GERMAN TEXTILE & CLOTHING INDUSTRY Introduction:

Nilesh.I.Yadav

Germany is the most populous country in ope and contributes to 23 % of the EU budget. It is Indias biggest trading partner in ope and the 5th biggest trading partner in the world. Germany is also Indias second largest technology partner. India was amongst the first countries to recognize Federal Republic of Germany (FRG) after the Second World War. There has been a rapid growth in trade and economics with bilateral trade reaching o 15.44 billion in 2010. The two countries also work together in various international forums including the UN, G-4 and G20. ECONOMIC INDICATOR (2010) Population GDP GDP Growth Rate GDP Per Capita Inflation Total Imports Total Exports Currency Exchange Rate GERMANY 82,282,988 US$ 2.951 trillion 3.3% US$ 35900 1% US$ 1.12 trillion US$ 1.337 trillion EURO() 1 =68.305 INR = 105.328 BDT ( Dec 2011)

Current Textile & Clothing Situation in Germany: The Textile and Clothing Industry is still in an economic boom in Germany. After a few month of slight change, sales level has been high for most of the segments, which further brightens the situation. The sales index for Textile and Clothing has risen significantly during the Year 2011. There has been a double-digit growth for technical-textile, knitted and clothing sector. In addition, the views are positive because the IFO index has performed well overall and textile in particular in manufacturing sector. Table 1 shows the current figures of German T & C industry, while Table 2 shows Imports & Export figures.

Table 1: Current Figures of Textile and Clothing - Germany:

Period Month Textile Figures % Change 2010-11 1. Sept 2011 Jan-Sept 2011 2. Sept 2011 Jan-Sept 2011 3. Sept 2011 Jan-Sept 2011 4. Aug 2011 Sep 2011 5. Aug 2011 Sept 2011 6. Aug 2011 Sep 2011 7. % Change Clothing Retail Total Retail Employees 53961 53368 2.0 1.0 28551 27959 0.7 -2.6 82512 81327 1.0 -0.3 Clothing Figures % Change 2010-11 Textile & Clothing Figures % Change 2010-11

Gross wages and salaries ( in million ) 138 5.0 71 1257 5.8 654 Turnover ( in million ) 950 7.1 7754 10.2

1.5 3.6

209 1910

3.8 5.0

764 5568

-0.4 7.4

1715 13322

3.6 9.0

Production( Index 2005= 100) 77.0 3.6 67.9 0.1 94.5 -2.1 66.0 -6.1 Intake Orders 85.5 6.6 111.6 9.3 100.3 0.1 72.4 5.8 Prices (producer price index for domestic sales, 2005=100) 114.6 7.7 105.8 2.0 114.8 7.6 105.8 1.6 Retail (sales base year 2005=100) Sept 2011 Jul-Sept 2011 Jan-Sept 2011 -6.6 2.5 -2.3 2.1 2.0 2.8

144.9 160.5 197.1 172.7 220.4 220.6

1.9 -4.1 8.9 9.1 4.8 4.6

Sept 2011 3.4 2.4

Jul-Sept 2011 2.4 2.1

Jan-Sept 2011 1.6 2.0

The overall German Textile and clothing industry turnover is 9% higher in 2011 when compared to year on year basis. The Textile sector recorded 10.2% more sales, the clothing sector, however, shows 7.4% more sale lesser than textile due to relatively low value last year. Employment grew in the area of textiles by 1% compared to the same period last year, while the employment in the clothing sector decline by 2.6%. The overall employability of the industry decline by 0.3% in 2011 when compared to the same period of previous year. The production has increased on year on year basis for both textile and clothing Industry. Textile sector shows an increase by 4% while clothing sector shows an increase of 1.6%. The intake orders, which are good economic indicators of any industry also shows rise in both the sectors, a 5.9% to 9.1% on y-o-y basis for textile industry as a whole.

Retail sales rose in comparison to the beginning of 2010, but a 2% growth of retail clothing trade is somewhat weaker than retail sector as a whole which shows a growth of 2.8% in comparison with the first nine months of 2011 with 2010. When foreign trade is compared by y-o-y basis, such that September 2011 with September 2010, it shows that textile exports and imports both are positive and are 11% and 13% respectively. The exports in the clothing sector rose by 10.8% compared to the same period previous year, while the imports grew by 17%. The imports surplus shows a 24.6% higher when compared to same period previous year which is due to sharp rise in the commodity prices. Market participants are high due to high global demand, but it(participant) will not rise if the prices keep increasing. Table 2: Germanys Textile Imports & Exports: Exports ( in Million s) Products
Intermediate Products Primary Products Finished products (Textiles) Finished products (Clothing) Total September 2011 % Change 2010 Jan-Sept 2011 % Change 2010

198 344 1108 763 2414

September 2011

196 335 1093 756 2380

1.0 2.8 1.4 0.9

1830 3211 8826 5812

1680 2952 7953 5247 17830

8.9 8.8 11.0 10.8 10.4

% Change

1.4 19678 Imports ( in Million s )

% Change Jan-Sept 2011

Products
Intermediate Products Primary Products Finished products (Textiles) Finished products (Clothing) Total

2010

2010

141 209 1722 1326 3399

143 214 1713 1253 3323

-0.9 -2.3 0.5 5.9 2.3

1321 2161 14487 10827 28797

1156 1918 12822 9253 25149

14.3 12.7 13.0 17.0 14.5

Large Potential for Exports: The Textile Market in Germany Germany is the second largest importer of textiles worldwide. For foreign textile companies, this represents an opportunity to increase their exports by expanding their presence in the German

market. With the right information about the market, the distribution channels and potential business contacts in Germany, textile companies worldwide will be able to increase their market share successfully. The textile and clothing sector in Germany is one of the largest industry groups in the country. In 2006, Germany exported 20 billion s and imported 29 billion in textiles and clothing. Based on total revenue for the same year of 22 billion s and 122,000 employed in the sector, the textile branch represents one of the most important consumer products industries in Germany. See Table 3 which shows the evolution of German Textile and Clothing Industry over past 6 years Since the 1960s, the German textile and clothing sector has gone through major structural changes that have led the industry to reduce and outsource some of its inland production. As a result, Germany covers today its local demand for textiles and clothing partly with its own production and largely by importing from other countries. Table 3 : Evolution of German Textile and Clothing Industry Over past 6 years
No. of firms (with 20+ Employ ees) 732 323 1055 % Change over previou s year No. of employ ees (in thousan ds) % Change over previou s year Gross Wage (in Million ) % Change over previou s year Total Revenu e (in Million ) % Change over previou s year Domes tic sales (in Million ) % Change over previou s year Foreig n Sales (in Million ) 4.687 2.821 7.508 % Change over previou s year Export Ratio (in %)

Past 6 Years T &C ndustr y

2010 Textile Clothin g Textile +Clothi ng 2,009 Textile Clothin g Textile +Clothi ng 2008 Textile Clothin g Textile +Clothi ng 2,007 Textile Clothin g Textile +Clothi ng 2,006 Textile

-4.7 -9.5 -6.2

637 335 971

-2.1 -5.1 -3.1

1900 979 2879

1.2 3 -2

10818 7339 18156

16.8 3.0 10.8

6130 4518 10648

15.1 0.2 8.3

19.2 7.9 14.7

43.3 38.4 41.4

768 357 1125

-3.3 -6.3 -4.3

650 353 1,003

-10.4 -6.9 -9.2

1877 1009 2886

-10.3 -8.0 -9.5

9261 7122 16382

-16.7 -12.5 -14.9

5327 4.507 9835

-15.7 -10.9 -13.5

3.933 2.614 6.548

-18.0 -15.2 -16.9

42.5 36.7 40.0

794 381 1175

-9.3 -2.1 -7.0

726 379 1,105

-10.8 -4.1 -8.6

2093 1096 3189

-10.6 -3.8 -8.3

11116 8141 19257

-15.7 -11.8 -14.1

6317 5057 11375

-16.3 -12.7 -14.7

4.799 3.084 7.882

-15.0 -10.2 -12.5

43.2 37.9 40.9

875 389 1264

-4.7 -5.8 -5.3

814 395 1,208

-1.6 -2.9 -2.1

2341 1139 3479

-5.0 -9.0 -6.0

13191 9230 22421

0.8 -0.4 0.3

7546 5796 13342

-0.3 -2.9 -1.5

5.644 3.433 9.007

4.5 7.9 5.8

42.8 37.2 40.2

922

-6.0

826

-6.4

2351

-5.0

13085

1.2

7633

-1.0

5.452

4.5

41.7

Clothin g Textile +Clothi ng 2,005 Textile Clothin g Textile +Clothi ng

415 1337

-6.4 -6.2

410 1,236

-2.8 -5.3

1149 3500

-2.0 -4.1

9.266 22.351

0.3 0.8

6019 13653

-1.2 -1.1

3.246 8.698

3.3 4.0

35.0 38.9

981 444 1425

-6.0 -7.7 -6.6

883 422 1,305

-7.2 -5.7 -6.7

2476 1173 3649

-5.8 -3.0 -4.9

12.928 9.234 22.163

-3.4 2.7 -0.9

7710 6091 13801

-4.6 1.6 -2.0

5.218 3.144 8.362

-1.5 4.9 0.8

40.4 34.0 37.7

German Bangladesh Economic Relations Germany is the second largest export market for Bangladesh worldwide. German exports to Bangladesh are also growing as German companies find increasingly attractive trade and investment opportunities in Bangladesh. The economic situation in Bangladesh and Bilateral Trade with Germany: Trade is developing exceedingly well. In the calendar year 2010 the trade volume increased by 23% to more than 2.8 billion . In its trade with Germany as with other Western trading partners Bangladesh has for years recorded a large surplus. German imports from Bangladesh in 2010 amounted to about 2.35 billion (2009: 2 billion) as compared with German exports to Bangladesh in the same period of 464 million (2009: 300 million). In 2010, total trade between Bangladesh and Germany is more than 2.8 billion. In the first six months of 2011, bilateral trade already stood at 1.786 billion, German imports from Bangladesh amounting to 1.555 billion and German exports to Bangladesh 231 million. This means bilateral trade grew by a total of 50 per cent, compared with 2010, in the first half of 2011 alone. More than 90 per cent of imports from Bangladesh are finished garments, German exports mainly comprising machinery, chemical products and electrical goods. Over the past few years, German shipping companies have had ships built in Bangladesh. About 96% of imports from Bangladesh are Textile Products, German exports mainly consisting of machines (2010: 42%), chemicals (18%) and power plant equipment (16%). Over the last four years, shipbuilding emerged as new sector in the bilateral trade. Currently, Bangladesh shipbuilders have secured orders from German ship owner worth 250 million.

Germany is Bangladesh's second-largest export market after the US. So far, German direct

investment in Bangladesh in the textile industry, transport and logistics, building materials, precision engineering and shipbuilding is still fairly insignificant but trending upwards.

Difference of bilateral trade in the period of January to June 2011 as compared to the corresponding period of 2010: y y Bangladesh Export 52% Bangladesh Import 36%

Total Bilateral Trade 50%

Major Export Products of Bangladesh to Germany are: y y y y Textile and textile Products 95.0% Food and food products 1.8% Leather and Leather Products 1.5% Ship Building has recently become a major export factor in our bilateral trade.

Major Import Products of Bangladesh from Germany are: y y y Machineries 43% Chemicals 20% Generator & Electrical Equipments 16%