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This refers to “MSME outreach drive starts today: Loan approvals for Rs 1-10 mn in 59 mins” (November 2). At a time when banks in general, and state-owned banks in particular, are burdened by stressed assets, and are taking deep haircuts for the resolution of the cases referred to the National Company Law Tribunal, this move raises the question whether the proposed disbursement will add to the existing non-performing assets or serve the purpose for which it is given.
The funding made by the banks for the Integrated Rural Development Programme and other government- sponsored schemes have not served the purpose. The MSME sector is crucial when it comes to job creation and supports the Make in India programme. As compared to the corporate sector, the credit requirement is small, and the viability rate is high as most entrepreneurs are inexperienced. The intention and the objectives behind the move are noble, yet the success depends on how the government develops a conducive environment for the smooth functioning and development of MSME units. At this juncture, the banks have to take it as a business opportunity, but while ensuring the speedy delivery of credit, they should not compromise on the quality of the asset they are going to create. Banks have to be more vigilant and prudent in identifying the borrower, extending need-based credit and ensure its timely recovery.
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Cotton millers of the district have opposed the fresh guidelines for procurement by the Cotton Corporation of India (CCI).Even as the CCI has increased minimum support price (MSP) of cotton by 30 per cent, it has also raised the lint percentage of the crop. Lint is separated from cotton seeds through ginning. The MSP of raw cotton has been increased from `4,350 per quintal to `5,540. Cotton crop arrives in the market for procurement from December to February.
As per the new procurement norm, lint content of crops harvested in December should be 31.1 per cent (pc), 31.7 pc in January and 32.40 pc in February. However, district members of Cotton Association of Odisha said the lint percentage in cotton crops grown in Rayagada has been gradually declining for the last three years to 28-30 pc. “The quality of the lint and fibres varies greatly due to seasonal conditions during cultivation and the way the crop is handled after harvest,” said B Laxman Rao, Rayagada representative of Cotton Association of Odisha.
The CCI purchases Fair Average Quality grade raw cotton from the farmers and gives it to ginning and pressing mills – selected through tender process – across Odisha to processes it into lint and cottonseed. CCI sources said if the crop does not meet the lint percentage, MSP cannot be assured.
“The present procurement guideline laid down by the CCI is not acceptable because the crop quality has been declining over the years,” Rao said. Earlier, the ginning and cotton mill owners had proposed to the CCI to consider 31 pc lint, 3 pc trash and 9 pc moisture as a unit to procure cotton but it was turned down by the higher authorities of the corporation.
Millers said there were no such conditions for cotton procurement earlier and the new norms will affect them as well as the farmers. As it is, ginning mill owners are getting 20 pc less ginning and pressing charges compared to other States, said Radha Krisha, a ginning mill owner here. There as 27 ginning and processing mills in Odisha and eight of them are in Rayagada.
The US government move to withdraw GSP (Generalized System of Preferences) benefits to India from last Thursday will impact export of handloom made home textiles products. Among the home textiles that would face the heat include products made of silk, jute and specialised products such as wall hangings, banners and national flags.
National flags predominantly manufactured and exported by SME sector account for the largest of exported item at Rs 466 crore ($64 million).
Ujwal Lahoti, Chairman, Textile Export Promotion Council told BusinessLine that India is the single largest country in the world with the highest number of handlooms and it would be impossible to source these products in required quantity from other countries. Concessional tariff under GSP, benefits the US consumers as much as it benefits Indian exporters, he added. Handloom fabrics, floor covering and silk products are manufactured by cottage industry in rural India thereby providing employment to a large number of female workers helping in poverty alleviation and sustainable development of small clusters. Premature withdrawal of GSP benefit will cast a financial burden on both the Indian manufacturers and the US retailers, said Lahoti.
Meanwhile, the interest subvention on pre- and post-shipment finance for exports by MSMEs to 5 per cent from 3 per cent and sanction of loan up to Rs 1 crore to GST-registered MSMEs would boost their confidence. Lahoti said it will provide a much needed support and encouragement to the MSME sector which contributes significantly to the textiles exports. A web portal has been launched through which MSMEs can avail of loans up to Rs 1 crore from Small Industries Development Bank, SBI, Bank of Baroda, PNB, Vijaya Bank and Indian Bank.
The MSME sector accounts for about 45 per cent of manufacturing output and about 40 per cent of total exports. One of the problems for MSMEs is getting bank finances as majority of them are from informal sector and find it extremely difficult to raise funds for their business activities as credit appraisal is a major challenge, he said.
Bangladesh’s apparel exports to the United States in January-September of current year increased by 5.84 per cent to $4.16 billion from $3.93 billion in the same period last year.
The country’s textile and apparel export to the US in first nine months of current year totalled $4.34 billion with 5.63 per cent growth from $4.11 billion in the same period last year, according to the data of the Office of Textiles and Apparel under the US Department of Commerce released on Friday.
Terming the export growth positive, exporters observe that export orders from US to Bangladesh increased little bit in recent times.
They said that the ongoing trade war between the US and China created huge opportunity for Bangladesh to grab large volume of orders from the US and the export to the market would rise more in the coming days.
According to the data, in value base textile and apparel export, Bangladesh remains in the fourth position in the US market while the position of the county was sixth in volume base export.
In volume, Bangladesh’s export to the US in the first nine months of 2018 grew by 3.56 per cent to 1.82 billion square metres from $ 1.76 square metre in the same period last year.
In value base export, China remains in the first position in the US market followed by Vietnam and India.
Although, the US was the largest export destination for Bangladeshi textile and readymade garment, the country (Bangladesh) meet only 5.02 per cent of total textile and apparel import value of the US.
The OTEXA data shows that the US import of textile and apparel in the January-September period of 2018 grew by 4.49 per cent to $83.35 billion from $79.77 billion in the same period last year.
The US import of textile and apparel from China in the period grew by 3.47 per cent to $30.01 billion while import from Vietnam stood at $9.80 billion with 6.93 per cent growth.
Textile and apparel export of India in the January-September period of this year stood at $5.89 billion with 2.95 per cent growth from $5.72 billion in the same period of 2017.
‘The apparel export growth in the US market is positive and we are happy with the growth. I think RMG export to US market from Bangladesh would increase more in coming days,’ former Bangladesh Knitwear Manufacturers and Exporters Association president Fazlul Haque told New Age on Saturday.
He said that ongoing trade ware between the US and China created opportunity for Bangladesh to obtain more
export order from the US buyers.
‘Although the volume is insignificant, the US brands and retailers have already started shifting their orders to Bangladesh from China. If the US imposes duty on Chinese textile and apparel, a huge volume of orders will be shifted to Bangladesh,’ Fazlu remarked.
‘As per the data, the textile and apparel export of India to the US is higher than Bangladesh but if we calculate the export of only RMG products, Bangladesh is far ahead of India,’ he claimed.
According to the OTEXA data, the US import of textile and apparel products were 50.77 billion square metre equivalents in January-September of 2018, an increase of 4.9 per cent from year-to-date September 2017.
Imports of textiles were 29.80 billion square metre equivalents with an increase of 7.2 per cent from the year-to-date September 2017 while apparel imports in the period were 20.97 billion square metre equivalents which was 1.8 per cent up from the same period of last year.
They hope the Centre’s measures would help exports to bounce back
The Tirupur Exporters Association (TEA) on Saturday welcomed the Prime Minister Narendra Modi announcement of outreach initiatives for micro, small and medium enterprises (MSMEs) at a time when they were struggling to compete in the global market.
In a press release, president of TEA, Raja M. Shanmugham thanked the Prime Minister for the support by which not only the spirit of the MSMEs but also their confidence would increase and they could concentrate on boosting their business.
Also, Mr. Shanmugham said, raising the interest subvention to five per cent from three per cent as was requested by the TEA for the past two years would create a level-playing field with the competing countries.
He welcomed the stoppage of visit by inspector of factories as it would end police raj and enable the MSMEs to do business without any hassle.
Mr. Shanmugham expressed hope these measures would help exports to bounce back and witness positive growth.
State govt. afraid credit would go to PM Narendra Modi’
Union Minister for Textiles and senior BJP leader Smriti Irani on Sunday accused the TRS government of deliberately not taking up some of the social welfare schemes of the Central Government like ‘Ayushman Bharat’ as caretaker Chief Minister K. Chandrasekhar Rao feared that the credit might go to Prime Minister Narendra Modi.
Addressing an election meeting held at Amberpet, the constituency of party MLA G. Kishan Reddy, she said people of Telangana deserved a better deal than having a government ruled by a single family. “The true liberation of TS is when the dictatorial rule of KCR is defeated in the election to be held on December 7,” she observed, exhorting her partymen to reach out to the people seeking support for the party.
Pointing out that the next month were the key to gain people’s support, Ms. Irani hailed the candidature of Mr. Reddy and claimed there was no single charge of corruption or any other illegal activity.
Assured win
TS BJP president K. Laxman affirmed that the victory of Mr. Kishan Reddy was never in doubt and he was sure people will vote for the party as it is the only credible alternative.
Giving his action taken report, Mr. Kishan Reddy who was elected thrice from the constituency, claimed that 21 school buildings have been built during his tenure from three earlier, five electric sub-stations were commissioned at a cost of ?390 crore, more than 5,000 women were provided livelihoods.
The upcoming flyover in the area will ease traffic problems, he said and charged that KCR has no right to seek votes without fulfilling the promise of constructing one lakh houses for the poor.
Sri Lanka’s apparel exports have grown 9.2 percent to 451 million US dollars, in September with exports to America up 16.23 percent to 222 million US dollar, an industry body said.
Exports to the EU were marginally down by 0.57 percent to 173 million US dollars.
Exports to other markets were up 16.67 percent to 56 million US dollars.
Total exports up to September were up 5.04 percent to 3,732 million US dollars, with exports to the US up 5.85 percent to 1,664 million US dollars.
Exports to the EU were up 4.43 percent to 1,578 million US dollars.
Exports to the EU which peaked at 1,626 million US dollars up to September in 2014 fell to 1,473 million US dollars in 2015 amid a withdrawal of GSP+ duty free access and has since recovered.
Amid a political crisis in Sri Lanka, the EU envoy has warned that if Sri Lanka sees a return to human rights violations, GSP concessions could be withdrawn.
The world’s largest silk producer Guangdong Silk-Tex Group has announced its plans to set up shop in Kenya.
Top officials of the government owned company met President Uhuru Kenyatta in Shanghai, China, today during which they confirmed plans to set up business in Nairobi.
Officials of the company were led by their Chairman Ke Huiqi.
The company will not only setup a silk processing factory at the Export Processing Zone in Athi River but will also establish a silk farm.
The Guangdong Silk-Tex Group will establish a cocoon farm on an estimated 8,237 acres of land with capacity to handle the entire silk value chain covering cocoon procurement, silk reeling, weaving and trading.
The venture is expected to create over 300,000 jobs for Kenyans.
In another sitting, President Kenyatta met officials of Cherami China-Africa Investment Management, a firm that plans to construct a cancer treatment centre in Kenya, in partnership with the University of Nairobi.
The proposed cancer treatment and referral centre is envisioned to become the largest such facility in Sub-Saharan Africa and will be constructed next to the University of Nairobi’s Dental School.
The joint venture will include exchange programmes with leading Chinese universities as well as capacity building for Kenyan cancer experts.
The partnership will also include other Kenyan universities as well as explore opportunities in agricultural value addition.
The Kenyan delegation to the meeting included University of Nairobi VC Prof Peter Mbithi while officials of Cherami were led by its Director Chen Ruibing and CEO Wei Xiaolin.
Earlier, President Kenyatta and President Xi held bilateral talks at the Xijiao State Guest Hotel in Shanghai during which they discussed measures to strengthen trade and investment ties between Kenya and China.
At the meeting, President Kenyatta, who is one of the Chief Guests at the China International Import Expo, said the trade fair provides a platform for more win-win partnerships.
On his part, the Chinese leader gave a firm assurance that China will take proactive measures to correct the trade imbalance between Kenya and China.
In a day full of meetings, President Kenyatta also held talks with Chinese investors eyeing opportunities at the Lamu Port.
China is hosting the first ever import expo that is attended by hundreds of companies and participants from over 130 countries among them Kenyan horticultural farmers and traders.
China is using the Expo to showcase its willingness to open up its huge market to other countries.
President Kenyatta will also use the opportunity presented by the Expo explore additional markets for Kenya’s commodities especially agricultural produce.
Tomorrow, President Kenyatta is scheduled to deliver a keynote address at the official opening of the expo.
Cabinet Secretaries Peter Munya (Trade and Industry), James Macharia (Transport and Infrastructure), and Monica Juma (Foreign Affairs) are among part of the President’s delegation to the Expo.
Others are Principal Secretaries Chris Kiptoo and Betty Maina.
Garment exports to the US rose by 5.83 percent year-on-year to $4.17 billion in the nine months to September thanks to the increasing Christmas spending by the Americans and the ongoing US-China trade war.
The North American clothing retailers and brands have been placing more work orders after gaining confidence from the near complete factory safety inspection and remediation run by the Accord and Alliance, exporters said.
US consumers will spend an average of $1,007.24 during the holiday season this year, up 4.1 percent from $967.13 they spent last year, according to an annual survey by the National Retail Federation and Prosper Insights & Analytics.
Based in Washington, the National Retail Federation (NRF) is the world’s largest retail trade association.
The growth of garment export to the US indicates that Bangladesh is becoming a lucrative destination for the American retailers and brands following the US-China trade war, as predicted by analysts earlier.
N.C. State University will rename its textile college following a $28 million donation, the largest in the program’s 119-year history.
On Friday, Chancellor Randy Woodson announced that the college will now be called the Wilson College of Textiles, in honor of the family of alumnus Frederick Eugene Wilson Jr., a business owner from High Point.
The gift from the Wilsons will be invested in an endowment to provide ongoing support for faculty, research and facilities for the only textile college remaining in the United States, according to the university.
Fred Wilson is is chairman of the board of his family-owned business, Piedmont Chemical Industries, Inc., based in High Point. The company historically made textile chemicals that used yarn and fabric. The business was started in 1938 by Wilson’s father when the textile business was thriving in North Carolina.
