For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on tri-monthly basis.
根据 Fortune Business Insights 的报告,2022 年价值 944 亿美元的全球棉纱市场预计将从 2023 年的 828.1 亿美元扩大到 2028 年的 1006.8 亿美元左右,预计 CAGR 为 4% % 在估计期间。 估值上涨的原因被认为是影响成品纺织品质量的纱线的独特特性。
在纱线类型中,估计普梳纱部分在此期间显示出相当大的扩张,这是由于该产品用于制造羊毛线的增加使用。在估计期内,服装部门也将实现合理增长,这可归因于电子商务渗透率的提高、可支配收入的增加等。
为国内纺织行业的利益而增加的政府举措被视为推动棉纱市场增长的关键因素。 这些举措侧重于纺织行业的技能发展、基础设施建设和部门发展。然而,由于与合成纱线价格较低相比的价格竞争,行业扩张可能会受到阻碍。
亚太地区的棉纱市场份额预计在预测期内将大幅增长,这可以归因于人口增长和消费者支出增加对产品的需求不断增加。然而,据估计,欧洲市场在预测期内将实现有利可图的增长速度。 这是由多年来不断增长的原材料需求和产业用纺织品的兴起所推动。
全球阻燃服装市场 2023-2027 预计在未来五年内将增长 100104 万美元,在预测期内以 4.9% 的复合年增长率加速增长。
阻燃 (FR) 服装是技术纺织品领域的一部分,该领域是全球的阳光产业。
市场研究解决方案 Reportlinker 的“2023-2027 年全球阻燃 tecApparel 市场”报告提供了全面分析、市场规模和预测、趋势、增长驱动因素和挑战,以及涵盖约 25 家供应商的分析。
本研究确定可穿戴技术是未来几年推动阻燃服装市场增长的主要原因之一。 此外,通过零售和在线渠道不断增长的分销以及新兴经济体不断增长的需求将导致市场需求巨大。
一些领先的阻燃服装公司是 3M Co.、Ansell Ltd.、Arco Ltd.、Carhartt Inc.、Carrington Textiles Ltd.、Cintas Corp.、DEVA FM。 sro、DuPont de Nemours Inc.、Frham Safety Products Inc.、Honeywell International Inc.、Hultafors Group AB、Hydrowear BV、Kimberly Clark Corp. 等。
根据 IMARC Group 的一份报告,2022 年印度的纺织品回收市场规模达到 3.087 亿美元,预计到 2028 年将达到 3.75 亿美元,2023-2023 年期间的增长率(CAGR)为 3.4% 2028.
纺织品回收是对旧衣服、纤维废料、边角料等进行再加工和再利用的方法。这些材料通常来自地毯、轮胎、家具、鞋类、废弃衣服、毛巾和床单。
纺织品回收有许多环境和经济效益,包括降低水和土地污染水平、限制化学染料的使用、优化能源消耗、最大限度地减少对原生纤维的依赖等等。
模拟印度纺织品回收市场的关键因素包括对生态完整性服装的需求不断增加、可持续时尚的新兴趋势以及消费者对生产新服装对环境的不利影响的认识不断提高。
由回收纺织品、塑料和有机原材料制成的生态服装越来越受欢迎,这进一步促进了这一增长,这有助于限制浪费并最大限度地减少垃圾填埋场空间。
政府政策和非政府组织计划以及纺织废料数量的增加和回收技术的改进也在推动回收市场,除了各种技术进步和回收过程中日益自动化以及领先制造商的广泛研发之外。
2021 年全球智能和互动纺织品市场估计为 21.476 亿美元,预计到 2030 年估值将达到约 164 亿美元,从 2022 年到 2030 年的复合年增长率为 25.6%。智能和交互式纺织品是与边缘计算、云数据、人工智能 (AI) 和蓝牙低功耗 (BLE) 等技术集成的织物,可以监控和交流穿戴者的数据。
根据 Global Market Insights Inc. 发布的报告,在研发方面的投资激增,以制造能够在战争情况下提供伪装效果、智能感知和响应能力的装备精良的士兵制服,再加上面料中的智能技术,以实现更轻的负载和更少的设备,促进了智能和交互式纺织品在军事和国防应用中的使用。
军事用途的智能纺织品能够监测穿戴者的表现,并配备 GPS 系统、传感器和活动跟踪器,提供多种属性,即绝缘性能、防弹保护和防水面料。在这些因素的加速下,预计从 2022 年到 2030 年,军事和国防应用领域将以超过 28.5% 的复合年增长率大幅增长。
在区域格局中,预计到 2030 年,欧洲的智能和互动市场将出现大规模扩张,占据约 28% 的行业份额。
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on tri-monthly basis.
JELLYFISH SWIMWEAR(Code: MT0123-01)
30 PANMURE ST
ROUSE HILL
2155 NSW
AUSTRALIA
PRODUCT: BATIK APPAREL
EMPERIL-COMERCIO INTERNACIONAL S.A. (Code: MT0123-02)
RUA NOSSA SENHORA ASSUNCAO 1
ESPRELA – TROFA
4785-177
PORTUGAL
PRODUCT: POLYESTER FABRICS
MAXI IMPORT AS (Code: MT0123-03)
BJORNERUDVEIEN 15
1266 OSLO
NORWAY
PRODUCT: UNISEX APPAREL
本会不负任何交易后果。
欲索取联络 ,请联络本会办事处,并注明代号。
Fact.MR 发布的关于纺织染料市场的最新见解预测,到 2031 年,该市场的估值将超过 80 亿美元。快速发展的时尚趋势正在刺激对时尚服装的需求,促使制造商采用新的色彩组合和设计,推动销售,预计 到 2031 年以超过 6% 的复合年增长率推动市场扩张该市场在过去 5 年取得了令人瞩目的收益,到 2022 年底接近 60 亿美元。在此期间,年增长率约为 5%。 制造商预计将主要关注亚洲市场,印度和中国等主要国家将成为利润丰厚的增长中心。根据印度品牌资产基金会 (IBEF) 的数据,印度纺织业在 2018-19 财年占工业产值的 7%,预计到 2027 年估值将超过 230 亿美元。同样,根据纺织世界的数据,中国的化纤生产 超过 5000 万吨,占全球产量的 66% 以上。 这种趋势正在激励知名企业加大对这些市场的涉足力度。
市场研究的要点
• 对直接纺织染料的需求保持高位,到 2031 年将超过 20 亿美元
• 到 2031 年,活性纺织染料将以约 7% 的复合年增长率实现最快增长
• 预计粘胶纤维染料的复合年增长率约为 6%
• 涤纶纺织染料增长迅猛,复合年增长率约为 7%
• 美国纺织染料销售额可能会增加,2021 年达到近 7 亿美元
• 到 2031 年,印度、韩国和澳大利亚的总收入将略高于 6 亿美元
• 中国纺织染料领域的收入将超过 20 亿美元
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on tri-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on tri-monthly basis.
MAXI IMPORT AS (Code: MT0322-01)
BJORNERUDVEIEN 15
1266 OSLO
NORWAY
PRODUCT: UNISEX APPAREL
TARGET CONTRACT SRL (Code: MT0322-02)
VIA MONTE ROSA 27
LIMBIATE (MI)
20812
ITALY
PRODUCT: WOVEN FABRIC
SIAM BUSINESS & TRADING CO., LTD. (Code: MT0322-03)
1011-5 SONGWAT RD.KHWANG SAMPHANTHAWONG,
KHET SAMPHANTHAWONG, BANGKOK
10100 THAILAND
PRODUCT: LADIES APPARELS
CHEMISETTE (Code: MT0322-04)
16 DE SEPTIEMBRE NO.621
MONTERREY NUEVO LEON
MEXICO
PRODUCT: LADIES APPARELS, LADIES UNDERGARMENTS
根据 Future Market Insights 的最新研究,尽管 2020 年增长放缓,但在 2021-2031 年的预测期内,全球二手服装市场销售额预计将以 11.2% 的复合年增长率增长。
2021 年,衬衫和 T 恤占据了 29% 的市场份额,原因是随着职业女性劳动力不断扩大,消费者偏好产生了变化。
该报告进一步指出,由于存在大量较低的社会经济消费者基础,巴基斯坦占南亚二手服装销售额的 40% 以上,而危地马拉在拉丁美洲领先,在预产期内占据超过 30% 的价值份额。
这一增长归因于终端消费者生活方式的变化,加上工业化、城市化、经济发展和全球化,在过去十年加速了时装业的销售,特别是在发展中的国家和地区。电子商务也改变了购物体验,超过 60% 的人选择通过在线平台购买产品、服务和获取商品。该报告进一步提到,ThredUP 和 Poshmark 等公司的存在将在未来几年推动对廉价和生态替代新衣服的需求。 在线分销渠道的扩张也将是兆头。消费者对在线转售平台的认知度不断提高,快速增长的在线初创企业提供二手品牌、设计师商品和租赁民族服饰,这进一步推动了二手服装市场的发展。
中国产业用纺织品行业在两年内增长了 12%。根据国家统计局的数据,2021 年 1 月至 2021 年 9 月,非织造布和帘子布产量分别下降 1.01% 和上升 29%。过去两年,产业用纺织品行业的营业收入下降了 14.74%,相比之下,前两年的平均涨幅为 10.78%。在前两年平均增长 14.12% 之后,他们的整体收入同比下降了 63.78%。营业利润率为5.25%,比上年下降7.11个百分点。 31家上市企业第三季度营业收入下降1.15%,整体利润下降33.59%。例如,运输车辆用纺织品和过滤纺织品领域的上市企业增长强劲。
前三季度,非织造布、特种纱、麻绳(索)、丝带出口增长6.91%。非织造布出口下降了 4.52%。出口量增长8.06%。工业用纺织品出口额增长39.74%。化纤无纺布防护服(含医用防护服)出口下降79.81%。
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on tri-monthly basis.
PT.SHAILENDRA TSHAI INDONESIA (Code: MT0222-01)
UDANG 3 MULTI KAVLING A 03/03/KEL, KADU
KEC.CURUG, TANGERANG, BANTEN 15810
15810 TANGERANG INDONESIA
INDONESIA, REPUBLIC OF
PRODUCT: BABIES APPAREL
COMERCIAL COPELEC SA (Code: MT0222-02)
AV 18 DE SEPTIEMBRE 688
CHILLAN CHILLAN
CHILE
PRODUCT: LADIES APPARELS
LUCKY STAR WEAVING CO., LTD. (Code: MT0222-03)
33/8, 33/11 MU4, OMYAI, SAMPRAN, NAKORNPATHOM
73160 THAILAND
PRODUCT: YARNS
2020 年全球产业用纺织品市场规模为 1903.3 亿美元,预计到 2028 年将达到 2858.8 亿美元,从 2021 年到 2028 年的复合年增长率为 5.15%。
Verified Market Research 的一份报告称,由于全球人口以惊人的速度增长,预计纺织品的增长将在预测期内激增,从而导致采用现代技术来促进成果。
该报告按材料(天然纤维、合成聚合物、金属、矿物、再生纤维)、工艺(机织、针织、无纺布)、应用(运输纺织品、医疗和卫生纺织品、工业产品和组件)分析了产业用纺织品市场) 和地理。
由于跨境需求高,技术纺织品的出口活动增加,有利于市场增长。
然而,与传统的低成本替代品相比,该市场的增长主要是由于产品成本高而受到阻碍。这主要是由于用于制造这些技术纺织品或在制造过程中使用的原材料成本上涨。
在全球范围内,公司正在扩大产业用纺织品领域;例如,去年,土工建筑材料制造商NAUE推出了可生物降解的无纺土工布Secutex Green。
Freudenberg Performance Materials Apparel 推出了适用于 Freudenberg Active Range 中所有类型运动服的新型高弹性和透气衬垫和胶带。
同样,全球科技集团 Freudenberg 收购了总部位于英国的 Low & Bonar PLC,这是一家生产技术纺织品的公司,收购金额未披露。
印度政府也准备通过 PLI 计划吸引对这一产品类别的投资。
根据最新报告,到 2027 年底,全球自适应服装市场价值预计将达到 4087.6 亿,复合年增长率为 4.1%。
适应性服装是专门为有不同程度残疾的人设计的服装,包括后天残疾、先天缺陷、先天性发育障碍和其他身体残疾。专门为满足这些群体的需求而设计的服装可以为在英国生活的许多人提供一种赋权感并提高生活质量。不幸的是,对于有学习障碍的人来说,适应性服装通常是有这种类型障碍的人最不希望购买或穿着的。但是,有一些选项可以为这些人在款式、合身性和功能方面提供更多选择,使他们能够购买外观精美且功能良好的物品。紧身裤、紧身衣、袜子和裤子都是适应性服装,适合那些可能难以每天走路、说话或执行普通任务的人。紧身裤和紧身裤是最容易穿脱的可穿戴服装类型之一,这要归功于它们紧贴身体的方式,并且可以根据个人穿着者的体型和尺寸进行塑造。适应性服装(例如这些特殊类型的服装)采用高质量、耐用的材料制成,可抗撕裂、撕裂和褪色。
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
In order to allow manufacturers, importers and marketers adjust their production processes to comply with the new requirements; authorities will accept products that are legal before the effective date.
The major change in this new standard is that the generic names must be written without capital letters.
This new standard provides generic names and definitions for the most important natural fibres in accordance with the fibre constitution or specific origin.
The standard provides a list of names in common, together with the relevant standard designations and consistent with the International Standard ISO 6938:2012 ‘Textile-Natural Fibres-Generic Names and Definitions’.
One important change in this new standard is that the words ‘lana’ (wool), and/or ‘pelo’ (hair), can be now added before the generic name of some animal fibres.
Lana may be added before alpaca, angora, cashmere, camel, guanaco, llama, mohair, vicuna, yak, beaver and otter.
Pelo may be added before cow, deer, goat, horse, rabbit, hare, nutria, seal, muskrat, reindeer, mink, marten, sable, weasel, bear, ermine and arctic fox.
For apparel and apparel accessories, one or more permanent and legible labels must be attached at the collar, waist or any other visible location with the below labeling information in Spanish or in any other language.
In case of country of origin, it should have name and address of the manufacturer or importer.
The speed of the boss is the speed of the team. ~~~~~~Lee Iacocca
I watched a disaster movie entitled “San Andreas” recently. I was amazed by the speed of people from the movie in taking action to deal with the emergency situation caused by earthquake and its aftermath. This reminded me the first ever serious earthquake with a magnitude of 5.9 happened on 5 June 2015 in Sabah which had killed a number of school students.
From the fiction story of “San Andreas” movie to the real tragedy in Sabah, we have witnessed the importance of speed of authority to handle crisis. In one Formula One Racing, the team of mechanics are required to change the racing parts within the limited time to avoid affecting the performance of the car racer. The decision of changing parts during the race is extremely critical. Speed becomes one of the criteria of their expertise.
After the earthquake happened in Sabah, how should the authority react to the situation with clear responsibility, to ensure the stranded mountain climbers were saved? As what Robert P. Murgallis, a training specialist for Emergency Incident Policy and Analysis Programs once said, “There is no time out during a fire. You can’t tell the fire to wait for a minute while you consult somebody or look up the solution in a book.” Every second counts to save more lives. Likewise, quick decision can speed up the administrative flow to generate profit and increase productivity or even save lives in case of emergency in commercial industry.
Furthermore, leaders in the Textile and Apparel Industry may have experienced how the bureaucracy delays timely proceed to action. In particular, when the multi-level management is structured in such excessive bureaucratic culture, the whole structure is completely ineffective as the instructions from a higher level of their superiors are always needed. No inquiry or incidents can be handled in a short period of time without consultation and approval. Thus, this defeats the efficiency and causes frivolousness when there is a breakdown of machinery in the production floor.
Excessive bureaucracy is unwarranted as it increases communication procedures, seriously affecting the efficiency. It is very common that the high level executive cultural decision-making power lays in the hands of the highest level. This culture of making decision from top to bottom or from bottom to top approach will create “no one really cares” culture.
As what Max Weber said, “ Precision, speed, unambiguity, knowledge of files, continuity, discretion, unity, strict subordination, reduction of friction and of material and personal costs – these are raised to the optimum point in the strictly bureaucratic administration.” Try to imagine each layer of employees doing administrative or production work within parts, the consumption of time and energy being spent when they need to make decisions on the ground floor. In fact, unforeseen incidents cannot be solved in a short time.
Nowadays, most efficient leaders demand for reform bureaucracy and advocates reducing management levels flat management, some even prefer to decentralization. To achieve transformation of working norm, leaders must have intention to change the existing structure of the organization department for better productivity and remain competitive in the industry.
So, are you the type of leader to make your organisation the leap?
~ contributed by Mr. Liaw Fenn Yenn, TARUC Branch Campus Head on 9/7/2015~
Recently Prime Minister of Malaysia Dato’ Seri Najib announced a small change in his cabinet with 3 additional new ministers and 4 deputy ministers. It is no surprise that cabinet will be reshuffled if there is a reason for the change of cabinet. Certainly, there are always reasons for the change of cabinet based on political reasons or members who have retired, fallen sick or resigned from the post in the cabinets or other unknown reasons.
People always believe that reshuffles are good if those are not performing their duties should be relieved from their duties any time. In other words, reshuffles can give the cabinet a fresh image by bringing new and professional faces.
A big key word can be learnt from the recent cabinet reshuffle i.e. CHANGE. As a leader in the company, do you practice change in your organization structure like cabinet reshuffle? Why are changes important to the company? And how can reshuffles in the organization structure help to increase high performance company?
In any organization, reshuffles of staff duties is viewed as necessary to enhance effectiveness and efficiency by promotion and demotion of portfolios. It is not unusual to see a change in organization structure for smoother operations and better productivity. Staff like government minister is also indispensable.
There are following important aspects for the leaders of the Textile & Apparel Industry to look into from the recent minor change in the cabinet: –
1. Team building –The ability of each member will be contributed to the achievement of organizational objectives. In reality, there are always members who will sabotage other members out of the implicit motives that can be deadly to the attainment of common goals.
Just like the World Cup Soccer players, the way a team plays as a whole like Germany determines its success of becoming the World Cup Champion of 2014 held in Brazil on 14/7/2014. In organization, we need the committed staff members to play their roles with their skills.
Truly, it is not easy to get good and committed staff nowadays. Getting them to work together is tough. As a leader, it is imperative to build a good team for promoting the feeling that every staff member is unique and equally important.
2. Make Decisions
A leader must have the wisdom and power to make a change. Many a time, leaders have the authority but lack of power and strong will to make a drastic change in the management team. Leaders must consider different options, needs and potential. Certainly, there are members’ interest which will be sacrificed to benefit the company. Certainly, leaders make decisions to benefit their interest in some situations.
In order to make decisions in the best interest of the organization, leaders are advised to form a team that can understand and follow a corporate vision or mission statement that details specific goals the company strives to uphold. Each staff of the team is responsible for communicating of the vision to his subordinates for creating a healthy organization culture.
All organizations are made of departments. Each department is provided with a manager, who oversees its daily affairs. The managers of each department must work closely to ensure the company runs smoothly and in unity. They must always find ways to improve performance.
In a nutshell, a great leader must not create an illusion of change that does not produce a satisfying result!
Winston Churchill said, “To change is to improve, to improve is to change often.” The need to cope with a new, more challenging Textile & Apparel Industry is constantly making changes in the competitive business world. When it comes to the survival of companies, changes are incredibly important for a variety of reasons like the reshuffle of recent cabinet.
~ Written by Mr. Liaw Fenn Yenn, TARUC Branch Campus Head ~
However, GST paid on imports would create a cash flow problem for exporters because they would have to pay GST upfront. Hence, a suspended GST under the Approved Trader Scheme (ATS) was introduced to alleviate the cash flow problem faced by importers who mainly re-export their supplies.
Approved Trader Scheme (ATS)
Any taxable person registered under the ATS will be allowed to suspend GST payable on imported goods at the point of importation. The GST due on all goods imported in a particular taxable period would be summed up and accounted for in the taxable period where the importation takes place in a specific column in GST return. ATS participant must be on a monthly taxable period.
Example: ABC is a manufacturing company approved under ATS. On January he has imported raw materials amounted to RM100,000. The total amount of GST suspended is RM6,000. (RM100,000 X 6%). As an approved person under ATS, ABC needs to declare the amount of GST suspended i.e. RM6,000 in his GST return for the month of January.
Local Supply
Any goods sourced locally do not come within the scope of ATS whereby the normal rules of GST would apply. This means that GST has to be paid upfront and claim as input tax credit. Similar treatment applies even if goods or raw materials purchased from another ATS participant such as a company operating in a free industrial zone. However, if an ATS participant purchased goods from a bonded warehouse, payment of GST on the imported goods is suspended.
Parties Qualifying For ATS Consideration
The following taxable persons who registered under the act are eligible to apply for ATS subject to approval given by Royal Malaysian Customs Department.
a) All companies located within the Free Industrial Zones (FIZ);
b) All Licensed Manufacturing Warehouse (LMW);
c) International Procurement Centres (IPCs) and Regional Distribution Centres (RDCs) approved by the Malaysian Industrial Development Authority (MIDA);
d) Companies with turnovers above RM25 million and more than 80% of their supplies made are for export market;
Approval for ATS status is on a two-yearly basis and any application for renewal must be made two months before the last day of each approval period.
When supply of goods is on consignment terms, there is no supply yet when a manufacturer who is a consignor sent the goods to the consignee because the consignor still owns the goods until such time as the goods are adopted by the consignee. Adoption means the consignee indicates a wish to keep the goods.
Until the consignee does so, he has the right to return the consigned goods at any time, unless the consignor has specified a time limit.
For consignment sale, the basic tax point is based on:-
a)at the expiry date specified by the consignor (not more than 12 months from the delivery date);
b)when the consignee adopts the goods before the specified time limit expires; or
c)12 months from the date at which the goods were sent to the consignee, if no time limit is specified.
Example A
Company A is a manufacturer who delivered 1000 sets of shirt to a supermarket in Malaysia on 1 January 2016. The goods were delivered on consignment basis.
Ø On 5 July 2016, Company A was informed that 200 sets of shirt had been sold.
Ø Company A issued a tax invoice to the supermarket on 20 July 2016 and received payment on 30 September 2016.
Ø Basic tax point for goods sold will be on 5 July 2016, i.e. the point when the sale become certain.
Ø However since the tax invoice was issued within 21 days from the basic tax point, it overrides the basic tax point. So, the time of supply is on 20 July 2016.
Ø Company A must account GST in the taxable period of July 2016. (Assuming Company A is on monthly taxable period).
Ø If the supermarket is a registered person, it can claim input tax credit on the purchases.
Example B
Continuing from Example A above, let say, a balance of 800 sets of shirt were not sold and returned to Company A on 31 December 2016.
Ø In this case, GST on the 800 sets of shirt is not due because there is no transfer of ownership.
Ø Company A does not have to account for GST on the 800 sets of shirt that was not sold since they were returned before expiry of 12 months from the date it was first consigned.
Example C
If the unsold goods in example B above were not returned to Company A on 1 January 2017,
Company A has to account for GST due on the 800 sets of shirt in January 2017 since 12 months had lapsed from the date it was first consigned. Therefore, the tax point is on 1 January 2017.
Subcontractors normally do work that are given by another company known as a principal. The principal supplies materials to a subcontractor for further work to be done. In this matter, there is no taxable supply from the principal because there is no transfer of ownership of the goods to the subcontractor. Therefore, GST is not applicable.
A subcontractor can claim input tax incurred for his purchases as long as he is a registered person making taxable supplies like providing workmanship and value added work. He must keep original tax invoices from suppliers to support his claim for input tax credit.
If the subcontractor is a GST registered person, he has to account for GST output tax on the value of the service supplies to the principal. (See example below)
Accounting for GST will be as follows:
Materials Loan to Another Manufacturer
For materials lend to another manufacturer for his urgent use, it is deem as a supply because the business asset is transferred to another manufacturer. GST has to be accounted as an output tax.
GST charged to customers is termed as “Output Tax” and those incurred by the manufacturer on his business purchases and overheads is termed as “Input Tax”.
The input tax credit is allowed to be offset with any output tax credit and the registered person is only required to pay the difference if the difference is positive. If the input tax is more than the output tax payable, the Director General of Customs will refund the difference to him.
Under the normal rules of GST, a GST registered person is required to issue a tax invoice for every taxable supply he makes. A tax invoice must be issued within 21 days from the time of supply.
Example 1:
Company A delivered goods to Company B on 18.7.2015.
Ø If Company B did not make any payment prior to the delivery of the goods and Company A only issued a tax invoice on 2.8.2015, then the actual tax point is 2.8.2015.
Ø Company A will have to account for tax in the taxable period of August 2015. (Assuming Company A is on monthly taxable period).
Example 2:
In the above example,
Ø If Company B did not make any payment prior to the delivery of the goods on 18.7.2015 and Company A only issued a tax invoice on 20.8.2015, GST due will fall back to the basic tax point on 18.7.2015.
Ø This is because company A only issued the invoice after 21 days from the basic tax point.
Ø Therefore, Company A will have to account for tax in the taxable period of July 2015.
GST on Imported Goods
At the point of importation, value for GST computed is based on transaction value including insurance and freight, plus all duties payable and other incidental charges as shown in the example below:
Transaction value RM 50,000.00
Insurance and freight RM 2,000.00
Import duty *RM 5,200.00 (*Assuming Import Duty 10%)
Value of import RM 57,200.00
GST payable = RM57,200.00 x 6% = RM3,432.00
Discounted price
For discount given to customers, GST is computed only
on the discounted price.
GST Treatment on Imported Trade Samples
Trade samples will be given GST relief under the GST Relief Order at the point of importation. You must comply with the conditions that the trade samples are not to be sold, consumed, put to normal use or in any way put for hire or reward while in Malaysia.
Semi-finished goods send to overseas sub-contractors for value-added activities
Ø Semi-finished goods send to overseas sub-contractors are treated as exports and are zero-rate supplies.
Ø When the goods are subsequently brought back into Malaysia from overseas sub-contractors, you are entitled to get relief from payment of GST.
Ø However, GST is chargeable on the parts or components added on the processed goods.
Ø If you are a registered person, you can claim the GST paid on the finished goods as your input tax credit.
Ø Any value added services performed on that goods does not attract customs duty or GST.
Undercharged of Goods Sold
In case you had wrongly undercharged the price of goods sold, you need to issue a debit note and make adjustments to your account and declare it in your return in the taxable period.
Goods Given Free as Incentive
When a certain quantity of goods are given free as incentive for bulk buying, for example, 2 units were offered free, for every 20 units of a product purchased at a price of RM5, 000.00. GST will only be based on RM5, 000.00 since the 2 units given free is considered as a discount.
Returned Goods
If for some reasons, like defective or inferior goods return to supplier, supplier should refund the payment for the goods and the GST paid by way of a credit note. If you have already claimed the input tax credit on the returned goods, then you will have to reduce the said input tax in the taxable period in which you received the credit note.
Bad Debt Relief
If customers fail to make payment on goods previously supplied whereby output tax has been accounted, you can claim bad debt relief subject to the following conditions:-
(a) you have already accounted for and paid the tax on the supply,
(b) you have not received any payment or part payment six months from the time of supply,
(c) the debtor has become insolvent before the period of six months has lapsed, and
(d) you have taken sufficient efforts to recover the debt.
GST on Capital Items
Sales of capital items, except for Transfer of Business as a Going Concern (TOGC), are regarded as making taxable supplies. Therefore, sales of capital items are also subjected to GST at standard rate.
As a GST registered person, you can claim the GST incurred on capital items, for example a computer system or an office building. The input tax is claimable in the taxable period in which the capital items are acquired.
An employer hiring one and above employees must register with Socso and pay mandatory monthly contribution.
Under the Social Security Act 3(1) 1969, employees must be registered within 30 days from the first date of their employment and monthly contributions be made to Socso regardless of their status either temporary, part-time, on probation and including employees who are not confirmed in their employment.
It is important to ensure that employees are registered with SOCSO to be covered under the Socso protection scheme whereby employees are entitled to the Employment Injury Insurance Scheme and Invalidity Pension Scheme. Both schemes protect employees in the event of accidents happening at work.
Those breaching the Act are liable to a fine up to RM10,000 or sentence to two years’ jail or both.
Utilise HSP Vouchers Soon
Besides, workers with vouchers for the free Health Screening Program (HSP) are urged to utilize the vouchers soonest.
HSP vouchers were given to all eligible workers aged 40 years and above who are active contributors. Those who have not yet utilize their HSP vouchers last year can still do so. The vouchers will expire on 30 June 2014.
To do the health screening, workers need to go to the panel clinic registered with Socso. The list of clinics could be obtained from the Socso’s website www. perkeso.gov.my.
The government has allocated RM150 million to SMEs for the purchase of accounting software. Small and medium enterprises (SME) can apply for GST e-vouchers worth RM1,000 to purchase or upgrade GST-compliant software.
The aid is governed by SME Corp and the e-voucher can be applied online to purchase software from participating vendors. Application is opened from 1 June 2014 until 31 Dec 2014 and to redeem by 28 Feb 2015. Qualifying Criteria are :
Ä The SME company must be registered with the GST system under MyGST and given a registration number;
Ä Fulfill the SME Definition;
Ä At least 51% of Malaysian equity.
Teamwork makes the dream work. ~~~~ Bang Gae
It was truly a heartbreak and heartbeat experience to watch the Malaysian badminton players playing against the Japanese players during the tournament held in New Delhi on 25/5/2014! In any tournament, there is always a winner. That’s fact of life!
After watching the tournaments, I am truly impressed by the team spirit and sportsmanship projected by both teams. I ponder over the personalities and the unconquerable will which many of our employees are encouraged to endure in their work performance.
How many of the employees will portray an enduring and relatively stable characteristic to manage their failure like Japanese players when their first Singles lost to our first Singles Datuk Lee Chong Wei? Japanese players displayed strong fighting spirit to battle for every single point. Likewise, the attitudes of the employees are often being slammed by the employers in relation to their loyalty and enthusiasm. How many employees will show team effort to work together for the common corporate goals?
In a business world, the management of an organization often expects its employees will stand up like the supporters of Malaysia and Japan to show their support to ensure their co-workers or colleagues to carry out their tasks. However, this kind of scenario is absent in the actual organizations. Watching the two teams in the Thomas Cup Tournament was truly an unforgettable experience. Every player shown the virtues such as fairness, self-control, courage, persistence, proper reaction to the loss and defeat and continued to show support to other team players. Both Malaysia and Japanese players stood in front despite they lost their games. Thus, it would be a valuable asset for an organization to have a team of employees working together to achieve each others dream of success.
Through the true sportsmanship exhibited by the Japanese players, the way they played as a team determines its success of winning the Thomas Cup. At the end, the attitude and true spirit of the Malaysian and Japanese players are indeed inspiring. The employees and even top management staffs, must cultivate the team spirit like the badminton teams, fighting for every single cause in order to succeed and maintain the well-performance in the industry.
The employees are just like a pool of intelligent players. The great NBA basket player, Michael Jordan, said that “Talent wins games, but teamwork and intelligence wins championships.” All the employees can create successes for the organizations in the Textile and Apparel Industry if the right attitude is shown towards the working goals.
In a nutshell, the contribution of each employee in every organization determine the overall success of the organization by building the team work regardless who are the winners of the games, carry on to perform their specific tasks to accomplish the overall goals. In a good sport, there are no losers and only those who do not take defeat well are sore losers. The key word for leaders who stand there with supportive cheers is to build the teamwork, create successes through concerted efforts and focused plans which can move our industry further. A man with skills may walk miles, but a group of men can move mountains.
~ Written by Mr. Liaw Fenn Yenn, TARUC Branch Campus Head, on 27/5/2014 ~
Instead of a number, many clothing companies are switching to sizes by letter. For example: a size 4 and size 6 would turn into a small; a size 8 and 10 would become medium; 12 to 14 would be large.
US retailers are increasingly replacing numerical sizing—dresses sized zero to 16 and beyond, with the vaguer sizing system of small, medium and large that they call “alpha sizing.”
Alpha sizes, as well as XS and XXL, among others, have long been used for teeshirts and stretchy casual clothing. Now, higher-end designers are adopting the less specific sizing structure as well, combining two or three numerical sizes into a single letter size. Many brands are also utilizing stretchy fabrics with more give, making precise sizing less essential.
For manufacturers and retailers, alpha sizing makes production less complicated, with fewer different-sized items to manufacture; it makes online shopping easier, with customers less likely to purchase two sizes and return one; and stores have found that men, who are increasingly shopping for their own clothes, prefer alpha sizing.
For style-conscious customers, however, alpha sizing can make finding the perfect fit a chore. Just as with number sizes, which vary in different companies, and can run bigger or smaller from store to store, there are no universal alpha sizing standards, which is why one brand’s XS may be another’s M.
But as companies such as Gap increase their global reach, they are implementing global size standards to match. Gap uses both numerical and alpha sizing, depending on the garment.
“When I started, we had a European fit, the Japanese fit and American fit,” recalled Gap CEO Glenn Murphy. Now, he said, the company is adapting the American fit to become what he called “the global fit.”
When it comes to alpha-sizing, that “global fit” may mean that stores in Japan, where customers tend to be smaller, are stocked with sizes XXXS to L, while a customer in the US could buy the same sweatshirt in size XXXL. ”
Lately, Japanese clothing company Fatyo has decided to label sizing using descriptions such as “Twitch, Skinny, Fat and Jumbo” as opposed to small, medium, large, extra large. With a generation obsessed with size, many people don’t like to being called fat, Fatyo’s labels has been offensive especially ladies feeling insulted.
Let us pray for MH 370.
Former US President John F. Kennedy once said, “When written in Chinese, the word ‘crisis’ is composed of two characters. One represents danger and the other represents opportunity. ”As of this writing, Malaysian Airline MH 370 disappearing on its way from KLIA to Beijing on 8/3/2014 without giving any distress signal between Malaysia-Vietnam air space has shocked not only Malaysian but the whole world.
From this crisis, are leaders prepared well to handle crisis? How many companies in Textile & Apparel Industry have actually formed crisis management teams to handle crisis which will affect the manufacturing productivity and reputation of the companies? How many leaders in the industry will be able to develop detailed contingency plans for responding to crisis? How many leaders can turn the crisis into the opportunity for creating positive impact and showcasing the capability of handling a crisis?
In dealing with the catastrophe of missing airline MH370, it can be a learning lesson for leaders to handle any difficult situation by placing people or employees first. Leaders should look into the crisis and respond by having to immediate plan to tackle the crisis. They must be able to provide effective communication with accurate information and facts. They must also understand the society interaction and look into the demand of the affected society and parties during the crisis.
It is never too late for companies in the industry to learn from the current crisis of MH 370. It is time to form a crisis management team in the company so as to see through a sustained crisis. They need to develop a team with a leader who will act quickly and make the right decisions at the right time and right place.
Companies need to learn to coordinate and adapt the crisis by reacting immediately and appropriately to prevent disruption of daily routine operations. Only those who can respond to the crisis professionally will be able to survive well. As Darwin theory stated that survival of the fittest of which companies can adapt appropriately and react efficiently will be able to stay on long in the industry.
Let us learn from the incident of MH370, companies must plan to handle the crisis well. When there are crisis around, leaders should put people first or your employees number 1 spot! Communicate well with all parties and act quickly and decisively! Deploy action plan to tackle the issues which must be resolved swiftly.
Like the saying goes, “A crisis is an opportunity riding the dangerous wind.” Crisis can be an opportunity for changing the image and reputation of companies. However, if the crisis is not handled, the survival of companies can be affected.
~ Written by Mr. Liaw Fenn Yenn, TARUC Branch Campus Head, on 14/3/2014. ~
Considering just fashion apparel, there is one retail company that is clearly the largest in the world, and surprisingly it is not based in the U.S.
Answer: The world’s largest fashion retailer in terms of number of global outlets is Inditex, based in Spain. Inditex group comprised of 100 apparel-related companies, more than 6,000 retail outlets operating in more than 400 cities around the world, with more than 120,000 employees and an annual revenue of more than $15 billion of euros.
While the world’s largest retailer, Wal-Mart has more than 10,000 stores, most of which sell apparel, Wal-Mart stores are classified as hypermarkets. Inditex is strictly a retailer of apparel and fashion merchandise, and therefore, is considered to be the world’s largest fashion retailer.
The first Zara shop was opened in 1975 in A Coruña, Spain, a city in which the Group first began doing business and which is still home to its headquarters.
As per the new decree, apparel with FOB price of less than or equal to US$ 10 per gross kg would attract ad valorem tariff of 10 percent plus a specific tariff of $5 per gross kg.
However, when the declared FOB price of garments is greater than $10 per gross kg, the specific tariff will be calculated at $3 per gross kilo.
Under the earlier decree, all garments were taxed uniformly.
The new system was strongly objected by Panama, as its exports to Colombia were affected. Panama also filed a complaint with the World Trade Organization (WTO).
The new measure is expected to allow imports of products in accordance with formal trade tariff levels of the WTO, i.e. the effective tariff should not exceed 40 percent.
KWSP : Employers with More Than 50 Employees Compulsory to Use Electronic Channels
The Employees Provident Fund (EPF) has announced on 27th March 2014 that with effect from 1st April 2014, employers with more than 50 employees are required to submit their monthly contribution details through electronic channels, especially its e-Caruman facility.
The manual EPF printed Form A will no longer be send to employers.
Employers who wish to utilise e-Caruman facility must register for an i-Akaun. New employers who registered must complete the KWSP 1 or KWSP 1 (i) forms to get the activation code for the i-Akaun.
For more information, please contact the nearest EPF branch, or contact their Call Centre at 03-8922 6000 or log on to myEPF Website (www.kwsp.gov.my).
In 2013, a total of 16 projects were approved with total investment of RM764.6 million. Of these, 8 were new projects accounted for RM599.7 million and another 8 were expansion / diversification projects worth RM164.9 million.
Domestic investments amounted to RM132.1 million (17.3%) while foreign investments totaled RM632.5 million (82.7%).
Of the 16 projects, 8 projects were for the production of primary textiles (RM673.1 million), 4 projects were for made-up garments (RM65.5 million) and 4 projects for textile products/accessories (RM26 million).
Create Employments
The approved projects would generate a total of 1,493 employment opportunities, of which 663 in the managerial, technical and supervisory manpower categories. Some of the high paying jobs to be created include engineers, quality controllers and high skilled technicians.
Technology Driven
Investments in the textiles and textile products industry in 2013 are mostly technology driven whereby new technologies are incorporated in the manufacturing processes of these projects. Most projects continue to emphasize in R & D activities for the purpose of developing new high quality products.
The majority of the projects approved are export-oriented and will contribute towards the country’s national income.
Room of Growth
Some of the new projects will strengthen the textile cluster development in Malaysia by providing the downstream players with a new, domestic source of high quality primary textiles as an alternative to imported raw materials. There is still plenty of room for growth in the upstream textiles sub-sector, particularly for functional or high performance textiles that are in high demand with the aerospace, automotive, medical and construction industries.
Some of the major projects approved in 2013 include a new wholly foreign-owned project with investment of RM521 million for the production of pure cotton yarn. It’s entire production will be exported mainly to China, USA and Canada.
Two other expansions by foreign-owned companies will involve a RM32.5 million wool scouring, topmaking and shrink resist treatments and a RM28.4 million facility for producing knitted and finished fabrics.
~ Extract from MIDA 2013 Malaysia Investment Performance Report ~
A. Free on Board (FOB) Value shall be calculated as follows:
a. FOB Value = Ex-Factory Price + Other Costs
b. Other Costs in the calculation of the FOB value shall refer to the costs incurred in placing the goods in the ship for export, including but not limited to, domestic transport costs, storage and warehousing, port handling, brokerage fees, service charges, et cetera.
B. Formula for ex-factory price:
a. Ex-Factory Price = Production Cost + Profit
b. Formula for production cost,
i. Production Cost = Cost of Raw Materials + Labour Cost + Overhead Cost
ii. Cost of Raw Materials shall consist of:
1. Cost of raw materials
2. Freight and insurance
iii. Labour Cost shall include:
1. Wages
2. Remuneration
3. Other employee benefits associated with the manufacturing process
iv. Overhead Costs, (non-exhaustive list) shall include, but not limited to:
1. real property items associated with the production process (insurance, factory rent and leasing, depreciation on buildings, repair and maintenance, taxes, interests on mortgage)
2. leasing of and interest payments for plant and equipment
3. factory security
4. insurance (plant, equipment and materials used in the manufacture of the goods)
5. utilities (energy, electricity, water and other utilities directly attributable to the production of the good)
6. research, development, design and engineering
7. depreciation, maintenance and repair of plant and equipment
8. royalties or licenses
9. inspection and testing of materials and the goods
10. storage and handling in the factory
11. disposal of recyclable wastes
12. cost elements in computing the value of raw materials, i.e. port and clearance charges and import duties paid for dutiable component
Currently, tax payers with employment income are subject to monthly tax deduction (MTD). Yet they are required to submit tax returns before or on 30 April of each year.
The requirement to submit tax returns has confused tax payers from whom MTD has already been made and yet they are still required to submit the tax returns to the Inland Revenue Board.
Thus, to facilitate tax payers with employment income whose MTD have been made, the Budget 2014 proposed that these tax payers are NOT required to submit tax returns if satisfied with their MTD as a final tax.
This proposal is effective from year assessment 2014.
The Government has implemented the minimum wage policy on 1 January 2013. The monthly minimum wage is RM900 in Peninsular Malaysia and RM800 in Sabah, Sarawak and Labuan.
Under the MW policy, all enterprises are required to pay a minimum wages to both local and foreign employees, except those classified as domestic workers.
Under budget 2014, in order to encourage compliance and to reduce the financial impact on companies, the Government has proposed that the difference between the original salary and the minimum wages paid by employers be given further tax deduction.
The incentive is given for a period of the year 2014.
The current sales tax and service tax have certain weakness such as the impact of double taxation on consumers, the absence of full tax relief on exported goods and transfer pricing issue. These weaknesses ultimately will result in losses to the consumers and the government. In this regard, the Government proposes that the sales tax and service tax will be abolished under Budget 2014. These two taxes will be replaced by a single tax known as the Goods and Services Tax (GST).
More than 160 countries have already implemented GST. Most of the developed nations have long implemented GST or Value Added Tax (VAT). Even ASEAN countries such as Indonesia, the Philippines, Laos and Cambodia, as well as countries such as Burkina Faso, Burundi, Zimbabwe, Rwanda, and Kenya have implemented GST.
Standard Rate : GST standard rate is 6%.
Threshold
The threshold for registration under GST is the annual sales value of RM500,000 and above. Businesses below the threshold are not required to register but may register on a voluntary basis.
Effective Date : From 1 April 2015
Tax Incentive Package In Line with GST Implementation
To support the smooth implementation of GST, enhance tax compliance and reduce the cost of doing business, the following incentives will be given:
A. Secretariat fee and tax filing fee:
Secretariat fee and filing fee be given the following deductions for the 2015 year of assessment:
B. Expenses for the purchase of ICT equipment and software:
Cost for the purchase of ICT equipment and software be given ACA (Accelerated Capital Allowance) until year of assessment 2016.
C. Expenses for GST related training in accounting and ICT:
Training grant of RM100 million will be provided to businesses that send their employees for GST training in 2013 and 2014. In addition, financial assistance amounting to RM150 million will be provided to SMEs for the purchase of accounting software in 2014 and 2015.
In addition, to ensure smooth implementation of GST, the Government will provide the following additional packages:
First: Individual income tax rates be reduced by 1 to 3 percentage points for all tax payers to increase their disposable income. With this measure, 300,000 persons who currently pay income tax will no longer pay tax. Generally, families with monthly income of RM4,000 will no longer have tax liability. Other existing tax payers will also enjoy tax savings;
Second: Individual income tax structure will be reviewed. The chargeable income subject to the maximum rate will be increased from exceeding RM100,000 to exceeding RM400,000. The current maximum tax rate at 26% will be reduced to 24%, 24.5% and 25%.
The first and second measures will be effective from 2015.
Third: Corporate income tax rate be reduced by 1 percentage point from 25% to 24%. Whereas income tax for small and medium companies will be reduced by 1 percentage point from 20% to 19% from the year of assessment 2016.
Fourth: Cooperative income tax rate be reduced by 1 to 2 percentage points from the year of assessment 2015.
The reformed EU Generalised Scheme of Preferences (GSP) for the period running from 1 January 2014 – 31 December 2016, will focus support on countries most in need. Thus, Malaysia will no longer enjoy the tariff preference under GSP.
Countries which have been listed in the World Bank classification as high or upper-middle income economies during the most recent three years, based on Gross National Income (GNI) per capita, would cease to be beneficiaries of the new EU GSP. The 7 high-income countries and 12 upper-middle income countries includes Malaysia.
According to the European Commission, these countries lose beneficiary status because they no longer need preferences such as the GSP to successfully trade with the rest of the world. In fact, continuing to provide preferences to them increases the competitive pressure on exports from LDCs and other poor countries.
Countries Graduated from EU GSP
Besides Malaysia, some of the other “graduates” from the beneficiary scheme are: Saudi Arabia, Kuwait, Bahrain, Qatar, UAE, Oman, Brunei, Macao, Argentina, Brazil, Cuba, Uruguay, Venezuela, Belarus, Russia, Kazakhstan etc.
These countries remain “eligible”, but are no longer “beneficiaries” of the GSP scheme. This means that in case their situation changes (if they are no longer classified as high or middle-upper income) they will become beneficiaries of the scheme again.
VERY IMPORTANT REMINDER TO MALAYSIAN EXPORTERS
In this regard, the Ministry of International Trade and Industry (MITI) will no longer issue Borang A for export to EU and Turkey, effective 1 January 2014. Turkey is a member of the EU Customs Community.
MITI also remind exporters that the counterpart customs may not accept and acknowledge the Borang A if goods arrived on or after 1 January 2014. Exporters are advised to make early application for Borang A and ensure that your goods arrive at destination before 1 January 2014 in order to enjoy GSP duty preference.
Chester I. Bernard once mentioned that “Very few universities, national governments or formally organized nations, are more than two hundred years. Most cooperation fails in the attempts, or dies in infancy, or is short-lived.” What are the vision and mission that Cambridge University to hold on successfully for over 800 years? Cambridge University has a mission to contribute to society through the pursuit of education, learning, and research at the highest levels of international excellent and aspires to be a visionary organization and learning community by recruiting the best staff and students from all over of the world. Should T & A Industry in Malaysia try to strive to be the best industry by recruiting people who will be proud to join and contribute positively for manufacturing the best textile products and garments for the world market?
Leaders in T & A Industry should not have the vision that their existence is just for the survival of their businesses. Currently the current business landscape is very competitive which has moved on from globalization, technological change, innovation and knowledge management where human capital on intellectual has played a vital part to the success of the businesses. T & A Industry should main its vision and mission like Cambridge University where it strives to be a place in which individual visions and missions are shaped and realized.
One important factor that Cambridge University has been ranked the top among all the universities in the world is its past Vice Chancellors who provide effective governance and maintain excellent administrative system. To live up the challenge of globalization and growth of T & A Industry in Malaysia, leaders in the T & A Industry can learn from Cambridge University which has the CEOs with high intellectual and vast knowledge. The leaders must be open-minded with the foresights that they can drive the industry to crystallize its vision and mission. Without strong leaders in the industry, it is expected some of the factories in T & A Industry will be weak in view of the shortage of labour, skilled workforce, lack of highly knowledgeable staff in the industry.
It is said that “Behind every great man, there is a great woman”. Perhaps, it is also true to say “Behind every successful institution, there is a great leader”. I strongly believe there are some leaders in Malaysia T & A Industry could bring the industry up to another level to be competitive and lead the industry to be the best industry in the country.
~Written by : Liaw Fenn Yenn , TARUC Branch Campus Head~
Malaysia is not the only country in the region that has come under pressure to raise wages. Indonesia is set to increase its minimum wages for 44%, while Vietnam will increase its minimum wage by 25-30 percent for the private sector next year.
Garment manufacturers and exporters are worried over the rise of minimum wages. The hike in wages would hurt the bottom line of garment manufacturing companies.
JAKARTA Wage hike : Up 44% to US$ 229 per month
In spite of severe pressure from the city’s manufacturing and textile enterprises to keep the wage hike to a minimum, Jakarta Governor Joko Widodo nodded to affect a 44 percent hike in the minimum wage, taking it to Rp 2.2 million or US$ 229 per month
This comes on the heels of similar moves earlier in the month by six other provincial governments who approved a hike in minimum wages of up to 26 percent for next year – significantly higher than the 10 percent average seen this year – and other provinces are expected to follow suit soon. Meanwhile, the new Batam minimum wage will be of Rp 2.04 million (US$212).
Being labour-intensive, the textile sector would be the worst impacted by wage hike.
Not Overturn FDI However, economists said the rise in labor costs will not overturn the country’s foreign direct investment (FDI) story. FDI in Indonesia leaped 22 percent in the third quarter from a year earlier to a record high $5.9 billion.
There is still a wide minimum wage discrepancy between regions which allow room to maneuver or relocate within the country. In regions such as North Sumatra, for example, the minimum wage will be $135 next year.
FDI is drawn to Indonesia for reasons beyond cheap labor. Its population of 240 million represents not just a resource, but a significant market
VIETNAM Set To Increase Minimum Wages by 33% to $89- $125 per month
Vietnam has proposed to raise minimum monthly wage by about 33% leading to higher operational costs for companies doing business in Vietnam. The proposal aims to increase the minimum wage range from the current $67-$96 per month to $89- $125 per month.
The proposal is due to be implemented in March 2013 but if the sluggish economic climate persists the government may further delay the minimum wage hike to September 2013.
The Vietnamese government proposed the hike after it found out that the current minimum wages cover only 60% of cost of living. Majority of local Vietnamese companies have supported the hike.
THAI Employers Affected by Wage Hike: US$9.78 per day
Thailand’s minimum wage was increased to 300 baht a day in April in the country’s seven most developed provinces: Bangkok, Phuket, Samut Prakan, Nakhon Pathom, Nonthaburi, Pathum Thani and Samut Sakhon.
Workers in all other 70 provinces across Thailand will receive a daily minimum wage of 300 baht beginning Jan 1, 2013.
To assist entrepreneurs affected by the minimum wage hike, the Government plans to offer relief measures such as tax cut (Thai corporate-tax is 23%) and extended the reduction of monthly social security fund contributions from 5 to 4 percent for another year.
JAKARTA Wage hike : Up 44% to US$ 229 per month
In spite of severe pressure from the city’s manufacturing and textile enterprises to keep the wage hike to a minimum, Jakarta Governor Joko Widodo nodded to affect a 44 percent hike in the minimum wage, taking it to Rp 2.2 million or US$ 229 per month
This comes on the heels of similar moves earlier in the month by six other provincial governments who approved a hike in minimum wages of up to 26 percent for next year – significantly higher than the 10 percent average seen this year – and other provinces are expected to follow suit soon. Meanwhile, the new Batam minimum wage will be of Rp 2.04 million (US$212).
Being labour-intensive, the textile sector would be the worst impacted by wage hike.
Not Overturn FDI However, economists said the rise in labor costs will not overturn the country’s foreign direct investment (FDI) story. FDI in Indonesia leaped 22 percent in the third quarter from a year earlier to a record high $5.9 billion.
There is still a wide minimum wage discrepancy between regions which allow room to maneuver or relocate within the country. In regions such as North Sumatra, for example, the minimum wage will be $135 next year.
FDI is drawn to Indonesia for reasons beyond cheap labor. Its population of 240 million represents not just a resource, but a significant market
VIETNAM Set To Increase Minimum Wages by 33% to $89- $125 per month
Vietnam has proposed to raise minimum monthly wage by about 33% leading to higher operational costs for companies doing business in Vietnam. The proposal aims to increase the minimum wage range from the current $67-$96 per month to $89- $125 per month.
The proposal is due to be implemented in March 2013 but if the sluggish economic climate persists the government may further delay the minimum wage hike to September 2013.
The Vietnamese government proposed the hike after it found out that the current minimum wages cover only 60% of cost of living. Majority of local Vietnamese companies have supported the hike.
THAI Employers Affected by Wage Hike: US$9.78 per day
Thailand’s minimum wage was increased to 300 baht a day in April in the country’s seven most developed provinces: Bangkok, Phuket, Samut Prakan, Nakhon Pathom, Nonthaburi, Pathum Thani and Samut Sakhon.
Workers in all other 70 provinces across Thailand will receive a daily minimum wage of 300 baht beginning Jan 1, 2013.
To assist entrepreneurs affected by the minimum wage hike, the Government plans to offer relief measures such as tax cut (Thai corporate-tax is 23%) and extended the reduction of monthly social security fund contributions from 5 to 4 percent for another year.
The minimum wage of RM900 a month in the Peninsular and RM800 in Sabah, Sarawak and Labuan will be fully enforced on January 1, 2014, after deferment and relaxation given.
Human Resources Minister Datuk Richard Riot said the government had taken into consideration the issues affecting the various sectors in the country before its implementation. Postponement till Dec 31 this year was made due to various reasons, including the financial capability of the companies to implement the minimum wage.
The minimum wage system will be fully enforced in January next year throughout the country and would apply to all employers regardless of location of their business. Whether their businesses are in townships or anywhere, they are not exempted from this implementation.
Meanwhile, several ASEAN countries have raised their minimum wage standards recently. The ASEAN countries that have recently raised minimum wages are Thailand, Vietnam, the Philippines, Malaysia and Indonesia.
Bangladesh : Garment Workers Wages to Hike by 76%
On 4 Nov 2013, the board of government officials, garment manufacturers and union leaders recommended wages rise from 3,000 taka ($38) a month to 5,300 taka ($67), a 76% wage rise for the nation’s four million garment workers.
Inspite of the 76% wage rise, the level was still the lowest for the sector worldwide, and below the 8,114 taka ($102) unions had been demanding to ensure decent living standards and to keep up with inflation.
Four Different Regional Minimum Wage Levels in Vietnam
There are currently four different regional minimum wage levels in Vietnam that are amended periodically on a non-regular basis. Since 2003, Vietnam has increased its minimum wage levels ten times.
Specifically, the minimum wage rise will set the monthly minimum wage rate at VND2.35 million (US$111) for Region 1, VND2.1 million (US$100) for Region 2, VND1.8 million (US$86) for Region 3 and VND1.65 million (US$78.5) for Region 4. This represents an average increase of about 15 percent that has unfortunately somewhat affected the country’s labor-intensive industries, such as the garment, shoe and parts manufacturing industries.
Jakarta : New Minimum Wage Set at US$213 Per Month in 2014
Jakarta raised the capital’s minimum wage to IDR 2.4 million (USD $213) per month. The new minimum wage will be implemented in 2014 and constitutes a 10% increase from the current minimum wage of IDR 2.2 million.
Indonesian workers across the country demanded for higher minimum wages due to the country’s recent high inflation rate which curbs people’s purchasing power. Statistics Indonesia announced that the country’s inflation rate reached 8.32 percent (year-on-year) in October 2013.
The Market Development Grant (MDG) is a scheme to assist the small and medium enterprises (SMEs) in undertaking export promotional activities. Companies can apply for a reimbursable grant on the eligible export promotional activities undertaken.
All export promotion activities undertaken from 1 May until 31 December 2014 will be subjected to new MDG guidelines (MDG 2014). This guideline is subject to yearly review and changes from time to time.
GRANT CEILING
The maximum MDG grant for any eligible company is RM 200,000.00. Any applicant that has utilised the maximum grant of RM200,000.00 since the commencement of MDG in 2002, is not eligible for consideration.
Small and Medium Enterprises (SMEs)
Ø Incorporated under the Companies Act 1965;
Ø At least 60% equity is owned by Malaysian(s);
Ø Exporting products made in Malaysia; and fulfilling the following criteria:
Manufacturing Sector:
Trading Sector
ADDITIONAL MANDATORY REQUIREMENTS:
All complete applications must be submitted online and received by MATRADE within forty (40) days from the last date of the activity. All late applications will not be considered.
Malaysia has become more selective in its investment agenda, preferring quality investments. In 2014, the country attracted a record of RM235.9 billion in mostly high quality private investments that are expected to create 178,365 new jobs.
All this comes during a time of rapid change in Malaysia’s industry, as the country begins to make its final transition into a high-income economy. The Economic Transformation Programme is on target to transform Malaysia into a developed nation and intends to have a Gross National Income (GNI) per capita of USD15,000 by 2020.
Ratio Of Foreign And Domestic Investments
With competition for global FDI increasing rapidly, it is critical that domestic investors assume a more important role. Of the total investments approved, RM171.3 billion (72.6%) came from domestic sources while the rest (RM64.6 billion or 27.4%) came from foreign sources.
Investments within the Manufacturing Sector
The E&E sector attracted the largest amount of foreign investments (RM10.4 billion), largely due to two projects with investments of RM4.6 billion for the manufacture of wafer fabrication and printed circuit boards. Other industries with high levels of foreign investments were the basic metal products industry (RM8.0 billion), chemicals and chemical products (RM7.7 billion), petroleum products including petrochemicals (RM4.7 billion) and transport equipment (RM1.9 billion).
Japan was the manufacturing sector’s biggest foreign investor in 2014 (RM10.9 billion in 55 projects), followed by the European Union (RM8.4 billion in 35 projects), Singapore (RM7.8 billion each in 121 projects), China (RM4.8 billion in 24 projects), the Republic of Korea (RM1.6 billion in 11 projects) and the USA (RM1.4 billion in 23 projects). These six territories jointly accounted for 86.6 % of total foreign investments approved within the manufacturing sector in 2014.
Investments in the Textiles Sector
Malaysia’s textiles and textile products industry became the country’s 10th largest export earner in 2014, contributing approximately RM12.1 billion to Malaysia’s total manufactured exports in 2014.
A total of 17 projects valued at RM1,233.2 million in investments were approved in 2014, of which 11 were expansion/diversification projects (RM1,199.6 million) while the rest were new (RM33.6 million). Foreign investors contributed 52% (RM635.6 million) of the year’s total investments, while domestic investors contributed the rest (RM597.5 million).
Of the 17 projects approved, nine were for primary textiles production, five were for textile products and accessories and three were for made-up garments. These approved projects are expected to generate a total of 2,260 jobs.
One notable diversification project in this industry will be a RM646 million expansion project by a majority Malaysian-owned company that will turn it into one of Malaysia’s integrated textile manufacturers. The project involves the production of technical yarn and fabrics, as well as bleaching, dyeing, printing and finishing.
Another interesting expansion project with additional investments of RM19.6 million will manufacture high-end technical textile coated and bonded gloves for personal protective equipment (PPE) applications.
In general, 2014’s investment performance for textiles and textile products showed an increase of upstream investments in the production of natural and synthetic fibres, yarns and fabrics. These investments are mostly technology driven, whereby new technologies are incorporated in the manufacturing processes of these projects. The majority of these approved projects are also export-oriented.
Malaysia’s textiles and textile products industry concentrates on higher-quality products and niche markets and has thus far remained resilient despite the global economic slowdown. Most of the approved projects in 2014 emphasis R&D activities to develop new, high-quality products.
Under both FTAs, certain exports may enter the US market duty-free only if they are made from textiles produced in the region. Exports to the NAFTA and CAFTA-DR countries contributed to a US trade surplus of $2.1 billion in yarns and fabrics in 2012.
On the other hand, less than $400 million of US made yarns and fabrics was exported to other prospective TPP member countries such as Japan, Malaysia, and Vietnam in 2012.
According to researcher, the TPP has the potential to affect US textile exporters. It could enable Asian apparel producers, principally Vietnam, to export clothing to the US duty free. Vietnamese manufacturers make little use of US made textiles.
Sourcing in the Western Hemisphere
US exported most yarns and fabrics to NAFTA and CAFTA-DR countries.
Mexico is the US textile’s largest foreign market, with exports of $3.8 billion in 2012. Mexico’s apparel industry relies almost entirely on the US market for exports.
Competition from countries with lower wages has hampered Mexican apparel in the US market. Decline in US imports of Mexican apparel results in lower Mexican purchases of US fabrics which fell to $3.9 billion in 2012 from $6.3 billion in 2005.
In Central America, virtually all fibers are imported. The CAFTA-DR region has more than 600 apparel companies. About 90 textile mills produce knit and woven fabrics, man-made fibers, and mixtures.
For US textile exporters, Honduras, El Salvador, and Guatemala represent the biggest yarn and fabric markets in the CAFTA region. At $1.3 billion, Honduras was the largest of the three in 2012.
Apparel manufacturers in the Caribbean region also have preferential access to the US market under the Caribbean Basin Trade Preference Act (CBTPA) program. The region’s apparel factories mostly rely on US fabrics and yarns, with US exports totaling $67 million in 2012.
Although US exports are often more expensive, apparel producers in the Western Hemisphere have two main comparative advantages. One is geographic proximity, which confers lower transportation costs and faster delivery; transit times from the CAFTA-DR region to a US port range from two to seven days, compare to about two weeks to a month from Asia. The other advantage is duty-free access. For example, manufacturers of cotton T-shirts can avoid a 16.5% import duty if US inputs are used.
On the other hand, Mexico, Central America, and the Caribbean Basin have much higher wage rates than some Asian apparel suppliers, such as Vietnam, Cambodia, and Bangladesh.
All things considered, tariff preferences appear to be important in keeping apparel producers in the Western Hemisphere competitive in the US market, and thereby preserving export markets for US textiles.
TPP and Sourcing from Vietnam
Most US headquartered apparel firms have limited or no US manufacturing capabilities. Import penetration reached almost 90% of US demand in 2012, up from 73% in 2006. The US trade deficit in apparel products was $74 billion in 2012. Nearly 40% of imported apparel came from China. Vietnam furnished 9% of imports.
Central America, the Caribbean, Mexico, and Canada collectively accounted for 16% of US apparel imports in 2012, almost all of it made with textiles produced in the US.
Vietnam’s apparel sector buys the majority of its yarns and fabrics mainly from China and other Asian suppliers. The country have a growing textile industry, comprising 145 spinning mills, 401 weaving mills, 105 knitting mills, 94 dyeing and finishing mills, and 7 non-woven mills.
Vietnam has set a development strategy, aiming to increase fabric production to 2 million metric tons by 2020. Fiber production is targeted to increase to 500,000 metric tons in 2015 and 650,000 metric tons by 2020.
To date, Vietnam is not a significant market for US yarn and fabric, importing $63 million of such products in 2012. The US main textile-related export to Vietnam is raw cotton: US exports about 60% of the cotton used in Vietnamese textile mills.
Textiles and the TPP Negotiations
Textile industry trade groups have urged the US to insist on a strict “yarn forward” rule (YF). Organized as the Textile and Apparel Alliance for TPP (TAAT), they have warned that without a YF rule, Vietnamese apparel manufacturers could use Chinese textiles, thereby giving Chinese textile manufacturers duty-free access to the US market and undermining US textile production. More than 165 members of Congress have endorsed TAAT’s position.
Aligned against them are US retailers and importers of apparel including Walmart and the National Retail Federation (NRF), along with the U.S. Chamber of Commerce. They formed the TPP Apparel Coalition, which opposes the YF ROO and want maximum flexibility for sourcing whereby any apparel cut and sewn within the TPP area regardless of where the fabric originates to be eligible for duty-free entry. Some members of Congress support this position.
Effective 1 June 2014, Pembangunan Sumber Manusia Berhad (PSMB) has adopted new structure of financial assistance for Training Grant Schemes as follows :
Beginning 2015, company inductions, motivational and team-building programmes will not be approved and will not be covered under HRDF.
Besides, employers are required to submit the training grant application to HRDF within 14 days of the training date. The completed training grant application will be processed within seven (7) working days.
In the 50’s and 60’s PVC and PU was a popular choice for the use in waterproof garments. It was also impermeable to water, hence keep us dry. Yet, the inherent problem with PVC and PU coated fabrics is that moisture vapour couldn’t pass through and end up creating an uncomfortable wearer environment.A solution discover in the 70’s, that was the discovery of microporous coating. In this discovery, moisture vapour was allowed to pass through and the results significantly keep us comfortable. This was an innovation of its time and later many other materials were introduced that is followed with the introduction of Hydrophilic breathable Pu. However, still there was some shortcoming, particularly performing in wet and cold condition.
The formation of dew point occurs, when outside temperature is low (which is between 0oC and 10oC) and also in rain condition. This rapid condition results with the forming of vapour condensation. A warm body at 37oC inside a garment with cold saturated air outside struggled to cope with the existing moisture and as a results wearer in the discomfort zone.
The standard test for measuring moisture vapour transmission (MVT) rates on waterproof fabrics, either the fabrics coated or laminated, was fundamentally failed. The test was carried out in such condition; without any temperature gradient e.g. 35oc outer temperature, 35oC inner body, 50% humidity and NO RAIN.
Is this realistic ? Many studies have been carried out and this study had led to improved understanding of clothing performance particularly on how waterproof breathable fabrics perform when they are subjected to rain and cold. Question remains as in what condition, the study has to be carried out, either in actual condition or in laboratory conditions……..
Contributed by :
Bachik Abu Bakar, Zaharah Kunci Mon & Rohani Rahmad
Department of Mechanical Engineering Technology
Faculty of Mechanical & Manufacturing Engineering
Universiti Tun Hussein Onn Malaysia
Batu Pahat, Johor
10th Disember 2010
Effective 16 Dec 2010, as an important tool to curtail tax evasion and combating under-invoicing practices in import operations, Argentina established criterion values precautionary measure on import of knitted fabrics on good origin from Group 4 countries. The standard FOB value of the knitted items varies from US$5-7 per kilogram.
The EC revised Rules of Origin (RoO) for products imported under generalised system of preferences (GSP) on 18 November 2010. Rules of Origin is used to determine whether imported goods really originate from the countries covered by preferential trade arrangements, thereby making eligible for a preferential customs tariff. The new rule will come into effect from January 1, 2011.
EU has made changes in the rules of origin from certain LDC countries which will simplify the procedure of granting the GSP benefits to the exporting countries and will also benefit other countries involved in supplying raw materials to the country exporting the final product.
The 49 Least Developed Countries (LDCs) are:
Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi, Cambodia , Cape Verde, Central African Republic, Chad, Comoros Islands (Islands), Congo Democratic Republic of, Djibouti, East Timor, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti, Kiribati, Laos, Lesotho, Liberia, Madagascar, Malawi, Maldives, Mali, Mauritania, Mozambique, Nepal, Niger, Rwanda, Samoa, São Tomé & Principe, Senegal, Sierra Leone, Solomon Islands, Somalia, Sudan, Tanzania, Tuvalu, Togo, Uganda, Vanuatu, Yemen and Zambia.
The new rules of origin are simpler, and as claimed it’s “more development-friendly.” All the above countries are going to benefit and can export duty free to EU even if only stage of processing (ie garment making in case of apparel) has happened in that country. Consequently, these countries will be able to import fabrics from any country in the world and export apparel duty free to the EU.
Previously, most of the LDCs faced more restrictive rules, requiring double-stage processing and minimum local value content. It was virtually impossible for LDCs without textile base to enjoy the GSP facility unless they manufactured own fabric and make apparels, to qualify for the preferential treatment.
In practice, many LDC exporters forego the preferential market access, either due to their ignorance or due to higher cost of compliance of the origin rules. As a result, the rate of preference utilization of many LDCs remained insignificant, revealing the preferential treatment meaningless to many of them.
Who is going to Benefit ?
Who can be the losers ?
In line with measures to promote the tourism industry, tourism dutiable products such as apparel and footwear with FOB value exceeding RM200 has been given duty exemption under Customs Duties (Exemption) Order 1988.
According to the Tourism department, Malaysia attracted 23.6 million tourists last year. Tourism contributes RM1 billion per week to the Malaysian economy. However, the average tourist shopping expenditure in Malaysia is lower than our competitors as shown on the following chart :
Therefore, to further boost the tourism industry and to render Malaysia as the leading shopping destination, import duties of tourism products have been abolished under Budget 2011 effective on 15 Oct 2010.
Import duty abolished on tourism products (with duty of between 5% and 20%):-
– Handbags, wallets, suitcases, briefcases, apparels, footwear and hats;
– Jewellery, costume jewellery and ornaments; and
Import duty abolished on Daily-use products (with duty of between 10% and 20%):-
– Toys such as dolls and small scale recreational models
– Talcum powder, face powder and shampoo; and
– Bedspreads, blankets, curtains and table cloth
Disbursement of an additional RM3bil Working Capital Guarantee Scheme (WCGS) allocation under 10th Malaysia Plan (10MP) will commence immediately.
The scheme was first introduced in the second stimulus package in March 2009. It was fully utilised by year-end, despite being topped up from RM5bil to RM7bil. In view of encouraging response to the scheme, the Malaysian Government provids an additional RM3bil under the 10MP, making it total of RM10bil.
Those who are eligible and interested can submit their applications through the participating banks effective immediately. For details, please browse www.sjpp.com.my.
** SJPP (Syarikat Jaminan Pembiayaan Perniagaan Bhd) is wholly owned by the Minister of Finance Inc to manage the guarantee schemes.
The price of cotton has risen from under $0.93 in June to around $1.77 per pound in 20 Jan 2011. Historically, cotton has averaged 40-50 cents per pound. We are at record 140 year high in cotton prices.
The record high prices are mostly due to rising global demand from spinning mills, and global stock piles that are shrinking. Demand from Chinese cotton mills are showing no signs of slowing down at this time. There is an imbalance that most likely will not be solved anytime soon.
However, the real culprit in spiking prices is demand in the emerging markets. Producers, fearing a severe shortfall, are spending freely to assure a continued supply of the fabric, and some speculators have jumped into the volatile market.
Talk about a bullish situation. You have global demand easily outstripping worldwide supply. Crops in China, the world’s largest cotton producer, and Pakistan, the world’s fourth largest producer, were hit by major floods. U.S. weather has been unseasonable, and is also causing some problems in that respect. The U.S. is the world’s third largest producer of cotton, and the world’s largest exporter.
Obviously, garment producers will be passing on the rising costs to consumers.
Moving Production Base
Some companies will try to move clothing production to a cheaper venue to offset higher material costs. Others will try to shave the bottom line by switching to synthetics, but that strategy is proving dicey.
Lululemon Athletica, the sportswear company, is moving some manufacturing from China to Vietnam, Cambodia, and Bangladesh, where wages are lower, and Bon-Ton is benefiting from reduced-duty productions in Egypt and Nicaragua
Looking for Alternatives
Likewise, apparel companies are reconsidering the configuration of some of the items to reduce the amount of cotton used. Manufacturers will have to make up that money someplace. It may come out of the zippers and buttons and trims, or it will come out of using less fabric, perhaps fewer pleats or folds.
In addition to raising prices, some manufacturers are looking to slash costs by using more synthetic or other cellulosic fibers in their garments. Others will add other materials to make cotton stretch.
Bon-Ton has switched from cotton-heavy sweaters to those blended with rayons and synthetic fibers.
Some retailers are going for poly/cotton blends. Some spinners are putting more poly in the blend. It may be a 60/40, but in actuality it may be a 55/45. Also, some are going to lighter-weight fabrics. The alternatives to cotton are poly/cotton, rayon/cotton, Tencel blends and Modal blends.
Some manufacturers are also looking at alternatives, like bamboo. The versatile plant can be woven into fabric that looks and feels a lot like cotton, and right now, it’s cheaper than cotton.
Manufacturers Increase Price
Suzhou Unitedtex Enterprise Ltd., which sells $24 million worth of shirts and jackets annually to Gap, plans to raise prices by 5 percent to 30 percent for products that will be available in April.
Shandong Zaozhuang Tianlong Knitting Co., which makes Polo Ralph Lauren T-shirts and track suits for Le Coq Sportif, has raised prices as much as 70 percent from a year earlier. Tianlong ships 80 million yuan of clothes to Europe, North America and Japan annually, and raised the price of T-shirts it sells to Ralph Lauren to $4 each, from $3.20 in July.
Zhejiang province-based Ningbo Seduno Group, which sells about $30 million worth of men’s and women’s clothes to Hennes & Mauritz annually, increased prices by almost 20 percent since July. The company also supplies to Adidas, Zara and Nike and will keep raising prices as cotton costs increase.
Zhejiang Datu Garments Co Ltd., which shipped $4 million worth of pullovers to Wal-Mart Stores last year, raised prices to $9 a piece from $7.50 in August.
APEC is an organization that formed in 1989 in creating wider economic cooperation in Asian Pacific region.There are 21 countries in the organization that are Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, Taiwan, Thailand, USA and Vietnam.
The APEC Business Travel Card was initiated by the Asia Pacific Economy Cooperation (APEC) to assist the business community who has trade relations within the APEC member countries.
In 2010, a total of 3,588 APEC Business Travel Cards (ABTC) was issued to Malaysian business travelers. Since the initiatives started until February 2011, there are 5,299 Malaysian cardholders of ABTC.
The ABTC was developed in response to the need for business people to gain streamlined entry to the economies in the Asia-Pacific region. The ABTC enables business people to travel visa-free to participating APEC economies to explore new business opportunities, attend meetings and conduct trade and investment activities. The card is valid for three years during which it facilitates travel for multiple entry of two to three months in participating economies without the need for a visa. Cardholders can use the special service lanes at selected control points for streamlined immigration clearance upon presentation of the card and their valid national passport.
To qualify for the usage of the APEC Business Travel Card, applicants must be actively involved in business for which their frequent visits in the countries are accounted for. Information given by applicants will be distributed to all member countries for pre-clearance status. Approval by member countries channel through Malaysian Government.
Ministry of International Trade and Industry (MITI) and the Immigration Department of Malaysia are responsible for the ABTC Scheme in Malaysia. MITI is responsible for issuing supporting letters to genuine business applicants to endorse their applications, while the Immigration Department will issue the ABTC card upon approval from participating economies.
Further information on the process and procedures of applying the ABTC can be obtained through the Immigration Department of Malaysia official portal at:
http://www.imi.gov.my/index.php/en/travel-documents/apec-business-travel-card
For the application of the supporting letter, information can be accessed via MITI Website http://www.miti.gov.my / or contact:
Mr. Muhd Ikram bin Zulkurnain
Asia Pacific Economic Cooperation (APEC) Division
Tel : 03-6203 4707 / 03-6203 3151 Email : apecmiti@miti.gov.my
ith effect from April 1, 2011, the Singapore Consumer Protection Act has been expanded to include general consumer goods such as toys, baby products, textiles, DIY products, sports equipment. It will cover 15,000 categories.Currently, the Act covers a list of 45 electrical, electronic and gas home appliances considered as “Controlled Goods” which requires registration by SPRING, the national standards authority in Singapore, prior to being allowed to be on sale in Singapore.
Under the new Consumer Goods Safety Requirements, suppliers will have to ensure products meet international safety standards. These include those laid out by the European Standards Organisation, ASTM International in the US, as well as additional requirements specified by SPRING Singapore.
No additional paperwork is required to be submitted. SPRING will monitor goods sold by conducting random checks, consumers’ feedbacks and information-sharing from counterparts overseas, and will take further action when a red flag is raised.
WHAT’S NEW? Consumer goods that are required to meet international safety standards are:
• Children’s Toys
• Baby Products
• Power Tools
• Textiles and Apparel
• Sports and recreation products
• Costume Jewellery
ENFORCEMENT
With the new regulations, SPRING Singapore can remove or ban general consumer goods deemed to be unsafe or those that do not meet International Safety Standards. Retailers and suppliers who fail to do so will face:
• a fine of up to S$10,000 or
• jail term of up to two years.
The European Union unveiled plans to exclude middle-income countries such as Malaysia, Russia and Brazil from a preferential trade regime, saying concessions should focus on poorer countries.
The EU’s General System of Preferences (GSP) reduces tariffs or quotas for 176 countries, but just under 4 per cent of the bloc’s imports.
The European Commission said it wants it to be reduced to approximately 80 countries.
‘Trade preferences do not make much sense anymore’ for relatively well off countries ‘such as Russia, Brazil, Malaysia, Argentina, Saudi Arabia or Qatar,” EU Trade Commissioner Karel De Gucht said.
The final list would only be worked out just before the enforcement of the new rules, based on World Bank and other relevant data from the previous three years. The commission would like the new rules to be in place by January 1, 2014 at the latest.
Countries excluded would have an opportunity to secure alternative concessions by signing free trade deals with the EU.
Malaysia and the European Union hope to wrap up free trade talks by June 2012. So far, three rounds of negotiations were held. In July, another round of talks will be held in Kuala Lumpur.
Government of India has lifted the restriction on cotton yarn exports effective April 1, 2011.
According to the revised regulation, cotton yarns other than sewing threads not put up for retail sale are now listed under “free list.” The contracts for cotton yarn exports should be only registered with Directorate General of Foreign Trade and shipment can go ahead against the verification by the Indian customs.
Previously, cotton yarn exports were under license category with a maximum limit of 720 million kgs for the 2010-11 fiscal year, ending on March 31st, 2011.
To protect the safety of Taiwanese consumers, The Bureau of Standards, Metrology and Inspection (BSMI) of Taiwan has implemented an inspection regime for textile products manufactured or imported into Taiwan. As of the effective dates, all covered products must comply with the requirements and bear the commodity inspection mark before they can be sold in the Taiwanese market.
New Levy Mechanism for ForeignersForeigners entering Malaysia from June 1 will have their thumbprints taken within 20 seconds under a biometric system to enhance security at 96 entry points.
“The system is capable of tackling various immigration issues, including falsification of documents, overstaying, and misuse of visas, passes and permits.” said Deputy Prime Minister Tan Sri Muhyiddin Yassin.
Muhyiddin said the Cabinet Committee agreed in principle to implement a new levy mechanism where employers would be charged more if they employed more foreigners and for a longer duration. The suggestion would be tabled in the Cabinet for approval before its proposed implementation in June this year.
Many Factors To Be Studied Before Fixing Minimum Wage
Several factors should be studied in considering the minimum wage, including its possible inflationary effects, the impact on domestic investment and how it affects employers, the Deputy Minister of Human Resource Datuk Maznah Mazlan said.
She said the final study was being conducted with the World Bank, professional groups and the relevant ministries to consider all aspects of the issue before a decision was taken.
“We have 1.9 million registered foreign workers in the country and must consider the flow of funds to them. If we raise the wage to RM800 or RM900 per month (from the RM720 poverty starting point), the government might have to pay billions of ringgit more,” she said.
“We will also look at the experience of other countries such as South Korea and Japan,” she was commenting on the call of the Sabah branch of the Malaysian Trades Union Congress to set the minimum wage for the state at RM900.
A bill will be tabled in parliament in July to establish the National Wage
A ministry study in 2009 covering 1.3 million workers in the country showed that 33.8 per cent of them were paid less than RM700 per month.
Government Wants Retirement Age Raised
The Government is in discussions with stakeholders in the private sector to increase the retirement age of workers to 58, in line with the civil service,
“The objective of increasing the retirement age from the current limit of 55 is because people in this age group still have much to offer in terms of productivity,” Human Resource Minister Datuk Dr S. Subramaniam said.
The Malaysian Trades Union Congress (MTUC) had earlier urged the Government to extend the retirement age of the private sector to 60 as a means of retaining human capital and increasing productivity.
With effect from 1 April 2011, all employers in the Manufacturing Sector registered with Pembangunan Sumber Manusia Berhad (PSMB) are to pay the Human Resources Development (HRD) Levy based on monthly wages at the following rates:
Cotton prices started declining globally on the prospect of a higher yield next year, and a reduction in consumption by China. The price of cotton is likely to drop by 17 per cent by the end of the year, analysts say.
Cotton prices hit a historic high in March reaching a peak of over US$2.44 per pound.
But the market calmed down at end-March and early-April with a forecast of better output next year as cotton producing countries such as US, China, India, Pakistan and others increased acreage for cotton cultivation this year.
The retreat comes as a relief to apparel retailers, brands and manufacturers, with cotton prices now stabilised at around $1.55/lb. But Canadian T-shirt and sock maker Gildan Activewear Inc has warned it could take another two years before prices return to more normal levels.
Increase Production
The initial world cotton projections for 2011-12 show a sharp increase in production to a record 124.7 million bales, with India, China, and Pakistan accounting for 70 percent of the total output.
The cotton cultivation area is projected to rise by 7 percent in 2011-12 to 36 million hectares globally, the largest in 17 years, in response to record prices in 2010-11, said a report of the International Cotton Advisory Committee (ICAC).
Recent survey results from 15 Chinese provinces also show an increase of up to 6.8 per cent in cotton planting this year, compared with last year.
Chinese Demand Decline
Behind the pullback in cotton is China’s slowdown in purchases owing to massive stockpiling of the commodity. China consumes almost 50% of the world’s cotton. Demand has fallen as China and other consumers have moved to synthetics.
The China National Cotton Information Centre forecast a decline in China’s cotton demand into next year.
Cotton imports by China, the biggest buyer, fell 14.6 percent in March from a year ago. Inbound shipments were 276,436 metric tons, compared with 323,780 tons a year earlier. About 55 percent of China’s cotton imports in March were from the U.S., followed by India and Uzbekistan, at 31 percent and 7 percent respectively.
China Cotton Reserve Policy
China also plans a cotton purchase and reserve policy this year to stabilise prices. Under the programme, the China National Cotton Reserves Corporation will be responsible for purchasing when market cotton prices fall below the state purchase price for five consecutive working days. The sale of cotton reserves will take place whenever necessary.
China had occasionally conducted temporary cotton purchase and reserve programs in the country’s major cotton belt since 1999, but this is the first time that a purchase price is announced before the program starts.
Spinners Cut Down Yarn Production
When the Indian government lifted the ban on April 1, Indian spinners offered huge stocks to foreign buyers. Sensing the accumulated stocks, the buyers negotiated for lower prices. The price abroad of yarn, from a range of $6.25-6.4 a kg of 30s comb had crashed to below $5.
At present, the Indian spinning industry, say observers, is sitting on a yarn stock of roughly 440 million kg of inventory; the normal level is 150 million kg.
Spinning mills in Pakistan are cutting down yarn production, mainly due to a plunge in prices of yarn, which have fallen by 33 percent in the last two months.
Mr. Gohar Ejaz, Chairman of APTMA said, “APTMA has decided not fully operate the mills. We will be working for three days in a week.” Pakistan has the third largest textile industry in the world after China and India.
The former Chairman of APTMA – Mr. Abid Farooq said, “It’s a temporary thing, of course, because the market has over-corrected itself, as it went up too high and has now gone down too low. So basically there is an over-reaction to it and the mills are temporarily looking at the situation and curtailing production”.
Poland is located in the Central Europe, serving as an entry point to the Western and Eastern European countries. It is considered as the 7th biggest market in EU for bodywear, and 11th in knitwear consumption. Of the 12 European countries, in terms of market size, Poland is an important country for knitted outerwear consumption.
Consumer spending of body wear in Poland was €1,239 million during 2008. Comparing the consumption pattern during the period 2004-08, this is a positive increase of 29%. This indicates a favorable market for textile and apparels. Poland accounted for 3.2% of the total consumption of EU.
Poland imports huge quantities of fabrics, mainly for knitted garments. In 2008, the country ranked as the 12th largest importer of knitwear, and 1.9% of the total imports from EU. Currently, Poland’s apparel market is dominated by exports from Germany, China, and Bangladesh.
Poland offers good market potential for the exporters. If the exporters keep their focus on quality commitments, and timely delivery, chances are positive, that they will get some percentage of orders that are currently executed from their counterparts.
The Malaysia-India Comprehensive Economic Cooperation Agreement (MICECA) came into force on 1 July 2011.
MICECA is a comprehensive agreement that covers trade in goods, trade in services, investments and movement of natural persons. It value-adds to the benefits shared from ASEAN-India Trade in Goods Agreement (AITIG) and will further facilitate and enhance two-way trade , services, investment and economic relations in general.
TRADE IN GOODS
Under MICECA, the two countries will progressively reduce or eliminate tariffs on an agreed list of industrial and agricultural products between July 1, 2011 and Dec 31, 2019.
If you are exporting to India or importing from India, schedule of tariff commitments by both parties are available on MKMA website www.mkma.org.
How to enjoy the Preferential Duties
1.1 All non-originating materials used in the production of the goods have undergone a change in tariff classification in a sub-heading at the six digit level of the HS;
1.2 Qualifying value content of the goods is not less than 35% of the FOB value, provided that the final process of manufacturing is performed within the territory of the exporting Party.
The formulae for calculating the qualifying value content are as follows:
(a) Direct Method
(b) Indirect Method
CIF (Cost Insurance & Freight) = (carrier + port fee + insurance + freight+ profit)
means the price actually paid or payable to the exporter for a good including the cost of the good, insurance, and freight necessary to deliver the good to the named port destination.
FOB (Free On Board) = (carrier + port fee + profit)
means the price actually paid or payable to the exporter for a good when the good is loaded onto the carrier at the named port of exportation, including the costs necessary to bring the good onto the carrier.
In order for a product exported by Malaysian companies to enjoy preferential treatment (reduce duty or for some products zero duty) in India, exporters need to obtain a certificate of origin (CO) issued by the Ministry of International Trade and Industry (MITI), Malaysia. The CO is a certificate that can be used to satisfy your buyers that the products exported originate from Malaysia. The CO form can be obtained from the Federation of Malaysian Manufacturers (FMM).
If you import a product from India, in order for the product imported from India to enjoy preferential treatment in Malaysia, importers need to request the exporter/supplier in India to obtain a certificate of origin (CO) issued by the Export Inspection Agency of India (EIA). The CO form can also be obtained from the EIA offices.
MICECA is Malaysia’s fourth bilateral FTA after Japan, Pakistan and New Zealand.
The Malaysian business community is encouraged to take full advantage of the opportunities offered under this agreement.
Trade between Malaysia and India had been on an upward trend and totalled RM30 billion (US$9 billion) in 2010, and amounted to RM12.1 billion (US$3.98 billion) from January to April this year.
It is expected that the implementation of this agreement will boost bilateral trade to RM50 billion (US$15 billion) by 2015.
The Korean Agency for Technology and Standards (KATS) has revised the Self-Regulatory Safety Confirmation and the Safety Quality Labeling for Textile Products.
The new requirements will go into effect on December 27, 2011.
Highlight of the Self-Regulatory Safety Confirmation
Restricted Substances | Baby Textile Product (≤ 36 months) |
pH | 4.0 – 7.5 |
Formaldehyde (mg/kg) | ≤ 20 |
Azo Dyes (mg/kg) | Individually ≤ 30 |
Phthalates (%)
(DNOP, DEHP, BBP, DBP, DINP & DIDP) |
≤ 0.1 |
Organotin – TBT (mg/kg) | ≤ 0.5 |
Organotin – DBT (mg/kg) | ≤ 1.0 |
Dimethyl Fumarates (mg/kg) | ≤ 0.1 |
Flame Retardants | Banned |
Total lead (mg/kg) | ≤ 90
(Metal ≤ 300) |
Cord & Drawstrings | Comply |
Allergic Disperse Dyes | Banned |
* Small Parts | No small part after attachment test / domestic washing and drying test |
* Effective on December 27, 2011
Highlight of the Safety Quality Labeling
Performance of the Malaysian Textiles & Apparel Industry
Under the 2011 Budget, the Government has abolished import duties ranging from 5% to 30% on 328 products, of which 259 are related to apparel, shoes and headgears. The aim is to increase tourist spending in the country and promote Malaysia as a shopping haven in Asia to achieve the objectives of the NKEA.
The USA and Japan continue to be the major export destinations accounting for 26.6% of exports in this sector. Exports to the PRC, ROK, Germany and Turkey increased between 25.4% and 62.9%. Increase in consumer demand and higher quality of life were among the significant contributors to the increased demand in exports.
The price of cotton rose more than 100% due to speculation, hoarding and limited supply from the top producers in the world, namely Pakistan, which experiences natural disaster; and the PRC and India, both of which were subject to bad weather conditions. Cotton price is expected to remain high until August/September 2011.
Outlook
From 2006 to 2010, the average contribution of the textiles and apparel industry to total export of manufactured products was RM9.9 billion with an average total share of 1.6%. Although this sector is expected to face minimal decrease in total share of manufactured export in 2011, it is expected to continue as one of Malaysia’s top 10 manufacturing sector export earners due to increasing demand from the international market.
The Government is actively assisting the industry to be competitive and further penetrate the international market through FTAs. At the same time, Malaysian companies have to strive to create internationally-recognised brand names.
EU imports of cotton T-shirts continued stagnation during the first half of this year. Total shipments of non-EU countries increased by only 3% after a fall of 4.34% in the same part of the year.
In value terms, however, cotton shirt imports increased after the unit prices have increased significantly due to higher cotton prices. In euros, the average price rose almost 10% while gaining 16% in U.S. dollars due to the strength of the euro against the previous year.
European buyers also shifted orders to suppliers in Bangladesh, to find lower prices, while material costs were increasing rapidly. Imports from Bangladesh has increased by 14% by volume in the first half, while shipments were down 15% Turkey, 7.3% and 2.3% in China from India.
Although the average price rose 21% in Bangladesh, still the lowest in the world market. T-shirts from Bangladesh also took advantage of their free access to EU rules of origin have been relaxed as well, from 1 January. T-shirt producers can now import outside the country and remain eligible for duty-free access.
In the markets of Central Europe, German imports from outside the EU remained firm in the first half while exports to imports into the UK still slipped and French began a serious slowdown.
addition to other currencies such as the US dollar. Since July 2009, China’s government has started the use of RMB for settlement of cross-border trade.
Settlement in RMB may reduce the foreign exchange risk for exporter and importers and this can result in better pricing of goods and services transactions for Malaysian companies.
Malaysian companies will also benefit from savings from the currency conversion spreads as it is now a direct quote from RMB to Ringgit.
To settle import or export in RMB, companies just need to provide relevant trade document (e.g. invoice) to their bankers and ask for RMB/MYR exchange rate quote for trade settlement purposes. Once agreed, the banks will remit the RMB to Chinese exporter account in China (in the case of Malaysian importers buy RMB to pay for their import), or accept RMB proceeds from Malaysian exporters.
Who are eligible for trade settlement in RMB?
Any importer in 20 provinces in China can pay RMB to any company outside of China. The 20 provinces are Beijing, Chongqing, Fujian, Guangdong, Guangxi, Hainan, Heilongjiang, Hubei, Inner Mongolia, Jiangsu, Jilin, Liaoning, Shandong, Shanghai, Sichuan, Tianjin, Tibet, Xinjiang, Yunnan, and Zhejiang.
Malaysian companies need to check with their Chinese exporters whether their Chinese counterparts are eligible to receive RMB from outside mainland China. Only eligible exporters (known as Mainland Designated Enterprises or “MDEs”) in the 20 provinces can receive RMB from any company in the world. Currently there are approximately more than 67,000 MDEs.
Which Malaysian banks currently provide trade settlement in RMB?
Among others are AmBank, Bank of China, CIMB, Citibank, Hong Leong, HSBC, ICBC, Maybank, OCBC, Public Bank, RHB, Standard Chartered and UOB. There are varieties of products / services provided by banks including:
Please refer to your bank for details of products and services offered.
Several new regulations have been issued by the Brazilian government with the aim of reducing illegal and irregular imports of textiles and apparel.
The changes may delay shipping products into Brazil, slower processing times and additional customs controls if they do not meet the new requirements.
Special Inspection Procedures
According to an update from the US Office of Textiles and Apparel (OTEXA), a new Brazilian customs regulation includes special inspection procedures which may delay the release of imported goods up to 180 days.
The new procedures apply to textiles and apparel classifiable in chapters 61 and 62 of the Harmonized System – and the resulting delays could also result in additional storage or other costs.
Brazilian customs authorities have also enacted other regulations that will allow stricter monitoring and control of textile and apparel import transactions.
These include Normative Instruction 1.169, related to the control of goods that are suspected of being irregularly imported and are subject to seizure; and Normative Instruction 1.181, concerning procedures for the customs compliance of foreign operators, which are defined in the regulations as the producer, manufacturer or exporter of goods to Brazil.
Additionally, another obstacle to textile and apparel imports, from 1 December the Brazilian government will raise the Cofins (Contribution for the Financing of Social Security) for imports of textiles, shoes and furniture from 7.6% to 9.1%.
The Government of India will be implementing new rules & regulations with effect from 1st November 2011 for all Indian workers coming for employment in Malaysia. Followings are highlights of the new rules and regulations:
The minimum wage structure for Indian workers will be as follows:
For the new format of Employment Contract and other essential documents, please visit the High Commission’s website www.indianhighcommission.com.my and click on “Labour Matters”.
On 4 October 2011, the European Union issued a regulation that eliminates the current requirement to present a certificate of origin (or an invoice declaration of origin in certain cases) to be able to import most apparel and a range of textile products into the EU. The regulation will be effective from Oct. 24, 2011.
The regulation acknowledges that there is no reason to demand proof of origin when the products at hand can be imported into the EU without any constraints. The EU already has a comprehensive system to track the origin of imported merchandise, including a requirement to enter the country of origin in Box 34 of the single administrative document that importers have to complete for the release of goods for free circulation and an ex-post statistical surveillance system that monitors the impact of textile and apparel imports on the EU market.
However, companies doing business in the EU should keep in mind that textile and apparel products claiming preferential duty treatment still need to comply with all applicable certificate of origin and other documentary requirements to benefit from such preferential treatment.
The levy for all categories of foreign workers will see an increase of RM50 effective 1st Sept 2011.
However, first-time applications for every foreign worker which were submitted to the ministry before Sept 1 will remain at the old levy rate. The old rate is also maintained for any renewal applications of Temporary Employment Visit Passes which expire before Sept 1.
The new levy rates are only applicable for applications of expired temporary working pass that has been approved on or after Sept 1, be it a new application or an extension.
The new levy rates from Sept 1 onwards is RM410 for the agriculture and domestic sectors, plantation sector (RM590), manufacturing and construction sectors (RM1,250) and service sector (RM1,850).
However, for Sabah and Sarawak, the new levy rates are lower than those compared with the peninsular and it is RM1,010 for the manufacturing and construction sectors and RM1,490 for the services sector.
Date : 15th to 17th May 2012
Venue : Concorde Hotel, Shah Alam, Selangor, Malaysia.
Organized by : Faculty of Applied Sciences, Faculty of Art & Design , (UiTM), Malaysia. The Textile Institute, Manchester
Fee : RM1,100 per person (MKMA/MTMA Members)
(Interested participants, please get the Authorisation no. from MKMA secretariat for online registration)
Tentative Conference Programme
15/05/2012 Cocktail Reception
16/05/2012 Keynote Session
Parallel Session
Exhibition
Conference Dinner
17/05/2012 Parallel Session
Exhibition
The Textile Institute was founded in England in 1910. Its members consist of individuals and organisations from up to 80 countries. The main objective of its establishment is to provide a platform for learning, recognising achievements, rewarding excellence and to disseminate information.
The conference aims to provide a significant platform for industry and researchers around the world to meet, discuss, share and disseminate findings for future collaborations. Delegates will benefit from a wide range of plenary speakers, invited speakers and contributed talks from local and international presenters, along with poster sessions. It is anticipated that the conference will become a catalyst for bridging the research, innovation and enterprising spirits among the participants.
Women’s Clothing & Men’s Clothing
Although women’s clothing has the largest share of the market, the most promising sector in terms of growth prospects is that of men’s clothing. Indeed, this sector is forecast to grow at double digit growth rates until at least 2013. Russian men have become more selective in their clothing choices and are demanding higher quality products. Such demand grew when the economic situation in the country improved during 2000-08, and has grown again since.
Children’s Clothing
Also promising is the children’s clothing sector. The average amount of money spent on children’s clothing in Russia has grown significantly since 2008, and the market is expected to grow by 10% per annum until 2013.
Sportswear
However, one of the most promising and fastest growing categories in the Russian clothing market is that of sportswear. Indeed, this is expected to grow at an average growth rate of 16-19% per annum during 2010-17. Recently, Adidas announced that it planned to increase the number of stores within the region during 2011-15.
While some companies are expanding into Russia through franchise agreements, a number of brands are entering the market independently. However, companies planning on entering and expanding in the market without a Russian partner could face serious problems when faced with political obstacles and widespread corruption within the industry’s business practices.
In the meantime, the Russian market is expected to become more open once the country has joined the World Trade Organization (WTO). With WTO accession, the time is right for international brands to look at the potential of expanding into the Russian market.
U.S. consumers were definitely in a conservative mood when it came to buying clothing in 2011. Clothing and textile imports from overseas were down 2 percent for the year ending Nov. 30 when calculating imports by units. When it came to dollar value, imports jumped 9.2 percent, due primarily to rising raw-material costs that included cotton and polyester.
With 95 percent of U.S. clothing sourced from overseas, the country brought in $101.3 billion worth of apparel for the year ending Nov. 30, compared with $92.7 billion the previous year. But when calculated in square-meter equivalents, a fabric measurement, the United States imported only 54 billion SME, compared with 55.2 billion SME in 2010.
Part of the disparity was due to cotton prices, which started on a rocket-like ascent in November 2009, when cotton was at 72 cents a pound, and peaked at $2.30 a pound in March 2011. Since then, prices have leveled off quickly. Cotton now fetches about 90 cents a pound.
Even sourcing in China, a country known for its low costs, has been affected. The value of its apparel and textiles shipped to the US during the 12-month period was up 6.2 percent to $40.6 billion. But the number of units sent was down 2.5 percent to 25.2 billion SME. China accounts for 46 percent of all apparel and textiles imported by U.S. companies.
It was a different story for Vietnam, the second-largest apparel provider to the US. The unit value of its clothing and textiles ordered by U.S. companies grow nearly 10 percent while the dollar value of those goods was up nearly 15 percent.
Vietnam shipped 9.85 billion SME valued at $7.2 billion to the US as apparel companies tried to diversify their manufacturing sources.
India, the third-largest apparel and textile supplier to the US, is on a growth path, too. Its apparel and textile exports to the US rose nearly 2 percent in unit value last year to 3.3 billion SME. The value of those goods was up nearly 11 percent to $6 billion.
Under the package, the total export value of the 75 tariff lines is estimated at US$1.03 billion and the average tariff on these products is around 8.86%.
The EU trade package could generate $100 million to $300 million of additional textile export earnings a year. Pakistan exported about $13 billion of textile products last year.
The waiver will apply from Jan 1, 2012, until Dec 31, 2013. The EU could ask for the waiver to be extended for a third year if it considers Pakistan’s economy still needs help.
The deal was originally sought by the EU for unilateral trade concessions on 75 products for a period of three years to help Pakistan recover from the devastation of the 2010 floods. It was delayed after competing textile exporters such as Argentina, Brazil, India, Bangladesh and Indonesia raised objections. The package also faced tough resistance from within the EU bloc, notably from Portugal, France and Italy with strong textile industries.
Bangladesh, Brazil and India dropped their objections recently after EU amended to use tariff rate quotas (TRQs) on 20 products rather than full liberalization. The tariff rate quotas will be set at 20% above the average of exports in 2008, 2009 and 2010. Under the TRQ there’s no duty and over the TRQ there will be the normal MFN (most favoured nation) tariff.
The selected products represent almost 900 million euros (US$1.2 billion) worth of Pakistani exports to the EU, accounting for about 27% of the EU imports from Pakistan, which totaled 3.3 billion euros in 2010.
The EU is Pakistan’s most important trading partner, receiving 27.4% of the country’s exports and providing 17% of its total imports. Pakistan’s exports to the EU are mainly composed of textiles and clothing products, which account for over 60%, followed by leather products, which account for 13%.
Power and gas cuts have taken a heavy toll of the textile industry. The industry faced gas cuts for six months during 2011.
Pakistan is persuading EU to change the criteria for GSP Plus so that the country may be able to get benefit of this scheme and expand its exports under the GSP plus, import duties on products would be reduced and there would also be no limitation on exports. Owing to anti-drug efforts, Pakistan had been enjoying GSP Plus from 2002 to 2005, however, after the Indian interference, the status was withdrawn by the EU.
The certification should ensure that imported goods comply with the Egyptian standards and pass inspection by the General Authority of Export and Import Control (GOEIC).
The new regulations are set to protect the Egyptian consumer from bad quality imported goods which are harmful for consumers’ health. The new regulations would be implemented starting February 2012.
Import activities have increased drastically which in turn had a destructive effect on the Egyptian production. Egypt’s imports amount to $50 billion leading to a large trade deficit.
The Government of Argentina has put forward three possible measures to protect the domestic textile industry from unfair competition. The measures are:
The Government asked the textile industry to make a list of items that can be included in the list of 100 items on which tariff can be increased beyond the Mercosur Common External Tariff (CET), and also to add to Non-Automatic Licensing System (LNA) or apply anti-dumping protection.
Last December, Mercosur member countries decided to individually apply additional import duties above the CET on 100 items. However, the tariffs cannot exceed the 35 percent limit set by the World Trade Organization (WTO).
The Government is currently preparing a list of 100 textile and non-textile items on which Argentina would like to raise tariff. The final list is to be submitted to the Mercosur Trade Commission, and the new tariff would come into effect if no objection is raised by other member countries.
The Argentine Government is also considering increasing the current list of 605 items that come under Non-Automatic Licensing.
The Government would protect the domestic textile industry from unfair foreign competition and would support the industry in its efforts to innovate, add value and save every single job.
Market development grants (MDG) will be increased four-fold to RM52.5 million this year, from RM12.34 million allocated last year.
The eligibility ceiling for the grant has been raised from RM30,000 previously to RM100,000 per company under the MDG scheme aimed at assisting small-and-medium enterprises (SME) gain market access.
The Malaysia External Trade Development Corporation (MATRADE) would introduce an online application system to make it easier for exporters to take full advantage of the scheme.
Last year, 1,300 SMEs benefited from these grants, whose total value was RM12.34 million.
New MDG Guidelines
The scheme is to provide a matching grant to assist Small and Medium Enterprises (SMEs) undertake activities for the development of export. This guideline is effective on eligible activities commence on 1st January 2012.
Definition of SME
For manufacturing sector, having an annual sales turnover not exceeding RM 25 million (based on the latest financial report) OR not more than 150 full-time employees (based on latest EPF Statement).
Method of Disbursement
Companies can obtain a 50% reimbursable matching grant on the approved cost of the eligible claims and activities.
Eligible SME companies can claim a maximum grant of RM 100,000.00 for eligible activities undertake in 2012 and subject to first come first serve basis and availability of MDG fund.
Eligible Activities
Claimable Expenses for SMEs
a) Participation in International Trade Fair/Exhibition Local or Overseas
b) Participation inTrade Investment Mission or Specialised Marketing Mission
c)Participation in Malaysia Export Exhibition Center (MEEC)
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Background
The Customs Appeal Tribunal was established in 2007.
Prior to the establishment of the Tribunal, any person aggrieved by any decision of the Director General of Customs, which is mostly related to classification and valuation of goods and taxable services, had to appeal to the Minister of Finance. With the establishment of the Tribunal, all appeals against the decision of the Director General of Customs (except in any matter relating to compound and the seizure of goods) are now channeled to the Tribunal.
The Tribunal is an independent judicial body and its decision is deemed to be an order of a Sessions Court and can be enforced accordingly. The decision of the Tribunal is final and binding on all parties.
Objective
The Tribunal undertakes to –
FAQs
1. Who can appeal to the Customs Appeal Tribunal?
Any person dissatisfied with the decision of the Director General of Customs made under the Customs Act 1967, Excise Act 1976, Service Tax Act 1975 and Sales Tax Act 1972 can appeal to the Tribunal.
2. What are the decisions that are appealable?
Any decision of the Director General of Customs except matters relating to compound or goods seized are appealable to the Tribunal. Examples of appealable matters are decisions in respect of valuation, classification, drawback etc.
3. How is an appeal filed?
An appeal must be filed in Form A (4 copies) together with a filing fee of RM100.00
4. Where can Form A be obtained?
Form A can be obtained from the Tribunals office at the Ministry of Finance, Putrajaya or can be downloaded from the Ministry of Finance website at http://www.treasury.gov.my
5. When must an appeal be filed?
An appeal must be filed within 30 days from the date of the notification in writing of the decision of the Director General of Customs.
6. If the 30 days period has lapsed, can an appeal still be filed?
If the 30 days period has lapsed, an appellant can apply for an extension of time to file an appeal. The procedural guidelines for an application for extension of time can be found in the Ministry of Finance website at http://www.treasury.gov.my or from the Tribunals portal at http://tribunalkastam.treasury.gov.my.
7. Why must an appellant pay all taxes / duties including penalties before an appeal can be heard?
Regulation 4 of the Customs (Appeal Tribunal) Regulations 2007 stipulates that all duties/taxes and penalties payable must be paid before an appeal can be heard. However, appellants are advised to file in their appeal quickly so as to comply with the 30 days period. The Tribunal will only fix a hearing date after Regulation 4 has been complied with.
8. Where will the hearing be held?
The hearing will be held at the Tribunals office in Putrajaya. Where necessary, hearing can be held at any suitable place.
9. Are there any other costs apart from the filing fee?
Apart from the filing fee there are no other administrative costs. However, an appellant must bear the costs of calling witnesses on his behalf.
10. Is the decision of the Tribunal appealable to the High Court?
Any party not satisfied with a decision of the Tribunal can appeal to the High Court on a question of law or of mixed law and fact.
http://tribunalkastam.treasury.gov.my/?m=faq
Some bosses like to have meetings to talk the data collection, looking at the facts and figures before any decision is made. This process takes a few days and weeks but nothing comes concrete despite the meetings. In fact, some matters can be resolved with quick decision despite the formal and regular meetings needed which become part of the organization culture that nobody would dare to make any decision including the boss.
Sometimes, we talk about the time management which everyone including your boss knows but most of time you and your boss would forget the actual meaning of time management during the meeting. One of my great experiences in attending a meeting chaired by former Senior Government Official, who had chaired a meeting with more than 100 CEOs around for brainstorming session, conducted a meeting according to the agenda promptly and professionally without wasting everyone’s time but got the items discussed with good resolutions.
By the way, meeting is important and not a waste of time if we can conduct it effectively without let the members of the floor deviating from the issues they discussed and making a conclusion for the issue to be taken appropriate action.
The best way to conduct your meeting with the department managers without wasting their time depends on the chairperson who could keep the meeting within two hours and more regular interaction with people to discuss and act the issues encountered daily would make many staff happier as they can get the jobs done without going through the hassle of meetings every day.
~Written by FY Liaw(Head of TARC, Segamat Branch ) on 21/6/2012~
“Clearly, there is tremendous interest to go in there,” said Rick Helfenbein, president of the U.S. arm of the $1 billion Hong Kong sourcing company Luen Thai, which sources in China, the Philippines and other Asian countries. “It is the next horizon.”
U.S. apparel importers, however, may have to wait a few more years before they start making T-shirts, hoodies and cotton pants in Southeast Asia’s poorest country, which was ruled by a military dictatorship for nearly five decades.
The Obama administration believes more progress needs to be made in opening up the government before trade can resume between the United States and Myanmar.
With that in mind, Congress is poised to renew import restrictions that expire July 26. The bill would extend third-country fabric provisions for the African Growth Opportunity Act.
For that reason, many apparel trade groups are not stepping up to lobby against the bill and put an end to apparel-import bans from Myanmar. “Right now our members care more about the AGOA extension and the DR-CAFTA fixes,” said Nate Herman, vice president of international trade at the American Apparel & Footwear Association, that represents hundreds of U.S. apparel and footwear makers and importers.
“The infrastructure isn’t there yet. The training for workers isn’t there yet and the social responsibility isn’t there yet, but it is an exciting opportunity, and a lot of companies are looking at that option to be prepared,” said Julie Hughes, president of the U.S. Association of Importers of Textiles and Apparel.
Yet, some apparel companies fear that if U.S. import bans aren’t lifted soon, it will be too late for them to take advantage of this emerging market. Competition from other countries is brisk.
On April 24, Canada lifted its restrictions on imports from Myanmar and export investment on that country. On April 26, the European Union approved a one-year suspension of economic sanctions.
Japanese manufacturer and retailer Fast Retailing, whose Uniqlo casualwear stores populate the world, recently announced it may source in Myanmar.
U.S. officials are slower to renew full-on trade with Myanmar, whose gross domestic product totals only $50 billion, one-seventh of neighboring Thailand, whose population is slightly larger, at 67 million.
“The executive branch and Congress are inclined to go slow,” said Luen Thai’s Helfenbein. “Apparel people don’t know which way to turn. They have to be green lighted, and by the time they get there, Europe will have taken up the good spots.”
He noted that apparel companies feel comfortable working in Myanmar because it is not difficult to get to—only about an hour’s flight from Bangkok, the capital of Thailand. Between 2000 and 2003, the United States purchased about 50 percent of all of Myanmar’s clothing exports.
There is still a small garment industry around Yangon, the country’s largest city, with about 200 factories. Approximately 20,000 people work in the apparel industry.
Last year, Myanmar exported about $770 million worth of garments to primarily Japan, which received $243 million in apparel. Other apparel exports went to South Korea and Europe, which had only a partial import ban in effect.
The Obama administration’s cautious attitude toward allowing imports from Myanmar is to assure that more political freedoms are instituted.
If things progress, Congress could be back next year lifting the import restrictions and clearing the way for a new Asian sourcing spot.
“It could be the next Vietnam,” Helfenbein said.
In 2011, the United States imported $7.2 billion in textiles and apparel from Vietnam, making it the No. 2 country for sourcing U.S. clothing. China is No. 1, with $40.6 billion in textiles and apparel coming from that country last year.
These requirements are designed to increase the overall quality of clothing produced while providing consumers with rigorous safety protections and establishing fair trade in competition.
The Product Certification Body (LSPro) tasked with issuing an SNI product certificate will be appointed by the Indonesian Ministry of Industry, and accredited by the National Accreditation Body of Indonesia (KAN).
Product testing can only be undertaken by laboratories with the capacity to test for azo dyes and formaldehyde content in fabric used for babies’ and children’s clothing, and the SNI requirements state that no toxic azo dyes can be present in fabrics used for the manufacture of clothing classified for either babies or children up to 36 months.
Besides, formaldehyde levels cannot be higher than 20mg per kg for fabrics used to produce children’s clothing up to 36 months and 75 mg per kg for fabrics used in clothing for children aged over 36 months.
Further to this, SNI marking requirements necessitate that the information for babies’ and children’s clothing must contain the name of the brand, the type and composition of fiber used, the country of origin and the designation as either a babies’ or children’s garment.
Testing laboratories based overseas will require accreditation that is recognized.
Malaysia and Australia concluded negotiations on the Malaysia-Australia Free Trade Agreement (MAFTA) on 30 March 2012. MAFTA is expected to commence implementation on 1 January 2013.MAFTA is a comprehensive agreement, which comprises 21 chapters encompassing trade, services and investment as well as economic cooperation. It also covers Intellectual Property Rights, E-Commerce and Competition Policy. MAFTA marks another important milestone in Malaysia – Australia economic relations, complementing the already established ASEAN-Australia-New Zealand FTA (AANZFTA).
The Agreement outlines commitments of both countries on liberalisation of trade in goods. Australia will eliminate 100% of its import tariffs on all originating goods upon entry-into-force while Malaysia will progressively reduce or eliminate import tariffs on 99% of its tariff lines by 2020.
How does your product enjoy the Preferential Duties
In order to benefit from the preferential tariff rates under MAFTA, exporters need to fulfill the requirement on Rules of Origin (ROO) which determines the origin of a product.
For textile and apparel products to enjoy preferential treatment it must undergone substantial transformation in Malaysia or Australia. Most major items are to comply with the Change of Chapter (CC) rule.
In order for a product exported from Malaysia to enjoy preferential treatment in Australia, you will need to obtain a certificate of origin. Details on how to apply for certificates of origin, the schedules of commitments on goods and services and the full text of the MAFTA will be available on the website of the Ministry of International Trade and Industry, www.miti.gov.my.
The following allowances are within the definition as wages under Section 2 of the Employment Act 1955:
(a) Overtime Meal Allowance
(b) Shift Allowance
(c) Night Shift Meal Allowance
(d) Petrol Allowance
(e) Outstation Overnight Allowance
(f) Laundry Allowance
(g) Vehicle Wash Allowance
(h) Acting Allowance
(i) Cash Allowances
(j) Incentive Payments
Travelling allowance is not part of wages, under the definition of wages under Section 2 of the Employment Act 1955. However, employers may with the consent of the employees convert the said travelling allowance to be part of basic minimum wages.
Trainees & Apprentices can be exempted from the ruling on minimum wages. However, foreign workers legally working in the country shall be COVERED by the minimum wages requirement.
Where an employee is a probationer, the minimum wages rates may be reduced to not more than 30% of the minimum wage rate. The reduction rate is only allowed for the first six months of the probationary contract. No further reduction for extension of the probationary contract.
The Human Resources Ministry said it has begun training enforcement officers nationwide to ensure the base wage policy is met by employers.
It is critical for employers to have the operational details of the composition and mechanism of implementing the minimum wage before the Order is gazetted. This is to allow employers to fully use the six month grace period to adjust their salary scales, which would be a massive exercise and include employees in higher pay scales because of the knock on effects.
Investments in the Malaysian Textile &Clothing Sector
In 2011, the Malaysian textiles and textile products industry was the tenth largest export earner, contributing approximately 2.3 per cent to Malaysia’s total exports of manufactured goods. In 2011, exports of textiles and textile products amounted to RM10.8 billion. The main export items were yarn, woven fabrics and apparels.
Malaysian apparel manufacturers continue to maintain an excellent reputation for quality and capability in the production of upmarket brands such as Nike, Adidas, DKNY, Ann Taylor, Armani, Talbots and Tommy Hilfiger.
In 2011, imports of textiles and textile products amounted to RM6.6 billion. The main import items were yarn and woven fabrics which were used for the production of fabrics and made up garments.
Projects Approved in 2011
In 2011, a total of 14 projects were approved in the textiles and textile products industry with investments of RM291.1 million. Of these, eight were new projects (RM59.8 million) while the remaining six were expansion/diversification projects (RM231.3 million).
Domestic investments amounted to RM55 million (18.9%) while foreign investments totaled RM236.1 million (81.1%).
Of the 14 projects approved, three projects were for the production of primary textiles (RM204 million), seven projects for made-up garments (RM51.5 million) and four projects for the made-up textiles (RM35.6 million).
The approved projects would generate a total of 1,356 employment opportunities.
The major projects approved were:
• An expansion project by an existing foreign-owned company with additional investments of RM195 million for the production of yarn. This company is currently producing polyester chips, fibre, yarn and fabrics and undertaking bleaching, dyeing, printing and finishing fabrics activities. The company proposed to set up a new state-of-the-art fourth generation fully drawn yarn/partially oriented yarn technology plant in Malaysia. This project when implemented would be the first of its kind in the ASEAN region. 90% of its production will be exported to the USA, Europe and Japan.
• An expansion project by a Malaysian owned company with an investment of RM23.3 million. The company proposed to manufacture ropes and fishing nets and other nets for industrial use from man-made fibre. The project will produce established products under the ‘Eagle’ and ‘Fish’ brands which are well known in the fishing nets industry. Sixty per cent of its production is for the local market.
(Source : MIDA Report on Malaysia Investment Performance 2011
2011 Exports of the textile and apparel sector
(+ 15.9% 2010 : RM9.32 bil)
Exports of Apparels
Description | 2011 | 2010 | ||
---|---|---|---|---|
Value RM mil |
Share (%) | Change (%) | Value RM mil |
|
APPAREL & CLOTHING ACCESSORIES | 4,083.9 | 100.0 | 14.6 | 3,564.6 |
Textile Apparel | 1,261.8 | 30.9 | 18.4 | 1,065.8 |
Men | 1,208.8 | 29.6 | 35.0 | 1,014.9 |
Men`s Clothing, Not Knitted/crocheted | 778.6 | 19.1 | 24.2 | 626.8 |
Men`s Clothing, Knitted/crocheted | 430.2 | 10.5 | 10.8 | 388.1 |
Women | 773.1 | 18.9 | 8.7 | 753.3 |
Women`s Clothing, Knitted/crocheted | 460.9 | 11.3 | -2.4 | 472.2 |
Women`s Clothing, Not Knitted/crocheted | 312.2 | 7.6 | 11.1 | 281.1 |
Clothing Accessories, Of Textile Fabrics | 500.2 | 12.2 | 4.4 | 479.4 |
Articles Of Apparel & Clothing | 255.9 | 6.3 | 51.4 | 169.0 |
Headgear And Fittings Thereof | 61.7 | 1.5 | -14.6 | 72.2 |
Articles Of Apparel & Clothing Accessories, of Furskins | 22.4 | 0.5 | 124.1 | 10.0 |
Major Export Destinations of Apparels & Clothing Accessories
No. | Export Destination | 2011 | 2010 | |||
---|---|---|---|---|---|---|
Value RM mil |
Share
% |
Change
% |
Value RM mil | Share
% |
||
4,083.9 | 100.0 | 14.6 | 3,564.6 | 100.0 | ||
1 | USA | 1,782.4 | 43.6 | 10.8 | 1,608.6 | 45.1 |
2 | Mexico | 397.9 | 9.7 | 14.5 | 347.4 | 9.7 |
3 | Japan | 275.1 | 6.7 | 14.8 | 239.6 | 6.7 |
4 | Singapore | 257.4 | 6.3 | 9.2 | 235.8 | 6.6 |
5 | Belgium | 180.5 | 4.4 | 47.2 | 122.6 | 3.4 |
6 | Germany | 164.6 | 4.0 | 17.7 | 139.8 | 3.9 |
7 | United Kingdom | 153.0 | 3.7 | -17.0 | 184.2 | 5.2 |
8 | France | 111.7 | 2.7 | 24.0 | 90.1 | 2.5 |
9 | Canada | 73.8 | 1.8 | -7.4 | 79.7 | 2.2 |
10 | Thailand | 61.8 | 1.5 | 58.8 | 38.9 | 1.1 |
Note: 90% of exports to US are under contract manufacturing for international brands.
STRENGTH
WEAKNESS
OPPORTUNITIES
THREAT
PROPOSAL FROM MATRADE
The US Congress on 2 August 2012 renewed duty-free access for textiles and clothing made in sub-Saharan Africa. The provision, set to expire on Sept. 30, 2012, now will continue in effect until Sept. 30, 2015.
The African Growth and Opportunity Act (AGOA) was first passed by Congress in 2000.
AGOA’s Provision
AGOA’s third-country fabric provision allows lesser-developed sub-Saharan countries to ship duty-free and quota-free apparel using fabric and yarn produced anywhere in the world to the United States without paying import duties.
The provision waives duties on clothing from most AGOA countries, even if the yarn or fabric is made in a “third country” such as China, South Korea or Vietnam.
Exports by sub-Saharan nations to the United States under AGOA were worth US$70.6 billion last year, more than five times than in 2001 after the legislation took effect.
It provides sewing jobs for hundreds of thousands of African workers, about 70 to 80 percent of whom are women.
The apparel industry has been a major driver of employment growth in Africa under AGOA. In Lesotho alone, jobs in the textile and apparel industry have more than doubled – growing from 19,000 to 45,000 – because of AGOA.
Employment
A recent study estimated that the legislation has created 300,000 jobs.
However, the African Coalition on Trade, which advocates commercial relations between the continent and the United States, said that AGOA indirectly created as many as 1.3 million jobs. The AGOA extension eases fears that thousands of knitting mills across the region would have face closure.
AGOA Coverage
The bill adds South Sudan to the list of sub-Saharan African countries that might become eligible for AGOA benefits once it meets eligibility criteria.
AGOA covers most of sub-Saharan Africa but the United States excludes several countries such as Sudan and Zimbabwe seen as not meeting criteria on allowing political pluralism and market economies.
After 19 years of negotiations, Russia joins the World Trade Organisation (WTO) as its 156th member on August 22.
WTO accession was not achieved easily. Negotiations began in 1993, and right down to the last moment there was opposition within Russia. Besides, Georgia had tried to block Russia’s WTO entry since the two countries fought a short war in 2008.
WTO accession is a major step for Russia’s further integration into the world economy. It will facilitate investment and trade, help to accelerate the modernisation of the Russian economy and offer plenty of business opportunities for both Russian and worldwide companies.
Russia, which has a population of 140 million and is the last large economy to join the body. According to the WTO, Russia’s accession means that 97% of all world trade will now take place between its members.
From the date of accession, the Russian Federation has committed to fully apply all WTO provisions. Russia has agreed to undertake a series of important commitments to further open its trade regime.
Russia has also agreed to lower its tariffs on a wide range of products.
Quantitative restrictions on imports, such as quotas, bans, permits, prior authorization requirements, licensing requirements or other requirements or restrictions that could not be justified under the WTO provisions would be eliminated and not (re) introduced.
Effective from 11 July 2012, Ministry of Home Affairs (MOHA) decided to re-opened One Stop Centre (OSC). Applicants with JCS can attend walk-in interview at OSC.
Categories of Company
Type of Applications
Application of New Foreign Workers
Replacement based on Check out Memo (C.O.M)
Source Countries & Levy Rate
* Company can appeal to MOHA for gender changes.
* Levy rate is RM1,250 (effectively 1 September 2011)
The private sector Minimum Retirement Age Bill 2012 was passed by the Dewan Rakyat on 27 June 2012. The new age limit would raise the minimum retirement age for private sector workers to 60.
However, the bill will not apply to temporary or contractual workers, those on probation, apprentices, non-citizens and domestic maids.
Social Security Organisation (Socso) members aged 55 and above would be eligible for invalidity pension, in line with the minimum retirement age of 60 from next year onwards. Currently, only workers below 55 are covered under Socso’s Invalidity Pension Scheme. The matter has been approved by Socso. There would be no increase in contributions.
The current minimum retirement age for most private sector workers is 55 but no mandatory retirement age has been set unlike in the public sector.
The retirement age for the public sector has already been raised to 60.
“Any retirement age in a contract of service or collective agreement made before, on or after the date of coming into operation of this Act which is less than the minimum retirement age provided… shall be deemed void and substituted with the minimum retirement age provided under this Act,” reads Section 7 of the Bill.
Employers who prematurely retired their employees were liable to a fine of up to RM10,000.
Premature retirement does not include optional retirement and termination of contract of service for any reason other than on the grounds of age.
Under the bill, those who are prematurely retired by the employer have the option to complain in writing to the director-general of the Labour Department, within 60 days of the retirement date. The director-general will then conduct an inquiry.
In consideration of those who may want to retire early, the bill provides for optional retirement, as agreed to in their earlier contracts.
Currently, Malaysia is the only country in Southeast Asia with a retirement age of below 60. The retirement age in Indonesia and Thailand is 60, while in Singapore, it is 62. 55-year is still considered young these days and that many countries including USA, UK and Australia had increased their retirement age above 65. It is a global trend and people are getting healthier.
(1) Application of Duty Exemption for Machinery / Equipment / Parts & Consumable (PC1)
(2) Application of Duty Exemption for Raw Materials and Components (PC2)
The new system will enable:
· The applicant company will received Letter of Decision (Surat Keputusan), terms of approval and Appendix via online;
· Relevant Ministries and Agencies such as the Ministry of Finance, Ministry of International Trade & Industry, Customs Department will also receive and acknowledge the Letter of Decision (Surat Keputusan) via online.
The new procedure will take effect from 15 August 2012. For further enquiries on the new procedure, kindly contact JPC Secretariat:
(1) Nor Aswana Iskandar
(Tel: 03 – 2267 3510)
(2) Datin Hasnah Abu Hassan
(Tel: 03 – 2267 3567)
Private sector employees can withdraw their FULL Employees Provident Fund savings at age 55.
EPF members could withdraw their savings any time after the age of 55 using one or more of three different options – as a lump sum, as monthly payments or at any time subject to a minimum amount of RM2,000 at intervals of at least 30 days.
Employees who withdrew their savings at 55 could continue making contributions until they retired. At 50, a 30% EPF withdrawal could be made.
Human Resources Minister Datuk Seri Dr. S. Subramaniam announced that the EPF Act 1991 would be amended to cater for the changes.
The amendment is in line with the Minimum Retirement Age Bill 2012, which was passed in Parliament earlier this year and affects the private sector. The Bill raised the minimum retirement age in the private sector from 55 to 60, effective January 2013.
When the Bill was tabled for reading, it raised fears from workers groups regarding EPF withdrawal age, with some quarters claiming that savings could only be collected at 60.
However, Finance Minister II Datuk Seri Ahmad Husni Hanadzlah reassured them that the Government would not implement such a system.
Lump-sum vs Partial Withdrawal
Upon reaching 55, most people prefer to withdraw all their savings in the EPF but more and more people are opting for flexible withdrawals (partial or monthly payments).
According to the EPF, last year, 235,931 employees made withdrawals at age 55 and 70% of the withdrawals were full withdrawals. The number of flexible withdrawals increased by 41.67% to 82,690, compared with 2009.
Choosing between withdrawing a lump sum and making a partial withdrawal depends on many factors. Financial planners say you can ask the following questions when crunching the numbers for your retirement plan, not at 55.
1) What is your behaviour towards money?
If you are quick to spend money without a plan, think twice before withdrawing the whole. Those who are not used to having large sums of money tend to get emotionally charged. It can lead to splurges on big-ticket items such as luxury cars. Be aware of the consequences. If you know that you are an emotional spender, it is best to drop the idea of a lump-sum withdrawal because you have to make smart choices with the money.
2) Can you generate higher returns at a higher risk?
For the past 59 years, from 1952 to 2010, the EPF has declared annual dividend rates of between 2.5% and 8.5%. In the past 10 years, the highest dividend payout from the EPF was 6% in 2000 and the lowest dividend payout was 4.25% in 2002.
The EPF promises a minimum dividend of 2.5% per annum. If you think that you or your financial adviser or fund manager can surpass the average returns made by the EPF, consider a lump-sump withdrawal to boost your retirement nest egg.
When doing so, observe the associated costs such as sales charges or management fees levied by the financial professionals and financial institutions. If you decide to retain your retirement savings with the EPF, there will be a small charge that differs from year to year.
3) Would you still be paying debts at age 55?
If you will still be servicing high-interest debts at age 55, consider using your EPF savings to pare down or settle the loans. This is especially so if the interest levied is higher than the returns generated by your savings.
Holding any of these debts negates any investment gains unless you are able to get superior returns on your investment over the years. Withdrawing your retirement savings, be it in a lump sum or partially, to settle your high-interest debt is a smart option but ensure that there is still some money left for your retirement.
4) Do you want to control your retirement funds?
Contributors have little control over how their savings are managed and invested by the EPF.
A key benefit of withdrawing your retirement savings in a lump sum is that it allows you to expose your loved ones to managing money with a long-term perspective.
Withdrawing your retirement savings in a lump sum at the point of retirement allows you to slowly educate your young-adult children on how to manage a big sum of money. Let them know where you keep your savings and what you are doing with it.
Why is it common that employees are required to adhere to the standard working rules? Bosses tend to believe the employees will make wrong decisions if they are not being consulted. Many bosses, or so called immediate superiors are concerned with their authority is not being respected. From time to time, they will exercise their authority over certain issues so that they are known that they are the decision making body. Therefore, many employees who are being treated like children are afraid to make decision so that they can be protected from making mistakes.
Bosses also believe their existing organization working norm and culture is the key factor for bringing up the growth of their organizations. They have created a culture in which employees will have to go through process of seeking permission and asking approval to carry out their duties so that mistakes can be avoided.
Employees who tend to work differently or not conforming to the existing procedures are rarely being trusted. We understand that the enemies of innovation and change of the organization are conformity and procrastination. As a result, employees are careful of their speech, and more often, their ideas so that their actions and ideas will be unlikely to be misinterpreted. Certainly, many employees do not like to rock the boat when their bosses are not welcoming their new ideas to work differently.
Paradoxically, some organizations suppress contentions: many department bosses are concerned of the changes and ideas that require work differently from the norm. Some can be confronted with new suggestions as they assume they should be in charge and no change of system or policy is needed. This sort of situation happened in many department bosses who have been working many years in the organization.
Rules and policies of the organizations are necessary for employees to work effectively. But bosses using rules and policies excessively to control employees can kill invention, learning and work commitment. Bosses should treat employees like adults and allow them to make decisions and work out the best at the interest of the organization. Employees being treated like adults can create innovation and change which can influence the survival and growth of an organization.
Submitted by : Liaw Fenn Yenn (Head of Tunku Abdul Rahman College, Segamat Branch)
Written on 1/11/2012
The EU has adopted a new Generalised System of Preferences (GSP) on 31 October 2012. In order to allow ample time for operators to adapt to the new scheme, the new preferences will apply as of 1 January 2014.
Until 31 December 2013, the preferences under the previous scheme will continue to apply.
One of the main objectives of the EU’s new GSP is to focus help on those truly in need : Least Developed Countries and poor economies with no other preferential channels to access the EU market.
Focus on Countries Most in Need
The number of GSP beneficiaries is expected to be reduced from the current 176 to 89 as more advanced economies place a lot of competitive pressure on LDC and other poorer countries which lag behind. Preferences must be re-focused to help those most in need.
The new scheme listed 89 countries which need GSP trade preferences the most: 40 Low income’ and ‘lower middle income’ countries, as classified by the World Bank.
(A) Everything-but-Arms (EBA) beneficiaries : 49 LDCs continue to receive EBA treatment (duty free quota free access except for arms):
Africa (33): Angola, Burkina Faso, Burundi, Benin, Chad, Democratic Republic of Congo, Central African (Republic), Djibouti, Eritrea, Ethiopia, Gambia, Guinea, Equatorial Guinea, Guinea-Bissau, Comoros Islands, Liberia, Lesotho, Madagascar, Mali, Mauritania, Malawi, Mozambique, Niger, Rwanda, Sudan, Sierra Leone, Senegal, Somalia, Sao Tome and Principe, Togo, Tanzania, Uganda, Zambia.
Asia (10): Afghanistan, Bangladesh, Bhutan, Cambodia, Lao, Maldives, Myanmar/Burma, Nepal, Timor-Leste, Yemen.
Australia and Pacific (5): Kiribati, Samoa, Solomon Islands, Tuvalu, Vanuatu.
Caribbean (1): Haiti
(B) 40 Standard GSP beneficiaries
Armenia, Azerbaijan, Bolivia, China, Cape Verde, Colombia, Republic of Congo, Cook Islands, Costa Rica, Ecuador, Georgia, Guatemala, Honduras, India, Indonesia, Iran, Iraq, Kyrgyzstan, Marshall (islands), Micronesia, Mongolia, Nauru, Nicaragua, Nigeria, Niue, Pakistan, Panama, Paraguay, Peru, the Philippines, El Salvador, Sri Lanka, Syria, Tajikistan, Thailand, Tonga, Turkmenistan, Ukraine, Uzbekistan, Vietnam
Countries No Longer Eligible
(A) 33 Overseas Countries and Territories (OCTs) which have already a special market access arrangement to the EU or belong to developed countries. As these partners have alternative market access arrangements, no negative impact expected.
Anguilla, Netherlands Antilles, Antarctica, American Samoa, Aruba, Bermuda, Bouvet Island, Cocos Islands, Christmas Islands, Falkland Islands, Gibraltar, Greenland, South Georgia and South Sandwich Islands, Guam, Heard Island and McDonald Islands, British Indian Ocean Territory, Cayman Islands, Northern Mariana Islands, Montserrat, New Caledonia, Norfolk Island, French Polynesia, St Pierre and Miquelon, Pitcairn, Saint Helena, Turks and Caicos Islands, French Southern Territories, Tokelau, United States Minor Outlying Islands, Virgin Islands – British, Virgin Islands- US, Wallis and Futuna, Mayotte.
(B) 34 Partners with another market access arrangement. As these partners have alternative market access arrangements, no negative impact expected.
(C) 20 High / Upper middle income countries would no longer benefit from the scheme. In terms of the World Bank per capita income classification, which is an internationally recognised measure, these countries such as Brazil, Malaysia, Russia and Saudi Arabia, have become high or upper middle income economies. They clearly no longer need preferences such as the GSP to successfully trade with the rest of the world.
Saudi Arabia, Kuwait, Bahrain, Qatar, United Arab Emirates, Oman, Brunei , Macao.
Latin America (5): Argentina, Brazil, Cuba, Uruguay, Venezuela;
ex-USSR (3): Belarus, Russia , Kazakhstan;
other (4): Gabon, Libya, Malaysia, Palau.
According to study, even without GSP, there will be limited drops in exports (1% range) for some of these partners. Even marginal drops in exports by the more advanced, bigger economies, can potentially provide significant opportunities for the poorest, whose exports are very small in comparison. To give an idea of the order or magnitude, a drop of 1% Brazilian exports, is equivalent to more than 16 times Burkina Faso’s total exports to the EU.
New “dynamic” approach
Once the new GSP enters into force, status of countries is revised continuously. When a country no longer fulfils criteria to be a beneficiary, the partner exits the beneficiary list with ample transition periods to ensure economic operators can adapt.
Special safeguards for clothing maintained and extended to plain textiles and to ethanol. Thresholds adjusted to 13,5% for annual increase of imported volumes; 14,5% of share of imports from GSP beneficiary countries (new graduation threshold); de minimis share 6%.
Malaysia-EU FTA
For Malaysian companies, hopefully the Malaysia-EU FTA can be finalized and concluded by next year. The FTA would fill the gap left by the expiring GSP in January 2014.
Currently, a lot of companies and businesses in Malaysia are benefiting from the GSP which could be affected once the scheme ends by 31 December 2013.
For more details EU’s New GSP, please browse MKMA website.
The National Wage Consultative Councils (NWCC) has released guideline on the implementation of minimum wage (MW). Here are some of the key areas that all HR Practitioners should pay attention to:
In line with the objective of implementation of the Minimum Wages Order 2012, a full time employee shall be paid an average MW of not less than RM900 (Peninsular Malaysia) or RM800 (Sabah, Sarawak and Federal Territory of Labuan) a month.
A full time employee paid on a daily basis and was present to work on normal working days without regard to the total hours worked in a day shall be paid a daily MW based on the following formula:
Daily Wages Rate = Rate of Monthly Minimum Wages x 12 months
52 weeks x No. of Working Days in a Week
(i) The daily minimum wage rates for Peninsular Malaysia are as follows:
No. of Working Days in a Week | Daily Wages Rates | Average Monthly Wages |
6 | RM34.62 | RM34.62 x 26 days
=RM900.12 ≈ RM900 |
5 | RM41.54 | RM41.54 x 21.67 days
=RM900.17 ≈ RM900 |
4 | RM51.92 | RM51.92 x 17.33 days
=RM899.77 ≈ RM900 |
Note: The above calculation is based on total working hours of a maximum of 48 hours a week.
For those workers who receive wages based on the output of their work, such as piece rate, tonnage and commission, they can have a low basic salary, but every month their wages must be higher than the MW to comply with the Order.
For example, a sales person can have a basic of RM500, but commission of RM3,000, total wages for the month is RM3,500 hence complied with the MW. However, if the commission is only RM250 for that month, total wage is only RM500 plus RM250, the employer will have to top up another RM150 to make it RM900 (for Peninsular Malaysia) to comply with the Order.
For part-timer, the minimum hour rate is RM4.30. For probationer, employer can pay not less than 70% of the MW for a period not more than 6 months. For example, a probationer in Peninsular Malaysia must get at least RM630 a month, even the probation period is 1 year, on the 7th month, employer must pay the probationer RM900 instead of RM630.
The method of implementation of the MW for employees without basic wages but their wages are paid by piece-rated, tonnage, trip or commission are as follows:
(i) If the wages paid is RM900 or above in Peninsular Malaysia, the MW of RM900 or RM800 is deemed to have been complied with; and
(ii) If the wages paid is less than RM900 in Peninsular Malaysia, the employer must top-up the additional wages to meet the minim MWof RM900 or RM800.
For those employers that haven’t comply with the Order yet, they need to restructure their wage system to comply with the Order. The most common way would be to include certain fixed allowances into wages. However, this must be done with the consent of the workers. There are a few rules to follow, but basically the restructuring CANNOT cause reduction of the current overall wages received by the employee prior to the restructuring.
In general, only allowances which are cash payments and given across the board can be included in wages. For example, OT allowance that given to those meet certain number of OT hours CANNOT be considered as part of the wages. Also, Housing Allowance pay to employees in cash every month can be considered as wage but NOT accommodation provided by the employer.
Subject to negotiation between the employer and employee, the method of restructuring of wages is based on the following conditions:
(i) the restructuring process is made ONLY ONCE BEFORE the commencement date of this Order and NOT a continous process after the commencement date of the Order;
(ii) the restructuring of the wages only involves payments in cash as defined in the definition of “wages” under section 2 of the Employment Act 1955;
(iii) non-wages payments that are excluded in the definition of “wages” under section 2 of the Employment Act 1955, shall NOT be restructured as MW. The non-wages payments are as follows:
(a) the value of any house accommodation or the supply of any food, fuel, light or water or medical attendance, or of any approved amenity, or approved service;
(b) any contribution paid by the employer to any pension fund, provident fund, superannuation scheme, retrenchment, termination, lay-off or retirement scheme, thrift scheme or any other fund or scheme established for the benefit or welfare of the employee;
(c) any travelling allowance or the value of any travelling concession;
(d) any sum payable to the employee to defray special expenses entailed on him by the nature of his employment;
(e) any gratuity payable on discharge or retirement; or
(f) any annual bonus or any part of any annual bonus.
(iv) allowances paid specifically due to the nature of work such as heat allowance, dust allowance, noise allowance, standing allowance and similar kind of allowances that are provided to specific employees are NOT advisable to be restructured;
(v) housing allowance may be restructured as part of the minimum wages provided that the allowance is not a replacement of a value of benefit provided by the employer, but as a cash payment based on the contract of service; and
(vi) the restructuring of wages shall not reduce the total wages received by the employee before the restructuring.
Penalty
Offences | Penalty |
First offence | RM10,000 for every employee where MW has not been met. Court can direct employer to pay the wage variance and other payments on top of the penalty. |
General Penalties | RM10,000 for every offence where no penalties have been stated |
Continuous offences | RM1,000 daily for continuous offence upon conviction |
Repeated offences | RM20,000 or jail term of not more than 5 years |
Besides, this Act does not prevent an employee from retiring upon attaining the age of optional retirement.
Deferment Application : Submit before 28 Feb 2013
Employers who need extension period may apply to the Minister of Human Resources to defer the implementation. The application must be submitted with strong reasons and justifications not later than 28 February 2013.
While systems are important, our main reliance must always be put on men rather than on systems.
Robert E. Wood
Many people may ask why is it common to see some companies doing so well and yet some don’t. Many companies have been established for years. Some with track record as public company listed in the Bursar Malaysia, others with track records of more than 50 years or more in the industry. But, what made these companies failed?
Management and workers seem oblivious to their company failures. Many cases in the past have shown that many company failures were due to company CEOs’ management skills besides global market situation, government policy and some other factors.
Apparel and Textile Industry has been a talking point as sun set industry for years. Many companies are either scaling down their operations or have already started to set up factories in other countries like Cambodia, Vietnam and other regions where labour cost is lower than Malaysia despite the difficulty of training needed for the new recruits in these countries.
Many employees have been working with the companies for years since they came out from school or universities. Many were shocked and unprepared for the companies when they were declared to close theirs. In deed many companies’ failures can be avoided. Nevertheless, most management staff and workers do not see the need for the responsibility to carry their tasks and play their roles to overcome the hardship facing by the company.
Let’s talk about the role of senior management personnel. Most of them may enjoy the best fringe benefits given by the companies. But not many seem to manage and run their companies in a highly integrity manner. They can be seemed to be very honest and whole heartedly managing their companies. Many turned out to be otherwise. Because of their poor leadership and personal incapability, they demoralize the middle management staff because they are the strong believers of “founder effect” which in corporations being known as “how we’ve always done things”. Remember the saying goes “The fish rots from the head” which is a good reflection of poor leadership can cause the failure of the company.
Looking at the level of staff working in the middle management level, the staffs are trying very hard to carry out their tasks. They could have died and jumped from the high floor building if needed to do their jobs. Nevertheless, their work momentum is slowly murdered by the leaders or bosses from the top who have always been seen doing their best to help their companies. Most of them attended at workshops with excellent trainers ended with much hypocritical complimentary feedback.
The lowest categories are always asked to carry out their daily jobs with many good promises. They are made to work. Most of them are there to work daily day and night. Little did they know, the management has created a corporate culture that slowly rotten the companies to their core? The next fine day, they were told that they would be either retained with reduced wages if lucky or worse told to leave company without compensation.
As suggested by Tom Peters and Robert H. Waterman, Jr. in his book entitled “In Search of Excellence”, CEO of companies should walk the talk by showing strong commitment to employees and demonstrate long term approach to build a working culture by providing an atmosphere to foster creative thinking and product innovation and also respecting and treating every employee as an important contributor for the success of the company.
Year 2012 ended with US fiscal cliff. This year of 2013 is a year of many CEOs in the Malaysia Textile and Apparel Industry expected to be more stressful. Why? US, being the world economic leader, is facing its financial turbulence which will affect the Malaysia textile and apparel industry as the textile and apparel goods exported to US accounted for a significant of 20% of its total exported value of RM10 Billion in year of 2012.
This is a food for thought for many CEOs to build a good culture to face the challenges in year 2013!
– Contributed by Mr. Liaw Fenn Yenn (Head of TARC, Segamat Branch) on 24/2/2013 –
“A leader shapes and shares a vision which gives point to the work of others.”
q Charles Handy
With the growing recognition on the importance of companies playing their active role of Corporate Social Responsibility (CSR) in Malaysia, the leaders of the Textile and Apparel Industry (T & A) is expecting to face the challenges and take steps to incorporate their growth with the CSR by way of not only focusing on business profit but also be more socially responsible. Can leaders of T & A Industry be inspired to play an active role of CSR by creating competitive advantage for the betterment of their respective companies?
T & A Industry has been established its first greige fabric textile factory at Tampoi, Johor in 1957. It has been 56 years old for big and small factories going through challenges of various stages. It is the fundamental rule of companies being formed to provide jobs, investing capital, and doing business every day and these have a profound and positive influence on society. Nevertheless, there is one important thing a company can do for society, and for any community, through the role of CSR is to contribute to a prosperous Malaysia economy.
Lynas in Kuantan can be a very controversial company, which has to adopt eco-friendly raw materials for production and efficient system for the disposal waste, needs to play a role of CSR for the safety and welfare of the employees and people living around the factory. These companies must realize that their social responsibility towards the society and the environment is very important.
Likewise T& A Industry leaders must strive to fulfill their social responsibility by providing their employees with safe working conditions, fair policies. There is no bias towards age, gender, colour or marital status in their employee policies. Leaders in T & A Industry can also play their role of CSR externally by undertaking community tree planting projects, undertaking charity work for the under privileged sections of the society and by creating more job opportunities. Donating money for various charitable causes such as textile and apparel education for academic research, support of orphaned children, support of fire or flood victims, and for charitable artistic events.
For the purpose of corporate social responsibility of making a significant contribution towards the spread of education, leaders of T & A are suggested to create a fund for sponsoring employees’ children or the underprivileged for pursuing their tertiary education at the programmes relevant to the T & A Industry. They can also form partnership with the academic institutions by sponsoring their research project related to the industry. This sort of CSR project will not only enhance the welfare of their employees but also attract more graduates who are prepared with the required skills to work in T & A Industry.
In a nutshell, the concept of CSR is gaining popularity in Malaysia industry. More and more company leaders are becoming involved of the CSR and it is believed that CSR will be a key factor to generate growth of business and sustainable survival of the industry at large. For the survival and continuous growth of companies in T & A Industry, leaders of these companies have to exercise a potent fascination over the role of CSR. It is said by Chanakya that “The fragrance of flowers spreads only in the direction of the wind. But the goodness of a person spreads in all directions”. If leaders can translate this quote of wisdom strategically to enhance their business success, perhaps many companies may be surprised by their active role of CSR which is can be a source of innovation and competitive advantage for T & A Industry.
– Contributed by Mr. Liaw Fenn Yenn (Head of TARC, Segamat Branch) on 12/4/2013 –
The apparel market in Chile is estimated at USD2.2 billion with an increasing Compound Annual Growth Rate (CAGR) of at least 3% since 2006.
Strong local players compete in a highly developed retail industry. Department stores such as Fallabella, Ripley and Paris remain the leader in the market and continue to dominate and now more department stores are entering online and e-commerce businesses.
Fostered by trade liberalisation with many countries, private labels have become a strategy of differentiation between department stores. Many US and Europe brands entering the market while Chinese manufacturers offering contract manufacturing to the local designers and department stores. Supermarkets / hypermarkets such as Jumbo and Lider are gaining ground in apparel as a convenient alternative.
Conscious Chilean consumers are growing where value for money remains key decision driver; however they are still looking for latest trends. Chileans usually shop at major departmental stores, hypermarkets and independent outlets. Sales are especially good during festive seasons like Christmas and Children’s Day, which is celebrated in a big way here.
On apparel brand franchising, Chile’s favorable business climate is slowly opening new opportunities for the franchise industry. According to 2012 estimates, there are approximately 150 franchises operating in Chile.
Malaysia – Chile Free Trade Agreement (MCFTA)
Malaysian products do benefit from the Malaysia – Chile Free Trade Agreement, in place since early 2012. Malaysian garment manufacturers have huge potential by approaching various Chilean clothing brands that are currently sourcing from China but have reported to be looking for other markets to produce their clothes due to increased cost in China as well as quality issues.
MATRADE Santiago would be able to assist Malaysian exporters in finding suitable Chilean companies who are interested to source for new garment manufacturers. It is also suggested for Malaysian companies to do a trade visit to Chile to assess the market and participate in business matching sessions. Chilean companies are more open to suppliers who make effort to come to the country and be persistence in marketing your product.
For more info on the market and potential importers, please contact MATRADE Santiago (Email: santiago@matrade.gov.my)
The Companies Commission of Malaysia (SSM) launched the Limited Liability Partnership (LLP) on 5th February 2013, as an alternative business vehicle. LLP is a new form of business vehicle that would complement the traditional options of carrying on a business either by way of sole proprietorships, partnership or companies. LLP provides the protection of limited liability for its partners and flexibility of the partnership arrangement for the internal management of its business.
What is the difference between an LLP and a Company?
There are many fundamental differences between an LLP and a company. Amongst others, the differences are:-
Why would one choose to register an LLP?
The LLP provides the flexibility of organizational arrangement through the partnership agreement whereas a company is subject to a more stringent compliance requirement. On the other hand, registering LLP provides the limited liability status as compared to registering a business which exposes the owner to unlimited liability.
What kind of business can use LLP as a business vehicle?
It is for all kind of lawful businesses with a view to make profit.
Who can be the partners in an LLP?
There must be minimum of 2 partners and no limit for maximum number of partners. It can be individuals or bodies corporate or a combination of both. Two companies can also form an LLP as a form of joint ventures.
Is there an approved accounting standard imposed on LLP?
One of the main objectives for introducing the LLP business vehicle is to give businessmen the flexibility of internal arrangement in conducting business similar to a Conventional Partnership which is not required to adopt any particular accounting standard. As such, there is no approved accounting standard imposed on LLP.
More information on LLP is available on SSM website www.ssm.com.my .
The Taiwan External Trade Development Council (TAITRA) is offering a special incentive for one-on-one trade meeting with potential Taiwan suppliers at TAITRA Headquarter Taiwan, Taipei.
The special incentive package includes the following:
Terms and Conditions:
The incentive quota is limited, kindly contact MKMA secretariat for registration form and further information. Application form must submit one month prior to visit to facilitate arrangements.
To make life easier for companies, the Australian Government has developed a new online tool – the MAFTA Tariff Finder – ensuring that the answer is now just a click away.
The MAFTA Tariff Finder enables users to quickly and easily assess the tariffs that apply to goods coming into Malaysia from Australia. For goods being sent in the other direction, the process is obviously much simpler, as all Australian tariffs for Malaysian goods were removed with the introduction of MAFTA.
Companies wanting to access the Tariff Finder can do so at http://maftatariffs.austrade.gov. au /tariff-finder/ .
After logging in, just enter the Harmonised System Code, and instantly see the tariff that will apply under MAFTA.
The MAFTA Tariff Finder is a practical tool that will support the development of businesses between Malaysian and Australian companies. It will also assist Malaysian companies to source goods and manufacturing inputs from Australia more cost effectively.
In addition, Australian exporters now need only provide a valid MAFTA Declaration of Origin to a Malaysian importer, rather than a Certificate of Origin, in order for the importer to take advantage of the reduced tariffs under MAFTA.
However, Malaysia still requires its exporters to provide a valid MAFTA Certificate of Origin.
In addition, Australian exporters now need only provide a valid MAFTA Declaration of Origin to a Malaysian importer, rather than a Certificate of Origin, in order for the importer to take advantage of the reduced tariffs under MAFTA.
However, Malaysia still requires its exporters to provide a valid MAFTA Certificate of Origin.
Written by : Mr. Liaw Fenn Yenn , Branch Campus Head, Tunku Abdul Rahman University College
The great menace to the life of an industry is industrial self-complacency. – Joyce Carol Oates
een a long journey for the success of Textile & Apparel Industry to go through several stages of development since 1970s as mentioned by Mr. Tan Soo Seng during the MKMA Dinner. In fact, the Malaysia Textile and Apparel Industry should be celebrating like our country going to celebrate 56th year of independence since 1957.
Looking back, Textile and Apparel manufacturers have had gone many difficult stages from its textile factory at Tampoi in 1957 and have produced a plethora of job opportunities to the people with a positive economic impact of exporting billions of Ringgit in textile and garment goods. Nevertheless, what are the challenges and uncertainties that the industry has to face and move on to shape the future with proper implication of strategies?
The most recent minimum wage gazetted on 1/7/2012 and has been taken effect from January 1, 2013 for all industries to pay its employees with the floor wage of RM900 and RM800 per month for the Peninsular and East Malaysia respectively. Such policy will surely increase the production cost of the industry. What can the industry do with such added labour costs when the productivity of employee will not increase proportionately?
Generally, manpower is always the main concern for any industry. The most critical problem in T & A Industry is the shortage of needed manpower at all levels. Local people are not being attracted to work in this industry. The current way by getting foreign workers to create lifesaving for the continued growth of T & A Industry is seemed to be unavoidable. But can the employment of foreign workers be a forever solution to address this acute shortage of workers in the industry?
With the introduction of new minimum wage policy, employers in the T&A Industry will be compounded again not only the shortage of workers but also the added labour costs. Perhaps it is time to consider those near to their retirement age of 60, which has been revised from 55, to take on the tasks. According to the research by Schalk (2004), he found that older employees are more willing to work extra hours if that is what is needed to get the job done, to work well with others, to provide good services and to deliver good work in terms of quality and quantity.
Perhaps employers in the industry should take steps to retain older employees while also planning to recruit college graduates more aggressively. They may have to come out programs to encourage older employees to delay retirement, offer incentives like flexible work hours, and train these older employees to cope with new technologies and work processes. According to Yip (1990), there are high percentage of employees suggested that retirement age should be increased to 60 years as they believe they are still healthy and fit to work.
In order to overcome the shortage of manpower in the T & A Industry, we will go back to the basics as Peter Drucker, the great management guru asserted that employees are the assets, not as costs. Employees, regardless of their age, are the greatest assets to be the pillar for the continued growth and long survival of the industry.
Lastly, may the T & A Industry continue to prosperous well and ensure the success of the industry. I sincerely hope that MKMA will celebrate its anniversary every year together with our national Merdeka Day Celebration!
REFFERENCES
Schalk, R. (2004), “Changes in the employment relation across time”, in Coyle-Shapiro, J.A-M., Shore, L.M., Taylor, M.S. and Tetrick, L.E. (Eds), The Employment Relationship: Examining Psychological and Contextual Perspectives, Oxford University Press, Oxford, pp. 284-311.
Yip, C. (2009, April 25). Employment after 55 becoming a trend as living costs rise. The Star.
The move to retain the contribution rate until 60 was in line with the implementation of the minimum retirement age which took effect on 1 July 2013. This will accumulate more savings for members after retirement.
Employees aged between 60 and 75 will contribute a half-rate at 5.5% and their employers are required to contribute 6% or 6.5% for those earning RM5,000 and below.
The existing age of 55 and 50 for withdrawals is unchanged and members could still opt to withdraw savings in Account 2 at 50 and make full withdrawals at 55.
Employers can logon to www.kwsp.gov.my to verify the new contribution schedule.
The Employees Provident Fund (EPF) has introduced e-Contribution on 28 March 2013, an online facility that allows employers to remit EPF contributions through i-Akaun on myEPF website (www.kwsp.gov.my). 13 banks have tie-up to offer facilities for convenient electronic contribution via i-Akaun.Three main services are provided through e-Contribution and includes :
1. Remittance of payment with Form A;
2. Submission of Form A only;
3. Remittance of payment only.
This facility offers employers the benefit of paying their EPF contributions in a secure and time-saving manner.
The advantages with e-Contribution include transactions being conducted at anytime and anywhere. The transactions are fast, accurate and secure, offering precision in members and employers information. Transaction status can be viewed online making it user friendly and hassle free.
How to participate?
To participate in this new convenient facility, employers must be a registered i-Akaun holder. Only employers who wish to make payment via this facility need to register for e-Contribution direct debit services with any of the 13 participating banks that have come together to support the electronic facility with the EPF, by filling up the direct debit authorization form (DDA).
The DDA can be obtained at any RHB Bank or EPF branch. Duly completed forms must be submitted to any RHB branch (except RHB Easy) for confirmation and must be accompanied with EPF documents such as pre-printed Form A and contribution statements.
While each DDA form can only be used for one bank account, employers are allowed to open a maximum of four bank accounts to add to their convenience and flexibility.
In addition to e-Contribution, the i-Akaun also allows employers to view their list of employees whose contributions have been paid for the month and their contribution history, to register new employees and to check an employee’s EPF number.
For more information, please log on to myEPF website, visit the nearest EPF branch or contact EPF Call Centre at 03-8922 6000.
he babywear market is highly fragmented with few dominating brands in the mass market, allowing manufacturers who can provide good quality and design to develop.Global retail sales of babies and children’s clothes and footwear are expected to see sustained growth and reach US$237 billion by 2016. The BRIC countries – Brazil, Russia, India and China – are emerging as important markets. Their combined sales have exceeded that of the EU and are expected to jump 50% from now, to US$73.8 billion in 2016.
Sustained demand for babies’ and children’s apparel
There is a sustained demand for babies’ and children’s clothes as they are necessities. But since used infant clothes and shoes usually remain fairly new, there are secondhand markets or voluntary transfer of used items. Therefore, the demand for new infant clothes may not be proportional to the number of newborns.
However, due to improved nutrition, babies and children are growing faster in size than before, which has shortened the product life cycle. Furthermore, baby apparel is always the most popular newborn gift, lending some support to the sales. The global sales of babies’ and children’s clothes and footwear are expected to see a steady annual growth of 5% in the next couple of years, hitting US$237 billion by 2016.
Strong growth from emerging markets
According to Euromonitor International, mature markets, including the US, EU and Japan currently account for about half of the world total in terms of sales. The US and the EU markets are expected to see a mild growth while the sales in Japan are likely to be stagnant. The BRIC countries are emerging as important markets. Their combined sales reached US$48.7 billion in 2012, exceeding that of the EU.
All About Design and Quality
Although consumers have a preference for familiar brands, more importantly, they look for high quality and suitable design for their babies and children.
Generally speaking, babywear should be simple, comfortable, safe, easy to put on and take off, and comparatively loose. The use of fabrics in different types of childrenswear is largely universal. Knitted fabrics are commonly used for casual wear.
In the summer, cotton, gingham, gabardine and sail cloth are often used for daytime wear while double knits, velveteen and corduroys are good during cold weather. Fleece is increasingly popular for outerwear because it dries quickly and is easy to wash, although wool is still more preferred in some markets.
The weather conditions in different markets may have an impact on the choice of fabrics. For example, in countries where the humidity is high, moisture-wicking garments will be in greater demand.
Manufacturers should also be aware that the size and body shapes of babies and children in different countries can be quite different.
Bright colours such as pink, light blue and yellow are the traditional colours for baby wear. In mature markets, parents are usually fashion-minded enough to accept the innovative use of colours and fancy patterns, such as warm and cool colour combinations. It is also common to add some fun elements in the design of childrenswear.
In contrast, consumers in developing economies tend to be more traditional. In particular, manufacturers and designers should be aware of the cultural meaning of different colours. For example, in Brazil, purple means death and mourning while in Belgium, pink is used for baby boys.
Practical and safe Comfort and safety are the most important considerations of parents when buying clothes for their babies and children. Infant clothes are usually one-piece with full openings for easy changing, and easy access to nappies for frequent nappy changes.
For all types of children’s clothing, materials should be non-flammable and non-irritating without harsh dyes or potentially harmful chemicals. It is also essential to pay attention to the accessories and small parts of the clothing. Dangling strings, tassels and ribbons should be basically avoided as children may pull, tear and bite their clothes, which can pose choking and strangulation hazards. Manufacturers and exporters should check and comply with the import regulations, safety standards, voluntary industry standards, as well as the labelling requirements of their targeted markets.
2025 is not going to be the sector that we know as of now. Changes are happening all across and at a speed never thought possible.The first and foremost trend which emerges is that we believe the global apparel market will cross the US$ 2 trillion mark from the current value of US$ 1.1 trillion. This means an addition of US$ 1 trillion in the market which presents a huge business opportunity for sector players.
Present Scenario
The current global apparel market is estimated at US$ 1.1 trillion. Almost 75% of this market is concentrated in EU-27, USA, China and Japan. In terms of population, these regions are home to only one-third of the global populations, signifying high per capita spend on apparel in these developed markets. The next largest markets are Brazil, India, Russia, Canada and Australia.
The rest of the world with a population share of 44% has a miniscule share of <7% in the global apparel market.
The International Textile Fair – Dubai 2015 is set to take place on 26th & 27th April, 2015 at the Dubai World Trade Centre. Dubai has business visitors from all over the world, making it currently the 3rd largest re-export market.This International Textile Fair is UAE’s prime and exclusive trade show for fashion & textile visitors. You are welcomed on board to explore the opportunity to expand your business at an international level.
Exhibitor Products:
· Fabrics, home & industrial textiles, raw materials and fibers;
· Design and production systems: Computer aided design and production system, textile/ clothes colour cards, samples, CDs;
· Accessories: Embroidery, laces, linings, trimmings;
· Apparel and apparel accessories;
· Textile Machinery.
Standard size booth is 12sqm and the rate per stall is US $4800 inclusive of the shell scheme. You will be provided with 1 table, 2 chairs, 3 spotlights, a name fascia and power socket. A discount of 20% will be given to MKMA members. Eligible SME companies can claim the expenses from Market Development Grant (MDG).
The Islamic clothes, fashion and design market is an emerging industry with huge potential. There are 1.6 billion Muslims around the world represent about 23% of the world’s total population. The lack of a global Islamic clothing brand presents a unique opportunity for fashion designers and companies. Currently, no single Muslim brand dominates the market.
Muslim Spending on Clothing
According to a the finding of a report by the Dubai Chamber and Commerce, the global Muslim population spent $224 billion on clothes in 2012, accounting for about 10.6% of the global spending in the garments sector. Spending by the Muslim population is expected to grow to $322 billion by 2018, comprising about 11.2% of the global spending.
Globally, spending on clothing and footwear reached about $2.1 trillion in 2012 and this figure is expected to reach $2.9 trillion by 2018.
Further, the report pointed out that the global Islamic clothes, fashion and design market is larger than most top global clothing markets such as China, with customer spending worth $221 billion, Japan with $111 billion, Russia with $106 billion and Germany with $101 billion in 2012. The only exception is the US, which is the biggest market in terms of expenditure on clothing and footwear recording $494 billion in spending in 2012.
Highest Clothing Expenditure Muslim Countries
Among the Muslim majority countries, Turkey recorded the highest spending on clothing in 2012 worth about $24.9 billion, followed by Iran with $20.5 billion. Other prominent nations in this group are Indonesia with $ 16.8 billion, Egypt $16.2 billion, Saudi Arabia $15.3 billion, Pakistan $14.4 billion and the UAE with $10.2 billion.
Western Muslim Clothing Market
Interestingly, there is a significant Muslim clothing market within Europe, the US and Canada. Collectively, Muslims within these countries spent about $21 billion on clothing and footwear in 2012, making the western Muslim clothing market the second biggest after Turkey.
OIC Countries
The 57 countries that form the Organization of Islamic Cooperation (OIC), recorded a trade surplus in clothing products of about $ 35 billion in 2012 with $59 billion of clothes exports and $24 billion in clothes imports.
Within the OIC, the Gulf Cooperation Council (GCC) countries were the top importing countries with cloth imports worth about $11.4 billion in 2012 led by the UAE with estimated cloth imports of about $7.2 billion in 2012, followed by Saudi Arabia with $3 billion.
The top clothes exporter within the OIC group is the group of South Asian countries with total clothes exports valued at $25.9 billion in 2012, led by Bangladesh which exported clothes worth $ 22 billion during the year.
Turkey is the second major clothes exporting country within the OIC group with $14 billion followed by Indonesia with $7.2 billion.
Potential of Islamic Clothing Industry
Asia Pacific has the highest number of Muslims with about 985.5 million people accounting for about 24% of the region’s population. The Middle East and North Africa has the highest concentration of Muslims where about 93% of its approximately 341 million inhabitants are Muslims.
The emerging Islamic clothing needs therefore, present ample potential business opportunities for clothing manufacturers, specifically manufacturers of women’s wear, distribution channels or retailers, including those online, and designers.
“The ear of the leader must ring with the voices of the people.”
~ Woodrow Wilson~
One morning, I was having my breakfast at the local Hawker Centre when a lot of people having their breakfast were talking about the Hong Kong Students Protest. I was listening to their discussion about the student demonstrators took to the street of blocking traffic on the key streets to the financial centre started on 27/9/2014 night. Will the protest be ended up like the Tiananmen Square Massacre on June 4 1989 that many people were killed after which students and other demonstrators had occupied for seven weeks in Beijing? At this juncture, it appeared unlikely that the students protest will end soon.
Certainly I am not here to discuss the political will of the students to demand on the democracy will for Hong Kong people. Nevertheless, this incident has given us much food for thought on the question: “Do leaders need to listen?” Advising leaders to listen can sound like perplexing. At times, do you think the leaders will listen to the problems that they are facing? But, sadly, this is always not the case.
In theory, listening is part of communication skills important for a leader. But many a times, leaders would rather listen to their stories that have been filtered. Leaders can be misled for making decisions if they are given one-sided stories. Many people can be leaders, but few will have the great power to benefit others with great purpose by listening to the truth from their people. When the leaders are not listening, then things can get worse. Listening is a skill that underlies all leadership skills which leaders sometimes have taken it for granted.
In today’s fast-paced and demanding world, leaders need to connect with people in any organization. Peter Drucker was a great management guru, and he once said, “The most important thing in communication is hearing what isn’t said.” This is what is needed most from leaders. A leader needs listening skill to communicate regularly with his people.
Allow me to share with you one final thought to reflect on – good leaders do not just listen to those who agree with you, but listen to those who may confront you or challenge you. I do believe what Ralph Nicholas said, “The most basic of all human needs is the need to understand and be understood. The best way to understand people is to listen to them.”
The Hong Kong Students Protest is an incident that prompted leaders to hear what others wanted. Listening will allow leaders to excel in leadership. Certainly it will provide leaders with endless possibilities if they really hear what others have to say.
~ Written by Mr. Liaw Fenn Yenn, TARUC Branch Campus Head on 10/10/2014~
President of the China National Textiles and Apparel Council (CNTAC), Wang Tiankai said that “China is in a strong transformation. China is shifting from a mass production country to a place where we put much more emphasize on quality.”
The reasons were mentioned: high labor costs; rising environmental awareness; the lack of efficiency to use the natural resources; and the energy efficiency. Wang clearly defined the priorities of the Chinese textile industry: “To improve basic research and development projects; to bolster technical innovations; to improve environmental conditions for a better climate; and to establish consistent recycling of textile waste.”
Bruno Lanvin, executive director of INSEAD’s European Competitiveness Initiative, said that, “China is shifting its focus from just putting things together. China knows that if it wants to play in the top league, it needs to create and innovate, and they can do that only with a highly educated population.”
Things are changing. Wang said that the “Made in China” label must be changed into a “Created in China” label. The plan is to transfer China from a manufacturing-focused country into an innovation-based economy by the year 2020.
Focus on R & D and Innovation
China has the fastest growing expenditure in R&D. A survey said that last year, China overtook Japan in terms of R&D spending. The total Chinese investment for R&D rose from US$148 billion in 2012 to US$166.5 billion in 2013. Analysts expect that by 2018, China will overtake the combined R&D spending of Europe’s 34 countries.
Knowledge-based economic activity is gradually shifting toward Asia, particularly China. United States still leads the way in R&D spending globally. However, China is constantly closing the gap. Experts anticipate that by 2022, China’s R&D spending is expected to match that of the United States, when the two countries are expected to spend some US$600 billion each on R&D.
Wake up, today the global economy is facing its biggest transformation. It could be a rough time in the future for many businesses. China enterprises are shifting from a mass production entity to a place where quality products are in the spotlight. Many Asian economies are boosting their R&D expenditure to build their competitive advantage to produce high-end products. Are we lagging behind? Are we ready for the challenges?
Taxable Period
The category of a taxable period depends on the amount of annual sales:-
A taxable person may apply to be in any other category from the Director General.
GST Return Form
GST returns and payments must be submitted using the GST-03 Form which can be downloaded from the GST portal or request for a printed copy from the nearest GST office.
Last Date to Furnish the GST Return
The GST return is required to be furnished not later than the last day of the month following the end of the taxable period. Where a taxable person’s taxable period does not end on the last day of the month, the GST return should be furnished not later than the last day of the thirty (30) days period from the end of the varied taxable period. Penalty will be imposed on last payments.
Submission of GST Return
(a) Electronic filing is encouraged;
(b) By post to the GST Processing Centre; or
(c) By hand furnishing to the GST Processing Centre.
Tax Refund
ü 14 working days for on-line submission
ü 28 working days for manual submission
Pre-requisite for Input Tax Credit Claim (ITC)
Ø Claimant must be a taxable person;
Ø Must have valid tax invoices issued under the name of the claimant;
Ø Goods and services are acquired for the purpose of making taxable supply;
Ø Goods and services acquired are not subject to any input tax restrictions e.g. motocars.
Criteria to Claim Input Tax
Ø Tax Invoice; Must be in the name of claimant. Name of third party such as employees or directors will not be accepted;
Ø Customs Form No.1 for imported goods;
Ø Customs Form No. 9 for goods removed from bonded warehouse;
Ø Document to show claimant pays imported services;
Blocked Input Tax : The following supplies shall be excluded from any credit under GST:-
(a) Passenger motor car;
(b) Club subscription fee;
(c) Medical expenses;
(d) Insurance premium;
(e) Family benefits; and
(f) Entertainment expenses.
Accounting Basis : There are two (2) types of accounting basis namely:-
(a) Invoice Basis : Generally, every taxable person shall account for GST on an invoice basis.
1. account for output tax on the date in which tax becomes due (time of supply); and
2. claim input tax on the date in which he holds a valid tax invoice.
(b) Payment Basis : A registered person may write in to apply for tax on payment basis.
1. account for output tax on the date in which payment is received; and
2.claim input tax on the date in which payment is made.
GST Return Amendment
Where a registered person has made an error in declaring the GST return he can correct the errors/mistakes by making amendments in the returns (GST-03). Any amendment made not later than the return due date will not be subject to late payment penalty.
After the return due date, any error should be made through voluntary disclosure and will be entitled a reduction on penalty for late payment.
GST Adjustments : Credit Notes and Debit Notes
Ø Credit note is issued when the amount previously invoiced is reduced or a transaction is cancelled for whatever reason.
Ø Debit note is issued when the amount previously invoiced is increased for the same supply.
Ø Credit and debit notes therefore provide a mechanism to allow GST adjustments..
Adjustments Due to Credit Notes Issued
When a credit note is issued and output tax has been paid, the taxable person must reduce his output tax in the return for the taxable period in which the credit note was issued.
The customer who is a registered person on the other hand, must reduce his input tax in the return for the taxable period in which he received the credit note if he has claimed the input tax.
Adjustments Due to Debit Notes
When a taxable person issues a debit note, he must increase his output tax for the in the return for the taxable period in which the debit note was issued.
The customer who is a registered person on the other hand, can increase his input tax in the return for the taxable period in which he received the debit note.
Some leaders manage to handle the crisis well whereas others fail miserably when they are bombarded with all sorts of nasty criticism. The Air Asia CEO has adopted an excellent approach which is closely related to the five guiding principles for strategic crisis leadership to handle a crisis. This approach was outlined by Bruce Blythe, CEO of Crisis Management International, Inc. which consist of the followings:
I. Take care of the well-being of people first with passion.
II. Take full responsibility
III. Respond quickly to the needs of all stakeholders
IV. Make honest, legal and ethical decisions
V. Communicate with all stakeholders openly
Air Asia CEO has shown many leaders the proper way of handling the crash of Flight QZ8501. During crisis, Tony Fernandez was there to assist, to do everything he could do to support the relatives of the passengers and crew members as they went through this critical time. He apologised profusely for what they had gone through and he took responsibility to lead the company.
Tony Fernandez flew to Surabaya the next day after the incident to handle the crisis personally. Incidentally, he has shown the compassion by changing the airlines’ bright red logo to a grey outline after the incident occurred. Experts said the initial response to the tragedy by Tony Fernandez is a textbook example of how to respond in a crisis.
Many of the leaders might be traumatised by the disaster but Tony Fernandez enlightened us with his way of handling crisis that would get out of the predicament alive. Looking at this man, we learnt that we should be able to handle crisis better in future! Many of us can be leaders in our industry and society. Being leaders, do we assume the responsibility to the organisations we are serving? To maintain on the competitiveness and long term survival, the guidelines introduced by Bruce Blythe and the way of Tony Fernandez handling a crisis we must remember to.
Winston Churchill once said “The price of greatness is responsibility.” In conclusion, leadership during crisis is paramount. Therefore, a true leader must take responsibility to handle crisis like Tony Fernandez.
Written by Mr. Liaw Fenn Yenn, TARUC Branch Campus Head on 12/1/2015~
Apart from that, technical textiles use in multiple industries such as aerospace, construction, marine, medical, defense and agriculture also provides great opportunity.
There are also opportunities for creative entrepreneurs who can supply innovative fresh products to the Canadian market. For instance, the introduction of the wrinkle-free woven shirts, stain resistance, adjustable collars as well as fade resistance.
Top official demanded that fabric and textiles suppliers and merchants must comply with the new system by using the metre as a unit instead of the yard.
The shift to metre followed the UAE’s introduction of litre instead of gallon as a unit of measurement for fuel in 2010. The new move is part of the efforts to build in the UAE infrastructure based on international best practices in order to fulfil the requirements of World Trade Organisation.
According to the book entitled “No man is an Island”, Mr. Lee Kuan Yew was well-known for his strong determination and personality of achieving his vision. His no-nonsense leadership enabled him to make full commitment to build a nation free from corruption and with great wealth. The key question is, “Whether Singapore will continue to maintain her success and growth without PM Lee?
Before Mr. Lee Kuan Yew passed away, we have seen the growth of Singapore in all aspects from Mr. Goh Chok Tong to Mr. Lee Hsien Long as the successors of Singapore Prime Minister. The current Singapore Prime Minister Lee Hsien Loong once said,” In Singapore, succession planning is given a lot of attention in order to ensure a team of new leaders are capable of leading the country further.”
A great leader has an exemplary character. Often, a succession plan is similarly crucial to a company in order to build a company which last. Has the succession plan carried out by Singapore prompted our leaders in Textile and Apparel Industry to ponder the succession plan of their companies? Do they have their succession planning in line?
Look at Berkshire Hathaway, Warren Buffett being the chairman was diagnosed with prostate cancer. He told shareholders that the company had selected a successor even the candidate hasn’t been notified yet. According to Paul Karofsky, the executive director emeritus of Northeastern University Center for Family Business, statistically, less than one in three businesses can survive their business operations into second generation of the family and just one in 10 get through into the third generation due to the lack of succession plans. It is conceivable that succession planning is important for staying alive and move ahead of their competitors.
Another example of a company that implementing succession planning is General Electric led by Jack Welch. In 1991, Jack Welch said that, “Choosing a successor involves a tremendous amount of thought almost every day.” According to GE Capital, succession planning is the key to long term competitiveness and growth. It is the privilege of survival for a business leader to ensure the continuity of business operations when he is not around. During 2011,Tim Cook, chief operating officer, has taken over the helms of the company after Apple’s Steve Jobs resigned. Clearly Apple’s succession planning was in place. When Jobs resigned and Tim Cook as CEO was recommended to the Board to implement its succession plan. Incidentally, other companies that are known for succession planning are Honeywell, Microsoft, Proctor and Gamble, as well as Pepsi.
Succession planning is one of the key issue neglected by some leaders who have been staying in the top enjoying the best. Nevertheless, they have not tried to look into the talent and human resources available for the future leadership development with long range strategic planning. Undeniably, the succession planning should be practised by aligning talent with business strategy to enhance the prospects of achieving the short- and long-term objectives. Having a well succession planning is essential for organizational growth and continued success.
In a nutshell, a good leader like Mr. Lee Kuan Yew had shown the world of his succession plan to have someone capable of continue his dream for the interest of its people. Obviously, Singapore has a well-developed succession plan to move on further. Mr. Lee Kuan Yew, rest in peace!
~ contributed by Mr. Liaw Fenn Yenn, TARUC Branch Campus Head on 23/4/2015
As the country began cutting the textile import duty under the Asean-China Free Trade Agreement, Indonesia’s batik and batik-patterned textile imports increased from $80.8 million in 2013 to $87.1 million in 2014 – mostly from Malaysia and China.
Indonesia’s batik exports during that same period jumped 22% to $340 million.
The batik industry in Indonesia employs 1.3 million people, generating sales value of Rp 5.9 trillion ($440 million).
Under the regulation, which takes effect as of Oct. 25, importers must register with the Trade Ministry and obtain a permit and recommendation from the Ministry of Industry and the Ministry of Cooperatives and SMEs.to import any kind of fabric with a batik pattern.
Such recommendations must at least contain Tariff/HS code information, the volume of batik textile to be imported, the name of the import destination port, and validity period. In addition, it must be accompanied by information on the product or packaging in Bahasa Indonesia.
The rules also restrict the number of ports through which the companies may ship in. The seaports are Belawan in Medan, North Sumatra; Tanjung Perak in Surabaya, East Java; Soekarno-Hatta in Makassar, South Sulawesi; while the only airport allowed is Soekarno-Hatta in Tangerang, Central Java.
In addition, all imports must have prior report from an independent surveyor to verify the origin of the batik-patterned textile.
In 2009, Unesco had recognised Indonesian batik as a world intangible heritage item.
The Regulation 8(1) of Pembangunan Sumber Manusia Berhad (Registration of Employers and Payment of Levy) Regulations 2001 had been amended to:
“ All payment of the levy shall be made by the employer not later than the 15th date of the month immediately following the month in respect of which those payments fall due’’ .
This means that, every payment of levy shall be made before or on the 15th of the following month. The implementation will be effective for the payment of levy for July 2015 where the levy need to be paid before or on 15th August 2015.
Referring to Section 18(1) of the Pembangunan Sumber Manusia Berhad, Act, 2001, it stated that:
‘’An employer who fails to pay within such period as may be prescribed, any levy due from him shall be liable to pay interest on the unpaid levy at the rate of ten per centum per annum in respect of each day of default or delay in payment’’.
It means that, interest will be imposed if the employer pay levy on or after 16th day of the following month.
For illustration:
For the payment July 2015 levy, employer has to pay levy before or on 15 August 2015. In the event the employer pays levy on or after 16 August 2015, the interest of 10% will be imposed upon employer.
Nevertheless, as a transitional period, the employer shall entitle for the waiver of interest of levy. The period for waiver of interest is allocated for the period of 15 days only for each month. The waiver of interest is effective from August 2015 until December 2015.
It means that, the waiver of interest is only applicable if the employer pays the levy after 15th until the last day of following month only. For employers who pay the levy after the last day of the following month, employer shall be liable to pay for interest. .
Every year, Malaysia is getting emissions of smoke, dust, smells that caused by the open burning of forest or plantation by our neighbour country. A nuisance to our daily life prompted our industry players to think about the importance of fulfilling the business’s environmental obligations.
Many a time, we have taken things for granted, we fail to appreciate the beauty of blue sky, with the good quality and refreshing air around us. Responsibility towards the environment is getting important in today’s business. Not to forget the dyeing and printing sectors in the Textile Industry that generate huge quantity of toxic effluent after dyeing or printing of fabrics. Are we also neglecting the need to take necessary precaution to help controlling the potential environmental risks to our own soil here?
Leaders in the Textile and Apparel industry must exemplify to address the issues of hazardous waste including the material that presents particular environmental risks or can harm sickness (e.g. dyeing chemical, printing paste and unwanted fabrics) which will bring catastrophic consequences for our future generations. Plans of isolating the solid waste that can be recycled must be carried out before sending to landfill in order to reduce its environmental impact.
Last week, Segamat River was discharged with contaminated effluent from a factory polluting the entire river. As a result, the whole town was stopped getting the water supply for a day. Again, it is imperative to treat liquid waste before disposal especially in the factory.
Incidentally, the potentially harmful dye or printing substances should be kept and discharged before and after use. We must prevent accidental contamination of groundwater with harmful contaminants. Factories should always avoid throwing away harmful substances into our own drains or garbage tank or our own backyard which can be contaminated.
As we look back, in particular cases, we can see how ignorance of business owners for showing unethical manner towards the environment which has brought sufferings to us today. At times, we may be held responsible for contaminated land we own or occupy if whoever causing the contamination cannot be identified.
Understanding the importance of corporate responsibility towards our environment is crucial for good business. It impacts creation of good corporate reputation. But one thing for sure is the responsibility towards environment plays a crucial role in our existing and future lives and business.
Are we ready to play our role now? Or should we do nothing but be grateful as what Indonesia Vice President said, “For 11 months, they enjoyed nice air from Indonesia and they never thanked us. In fact, they got upset just because of one month suffering from the haze caused by Indonesia.”
~ contributed by Mr. Liaw Fenn Yenn, TARUC Branch Campus Head on 28/9/2015~
Cambodia raises clothing worker wage
Cambodia announced it will raise the minimum wage for clothing workers by 9.4% to $140 a month. When other benefits were calculated, the workers would be making an average of $157 to $168 monthly next year.
The new wages will take effect at the beginning of 2016. A $100 level was set for 2014 and $128 this year but tensions over wages remained high. The increase falls short of the $160 a month wage proposed by unions.
The clothing and footwear industry is Cambodia’s biggest export earner, employing about 700,000 people in more than 700 garment and shoe factories. In 2014, the country shipped more than $6 billion worth of products to the United States and Europe.
Vietnam : Forthcoming Wage Hike
The Vietnam National Wage Council agreed on a 12.4% increase in minimum wages for 2016.
The region-based salaries are fixed. Upon Government’s approval, the monthly minimum wages would be VND3.5 million or US$ 155 for region one (up VND400,000 or US$17.78), VND3.1 million (US$137.80) for region two (up VND350,000/US$15.56), VND2.7 million (US$120) for region three (up VND300,000 or US$13.33) and VND2.4 million for region four (up VND250,000 or US$11.11).
Vietnam earned US$17.8 billion in textile and garment export revenue in January-August, up 10% year-on-year. The sector targets US$27.5-28 billion in export revenue this year.
Myanmar Sets Daily Minimum Wage
Myanmar sets a new minimum wage of 3,600 kyat ($2.80) for an eight-hour work day, effective Sept. 1. That’s $67 a month, based on a six-day work week. The wage is for eight-hour days in a six-day week; it doesn’t address overtime pay or working conditions.
Last year Myanmar exported $1.5 billion of clothes and materials, up from $1.2 billion in 2013 and $947 million in 2012.
Financing rate : 4% to 6% per annum
Maximum tenure : 5 years
Financing Margin : RM5 million
Participating financial institutions
• All commercial banks and Islamic banks;
• Small Medium Enterprise Development Bank Malaysia Berhad (SME Bank);
• Bank Pertanian Malaysia Berhad (Agrobank);
• Malaysian Industrial Development Finance Berhad; and
• Sabah Development Bank Berhad.
Eligibility criteria
• Business enterprise based on the definition of SMEs in Malaysia;
• Maximum shareholders’ funds not exceeding RM2 million;
• Shareholding by Public Listed Companies or Government-Linked Companies (if any) should not exceed 20%;
• Malaysian residing in Malaysia and owned minimum 51% shareholding incorporated under the Companies Act 1965, the Co-operative Societies Act 1993, the Societies Act 1966, registered with the Companies Commission of Malaysia or any other authoritative bodies; and
• Not more than seven (7) years in operation.
(However, participating financial institutions may consider cases of SMEs who have been in operation for more than seven (7) years).
Purpose of financing
• Expansion in productive capacity; or
• Working capital or both.
Eligible sector : All economic sectors
Application procedure
Applications should be made through any participating financial institutions. Approvals will be subjected to the normal credit approval procedures and security requirements of the individual participating financial institution.
For more information:
Ø Log on to SMEinfo portal http://www.smeinfo.com.my
Ø Call BNMTELELINK 1-300-88-5465
Ø Facsimile: 03-2174 1515 or E-mail: bnmtelelink@bnm.gov.my
China has been pushing its own FTA, the Regional Comprehensive Economic Partnership (RCEP), with 16 countries. Seven countries of RCEP are members of TPP. However, it includes major countries like India, Indonesia, the Philippines, South Korea and Thailand.
RCEP countries account for 12 % of global trade (TPP 13 %), a collective GDP of 29 % (TPP 36 %), and nearly half of the global population (TPP 11 %). With TPP steadily progressing to be a reality, the pressure will be on China to accelerate the progress of RCEP.
Australia, Japan, Malaysia, New Zealand, Singapore, Vietnam and Brunei – are in both TPP (Trans-Pacific Partnership) and RCEP. The TPP deal, reached on October 5 after marathon talks between the United States and 11 Pacific Rim nations, aims to liberalise trade in 40% of the world’s economy and would be a legacy-defining victory for President Barack Obama.
RCEP’s history reaches back some 10 years, starting as a study process for an FTA between ASEAN, China, Japan, and Korea (known as ASEAN+3). This was complemented from 2007 with a parallel study process for an ASEAN+6 FTA, which included the ASEAN+3 partners plus Australia, India, and New Zealand.
o Mens’ and Boys’ Shirt, not knitted/crocheted, of cotton (HS620520);
o Jerseys, Pullovers and Cardigans, knitted/crocheted, of cotton (HS611020); and
o T-shirts, singlets, and other vests, knitted/crocheted, of cotton (HS610910).
Malaysia currently rank number nine (9) in the list of top exporters to the US for woven mens’ shirt (HS620520) and number 22 in the list of exporters of knitted mens’ shirt (HS611020). However, in terms of total exports of textiles and apparel products to the US, Malaysia rank number 26.
Elimination/reduction of duty by TPP partners for textiles and apparel products will provide better market access to new matured markets such as Japan, Australia and Canada.
While the US tariff lines predominantly carry as high as 32% import duty and only 70% of the tariff lines are under EIF, Canada offers a better deal with majority (83.8%) of the offers are under EIF with lower import duty (maximum 18%). Therefore, it creates a good opportunity for Malaysian exporters to explore.
Offers by Key TPP Partners
72.9% textiles tariff lines constituting 36.44% of total exports to the US will see duty elimination upon entry into force (EIF). Without TPP, only 11% of tariffs or 0.9% of total exports are duty free. Two major products (dress shirts) are given duty free upon entry into force, an offer exclusively given by the US to Malaysia and Viet Nam only.
86.82% textiles tariff lines constituting 89.55% of total exports to Canada will see duty elimination upon entry into force. Without TPP, only 40% of tariffs or 12.46% of total exports are duty free. Major products given duty free upon entry into force are women’s Jersey and pullover, women’s or girl’s cotton blouses, and handkerchief.
27.57% textiles tariff lines constituting 0.74% of total exports to Mexico will see duty elimination upon entry into force. Without TPP, only 12.67% of tariffs or 0.02% of total exports are duty free. Major products given duty free upon entry into force are nylon yarns and ties/bow ties.
13.25% textiles tariff lines constituting 2.53% of total exports to Peru will see duty elimination upon entry into force. Without TPP, only 6.52% of tariffs or 0.02% of total exports are duty free. Major product given duty free upon entry into force is wool tops.
Yarn-Forward Rule (YFR)
The Yarn Forward Rule is expected to benefit Malaysia in attracting investments into the sector especially in the upstream sub-sector where activities such as fibre and yarn spinning, dyeing and production of fabric are undertaken.
This rule will encourage fabric and apparel producers in TPP countries to source locally produced raw materials to produce finished goods for exports to other TPP countries.
It is also expected that more companies will consider Malaysia as choice location to establish integrated textile production mills and potentially relocation of textile mills to Malaysia from non-TPP countries.
Malaysia’s closest competitor in the apparel sub-sector is Viet Nam and Thailand which has exceeded Malaysia’s exports to the US by multiple folds. One of the main contributing factor is the low cost of labour in the countries and the abundance of low and semi-skilled labour. Labour intensive industry is definitely no longer Malaysia’s way forward.
Therefore, Malaysia has embarked on a mission under the 11th Malaysia Plan to elevate the textiles and apparel industry by focusing on the research, development and design (R&D&D) of technical and smart textiles as well as development of Labour Saving Devices (LSD). RM15 million has been allocated for the project.
Additionally, collaboration with research and development institutions (SIRIM), universities (UiTM) and international research body (Fraunhofer Germany) are also being worked out carry out the task.
By focusing on the development of the upstream sub-sector, it is hoped that Malaysia will be able move up the value chain and will be able to produce high value and high quality technical and smart textiles for exports.
Malaysian TC EXPORTS & IMPORTS with TPP Countries
Malaysian Textiles and Clothing trade with TPP countries in RM Billion
TEXTILES AND APPAREL TRADE WITH TOP THREE TPP COUNTRIES