many of the skilled labour and management jobs within Chinese-run garment companies are held primarily by Chinese professionals, according to Cambodian media reports.
This, coupled with a perception that the corporate culture within these Chinese-run organisations is difficult to tolerate, implies that the average Cambodian would choose to work in a US concern, the letter said.
“As a community, this leaves America, Americans and American businesses in a strong position, provided we continue to engage,” it added. (DS)
Home Myanmar : Greenback appreciation costs textile industry (Source: Shine Lin Aung, Eleven
Myanmar, September 23, 2018)
A currency exchange counter in Yangon. (Photo-Kyaw Zin Phyo)
Due to the greenback appreciation, local textile industry is making losses, according to Myanmar Textile Entrepreneurs Association. The value of a US dollar has increased from Ks1,500 in early September to Ks1,650 on September 20. Yin Yin Moe, Secretary of Myanmar Textile Entrepreneurs Association said: “The greenback appreciation has impacts on local garment industries as we have to import all materials from foreign countries. In addition, it also affects some garment industries which import its products. Even textile industries have suspended their sales due to losses.” The textile shops will resume their sales after the situation returns to normal. “We cannot expect to what extent the textile industries suffer losses. I think it would be about 50 to 80-per-cent loss in the local market, she added. Local textile industries have stopped the recruitment of new workers due to losses. Some garment factories have temporarily suspended some workers from their works.
Home China might avoid Trump tariffs by exporting via Vietnam (Source: Dat Nguyen, VnExpress International, September 24, 2018)
Containers of China Shipping and Cosco are loaded at a port in Ho Chi Minh City. Photo by Reuters/Kham Vietnam could suffer collateral damage if Chinese businesses use made-in-Vietnam labels to avoid U.S. tariffs, experts warn. Economist Vu Dinh Anh said it is “highly possible” that Chinese businesses would seek to export their goods through Vietnam to the U.S. amid the trade war between the world’s two largest economies.
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One way they can do this is exporting their products to Vietnam and asking a Vietnamese business to label them as “made in Vietnam,” he told
VnExpress International.
They can also set up factories in Vietnam and manufacture products with materials imported from China, he added. “This will result in bad consequences for Vietnam as the U.S. might impose the same tariffs on Vietnam as it did on China.” Vietnam’s textile and footwear industry insiders expressed the same concern. Pham Xuan Hong, chairman of the HCMC Association of Garment, Textile, Embroidery and Knitting, said it is possible Chinese garment products would be labeled as made in Vietnam and exported to the U.S. “We propose that the government control this situation by tracing products’ origin and severely penalizing violations. Otherwise the whole industry will have to suffer consequences,” he told local media. Diep Thanh Kiet, vice chairman of the Vietnam Leather, Footwear and Handbag Association (LEFASO), said there is a “very high” possibility that Chinese bags would be exported to the U.S. through Vietnam. If Chinese bag makers want to export to the U.S., they can set up a factory in Vietnam to facilitate the exports, and this can be easily done with a budget of just $200,000, he said. If this cannot be controlled, there could be grave consequences for Vietnamese textile firms since “the U.S. might apply the same tariffs as they have done on China,” he warned. This has happened before with steel. In May this year the U.S. slapped anti-dumping duties of 199.76 percent and countervailing duties of 256.44 percent on imports of cold-rolled steel produced in Vietnam using Chinese-origin substrate. Anh said Vietnam should not repeat this mistake twice since there is a possibility that the U.S. would conduct investigations if it has any suspicion about product origin.
A chance to thrive
But there are opportunities for Vietnamese consumer goods exports amid the trade war. About 27 percent of Chinese goods set to be affected by the new tariffs are consumer goods, and Vietnam exports many similar items to the U.S., said Can Van Luc, chief economist with the Bank of Investment and Development of Vietnam (BIDV).
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“The escalating trade war will create opportunities for Vietnamese exporters of consumer goods to expand their market share in the U.S.,” Luc said. A recent report by Bao Viet Securities (BVSC) said footwear and textile products have a “great opportunity” to grab U.S. market share from China. Since the Chinese yuan has weakened against the U.S. dollar and dong, Vietnamese businesses would be able to import garment, leather and other materials cheaper, and this would result in more competitive prices in the U.S., the report said. Other products to benefit from the trade war are wooden furniture, electronics, sports equipment, and toys, BVSC said. Viet Capital Securities (VCSC) pointed out in a report, “Vietnam will benefit from the trade war if U.S. businesses look for an alternative supply chain and Americans start buying Vietnamese goods.” It added that foreign direct investment might shift to Vietnam from China to avoid U.S. tariffs. The U.S. administration said it would begin to levy new tariffs of 10 percent on about $200 billion worth of Chinese products on September 24, with the tariffs to go up to 25 percent by the end of this year. China retaliated immediately with 5 and 10 percent tariffs on $60 billion worth of U.S. products. The U.S. has been Vietnam’s largest trading partner this year, with $30.2 billion in turnover in the first eight months, according to the Ministry of Planning and Investment.
Home The future is in Africa, China already knows it (Source: The Herald, September 24, 2018) During the past decade, China has been investing a lot of money in sub-Saharan Africa: Some Western observers worry that this represents a new form of colonialism. Given the continent’s history with European conquerors and rich countries trying to cheaply exploit its natural resources, that suspicion is understandable. But although China can sometimes be predatory — for example, when uneconomical projects saddle African companies or governments with unpayable debt — the new African investment bears little resemblance to the colonialism of old. Colonialism, and the pseudo-colonial exploitation that sometimes followed independence, was mostly about extracting natural resources (and sometimes slave
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labour). Although securing access to natural resources is surely one of China’s goals, its investments in Africa go beyond extractive industries. The sectors receiving the most Chinese money have been business services, wholesale and retail, import and export, construction, transportation, storage and postal services, with mineral products coming in fifth. In Ethiopia, China is pouring money into garment manufacturing — the traditional first step on the road to industrialisation. Receiving foreign investment isn’t the only way that a country can industrialise. But as China itself has shown in dramatic fashion during the past few decades, attracting foreign capital can be a key part of an effective growth strategy. When a company from China — or the US, Japan, France or elsewhere — employs Africans to make clothes, program software or build houses, African workers immediately share the benefits. This also provides income to local African entrepreneurs, who create new businesses to sell things to the foreign companies and their employees. And if countries are smart about appropriating foreign technology, it can lead to long-term productivity increases as well. As Africans learn techniques, ideas and tricks from foreign companies (and invent new ones themselves), they will gain the leverage to capture an ever-bigger slice of the value that foreign investments create — and as their productivity improves, that value will grow in size. Meanwhile, African governments will control access to an increasingly large share of the world’s young customers, and will be able to use this leverage to extract ever-greater concessions — money, technology and favourable contract terms — from multinational corporations. Instead of standing on the sidelines and wringing their hands over China’s investments, Westerners and people in other rich countries should be looking to copy or surpass China’s efforts to tap the final frontier of emerging markets. The biggest reason Africa will be important is population. Look up any map of total fertility rates, and you can easily see that with a few scattered exceptions, sub-Saharan Africa is the only place where people still have large families. Though family sizes will decrease as the continent becomes richer — this is already occurring — Africa is still expected to experience much more population growth than anywhere else: By the end of this century a third of the world’s population, and a greater fraction of its young people, will be African. The future of Africa is synonymous with the future of the human race. As the continent becomes more populous, those companies with an established presence in Africa will be better positioned to sell into burgeoning African markets. They will have the local market knowledge, connections and distribution channels to beat out rivals who failed to invest early.
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Several other trends make investment in Africa a more tempting prospect. Literacy rates have increased rapidly. Malaria deaths have fallen by almost half since the turn of the century, and hunger and child mortality have both plunged. A healthier and more-educated populace is much better equipped to read instructions, absorb information and show up for work consistently. Meanwhile, increased literacy and internet access is uncovering vast pools of previously hidden African talent. Governance is also improving. The big wars of the 1990s and 2000s are mostly over. Democracy is proliferating, as coups and strongman autocrats become rarer. Measures of governance have improved. More stable government means a more stable environment for businesses looking to invest. There is no shortage of potential investment destinations. The continent has 54 countries, sporting a dizzying array of institutions, languages and comparative advantages. Six countries in particular — Mozambique, South Africa, Nigeria, Ghana, Zambia, Ethiopia and Kenya — have emerged as early leaders: My Bloomberg Opinion colleague Tyler Cowen is especially enamoured of Ethiopia, whose sense of historical pride he believes will drive it to seek rapid growth. The Chinese seem to concur. The second question is what to invest in. Africa still isn’t competitive with China in terms of manufacturing costs, but as Chinese wages continue to rise, the gap is narrowing. But an even more important sector could be services. A recent Brookings Institution report shows that in many parts of Africa, growth is now concentrated in tradable services related to agriculture, information technology and tourism. Kenya, Rwanda, Senegal and South Africa have emerged as IT service leaders. As manufacturing becomes more automated around the world, expect the service sector to grow in importance. A third possibility is housing and infrastructure. Those billions of young, wealthier Africans will need places to live, roads to travel on, solar energy to power the air conditioners that protect them from global warming, water infrastructure, and so on. So Westerners shouldn’t worry that investing in Africa means repeating their ancestors’ colonial sins. In the modern global economy, funding productive industries is more important than grabbing resources — a win-win relationship instead of exploitation. China understands this, and appreciates Africa’s huge, untapped productive potential. The West should, too. – Moneyweb.
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Malaysia : Economist - An ageing nation needs GST (Source: Robin Augustin, Free Malaysia Today, September 23, 2018)
Economist Firdaos Rosli says the 6% GST should not have been abolished but its rate reduced and exemption list tweaked KUALA LUMPUR: An economist has criticised the government as being short sighted in its decision to scrap the goods and services tax (GST), saying it has apparently failed to consider the reduction in income tax collection as the Malaysian population gets older. Speaking to FMT, Firdaos Rosli of the Institute of Strategic and International Studies (Isis) noted government statistics showing that the proportion of elderly Malaysians has been steadily increasing, from 5.4% of the population in 1970 to 8% in 2010. According to the statistics, the elderly will make up 23.6% of the population by 2050. “The government cannot generate revenue from retirees,” Firdaos said. “That is why the GST was important in collecting revenue from a broad group of people. “The sales and services tax (SST) is inherently weak in collecting taxes because it has a narrow base and a lot of room for tax evasion.” He said the 6% GST should not have been abolished but its rate reduced and exemption list tweaked. He also disagreed with the government’s plan to eventually abolish the 1 Malaysia People’s Aid (BR1M), saying it should be allowed to remain as the only cash transfer aid. “If we abolish BR1M and boost other subsidies like fuel subsidies, this will be a worse option of helping the poor because blanket subsidies benefit even those who don’t need it,” he said. He cited research showing that recipients of cash transfers purchase goods that help them become more productive. These would include food to keep them healthy, he added. However, he said the continuation of BR1M must come with the abolition of all other cash aid so there wouldn’t be any overlap.
“If we have only one form of cash aid, we can evaluate its effectiveness and set targets,” he said. “If we have multiple cash aids like we do now, it is difficult to determine how the money is used and how effective the different forms of aids are.” Prime Minister Mahathir Mohamad is on record as saying that BR1M made people dependent on the government, but Firdaos said there would always be pockets of people needing help. “The aid mechanism can always be improved upon to prevent abuse,” he added.
Home Bangladesh : Green garment factory owners left frustrated (Source: Refayet Ullah Mirdha, The daily Star, September 24, 2018)
A green factory of Viyellatex Group, a leading garment maker based in Gazipur. Star/file Green garment factory owners, who have spent billions of dollars for setting up the units, are left frustrated as the international retailers are not rewarding them with higher prices for the initiative. The factories cost 20 to 30 percent more to construct than the regular ones for their special design units. “The buyers do not pay even a single cent more for sourcing from a green garment factory,” said KM Rezaul Hasanat, chairman and chief executive officer of Viyellatex Group, a leading garment exporter. Bangladesh has the highest number of LEED (Leadership in Energy and Environmental Design) green garment factories certified by the US Green Building Council (USGBC). Currently, 67 green garment factories are in operation and another 300 are in the process of getting the certification. Of the top 10 green garment factories in the world, the first seven are also located in Bangladesh. Had Viyellatex Group not constructed its two green garment factories in Gazipur, it could have employed 30 percent more workers, Hasanat said.
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“I regret making the green factories,” he said, adding that the buyers pay much lower prices to Bangladeshi garment makers than the Chinese ones. Kutubuddin Ahmed, chairman of Envoy Group, which has constructed the world's first platinum-rated green denim factory, echoed the same. “The buyers do not pay extra prices to us, but the branding gives us a mileage in selling the goods -- they give priority to green factories,” said Ahmed, whose main intent for setting up green factories was to lower the consumption of water and power. Md Fazlul Hoque, managing director of Narayanganj-based Plummy Fashions, the platinum-rated knitwear factory, and Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association, echoed the same. “There is no special privilege for the green garment factories; only the buyers' priority,” Rahman said, adding that the buyers do not even want to quote a higher price for factory remediation as recommended by the Accord and Alliance experts. Although the buyers do not pay additional money for the virtue of sourcing from a green factory, there is a room for bargaining for a little more price per unit due to the green factories, Hoque said. For instance, if the price of a T-shirt from a normal-compliant factory is $3, it is possible for green factories to get 10 cents more. “The buyers though do not pay high prices to green factories out of their own volition,” Haque added. Regardless, the prices of Bangladeshi-made garment items has declined 40 percent over the last 15 years, Rahman said.
Home USA : More change ahead for New York’s shrinking garment district (Source: LNR,
September 23, 2018)
Hundreds of thousands of garment workers once toiled in the sweaty, elbow-to-elbow workshops of midtown Manhattan before the whirring of sewing machines was mostly silenced by foreign competition. But the city‘s garment district isn‘t dead yet. A group of manufacturers, landlords, designers and politicians has a plan to preserve a remnant of the garment industry in a neighborhood where about 5,000 people are still employed in workshops mostly serving higher-end designers, while doing away with zoning rules that critics said put onerous restrictions on prime real estate.
City Hall wants to preserve at least 300,000 square feet for garment manufacturing, but allow real estate developers to bring in more 21st century businesses. Property owners have already pledged to fill 300,000 square feet with apparel manufacturing, and the city is seeking to add more. For now, that‘s millions of fewer square feet than factories occupied in the industry‘s glory days from the 1920s to the 1960s. No one covers what is happening in our community better than we do. And with a digital subscription, you'll never miss a local story. The plan, if approved by the City Council, would lift 1987 zoning that reserved about 4 million square feet of space in the garment district‘s high-rises for apparel-production businesses. Today‘s garment workshops occupy only an estimated 700,000 square feet, according to the city‘s Economic Development Corp. And many say that number will likely dwindle away without the city‘s protection. “The truth is, it‘s a dying industry in the garment district, and who knows what would have happened to the remaining jobs without the city‘s intervention,” said EDC spokeswoman Stephanie Baez. A Council vote is expected in the next few months, after more reviews to tweak details. Under the plan, landlords would get a tax break for setting aside at least 25,000 square feet in a building for manufacturers, with tenants offered the option to sign leases for at least 15 years. The city would also spend $20 million to acquire a building that would be dedicated to manufacturing. The proposal represents a retreat from an earlier plan that would have done away with special protections entirely. That idea had been opposed by representatives of New York City‘s fashion design and theater industries, which still need highly skilled garment workers close by. “The New York fashion world depends on the Garment Center‘s tight-knit cluster of specialty suppliers and skilled workers,” said Manhattan Borough President Gale Brewer, who teamed with Council Speaker Corey Johnson to craft the new plan. Gabrielle Ferrara, who with her mother runs Ferrara Manufacturing, one of the neighborhood‘s largest garment factories, said she supports the plan. Something needs to be done, she said, to stabilize the shrinking district. “We‘re at a crisis point, 100 percent at a crisis point,” said Ferrara, whose 30-year-old business employs about 70 people and works with high-end designers. “When the city talks about investing in machinery and technology, the fact is, you can‘t invest without permanent real estate space,” she said. “I‘m nervous for the two-thirds of the industry with short leases of just months or a year; there‘s no safety net for them.”
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As recently as 1960, many of the clothes sold in the United States were made in Manhattan‘s garment district, where the city now proposes to preserve apparel-production space from 35th to 40th streets, just south of Times Square, and from Broadway to Ninth Avenue. Remnants of the old district remain. On the second floor of a massive building on West 37th Street is Absolute Couture, where ethnic Chinese workers sit all day at rows of sewing machines — not unlike the old days, at first glance. But the workers are better paid and more skilled than the ones who once eked out a living in shifts of 12 hours or more, with an occasional rat or mouse scurrying by. Workers overheard on the street now speak Spanish, Arabic, Chinese and Korean, with Yiddish still spoken by Jewish businessmen who once dominated the district. Newcomers to the neighborhood include shiny boutique hotels, spiffy restaurants and bars, and even a tiny hotel called Nap York where guests may reserve a sleeping “pod” for as little as an hour. Recent tenants also include artists, architects, and firms specializing in advertising, technology and media. They mingle with old-fashioned wholesale storefronts that offer everything from clothing, buttons and beads to trimming, just pockets and pleating work. Outside, workers pushing racks of garments on wheels squeeze past a cacophony of trucks, cars, bicycles and people on foot. Sitting on Seventh Avenue is a tribute to the human hands at the heart of the neighborhood: Israeli-born Judith Weller‘s life-size sculpture of her father, a Jewish man wearing a skullcap at a sewing machine, next to a needle threading a button.
Home Cambodia : Labour Ministry issues directives to address wages and indemnity (Source: Sen David, Khmer Times, September 24, 2018)
Workers are to be paid their wages bi-weekly starting in January.
The Labour Ministry on Friday issued two directives on wages and indemnity to improve labour conditions for workers. The first directive titled Wage Payment for Workers/Employees states that from January onward company owners are required to pay employee wages once every two weeks, noting that other benefits are to be paid once per month. The second directive titled Payment of Seniority Indemnity states that beginning in January seniority indemnity is required to be made twice a year. It said that workers’ seniority indemnity is equal to 15 days of their wages and benefits per year, adding that payments should be made in June and December. Ministry spokesman Heng Sour said that the directives are aimed to ensure that workers consistently receive their wages and indemnity. “This is a kind of good news for all employees,” Mr Sour said. “They can get their wages twice per month and their seniority indemnity twice per year.” He said that workers employed prior to 2019 and workers with unfixed contract durations will also be provided indemnity from their employers.
Mr Sour noted that workers in the garment sector who have been employed for more than two years will get 30 days of indemnity. As for workers outside the garment sector, those who have worked for more than one year will receive 15 days of indemnity, he said. In July, Prime Minister Hun Sen said that the government has spent $22 million on garment workers’ missing wages after factory owners closed shop and fled. Mr Hun Sen said that the government has forced factory owners to pay indemnity in order to avoid problems should they flee. “The government has spent a lot of money to save workers,” he said. “The government is also demanding indemnity for workers.”
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The Garment Manufacturers Association in Cambodia earlier this year said that it welcomed worker protection and payments of indemnity, but noted that the move could financially burden employers. Toun Saren, Collective Union of Movement of Workers secretary-general, said fleeing employers continue to be one of the most distressing labour issues. “I think it’s good for the protection of workers because there are many cases of fleeing employers that left workers with missing wages,” Mr Saren said. Sao Phalla, a garment worker who previously rallied for missing wages, said that the implementation of the two directives would protect workers. “Some workers try to work for five to ten years, but many employers flee before that moment,” Mr Phalla said. “So it’s good that the government is forcing employers to pay yearly indemnities.”
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