Textiles NewZ - 20 July 2011

Website Profile

Textiles NZ is in the process of developing a new and improved website – one that maximizes search engine optimisation and raises our and your profile by reaching a much larger domestic and international audience. Members listed on the website will benefit markedly from our new profile.

Could all members please check that your listing is up-to-date at - www.textilesnz.org.nz/sitedocs/search/search.aspx Please advise me of any changes. Also contact me at elizabeth@textilesnz.org.nz if you are not yet listed and would like to be.

Textiles Energy Efficiency

Textiles NZ has developed some great energy efficient projects for individual company members with financial assistance from the Energy Efficiency and Conservation Authority (EECA). Brochures and Guidance Notes are now available for thermal systems and compressed air. If you would like a copy, please contact me at elizabeth@textilesnz.org.nz

Did You Know?

Small businesses may qualify for vouchers to help pay for services such as training workshops, courses and coaching that build the management capabilities of their owners, operators and key managers.

To qualify, businesses must:

Have fewer than 50 full time employees
Be operating in a commercial environment
Be registered for GST in New Zealand
Be privately owned, or a Maori Trust or incorporation under the Te Ture Whenua Maori Act 1993 or similar organisation managing Maori assets under multiple ownership
Demonstrate a desire to innovate and grow
Have undergone a capability assessment with a Regional Business Partner (and meet any additional criteria specific to their region)

Vouchers may be used to help pay up to 50 percent of the cost of services (up to a maximum value of $5000 excluding GST) from registered providers that improve management capabilities in the following areas:

Business Planning
Marketing Strategies
Finance
Business Systems
Managing Resources
Governance
Sustainability
Lean Manufacturing/Business Operations
Exporting

For more information about the vouchers and registered providers please contact elizabeth@textilesnz.org.nz

Fraud Charges Cold Comfort to Betrayed Workers

The NDU says it is cold comfort to out of pocket workers that criminal charges have been laid against former Lane Walker Rudkin (LWR) director Kenneth Anderson.

The union’s General Secretary, Robert Reid, says he asked the receivers to refer matters of concern to the Serious Fraud Office when the company collapsed in 2009 and he is pleased the actions of Anderson will be examined in a court.

“Many of our workers have never received full payment of the redundancy and holiday pay they were owed by the company.

“Workers at the Wairarapa LWR subsidiary of Bouzaid and Ballaben were particularly hard done by. They only ever received partial payment of the money that was owed to them, while their Christchurch based colleagues fared slightly better and eventually got paid in full.”

Paul Watson, NDU Southern Region Secretary, says LWR was an iconic manufacturer with a proud history of employing thousands of Christchurch workers.

“Those workers deserved a better fate after the years of hard work and loyal service they gave to the company.

“LWR owed Westpac over $100 million. That’s not pocket change and I hope they and other banks have tightened their lending criteria to avoid such tragedies happening to unsuspecting workers again.”

Mr Reid says the union and the redundant workers will be watching the court case with interest.

“Ex-employees of LWR are still waiting to find out exactly how things went so wrong and would like to see justice served if there was fraud involved.”

National Distribution Union

Dinner Invitation – Canterbury Textiles Network Group - Members and Family

It’s time for another catch-up with things hopefully settling down a bit since the latest quakes.

Function Room Corianders Indian Restaurant Rolleston,

Thursday 28 July, 7pm. BYO wine only. Other drinks available for purchase.

RSVP Amber Borrie amber@briarpatch.co.nz Ph 03 317 9652, 027 370 7508

What’s Next for the New Zealand Dollar?

by Jonathan Underhill

Those folks tracking the fortunes of the US dollar to divine the direction of the kiwi dollar are missing half the picture, strategists say.

With America in the extraordinary position of needing to lift its debt ceiling – borrowing more to ensure it doesn’t run out of cash – to appease the credit ratings agencies, the greenback should be in free-fall.

Instead, it has climbed off its lows of two months back and New Zealand exporters now need to look closer to home for signals on where the kiwi is heading.

On a trade-weighted basis, the greenback hit a three-year low in early May but since then it has gained more than 3 percent.

The euro is buying around $1.40 – well below its peak this month of $1.60. Whatever worst-case scenario has been built into the greenback appears to have reached its nadir for now.

In last month’s Monetary Policy Statement (MPS), Reserve Bank Governor Alan Bollard said the greenback had recovered “as volatility in commodity markets and renewed focus on peripheral Europe have supported safe-haven currencies and seen the euro weaken considerably."

The Swiss franc has been a major beneficiary of safe-haven buying, reaching records against the euro, dollar and pound as the euro-region debates paths out of its debt crisis.

What does this mean for Kiwi exporters?

But that’s only half the equation for New Zealand exporters. Early May was also when the kiwi dollar sank to a two-decade low against the Australian dollar.

Now it is back to a 12-month high and, never mind the global economy, there are local reasons why the currency should outperform.

Exporters have to get their heads around the idea that the exchange rate is made up of two values – not just strength in the New Zealand dollar but also “the rictus of the U.S. dollar,” says Derek Rankin, of Rankin Treasury Advisory.

He has a target for the New Zealand dollar of 86.25 U.S. cents and his message to exporters is: “get hedged.”

Rankin has tracked the kiwi for 20 years and in that time the annual gap between highs and lows of the currency, expressed as a percentage, has averaged 17.5 percent. He used that figure to work backwards from the assumed low for the kiwi this year, 71.10 U.S. cents on March 17, to work out his forecast.

The kiwi sank against a backdrop of earthquakes in Christchurch and northern Japan, rising tensions from the Arab Spring and spiraling oil prices.
“The problem is exporters do not have enough cover and with an uptrend like this they wish they had more,” he said.

ExportNZ's national exporter outlook survey showed that 47 percent of respondents identified exchange rate volatility as a "key obstacle" to exporting or exporting more.

Rankin concurs with Bollard that there are structural changes occurring in the global economy that will underpin demand for New Zealand’s commodities.

But they disagree on the direction of the New Zealand dollar.

Last month’s MPS projected the trade-weighted index of the kiwi would ease back to 66 by 2014 from the prevailing level of 69.99 on June 8.

Since then the TWI has climbed above 73, the highest since February 2008, suggesting it would have to drop about 10 percent by 2014 to reach the Reserve Bank’s target.

“As the New Zealand dollar gets higher and higher, people have to understand this is along-term trend, he says.

The New Zealand dollar rose above 85 U.S. cents last week, a post-float high, on economic growth numbers that were twice the expected pace.

Strangely, New Zealand is out of sync with its biggest market and nearest neighbour.

Australia's stellar run, which got it through the global financial crisis without shrinking, may be running out of puff, at least at the margin. Westpac has even predicted the Reserve Bank of Australia (RBA) will be cutting interest rates next.

"For the last 12 months the kiwi has been at very low levels against the Australian dollar," says Roger Kerr, a director of Asia-Pacific Risk Management.

"That's been excellent for manufacturers into Australia. They've had lots of opportunities to hedge their sales."

He says exporters should consider having at least half their receipts hedged for a reasonable period.

Exporters could buy forward contracts on the kiwi dollar- the workhorse of the forex market, or consider using hedge options under their banking facilities, which allow firms to cover the risk.

They could spread risk further with a collar, cover that sets a top and bottom to your risk.

Ultimately Kerr invokes corporate duty.

If you're an exporter, shipping with no forex cover, you are potentially throwing away your shareholders' profits.

Are there any risks to the outlook for the New Zealand dollar?

"Unfolding developments overseas could still be a spoiler for New Zealand’s recovery," says Dominick Stephens, chief economist at Westpac in New Zealand.

"Europe and the U.S. seem far from resolving their government debt woes, and the non-mining parts of the Australian economy are softening faster than expected."

Narrowing the gap with Australian rates will stoke the appeal of the kiwi from the so-called hot money that roams the globe looking for yield.

Already New Zealand’s benchmark 10-year bond is yielding more than its Australian counterpart at about 5 percent to 4.92 percent respectively.

RBA Governor Glenn Stevens said this month that Australia's economic growth won't be as fast as earlier thought. He cited the impact of floods and cyclone - on flooded coal mines, lost crops and damaged infrastructure.

Still, Australia's terms of trade were now at very high levels and the outlook for the resources sector "remains very positive."

New Zealand exporters suffering most from the kiwi dollar's strength are the non-commodity producers, those who aren't surfing a global price surge and are instead trying to sell alongside products of US dollar-linked countries.

Companies with global sales, such as Fisher & Paykel Appliances, shifted plants to lower-cost countries and closer to end markets to limit the impact of a high kiwi.

In its latest full year, the manufacturer returned to profit, at least in part showing the benefits of building factories in Asia, Europe and North America.

Export News 20 July, NZTE

First Line of Defence

A ‘total life’ approach to nurturing client relationships has allowed Australian Defence Apparel (ADA) to thrive in a challenging environment, writes Belinda Smart.

As a leading supplier of equipment and apparel to the military, law enforcement and emergency services, and one that puts particular emphasis on onshore manufacturing, Australian Defence Apparel is keenly aware of the worth of value adding.

Notwithstanding a long history dating back to 1912, the Bendigo (regional Victoria) based company resists taking its longevity for granted, continually investing in research and development (R&D) and design and development (D&D), while also holding to another important but simple concept: relationships. The latter is particularly pertinent to what ADA operations manager Maverick Spiteri describes as a critical development in recent years: the company’s evolution from supplier of product into total solution provider. “We now work with customers to identify their needs, and where an off-the-shelf solution cannot be found we will provide options through our R&D and D&D department, working with our supplier network to achieve the best possible result. ADA now provides total life of product solutions including R&D, D&D, manufacture, warehouse distribution, laundering, reworking, re-certification and redistribution or destruction of products.”

The beauty of this approach, Spiteri explains, is that it gives ADA the ability to maximise its interface with customers. “It’s all part of a strategy to be more closely entwined with our customers; to keep the relationship between ADA and its clients as mutually beneficial and as long lasting as possible,” he says, adding that continual innovation also plays into this approach. “We like to ensure that the ‘journey’ never ends; as one product is phased out, the new product is being phased in.”

With technology a prerequisite to such innovation, the recent acquisition of a Lectra Made to Measure system has significantly enhanced the company’s efficiencies. “The decision to replace our old CAD system was due to it being obsolete for many years, and we were having issues with software upgrades, minimal tech support and difficulty in hiring staff with any knowledge of the system,” Spiteri says. “One of our early criteria was that we would only review CAD software that was well established in industry or training facilities, and that also gave us confidence that there would be on-going software development. This narrowed the choice down to two systems, and from there we had CAD staff review both. “There were a number of software features that Lectra was in front with, but the two major issues for ADA were the transferring of data from our existing system and the Made to Measure package, and in both areas the Lectra system proved to be superior.”

The new Lectra Made to Measure also allowed ADA to pare back some of its processes. Despite having supplied made-to-measure uniforms for many years, and utilised CAD systems for over ten, ADA still relied on manual order forms to be faxed, posted, or e-mailed before its internal order process could start. The new Lectra system changed all that, Spiteri says. “The Lectra system will allow our tailor network to enter customer measurements directly into wireless laptops with easy-to-use software, so that by the time the customer has walked out the door, their order, with all their individual alterations, will have been automatically processed in the Lectra system, with automatic markers made and a cut file ready for automatic fabric cutting. The whole process has been streamlined and simplified, reducing lead-times and costs.”

New efficiencies are vital to an environment where innovation can thrive, with recent innovations including the expansion and development of ADA’s personal protection products to include ballistic soft and hard armour, stab spikes, load-carrying vests and pouches and specialised equipment for the fire and emergency services. “We have always been a heavy investor in R&D and D&D and understand with our product range that there is no future for our business if we stand still. We’re investing on average between five and six per cent of our turnover each year [in R&D or D&D].” Thanks to such investments, certain innovations have allowed ADA to become more self-determined than before in offering proprietary products. “For many years, ADA has made ballistic vests and purchased hard amour plate inserts from overseas. With our investment in R&D, we have now become manufacturers of our own ballistic plates and in conjunction with our new range of load-carrying vests and pouches, are now a total solution provider in this area.”

With Australia representing a relatively a small market for specialised products, export is important for the growth of the business, he says. ADA now services clients in the UK, PNG, Vietnam, Thailand and China, where its products have been procured by both the police and defence forces. Meanwhile, domestically the possibility of an increase in natural disasters, heralded by the recent flooding and cyclone in Queensland, has led to a short-term natural spike in usage. “However, more important is that we have recently been awarded contracts that have looked beyond price and have taken into account the value of having a supplier that can respond quickly and support them with product in times of need. “While we plan to expand our export market by leveraging on our local expertise and expanded product range, we’re also committed to maintaining our local manufacturing presence by improving our lean processes and producing higher end products where labour is a smaller element of the cost”.

“As with any clothing manufacturer, our largest challenge is survivability against lower labour countries. We still believe that there is a future for local manufacturing and have no plans to reduce our Australian manufacturing presence. ADA's value-for-money proposition is based on risk versus cost; by being able to utilise our offshore manufacturing partners for a certain percentage of product while utilising our Australian manufacturing facilities for a certain percentage, we can give our customers the best of both worlds: cost reduction due to offshore cheaper labour and the low risk option of access to quick-response local manufacturing.”

Undeniably an example of staying power, ADA also has other cause to be proud of its achievements, Spiteri says. “We’re one of the biggest employers in Bendigo, with 200 staff. We started in our current form in 1988 with 10 people, and by 1995 we employed 100. Since then we’ve doubled. ADA is a really good news story for regional Victoria.”

Latest Textile & Fashion News Digest created at: 14/7/2011

Making Fashion E-tail More Real

Consumers could soon be able to access a more accurate idea of the look and feel of clothes purchased online, thanks to cutting edge UK digital project Digital Sensoria.

According to coverage in leading science title New Scientist, Sharon Baurley, a reader in design at Brunel University, London, who leads Digital Sensoria, said the project entailed the development of apps for iPhones, iPads and other tablet computers that could leverage touchscreen technology to portray fabrics realistically.

Interactive fabrics called Shoogles had been made using a process similar to stop-frame animation that created the illusion of movement, so users could stretch, rub or pinch materials as they would in real life. Baurley's team was also investigating a version of Facebook's "Like" button that measured a person's physiological response to touching real fabric and turned it into a like or dislike. Complex biosensors, which read neurological signals, would be required for this, but in future some form of emotion sensor could be incorporated into a smartphone.

An emotion sensor would give a more accurate reflection of people's feelings than simply clicking a button. "People are not always aware of their own feelings and sensations," explained Nadia Bianchi-Berthouze of University College London, another member of the Digital Sensoria project.

The project looked set to be transformed into viable tool for retailers, said Baurley

"There has been significant interest from major retailers in exploring new methods and tools to enable them to get closer to their consumers and gain insight into perceptions of products."

Baurley recently began collaborating with UK store Marks & Spencer on a project to help them crowdsource designs from their customers. Designers could upload sketches of their ideas, with customers responding by uploading images and fabrics that reflected their likes and dislikes, which could then be incorporated into the design.