Tag: factory

  • Korea automobile production falls for 3rd year in 2018

    Korea automobile production falls for 3rd year in 2018

    Korea’s auto production tumbled for a third consecutive year in 2018 amid weaker domestic and global demand, data showed Sunday. According to the data by the Korea Automobile Manufacturers Association (KAMA), Korea produced 4.03 million vehicles last year, down 2.1 percent from the previous year. The figure has been decreasing over the past three years from 4.56 million in 2015 to 4.23 million in 2016 and 4.12 in 2017.

    The 2018 figure put Korea as the seventh-largest car manufacturing country in the world, down one notch from the previous year, according to the association.

    Korea became the world’s fifth-largest maker of cars in 2005 and retained the ranking until 2015. But India edged out Korea to stand at the world’s sixth in 2016 and 2017. Last year, Korea fell behind Mexico.

    China was found to produce the largest number of vehicles in 2018, with 27.81 million followed by the United States, Japan, Germany and India.

    Korea’s total car exports also fell to 2.45 million vehicles last year from the previous year’s 2.53 million, the KAMA said, adding that the country accounted for 4.1 percent of the world’s car production in 2018, down 0.1 percentage point from a year earlier.

    “Contentious labor-management relations, as well as stiff labor market conditions, among others, appear to negatively affect local carmakers’ competitiveness,” the association said in a release, calling for state support and business innovation.

  • Shiseido opens a new factory in Fukuoka

    Shiseido opens a new factory in Fukuoka

    Shiseido Company, Limited has decided to build a new production site, Shiseido Kyushu Fukuoka Factory in Kurume City, Fukuoka Prefecture, Japan. The new factory, which is slated to start its operation in fiscal 2021, will mainly manufacture skincare products for Japan and overseas markets. The investment is expected to be approximately 40-50 billion yen.

    Shiseido has been making concerted efforts as a whole toward the realization of even greater growth to accomplish the medium-to-long-term strategy VISION 2020 and to “Be a Global Winner with Our Heritage”.

    As part of its production strategy, Shiseido is pursuing the establishment of a supply chain strategy from a global perspective in line with its Group-wide marketing strategy, and progressing in the creation of a flexible operational structure at each of its factories around the globe by taking into account various elements such as costs, lead time, inventories and procurement of raw materials.

    Amid such, the company has concluded that it is vital to establish a stable and sustainable production system from a medium-to-long-term perspective in order to respond to growing demand for cosmetics inside and outside Japan and secure further business growth in the future.

    To this end, Shiseido has decided to build another new factory following Nasu Factory and New Osaka Factory (tentative name) which are currently under construction. Investments in the production base including factories currently under construction, establishment of the new Kyushu Fukuoka Factory and reinforcement of existing factories are expected to exceed 170 billion yen.

    The new factory will focus on the production of skincare products which are growing in demand, and provide safe high-quality products in compliance with ISO 22716 international standards.

    As a next-generation factory, it will utilize cutting-edge facilities and advanced technologies such as IoT in the creation of innovation. Furthermore, through the inheritance of long-standing production technologies and expertise which are Shiseido’s strength, we will realize the new factory as people-friendly with high productivity.

    It will operate in an environmentally friendly manner while being able to support our business continuity plan (BCP), aiming to exist in harmony with the surrounding environment including mountains and rivers.

  • Korea’s industrial output growth slowest in near 20 years

    Korea’s industrial output growth slowest in near 20 years

    Industrial output is growing at the slowest rate in nearly 20 years, while facility investment dropped the most in a decade.  Other signs that the economy is in trouble include seven straight month of declines in the coincident and leading indexes. According to Statistics Korea and the Ministry of Strategy and Finance Thursday, last year industrial output grew 1 percent compared to 2017. This is the slowest annual growth rate since 2000.

    Manufacturing industry output was only able to rise 0.3 percent, while the construction industry, which is an important contributor to the domestic economy, fell 5.1 percent, with a particularly weak second half.

    Facility investment was down 4.2 percent, the sharpest drop since 2009, when the number declined 9.6 percent. The government said the decline in facility investment was largely due to weakening in the semiconductor sector.

    Consumption statistics were relatively strong, on the rising sales of both durable and nondurable goods. When compared to the previous year, consumption rose 4.2 percent, the sharpest increase in seven years. In 2011 consumption went up 4.6 percent.

    Strength was noted at duty-free shops and online.

    While traditional retail store sales were down, including those of discount marts like Emart and Lotte Mart, falling 2.8 percent, as well as those at smaller supermarkets and miscellaneous stores, falling 0.7 percent, sales of online stores were up 14.2 percent and duty-free sales surged 31.5 percent. Chinese tourists returned to the country in great numbers as a result of easing tensions over the introduction of a U.S. missile defense system.

    Convenience store sales were up 8.5 percent, a trend that has been seen in recent years as the number of people living alone has been rising.

    December figures weren’t comforting.

    When compared to the previous year, overall output grew 0.3 percent, which is half of the 0.6 percent reported in November. When compared to the previous month, December output fell for the second consecutive month at 0.6 percent.

    Manufacturing and mining output improved compared to the previous month. It also rose 1.6 percent compared to the same month the previous year, compared to November’s 1.1 percent.

    December output fell 1.4 percent month-on-month, the second consecutive month of decline.

    While the fall in output of automobiles was one of the major factors, down 5.9 percent compared to November, semiconductor output was also another contributing factor, as it fell 4.5 percent.

    The ministry said automobile production continued to fall as exports have shrunk. Overseas and domestic demands have been weak.

    Semiconductors, which have long been a positive force, started to become a drag, with production at some companies falling on weak demand.

    Investment in December alone fell sharply, declining 14.5 percent year-on-year, the sharpest fall since September 2018, when it tumbled 19.2 percent. Even when compared to the previous month, it dipped 0.4 percent.

    The coincident index, which shows the current economic situation when compared to the previous month, fell 0.2 points, down for nine consecutive months.

    It is the longest losing streak since falling for 11 months starting September 1997, when Korea was hit by the first financial crisis.

    The leading economic index fell 0.2 points compared to November, declining for seven consecutive months.

    In a statement, the ministry said it will swiftly move on “big projects” so investment sentiment will improve.

    “The government, if possible, is trying spend a quarter of the budget as early as possible,” Finance Minister Hong Nam-ki said Thursday.

    He denied he is looking into the possibility of a supplementary budget to boost the economy.

    “We’re only in January,” Hong said. “A supplementary budget is not under consideration.”

    The minister said the government will be announcing export measures, mostly focusing on financial aid to SMEs.

    “While finding new markets [for exports] is important, currently the most difficult issue is [SME] exporters struggling to get financial aid,” Hong said.

  • Vietnam foreign investment skyrockets in January

    Vietnam foreign investment skyrockets in January

    FDI pledges for new projects, increased capital and stake acquisitions in Vietnam rose 51.9 percent year-on-year to $1.9 billion in January. In a statement Monday, the Ministry of Planning and Investment said the manufacturing sector attracted the most interest from foreign investors, accounting for $1.19 billion or 62.4 percent of the total FDI. Science and technology ranked second with $185.8 million, followed by real estate with $179.1 million.

    Japanese were the top investors with nearly $364 million. South Korea and China were next with $349.1 million and $307.8 million.

    Ho Chi Minh City is the most attractive location for FDI investors in January, accounting for around 39.1 percent of the total FDI. Southern Binh Duong Province ranked second, accounting for 12.5 percent, followed by northern Hai Duong Province with 6.5 percent.

    As of January 20 authorities had issued licenses for 226 new projects with a total capital of $805 million. Meanwhile, another $340.2 million was pledged for existing projects this month.

    The two biggest projects were Kyoshin Vietnam’s $134.7 million investment expansion in HCMC by Japanese investors to produce, process and export electrical components and molds, and Katolec Global Logistics Vietnam’s $65 million investment for warehousing and storing goods in the northern province of Ha Nam.

    Estimated FDI disbursement for the month was $1.55 billion, up 9.2 percent year-on-year.

    Vietnam reported FDI disbursement of $19.1 billion last year, up 9.1 percent.

  • Vinamilk to open plant in Myanmar, its 2nd in Southeast Asia

    Vinamilk to open plant in Myanmar, its 2nd in Southeast Asia

    Vietnam’s biggest dairy company plans to open a plant in Myanmar this year and is preparing to enter Indonesia and China. The Myanmar factory will be Vinamilk’s second in Southeast Asia after acquiring its first in Cambodia. It is in discussion for one joint venture in Indonesia. Myanmar is one of Vinamilk’s strategic markets to offset declining revenues in the Iraqi market, which once accounted for 60 percent of its exports. In 2017, Vinamilk reported falling exports for the first time in 20 years due to political tensions in the Middle East.

    In the latest year for which export figures are available, 2017, it shipped products worth VND7.4 trillion ($312 million), a 4.2 percent decline from the previous year.

    The company is also preparing to enter the Chinese market later this year. Chinese authorities are expected to sign a draft protocol in April this year allowing Vietnamese dairy products to be exported.

    Vinamilk is planning a change in export strategy.

    “The company will move from traditional exports to intensive cooperation with distribution partners in new key markets, and gradually build production facilities in potential markets such as Myanmar,” Vinamilk chief executive Mai Kieu Lien told shareholders in 2018.

    She added that the company has set aside $750 million for acquisitions, building new facilities and setting up cattle farms between 2017 and 2021.

    It now has 13 plants and 10 dairy farms in Vietnam, a plant each in the U.S., New Zealand and Cambodia and a subsidiary in Poland.

    In all, it has three wholly-owned foreign subsidiaries: Driftwood Dairy Holding Corporation in the U.S, Angkor Dairy Products Co., Ltd, in Cambodia, and Vinamilk Europe Spo’stkaz Ograniczona Odpowiedzialnoscia in Poland.

    It holds a 22.81 percent stake in a joint venture with Miraka Dairy in New Zealand and has a Thailand-based trading office.

    Last year the company paid $19.74 million to buy a 51 percent stake in Laotian company Lao–Jagro Development Xiengkhouang Co., Ltd, to set up a series of hi-tech beef and dairy farms based on Japanese technology.

    Vinamilk’s products are available in 46 countries and territories, including some demanding markets such as Japan, the U.S., Australia, New Zealand, and Canada.

    Last year the company reported profits before tax of VND11.52 trillion ($499.26 million), up 12.05 percent from the previous year, on revenues of VND52.63 trillion ($2.28 billion), down 2.93 percent.

  • Korean firm to set up halal ramen plant in Malaysia

    Korean firm to set up halal ramen plant in Malaysia

    FGV Holdings Bhd is looking to partner with South Korea’s Samyang Foods Co Ltd for the establishment of Samyang Halal’s production facilities in Malaysia. FGV told Bursa Malaysia that it had signed a memorandum of understanding (MoU) with Samyang. The production facilities will focus on serving halal ramen and instant noodle products for Malaysia and global markets.

    FGV’s newly appointed CEO Datuk Haris Fadzilah Hassan said the collaboration is part of he group’s strategic direction to expand its downstream business by diversifying the product offerings and penetrating into new markets.

    Its logistics and support businesses sector is also set to benefit from this partnership by providing a total logistics supply chain solution.

    “With this MoU, FGV hopes to explore the opportunity for both parties to establish a halal ramen and instant noodle manufacturing plant in Malaysia. The global halal food market is one of the fastest growing segments in the food industry and is expected to reach more than US$740 billion in value by 2025,” Haris said.

    FGV said the collaboration will also give FGV access to Samyang’s supply chain, which includes cooking oil, vegetable fats and sugar for its existing ramen plant in Wonju, South Korea.

    Samyang is listed on the Korean Stock Exchange with a market capitalisation of KRW459.514 billion (RM1.68 billion). It is in the business of manufacturing and selling various food products such as ramen, snacks, dairy products, sauces, and frozen dumplings.

    FGV noted that its downstream entity Delima Oil Products Sdn Bhd (DOP) can leverage on Samyang’s strong R&D and global distribution networks to improve quality and expand the reach of its “Saji” products regionally and globally.

    “In addition, DOP will benefit from Samyang’s ver 50 years’ experience in the ramen and instant noodle industry to strengthen its own products and brand positioning.”

  • Hyundai develops safer airbag deployment system

    Hyundai develops safer airbag deployment system

    Hyundai Motor Group, Korea’s biggest carmaker by sales, said Monday it has developed a safer airbag deployment system to better protect people from multiple crashes. The advanced airbag system immediately prepares for additional crashes once it recognizes an initial collision, in cases where the collision is not serious enough to warrant a deployment, the conglomerate said in a statement.

    “If the first collision is a minor one, but the vehicle continues on and collides with something else, such as trees or street lamps, the airbag system optimizes itself to prepare for additional crashes,” a company spokesman explained to reporters over the phone.

    It is the first time a Korean carmaker has developed such a multi-crash airbag system, the statement said.

    Existing airbag systems do not inflate once they determine the initial collision is minor, even if subsequent impacts involve greater force and can lead to serious injury, it said.

  • Proton aims to double exports in 2019

    Proton aims to double exports in 2019

    Proton Holdings Bhd aims to double the export of its cars to at least 3,000 units this year from 1,388 units in 2018. “In 2017, we exported 248 units. This year we want to export more,” its CEO Li Chunrong said. With the support from the Malaysian government, he said, the group could export up to 4,000 to 5,000 units this year. Asked on the group’s plans to enter the Pakistani and the Middle Eastern markets, Li responded by saying that Asean will remain as the group’s focus for its export business, but it does not intend to abandon other markets.

    “We don’t want to forget the other markets (as well). We are trying our best to enter other markets,” he added.

    On response to the Proton X70 that was officially launched on Dec 12, 2018, the group said bookings for the sports utility vehicle have exceeded 15,000 units, with over 2,000 units delivered so far.

    Earlier, Proton deputy CEO Datuk Radzaif Mohamed said the group expects to bring an initial investment of RM47 million into the country through the second set of collaboration agreements between its vendors and their overseas counterparts.

    On Oct 10, 2018, Proton hosted its first signing ceremony where eight colla-boration agreements were signed and they are expected to help bring in an initial investment of RM170 million into the country.

    Radzaif said the collaborative agreements will range from technical tie-ups and joint ventures to 100% foreign direct investments with foreign vendors investing into the Malaysian economy.

    Aside from the investments in facilities and technology, he said, the collaborations are also expected to create about 450 new jobs in the automotive industry that range from assembly to design engineering.

    Additionally, these vendors will supply parts to Proton’s manufacturing facility in Tanjung Malim, which is undergoing expansion at a cost of RM1.2 billion.

    Meanwhile, Deputy International Trade and Industry Minister Ong Kian Ming, who witnessed the signing ceremony, said the government is targeting RM15 billion from exports of local automotive components and spare parts by 2020.

    Malaysian Automotive, Robotics and IoT Malaysia (MARii) CEO Datuk Madani Sahari shared that the value of exports for automotive components and parts could have easily touched the RM12 billion mark by end of December 2018.

  • Samsung in strategically key Vietnam for the long haul

    Samsung in strategically key Vietnam for the long haul

    South Korean conglomerate Samsung is committed to a long-term presence in Vietnam as a major base for its global operations. Won Hwan Shim, vice president of Samsung Electronics, reiterated the group’s commitment to Vietnam in a Friday meeting with Vietnam’s Prime Minister Nguyen Xuan Phuc. Shim said that Samsung’s plants in Vietnam had the most impressive growth among the company’s global facilities.

    Samsung, the world’s biggest smartphone maker, has been investing more and more in Vietnam, especially in its research and development centers, Shim said, adding that the group is transferring technologies to these local facilities.

    The company invested $600 million to finish the Samsung Ho Chi Minh City Research & Development Center in November 2017, its second such facility in the country after Hanoi, he noted.

    PM Phuc said that he expects more impressive growth numbers from Samsung this year, and also asked that Samsung continues to make Vietnam its most important global base, further expanding its operations here.

    Samsung has invested $17.3 billion in eight factories and two research and development centers in Vietnam, creating jobs for more than 160,000 locals.

    It is the largest foreign investor in Vietnam. Last year, Samsung estimated its exports from Vietnam was $60 billion, up 12 percent from 2017, accounting for a quarter of Vietnam’s total exports.

    Samsung last month closed one of two phone factories in China to focus more on low-cost countries like Vietnam and India for production as reported.

    The group’s two phone factories in Vietnam together make 240 million units a year. The factories, located in the northern provinces of Bac Ninh and Thai Nguyen, produce half of all the cellphones that Samsung supplies to the global market.

  • LG H&H buys Avon factory in China

    LG H&H buys Avon factory in China

    LG Household & Health Care announced Wednesday it is buying Avon’s Chinese factory in an effort to expand production facilities. According to LG Household, subsidiary The Face Shop will purchase the London-based cosmetics firm’s factory in Guangzhou, China, for around 79.3 billion won ($70.8 million). Avon’s 49,500-square-meter (12.25-acre) factory in Guangzhou, China is capable of producing 13,000 tons of cosmetics and hair care and body products every year. Its facilities meet cGMP (current Good Manufacturing Practice) regulations, which are enforced by the U.S. Food and Drug Administration.

    LG Household will use the Guangzhou factory to manufacture LG products like The Face Shop branded goods for its Chinese and other Asian businesses while continuing to produce Avon products as well. Avon employees will remain at the factory.

    The buyout deal is expected to be finalized in February after Chinese authorities approve the transaction.

    The move comes less than a year after LG Household purchased Avon’s Japanese operation for around $96 million last April. Avon said it hopes the Guangzhou factory sale will help increase its operational flexibility.

    “This transaction is a significant step forward in our effort to ‘Open Up Avon’ by operating more efficiently, with a leaner, more agile global infrastructure,” said Jan Zijderveld, CEO of Avon. “We know [LG Household] well and believe that they will continue to be a strong partner for Avon.”

    “We are pleased to … add a state-of-the-art facility with powerful capabilities to deliver quality products for the fast-growing local market,” added Suk Cha, CEO of LG Household.

  • Vietnam to see slower growth in 2019

    Vietnam to see slower growth in 2019

    Vietnam’s economic growth is expected to slow down this year though it will remain a regional outperformer, according to leading global analysts. Fitch Solutions, an arm of Fitch Ratings, said in a report released Wednesday it expects Vietnam’s GDP growth to slow to 6.5 percent in 2019 in line with a wider trend of slowing global growth, but added the country would remain one of the fastest growing economies in Southeast Asia.

    The economy grew by 7.1 percent last year, the fastest rate of expansion in 11 years, according to official data. This was well above the 6.5-6.7 percent target set by the National Assembly.

    “Its increasing openness and reliance on foreign investment suggests that it is unlikely to be spared from the global growth slowdown arising from rising trade protectionism and tighter financial conditions.

    “Although we believe that Vietnam’s manufacturing sector and economy will continue to outperform the region over the coming quarters, growth is likely to face headwinds stemming from rising global trade disruptions and tightening financial conditions, which will negatively impact global economic growth and risk sentiment,” Fitch Solutions stated.

    The World Bank Group in its bi-annual report on Vietnam issued last month said the country’s GDP growth is likely to slow from 6.8 percent in 2018 to 6.6 percent this year as the global economy weakens.

    Weaker global demand for exports and reduced investment and trade flows as the U.S. Federal Reserve raises interest rates are other risks for Vietnam’s economy, Sebastian Eckardt, the World Bank’s lead economist for Vietnam, said.

    The Asian Development Bank (ADB) in a forecast released last month for the East Asia and Pacific region projected Vietnam’s growth at 6.8 percent for 2019, slightly lower than the 6.9 percent it expected for 2018. These rates are the second highest in the forecast behind only India’s.

    Disbursed foreign direct investment (FDI) in Vietnam reached a record $19.1 billion in 2018, up 9.1 percent year-on-year. With exports rising by 13.8 percent to $244.72 billion and imports at $237.51 billion, the country achieved its highest ever trade surplus of $7.21 billion last year.

    Fitch Solutions said in 2019 the manufacturing sector would remain a key economic growth driver and outperform the region.

    Vietnam has grown to become a manufacturing powerhouse, particularly in electronics, due to its relatively cheap and large workforce, geographical advantages, attractive tax breaks, stable political environment, and open trade policies.

    The opening up of the Vietnamese economy also came at an opportune time as China began to shift away from lower-end and export-oriented manufacturing to focus on the domestic economy.

    Vietnam’s continued commitment to economic liberalisation will also attract foreign manufacturers seeking to leverage its preferential trade deals.

    The country is a signatory to 10 bilateral and multilateral free trade agreements (FTAs), with six more trade pacts in the offing, including the highly touted Vietnam-EU FTA.

    Fitch Solutions added that trade tensions between China and the US would continue to drive up costs for manufacturers operating in China, pushing companies to outsource to its neighbor Vietnam, which is more competitive in terms of wages.

  • Samsung signals big 5G equipment push, again, at factory

    Samsung signals big 5G equipment push, again, at factory

    Samsung Electronics Vice Chairman Lee Jae-yong’s first appearance in the field this year was to celebrate the start of production at a 5G network equipment factory Thursday. His field visit comes as the company puts more weight this year on the 5G network-equipment business, which involves components used in 5G networks. These components are supplied to telecommunications companies.

    Lee and several other top executives, including Koh Dong-jin, CEO and president of the IT & mobile division, were present at the celebration ceremony held at the company’s factory and office complex in Suwon, Gyeonggi.

    “The 5G market is a new field, and we have to build competence with the mindset of a challenger,” Lee told employees during the event.

    Lee and the team of executives stopped by the cafeteria of the complex for lunch, resulting in posts on Instagram featuring Lee and employees.

    The manufacturing line for 5G equipment in Suwon is the first in the industry to be designed using “smart factory” principles. It utilizes 5G connections to enhance productivity and reduce the rate of defects.

    The company originally manufactured 5G network equipment in Gumi, North Gyeongsang, but had the production line relocated to Suwon, the site of its R&D center. This was done to help create synergies between the manufacturing and R&D facilities, said a spokesman.

    Samsung signaled last August that 5G connectivity is one of its four growth engines for the future when it announced a plan to invest $161 billion by 2021.

    The business area is receiving considerable attention from global technology companies. 5G connectivity is vital not only to telecommunications in the future, but will also be an essential component of other, related state-of-the-art technologies, such as autonomous cars, AI-powered robots and virtual reality.

    Samsung’s presence in the global telecommunications equipment market is relatively low, with a share of around 11 percent for fourth-generation LTE equipment, according to market research firm Dell’Oro. The larger players include Huawei, Ericsson and Nokia, all with shares of more than 25 percent.

    The company’s current goal is to hit a 20 percent market share in the 5G equipment market next year.

    Samsung has been expanding its client base for 5G equipment mainly in Korea and the United States. Names on the list include SK Telecom, KT, AT&T and Verizon. Samsung hopes to leverage those client relationships to attract other customers.

    The company plans to release the Galaxy S10 in March. It will be its first smartphone to support 5G connections.

    Kim Young-ki, Samsung’s president of network business, said at an event last November that the company will invest a total of $22 billion to develop 5G-network technology.

  • BMW assembly on the anvil, says Vietnam auto conglomerate

    BMW assembly on the anvil, says Vietnam auto conglomerate

    THACO, a major player in the country’s commercial vehicle segment, plans to assemble German brand BMW cars in Vietnam. Tran Ba Duong, chairman of the Truong Hai Auto Corporation (THACO), said at a conference last week that BMW cars will be the next vehicle that THACO assembles in the country, following other brands like Peugeot, Kia and Mazda.

    He did not reveal further details about when this would happen and what models would be assembled.

    THACO became the sole authorized distributor of BMW in Vietnam starting January this year, after Ho Chi Minh City-based Euro Auto lost its license for smuggling 133 BMW cars in December 2016.

    Duong had said earlier that he plans to open 15 BMW and MINI (a car brand owned by BMW) showrooms by early next year. However, the company currently runs only one BMW showroom in Hanoi, another in HCMC and one MINI showroom, also in HCMC.

    THACO has not revealed its revenue from selling BMW cars this year, but a source told VnExpress that the company sold almost 400 vehicles in the first half of this year. Euro Auto, at its peak, sold 1,400 BMW and 400 MINI cars a year.

    BMW cars were first assembled in Vietnam in 1995 by the VMC company in Hanoi. However, low sales led to the factory’s shutdown in 2005, and VMC had to spend two years selling its inventory.

    Mercedes-Benz is currently the only luxury car brand that assembles its vehicles in Vietnam, and it tops domestic market sales in this segment. Industry insiders say that if BMW cars are assembled in the country again, they could emerge a strong competitor, especially in terms of price.

  • Tracking the dynamics of India’s gym wear market

    Tracking the dynamics of India’s gym wear market

    Whether or not one shows dedication in maintaining their gym routine is debatable, but it is an undeniable fact that gyms are doing well when it comes to their membership registers being filled. India’s waking up to being healthy and this means tons of gym memberships. This also means that when one takes a gym membership, the very next thing they do is head off to stores that deal in gym wear. Or they just log on and buy gym clothes and accessories. The demand for gym and active wear is growing in India because of a desire to stay fit and healthy. IMAGES Business of Fashion takes a look at the market dynamics…

    Setting the context for the story, Pallavi Burman, Head – Marketing, HRX shares, “The Indian active wear industry is currently estimated at a whopping Rs. 8500 crore. It is expected to continue growing at CAGR 12 percent and touch expected sales of approximately 6X at Rs. 54,000 crores by 2020.”

    Burman attributes the reason for this to growing health and wellness trend in India along with an increase in the number of sporting clubs, increased interest in sporting activities like football, basketball, tennis, badminton and cricket, the Indian active wear industry is fast proliferating. She says, “More disposable income and general inclination towards fitness is rising and resulting in the growth of this industry.”

    Another major reason for an increase in demand for gym wear is having Bollywood celebrities being spotted in gym gear, especially the likes of Hrithik Roshan, Malaika Arora and Kareen Kapoor Khan. It isn’t uncommon to see Page 3 pictures of these celebrities in their gym wear. The glamour magazines often have pictures and articles of how celebrities are taking gym wear to the streets and this eventually does give a fillip to the demand for workout clothes in the country.

    Market Overview

    Perhaps the above well explains the emergence of active wear in the country. Where dedicated gym wear is opted for only by a handful few, those opting for working it out in the gym clubbing their active wear or sportswear as gym wear. No wonder then that brands in India too offer gym clothes under the category of ‘active wear’.

    Pallavi Burman decodes the difference between the often clubbed together categories of active wear, athleisure wear, sports / performance wear. “By definition, athleisure and active wear clothing are those which can be worn from studio to street. Sportswear or performance wear, however, is clothing which help athletes or sports persons enhance their performance specially items like shoes, technologies like compression, socks in some sports etc.”

    Nivida Kohli, Design Manager, Numero Uno shares her views, saying, “As of today each distinct category is reinventing itself. This is a phase where the consumer market is changing since there is a generic shift towards more flexible lifestyles. Once this change settles in, I believe there will be clearer newer distinct definitions for sportswear and athleisure.”

    However, a lot many online players have an exclusive category for gym wear and some have gone a step further to have their portals dedicated to offering nothing else but gym clothing.

    The emphasis is more on offering men’s gym wear than having something specialized for women and unfortunately in India, gym wear still consists of mostly leggings and sports brassieres, although bigger brands have started innovating for women as well now.

    Taking note of this gap, brand Mojostar in association with Bollywood actor Jacqueline Fernandes, recently launched their exclusive portal www.justf.in that is dedicated to women’s active / gym wear.

    Just F was launched after Jaqueline and CEO Mojostar, Abhishek Verma, realized the gap in the market for women’s gym / active wear.

    “Sportswear needn’t be super masculine, so we are introducing fusion elements, florals, and may even add lace to some designs,” says Jacqueline Fernandes in a media interview. She has actively participated in the designing of the brand and has ensured that little things are not given a miss like pockets in fitness wear, the positioning of the straps and hooks and the materials used for leggings.

    According to Abhishek Verma, the focus for the brand for now would be functionality and support. The brand is also going quite aggressive with their collection of sports bras.

    The research by the brand indicated that most of the international brands that are present in this category design their range keeping in mind the target audience of western countries, which don’t fit the average Indian woman. Another reason for launching Just F was to give Indian women appropriate exercise clothing at reasonable costs, especially since most international brands come with a hefty price tag.

    Growing Demand

    Pallavi Burman says that with Indians becoming more health conscious and image sensitive, their pursuit for fitness has increased. “The average age bracket for Indian fitness enthusiasts is 20-35 years, which makes for the majority population of young Indian students and professionals. This target set loves to experiment with their wardrobe. Office wardrobe has drastically changed – we don’t see dress pants and brogues and oxfords anymore. Jeans and trainers have smoothly replaced these items. Everything in today’s clothing spells comfort and chic,” she says as way of explanation of why there a fillip in the performance wear category in Indian retail has been noticed.

    She explicates that to be able to tap into this big chunk of the Indian population with available disposable income and the affinity for fitness, brands and minimalistic wardrobe brands have to focus hugely on active wear and the athleisure segment.

    Gym Wear Essentials in India

    According to Pallavi Burman, a pair of leggings and shorts for women and men respectively –usually a loose tee and a pair of decent walking shoes – constitute for basic gym wear in India.
    “But this isn’t enough if the exercise routine includes more than walking. While almost 50 percent of Indians still prefer traditional ways of staying active like walking and running, the other 50 percent are inclined to swimming, cycling and other sports and training means. For targeting this kind of segmentation one needs to delve deeper into sub categories.”

    What makes gym wear more intricate for women is the inclusion of a high-performance sports bra. Without a well-designed sports bra, the gym wear ensemble for women remains incomplete. Quite a few Indian brands that have taken note of this and the range available online as well as offline is exhaustive. It is interesting to see brands like Triumph launching exclusive brassieres for gym wear considering they are a premium lingerie wear brand. The option they have is bounce control certified by world renowned Research Group in Breast Health, the University of Portsmouth. Elaborating on the same, Jennifer Kapasi, Commercial Director, India & Sri Lanka, Triumph International shares, “Triaction by Triumph is a stylish, high-performance sportswear collection that gives modern women the freedom to train how and when they like. Boasting the best bounce control levels on the market, three versatile fits and superior comfort, Triaction supports women throughout the day—on the go from the gym or studio in complete style.”

    Innovative Fabric Play

    Anything that stretches and helps absorb sweat yet keeps the fabric dry is the most preferred fabric when it comes to performance wear. Reiterating the same, Pallavi Burman says, “The fabric we use is always stretchable “wicking” blend made up of polyester and lycra. We also use a breathable mesh fabric as design and utility elements and several other performance enhancing features like anti-microbial layering, UV protection, rapid dry etc.”

    When you go through the collection, what catches your attention is interesting mélanges for both men and women. She says, “Color blocking and coordinated sets are finding a big audience in this space now.”

    Adding in a safety feature to go along with their sportswear, Numero Uno uses reflective N1 ACTIVE prints that act as safety alerts along with digital and high-density prints for a futuristic fashion flare. Kohli further adds, “For our sportswear/active wear, we are using fabrics that have technically advanced finishes with features like Anti-Static, quick dry, moisture wicking, Windproof, water repellent, Anti-microbial, odour control, easy care etc.”

    Triumph has developed two series of specialized brassieres that use innovative fabrics for the woman on the go. Their Dynamic Lite series with 3D Powertech material is made from the innovative fabric Dynamic Lite, which offers flexibility that keeps its shape over time. It fuses three innovative fabrics in one, is a two-way stretch fabric, has a strong lightweight mesh and soft moisture management lining which are insightfully laminated together, allowing the bras to stay very light and adjustable to all body shapes. These features make the bra light and comfortable to wear with its functional unpadded fabric combination. This innovation received an honorable mention at the 2016 Red Dot Deign Awards.

    Elaborating on the second innovation, Jennifer Kapasi says, “Our Magic Motion series is made from the most comfortable fabrics. Powered by LYCRA sport technology, these bras have stay dry properties, bacteria-reducing fabric with moisture management mesh. Extremely elastic fabric using LYCRA, guarantees unique freedom of movement.”

    The next generation LYCRA® SPORT technology combines the proven stretch performance of LYCRA® fibre with demanding testing standards that measure fabric performance descriptors on a simplified 1-10 scale. The three indexes measure Power, Comfort and Energy (PCE™). Triumph has gone ahead to combine these indexes to create performance levels tailored to fit each garment’s end use.

    The range at Just F is made using polyester-spandex or polyester-cotton blend which well suits the Indian climate.

    Promoting Gym Wear

    Since gym wear is a part of the performance wear / active wear category, brands don’t actively engaging in marketing and promotion initiatives targeting gym goers. However, on the other hand, some brands like HRX go the extra mile to reach to their target audience right at the place they are at – i.e. the gym!

    Pallavi Burman reveals, “Ours is the first homegrown, successful fitness brand in the country. We have multiple partnerships for various verticals all-leading to and adding up to fitness. We have our active wear and athleisure collection exclusively available on Myntra, we have the signature HRX Work out available at all Cult gyms, we have HRX Athlete meal packs selling at Eat.fit and we have our Mi HRX fitness bands available with Xiaomi. Across the three partners we have active communication all around the year on Digital, TV, OOH and Cinemas. Needless to say Hrithik is the face of HRX and this is the biggest draw for building customer engagement.”

    On whether there is a genuine demand for gym / active wear in the country, especially by women, Jennifer Kapasi says, “Women who regularly work out and those who lead an active lifestyle desire sport specific garments designed to help optimize performance. They pay a lot of attention to the fabric when buying a sports bra. In general, they will tend to look for hi-tech fabrics with ‘moisture-wicking’ and ‘stay-dry’ features. One of the most important qualities women look for is a high percentage of Elastane which not only makes the bra comfortable to wear but also retains its shape after multiple uses.”

    To launch their Autumn/Winter ‘18 Triaction – a collection by Triumph – took a digital approach through the launch of an online campaign ‘Team Triaction’, featuring four inspiring women, undertaking a fitness challenges to test both mind and body.

    “Team Triaction is led by actress and fitness enthusiast Mandira Bedi. She is joined by celebrity fitness instructor and owner of a Pilates studio Namrata Purohit; popular yogi and influencer Yogasini (aka Radhika Bose); and lifestyle and beauty influencer Juhi Godambe. The campaign also included a weekly contest with four rounds for Instagram and Facebook fans,” states Jennifer Kapasi.

    Getting Future Ready

    While there are a lot of dedicated online portals for gym wear, it remains to be seen how these enterprises survive over a period of time with their niche offering. With fitness being seen as a goal on everybody’s to-do list, especially with the new year approaching, all the gyms will experience a full house and so the sale of gym wear eventually is going to go up, but it is completely upon these brands to maintain the tempo for after all.

  • Vietnam labor costs highest among ASEAN comparators

    Vietnam labor costs highest among ASEAN comparators

    Vietnam’s labor cost is the highest among comparator countries in Southeast Asia, a World Bank report says.

    In a report on enhancing enterprise competitiveness and enhancing small and medium-sized enterprise (SME) linkages, it says Vietnam’s labor costs are higher than in comparable Southeast Asian peers.

    It defines labor costs for each firm as the cost of all payments to all workers divided by the number of workers.

    It says wage costs about $2,739 per worker for the median Vietnamese firm, about twice as high as in Laos, Myanmar and Malaysia, and about 30 to 45 percent higher than in Cambodia, Thailand and the Philippines.

    While Vietnam’s labor costs are higher than in the rest of the region, they seem in line with productivity levels and thus do not seem to be a major obstacle to competitiveness, the report says.

    The average manufacturing firm in Vietnam produces about $10,500 worth of value-added per worker per year, higher than in most countries in Southeast Asia. It is around $10,000 in Malaysia, and $5,000 in Cambodia.

    Vietnam’s relatively high value appears to be partly driven by high and growing use of capital, the report says.

    The report also breaks down labor productivity in the country by region. The north-central and central coastal regions of Vietnam have the highest productivity — of almost $16,000 value addition per worker — while the southeast comes in second at $14,000.

    The Red River Delta region has a productivity of only $7,000, and it is even lower in the Mekong River Delta at around $6,000.

    It also said that foreign-owned firms are generally more productive than domestic firms, which can be explained by their easier access to technology and finance through their parent companies.

    The World Bank report also says that capital productivity is low in Vietnam. The ratio of sales to value capital in Vietnam is around 160 percent, lower than in any of its peers in Southeast Asia. The bank’s data confirms that capital might not be used very efficiently in Vietnam.