Alok Industries to cut debt-equity ratio- Rajas Kelkar,ET Bureau

 5 Nov, 2010, 03.04AM IST

 MUMBAI: Alok Industries, a listed textile-to-retail company, expects to bring down its debt-equity ratio of 1.81 over the next couple of years by generating higher profits and selling part of the real estate business.

Alok Industries CFO Sunil Khandelwal said that the total value of the real estate portfolio, held in step-down subsidiary, is Rs 2,200 crore. The company expects to receive at least Rs 1,500 crore by March 2012 end. “We have 6,40,000 sq ft of commercial real estate held in step-down subsidiaries,” he added.

Alok Industries primarily makes textiles and owns retail stores in India and the UK. The company operates 260 stores called ‘H&A’ in India. Mr Khandelwal said that the company was looking to raise private equity for the retail business two years ago.


“We are looking to expand to 400 stores by March 2011 end. We will look at value unlocking in the retail business only when we reach 700 to 800 stories over the next couple of years,” he added. Mr Khandelwal said that the company follows a franchisee model.


In case of the UK stores, Alok could consider exiting the business, he said. UK retail stores ‘Store twenty one’ are expected to make profits this year. “The idea was to push Alok Industries products. However, these stores no longer sell any significant Alok Industries products,” he added.

While he did not specify any time line for selling this business, he said that the company could evaluate the option of bringing the UK retail brand to India. “We could look at all kinds of possibilities,” Mr Khandelwal said. 

 The core textile business is expected to grow at 10-11%, in line with industry growth. Mr Khandelwal said the textile industry in India is expected to grow to $220 billion from $70 billion currently in the next 10 years. Alok Industries reported Rs 1,451-crore revenue for the quarter ended September 30. The company’s market cap stood at Rs 2,245 crore.

Source: http://economictimes.indiatimes.com/news/news-by-industry/cons-products/garments-/-textiles/Alok-Industries-to-cut-debt-equity-ratio/articleshow/6874176.cms

Textile processing, sizing industries call off strike

 KHALID ABBAS SAIF
FAISALABAD  (November 05, 2010) : Textile Processing and Sizing Industries have called off strike against Gas Shedding Schedule after restoring the gas supply, here on Thursday, while Owners and workers Powerlooms industry took out procession at various places and strongly demanded that the government should immediately banned the export of cotton and yarn to save the Value Added Textile Industry and its three million labourers across the country.

Protestors announced that if demands not accepted, the labour intensive powerlooms industry will observed strike for indefinite period from November 10. Talking to newsmen, Salamat Ali, Chairman, Pakistan Hosiery Manufacturers & Exporters Association (PHMA) North Zone disclosed that the Federal Government has accepted the industrial demand to end the discriminatory gas shedding and assured that gas shedding will be observed across the board under a new schedule, which will chalk out with the consultation of industrialists.

He said that the spinners and other concerned lobbies are creating such an atmosphere as to force the labour intensive and export oriented Value Added Textile Industry to roll back and set down for complete closure. He mentioned that the excessive export of cotton and yarn was damaging the textile industry and exports. He pointed out that India had refused to provide cotton to Pakistan due to its shortfall, while our government facilitating the cotton and yarn exporters ignoring the three million shortfall of cotton.

Salamat Ali, Chairman, (PHMA) North Zone demanded that the export of cotton and yarn should be banned to control the burning situation, which hampering the industry and three million labour's livelihood. He said that the recent 60 percent increase in yarn within a month would also further aggravate the economic situation, while discriminatory gas shedding adding fuel to the fire.
He said that the spinners and other concerned lobbies are creating such an atmosphere as to force the labour intensive and export oriented Value Added Textile Industry to roll back and set down for complete closure. He mentioned that the excessive export of cotton and yarn was damaging the textile industry and exports. He pointed out that India had refused to provide cotton to Pakistan due to its shortfall, while our government facilitating the cotton and yarn exporters ignoring the three million shortfall of cotton.

Salamat Ali, Chairman, (PHMA) North Zone demanded that the export of cotton and yarn should be banned to control the burning situation, which hampering the industry and three million labour's livelihood. He said that the recent 60 percent increase in yarn within a month would also further aggravate the economic situation, while discriminatory gas shedding adding fuel to the fire.

He said that hike in the petroleum products prices would not only create problems for the weavers, knitters and exporters, but at the domestic front the cost of industrial production would also increase many fold. Doing unfair business for industrial sector is yielding negative impact on the domestic and foreign investment in Pakistan, which is registered 30 percent decline during the current fiscal year. Most of the industrialists are facing financial crunch, he added.

He demanded to the government that the export of cotton and yarn should be totally banned till meeting the demands of the domestic sector and should be eliminated the monopolists and capital Mafia, who are adding fuel to the fire by their speculative activities ignoring the national interests.

Addressing a media conference, Waheed Khaliq Raamay, Chairman Council of Loom Owners Association announced that if the government not control the excessive export of cotton and yarn, the power-looms industry would go indefinite strike, which is providing the livelihood to one million workers.
 
Source: http://www.brecorder.com/news/cotton-and-textiles/pakistan/1121208:textile-processing-sizing-industries-call-off-strike.html

Chinese textile exporters struggle amid rising costs

19:44, November 04, 2010     

Exporters of textiles at the Canton Fair, China's largest trade fair, say they are struggling to survive amid rising raw material and labor costs.

"Wages have increased as much as 30 percent. But several of our partner plants have stopped production because of the worker shortage," said Chen Su, the assistant to the general manager at Sunvim Group, China's biggest home textile company, Thursday.

In addition, prices of raw materials are rising rapidly. Cotton prices have risen from 18,160 yuan (2,720 U.S. dollars) to 27,405 yuan per tonne, a 51 percent increase. The prices of other fabrics are also rising.

Furthermore, labor and raw material shortages often hampers the production of textile plants, leading to delivery delays, one of the greatest concerns for buyers.


Elliot Gessle, a British buyer at the Canton Fair, thinks Chinese textile products have lost their competitiveness. "Prices of most products are rising. But delivery delays have been the greatest headache," he said. Exporters of textiles at the Canton Fair, China's largest trade fair, say they are struggling to survive amid rising raw material and labor costs.

"Wages have increased as much as 30 percent. But several of our partner plants have stopped production because of the worker shortage," said Chen Su, the assistant to the general manager at Sunvim Group, China's biggest home textile company, Thursday.

In addition, prices of raw materials are rising rapidly. Cotton prices have risen from 18,160 yuan (2,720 U.S. dollars) to 27,405 yuan per tonne, a 51 percent increase. The prices of other fabrics are also rising.

Source: http://english.peopledaily.com.cn/90001/90778/90860/7188811.html

Cotton Soars to Record on Mounting Demand in China, ‘Bull Feast’

Nov. 4 (Bloomberg) -- Cotton soared to a record $1.4052 a pound in New York on concern that global demand led by China will outstrip production and erode inventories. Prices have rallied 86 percent this year on concern that damage to China’s crop may force domestic mills to import more cotton than estimated, reducing global stockpiles already forecast to drop to a 14-year low. The fiber has been the best- performing commodity on the Thomson Reuters/Jefferies CRB Index over the past 12 months.

“Even at $1.35, demand has not cooled off,” said Rogers Varner, the president of brokerage Varner Bros. in Cleveland, Mississippi. “It’s a bull feast.” Cotton for December delivery rose 4.93 cents, or 3.6 percent, to settle at $1.4045 a pound at 2:48 p.m. on ICE Futures U.S. Earlier, prices reached $1.4052, the highest level since the fiber began trading 140 years ago. The commodity has more than doubled in the past 12 months.
In China, cotton futures for May delivery reached a record of 29,980 yuan a metric ton yesterday on the Zhengzhou Commodity Exchange.

The U.S., the world’s biggest exporter, shipped 560,798 bales of upland cotton for the week ended Oct. 28, up 20 percent from the average of the previous four weeks, the U.S. Department of Agriculture said today. China, the largest user of the fiber, purchased 59 percent of the exports.

Government Price Control
China’s government is increasing its control on the price of cotton and will pay attention to challenges faced by textile companies, said Wen Zhongliang, the commercial counselor at the Ministry of Commerce’s foreign trade department. Wen attributed rising prices to an expected production deficit this year and speculative buying.

“Small, family-owned mills are forced to close due to raw- cotton prices being too high,” Sharon Johnson, a senior analyst at First Capitol Group LLC in Atlanta, said in a report yesterday. China is “especially hard hit,” she said.

Boraas Waefveri AB said it filed for bankruptcy as the rising cost of cotton and a lack of sales at the Krenholm Valduse division in Estonia prevented the Swedish textile maker from returning to profit.
Surging cotton prices may mean more expensive clothes, sheets and towels as textile mills including India’s Arvind Ltd. and retailers such as Next Plc pass along higher costs to their customers.

Next, a Leicester, England-based clothing retailer, said yesterday it will raise prices as much as 8 percent in the first quarter because of the jump in costs. Ahmedabad, Gujarat-based Arvind, the world’s largest denim maker and a supplier to jeans maker Levi Strauss & Co. and Gap Inc., has raised prices by as much as 15 percent, Citigroup Inc. economists Rohini Malkani and Anushka Shah wrote in an Oct. 11 report.

--With assistance from Jae Hur in Tokyo. Editors: Millie Munshi, Steve Stroth
To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net.
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

Source: http://www.businessweek.com/news/2010-11-04/cotton-soars-to-record-on-mounting-demand-in-china-bull-feast-.html

Lint prices hit Rs 9,000 mark, spot rate at Rs 8,500 amid rumours of tight Supplies

KARACHI  (November 04, 2010) : Prices were sharply higher on the cotton market on Wednesday as mills and exporters did active buying following the tight supplies rumours, dealers said. The Karachi Cotton Association (KCA) raised official spot rate by Rs 200 to Rs 8,500, they said.

In the ready business over 30,000 bales of cotton changed hands between Rs 8,400-9,000, they said. Seed cotton prices in Sindh and Punjab were sharply higher by Rs 100 to Rs 3900-4100 due to panic buying, they said. Market sources said that prices are tracking the NY cotton futures and tight supplies and delay by India in finalising the contracts causing rising uncertainties among cotton traders and this factor is pushing the prices sharply up.

According to a report the latest spike in US cotton futures to record highs replicates a bullish pattern that has been recurring for the last six weeks, where higher highs and higher lows point to a continued upward march. In Asia on Wednesday the US and China cotton futures climbed to all-time highs as tightening global supplies and strong demand from the world's top importer, China, continued to bolster the markets.

Bullish fundamentals have drawn large inflows of speculative funds into cotton, making it the best performing commodity this year, outshining the record-setting gold market and wheat futures. China's benchmark Zhengzhou cotton jumped 4.6 percent to 29,950 yuan a tonne, setting a new record for a third straight day, while the ICE Futures benchmark December cotton contract rose to a historic high of $1.3810 per lb in Asian trade.

On Tuesday the US cotton futures rallied to a fresh record due to speculative fund and trade buying sparked by a surge in China's cotton prices and worries over tight supplies spilling into the spring, analysts said. Analysts estimate that 80 percent of the US cotton crop, which is forecast at 18.87 million (480-lb) bales, already has been sold. They said most other major producers, such as Central Asia and Brazil, have sold their cotton as well. The benchmark December cotton contract rose the five-cent daily limit to trade at a record $1.3426 per lb at 9:57 am EDT (1357 GMT). The session low was at $1.2945.

The following deals were reported: 2000 bales of cotton from Rajan Pur sold at Rs 9000, 3000 bales from Shahdad Pur at Rs 8500-8600, 3000 bales from Tando Adam at Rs 8500-8600, 2000 bales from Mir Pur Khas at Rs 84000-8600, 1000 bales from Hyderabad at Rs 8500, 2000 bales from Sanghar at Rs 8400-8500, 2000 bales from Khairpur 8550-8600, 2000 bales from Upper Sindh at Rs 8700-8800, 400 bales from Chistian at Rs 8400, 400 bales from Khan Pur at Rs 8500, 3000 bales from Burewala at Rs 8500-8600, 1000 bales from Haroonabad at Rs 8400-8600, 1000 bales from Sadiqabad at Rs 8500, 600 bales from Hasil Pur at Rs 8500, 3000 bales from Khanewal at Rs 8500-8700, 200 bales from Shujabad at Rs 8500, 400 bales from Jahania at Rs 8500-8600, 1400 bales from Ahmed Pur at Rs 8600, 800 bales from Jan Pur at Rs 8600, 600 bales from Chichawatni at Rs 8600, 200 bales from Duniya Pur at Rs 8600, 1000 bales from Rajan Pur at Rs 8700-8750and 1000 bales from Dera Ghazi Khan at Rs 8700-8750.

===========================================================================
The KCA Official Spot Rate for Local Dealings in Pak Rupees
---------------------------------------------------------------------------
FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"
---------------------------------------------------------------------------
                                    MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL
===========================================================================
Rate              Ex-Gin   Upcountry   Spot Rate    Spot Rate    Difference
                    For      Price     Ex-Karachi  Ex. KHI. As   Ex-Karachi
                                                  on 02.11.2010
===========================================================================
37.324 Kgs        8,500       120        8,620        8,420            +200
---------------------------------------------------------------------------
Equivalent
---------------------------------------------------------------------------
40 Kgs            9,109       120        9,229        9,015            +214 ===========================================================================
Copyright Business Recorder, 2010


Source: http://www.brecorder.com/news/cotton-and-textiles/pakistan/1120962:lint-prices-hit-rs-9-000-mark-spot-rate-at-rs-8-500-amid-rumours-of-tight-supplies.html

China National Cotton Exchange to Tighten Price Controls, Cut Volatility

By Bloomberg News - Nov 4, 2010 2:16 PM GMT+0530 Thu Nov 04 08:46:44 GMT 2010
China National Cotton Exchange said it will take measures to stabilize cotton prices and reduce volatility, the exchange said in a statement on its website today.
The exchange will curb cotton price manipulations and tighten risk controls, according to the statement.

Source: http://www.bloomberg.com/news/2010-11-04/china-national-cotton-exchange-to-tighten-price-controls-cut-volatility.html

OUTLOOK-India cotton seen down on arrivals

 MUMBAI Nov 1 (Reuters) - Indian cotton may edge lower during the week as arrivals are in full swing in most growing areas, but beginning of exports may limit losses, traders said on Monday.
"Arrivals have started in most places now. Prices have cooled down by about two percent since last week," said an official with the state-run procurer Cotton Corp. of India.

The arrivals stood at 2.11 million bales (of 170 kg each) as on October 30, compared with 1.72 million bales during the same period in the previous year, the official said.

India has allowed cotton exports for the 2010/11 season from Monday, an official with the federal textile ministry told Reuters. See [ID:nSGE6A00DS]

India, the world's second-biggest producer and exporter of cotton, delayed exports by one month until Nov. 1, as arrivals of the fibre were delayed. See [ID:nSGE68R0LV]

India has stipulated the exports at 5.5 million bales to facilitate domestic supplies. [ID:nSGE69A0AA]
In India, the most common Shankar-6 variety was trading at 41,600 rupees per candy (of 356 kg each) on Monday, up about 80 percent compared with a year ago, data with the Cotton Association of India showed.

Cotton output in India is likely to jump to a record 35 million bales in 2010/11, higher than the earlier estimates of 32.5 million bales, on better yields. [ID:nSGE68L0F2]
(Reporting by Sourav Mishra; editing by Sunil Nair)

Source: http://in.reuters.com/article/idINSGE6A00IR20101101