Posts tagged Nepalese Textile Industry
Nepal is the future for Man Made Fibre Based Textiles

Man Made fibres such as Polyester, Acrylic, Nylon etc. have a huge future in Nepal. 3 key reasons for the same are:

1. Most of these fibres are used for creating low end or bottom of pyramid fabrics which are gradually being outsourced by economies of India and China. Except a very small % which is consumed in technical or performance textile fabrics that require special yarn properties and processing capabilities, all other requirements will need to be consumed by a handful of Asian economies and Nepal can provide the right haven given that the optimal government support is available. 

2. All man made fibres can be produced in huge quantities unlike natural fibres which have a heavy locational dependence such as Cotton which comes from cotton fields, Wool from Sheeps and Silk from worms. Only viscose which is extracted of a natural substance and its blends of polyester would be most optimal to produce in Nepal. 

3. Artificial fibres have a low dependency on processing and finishing in fabrics as by nature the fibre or yarn itself can be developed as per the requirement of the fabric. In the absence of proper processing infrastructure and ecosystem around it, artificial fibres will gain more popularity for exports from Nepal.

For us to be able to cash in on the opportunity both Government and the Textile development community need to take certain steps:

For the Government

1. Abolish short term benefits such as VAT refund on sales and instead promote capital investment based subsidies. Short term gains have only helped inefficient production of the same fabrics through the use of same old technology being used over the last few years. The objective of the government should be to promote technology upgradation and generation of efficiency that can help compete with the international market. Two key schemes that have helped other economies focus on such industries are

a. Technology Upgradation Fund - Create a seamless process to claim refunds for any upgradation in textile technology a firm is willing to go through.

b. Interest Subsidy on Capital Investment - Funding based on projects and interest subsidy thereof

2. Duty structure to support man made fibre based imports. Currently duty structure supports imports of natural fibres, yarn and fabrics. However, if we want to have a focused approach the duties should be in favor of import of manmade fibres and yarns to start with. As the industry develops to manufacture international grade fabrics duties on fabric can also be removed to promote healthy competition

For Textile Manufacturers

1. Choose one type of fibre / yarn that you would like to master on. Currently all textiles in Nepal are making a little bit of everything. There is no focus. If we are able to define a focus and concentrate on just developing qualities in the same type of Yarn, a significant technology upgradation can take place in the chosen sector. For example - companies willing to focus on P/V based blends and output from them, a range of suiting and shirting can be developed in them. Similarly, for Nylon, Acrylic or any other yarn or their blends. Strategies need to be defined basis input and not the output in the textile world.

2. Huge shift in Marketing - Textile owners need to accept the fact that they are the back-end to the fashion economy. We are in a B2B business and hence our brand should mater only to the immediate buyer or your agent. 10 - 15% of your production can be focused towards creating a retail brand like a Raymond, Siyaram etc. but the real business will come from supporting your dealers, garments and institutions that can consume your fabrics. 

3. Development - If we accept that we are the back end to a fashion economy we will align ourselves to developing atleast 5 new designs and 1 new quality every week. Tastes change every day and hence unique development efforts are required to keep the expectations of your customer alive.

My views are entirely personal and may not even resemble to the thinking of my organization. This is basis my limited exposure to the textile industry over the last 8 months of me taking interest in this company.