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Turkish Textile Workers to Strike
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Bangladeshi Factory Fire
Page 1

Rising Rupee Could Cost Jobs
Page 1

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     September 1, 2007                                        Issue #200


             McPete -Sez, 
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Turkish Textile Workers 
             To Strike
Workers at 17 textile and garment factories are due to go on strike after pay talks between a labor union and employers' association broke down earlier in August.
The strike action is set to start on September 10 and could lead to losses of $3bn according to Aynur Bektas, chairman of the Turkish Garment Industry Association (TGSD).
Talks between the Union of Textile, Knitting and Garment Industry Workers of Turkey (TEKSIF) and the Turkish Textile Employers' Association (TUTSIS) have been ongoing since April.
TUTSIS has been calling for a wage freeze for the first half of 2007 and a 3% increase for the second half of the year. But the union argues that with the inflation rate predicted to be around 7.5% at the end of this year, workers will effectively suffer a cut in their real income. 
Halit Narin, TUTSIS chairman, said in a statement that it is not possible to reach an agreement under the existing terms. He added: "The textile and ready-wear sector have no more competitive power, both sides have to show compromise during this period."
Factories that will be involved in the strike action include Altinyildiz, Yünsa, Vakko and Kordsa, Narin, Bahariye, Levi Strauss and Saray Hali. 
TEKSIF, which has more than 20 thousand members working in 54 companies, has also been supported in its strike action by the Öz Iplik-Is Union.
Öz Iplik-Is chairman Yusuf Engin said the decision to strike came after discussions, held on behalf of 5,000 employees, failed to yield any results. 
"We did not want to stop production, but because we did not receive any acceptable and reasonable offer we are using our legal right," he said.


Thailand Inventors Build 
              in Vietnam
Investors from Thailand are building textile, apparel and footwear plants in Vietnam, as they try to offset political instability and a currency crisis in their own country.
Among the most popular destinations in Vietnam are Ben Tre province, where Thai-owned plants are already set up to serve clients including Adidas, Nike and Puma. 
Examples are textile accessories producer Tong Siang, which hopes to build textile and dye factories worth US$80m, and sportswear maker Eagle Speed Thailand, which plans to lease ten hectares to build a sportswear plant. Nan Yang and Amara are also looking to invest in the country. 
It is thought that Thai companies see a good investment environment in the emerging Vietnamese market, where labor costs are approximately 20-30% lower than Thailand, according to Yotsaton Kijkusol, vice-chairman of Thai Garment Manufacturers' Association.
Vietnam had attracted 153 investment projects in all industries from Thailand, and the country is ranked 12th among 79 countries and territories investing in Vietnam.                 


Bangladeshi Factory Fire
A fire at a Bangladeshi garment factory has gutted facilities and destroyed clothing manufactured by Reach Fashion Ltd, in the Shanirakhra area.
According to local reports, the fire started above Reach's facilities, on the sixth floor of the building, burning BDT50m (US$730,000) worth of garments.
The cause of the fire has not been identified, but local news reported that there was a power outage at the time. There were no injuries as the fire happened at lunchtime while staff were outside.
Earlier in August another fire broke out in Dhaka, hospitalizing 20 people in the capital.

20/24              Photographed by Lawrence O. Brown

Vietnam Asked to Reinstate
    Monitoring System
Buyers from companies including Adidas, Ann Taylor, Liz Claiborne and Kohl's are calling on the Vietnamese government to reinstate the export monitoring system used to track the price and volume of apparel shipments from Vietnam to the US.
They say the decision to replace the Export License (E/L) system in May 2007 with a Certificate of Origin (COO) system makes it more likely the US will request anti-dumping investigations against Vietnam - and makes buyers wary about placing orders with suppliers based there.
In a letter sent to Vietnam's Minister of Industry and Trade, Christopher Muessel, chairman of the American Chamber of Commerce in Vietnam, warns: "From our perspective, Vietnam has taken a step backward, and has given the US domestic textile industry a reason to request anti-dumping investigations against Vietnam."
His comments come as the US is reviewing data on apparel imports from Vietnam with a view to deciding whether there is any basis to initiate an antidumping investigation. 
The monitoring program began on January 11, when Vietnam joined the World Trade Organization, and is scheduled to remain in place until January 19, 2009. Reviews are planned every six months, with the first formal review due this month.
The imports under scrutiny are of five broad groups of products made in Vietnam - shirts, trousers, sweaters, underwear and swimwear.
Muessel believes that data accumulated under the new COO system does not mirror data collected by the US since it does not require the apparel category or unit price value and is prone to irregularities. 
"The process is monitored by the Vietnam Chamber of Commerce," he writes, "rather than the Ministry of Industry and Trade of the Vietnamese Government. 
"Accordingly, factories voluntarily list the apparel category and unit prices on the certificate of origin application; however, the Vietnam Chamber of Commerce is not familiar with the US Apparel Categories system and does not verify accuracy of the information provided. 
"In a number of instances, factories erroneously or falsely have listed category descriptions that the agent or buyer requested, even if the categories were not accurate. 
"Therefore, even if VCCI is monitoring the information provided, data irregularities on the applications for COO cause inaccurate data accumulation."
This, he believes, gives the US domestic textile industry a reason to request anti-dumping investigations against Vietnam.
"Due to the urgency and importance of this issue, we request that the Ministry of Industry and Trade re-instate the export monitoring (export licensing) system as soon as possible, and in accordance with US HTS categories (10 digits), so that the data collected will mirror the US data," the letter says. 
There are also calls for the data to be available on the MOT website weekly, as in the past, to provide US buyers weekly information about Vietnam's apparel export data.
"Visibility provides buyers with the confidence to continue placing orders in Vietnam and minimizes the risk of the US Commerce Department self-initiating an anti-dumping investigation against Vietnam." 
An anti-dumping investigation would cause US apparel buyers to withdraw from Vietnam manufacturers almost immediately, because of the uncertainty and disruption that such a probe would bring.

 Rising Rupee Could Cost
           570,000 Jobs
The appreciation of the Indian rupee could lead to the loss of around 570,000 textile industry jobs this year, according to the Confederation of Indian Textile Industry (CITI).
Local media said CITI's report on the 'Impact of Textile Export  Deceleration on Employment' pointed to the loss of 272,000 direct jobs, with the remainder made up of those in allied sectors.
The rupee has risen by 10% on most exchange markets in the last six months leading to a slowdown in exports.

Pakistan Textile Workers
Textile workers in Pakistan have staged protests calling on their employers to introduce the 15% salary rise set out by the government in its Federal Budget in June this year. 
Hundreds of workers bearing placards gathered in an industrial area near Lahore. They were demonstrating against textile mill owners who are not increasing their salaries despite the government announcement.
Workers' leader Abbas Butt said that in June this year the government announced a 15% increase in salaries for skilled workers. Minimum wages for unskilled workers were also increased from INR4000 (US$67) to INR4600 per month, but the mill owners are still paying workers at the previous rates. 
Butt said that textile mills are not providing any in-house training to workers to increase their productivity and, due to high inflation rates in Pakistan, the cost of living has increased. 
He said that due to the low wage rate in the textile sector, workers are shifting to other fields like the construction industry were an unskilled worker can easily earn INR400 (US$7) per day.
The workers also showed slogans against the rising prices of utilities, and demanded that the government should increase social security facilities for workers

VF Acquires Lucy Activewear
VF Corporation has completed its US$110m acquisition of Lucy Activewear, which was first announced last month and signals a step into the luxury market for the apparel firm.
"We are delighted to welcome Lucy's 680 associates to VF," said Mackey J McDonald, chairman and CEO. 
"The Lucy brand is healthy and growing, with a rapidly expanding base of stores. We look forward to working with Lucy's talented management team as they continue to execute the brand's exciting growth strategy."
Mike Edwards, current CEO, and his team will continue to lead the business from Lucy's headquarters in Portland. 
"With VF's extensive resources, Lucy can take its customer experience to a new level in innovative product offerings, additional stores and outstanding customer service," said Edwards.
With approximately $57m in annual revenues, Portland, Oregon-based Lucy is a rapidly-growing women's active lifestyle brand, VF said. It is sold through a base of 50 owned retail stores and online.
VF's principal brands also include Wrangler, Lee, Riders, Rustler, The North Face, Vans, Reef and JanSport. VF has also tabled a $775m offer for the apparel brand Seven For All Mankind. 
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