AN SGS CORPORATE NEWSLETTER FOR AGRICULTURAL …

2014

FOCUS ON COTTONAN SGS CORPORATE NEWSLETTER FOR AGRICULTURAL SERVICES

SGS LOCATIONS FOR POST-SHIPMENT RAW COTTON ACTIVITIES

BRUNO WIDMER GLOBAL BUSINESS MANAGER – FIBRES

SGS has undertaken quantity control assessment on cotton worldwide for over 80 years. During this time, cotton textiles have increasingly been made in different locations to where the fibre is produced. Consequently, either local or imported fibres are being used in the production process.

An independent and neutral services provider is needed to oversee the complex requirements that farmers face in providing raw cotton through the trade to the mills producing yarns, who in turn have multiple buyers.

SGS is employed by the producers, traders and importers to represent them in assessing the raw material. We conduct independent sampling and quality testing, ensuring verification of weights and damage.

As a member of most of the cotton related trade associations in numerous countries around the world, SGS participates in their related working groups and committees where appropriate.

SGS provides its services to the entire supply chain from the farmer, to cotton producers, the textile industry and retail brands. Our coverage of the entire industry gives us a unique insight as well as being beneficial in helping to guarantee quality and profits.

In this issue we introduce our primary cotton services teams and look at the issue of cotton fibre tracing.

POST-SHIPMENT SERVICESSGS provides inspection, testing, audit, and certification services for raw cotton, linters and textile waste packed in the form of bales. We also able to offer the textile industry a full range of services for finished products, materials and/or components base on defined standards, regulations and performance requirements.

Inspection

Our operations are integrated in our local SGS companies. They are ISO certified and monitored by our quality assurance departments.Our inspection services include:

• Seal breaking, tallying, devanning (STD)

• Supervision of weighing

• Sampling or supervision of sampling

• Damage, Foreign matter, Country Damage surveys

• Warehouse assessments

Analysis

Our specialized laboratories verify cotton quality in terms of fiber length, strength, micronaire (a measure of fineness), color grade, short fiber content, trash distribution and other factors.

Other testing services include:

• Manual and visual classification

• Humidity testing

Other Services

• Stock verification

• Audits & certification

Our network gives our customers access to independent controlling services in consuming countries of raw fibers. The diversity of our services, combined with traditional inspection allows us to deliver and defend our clients with highest integrity.

With a presence in nearly every single region around the globe, our experts speak the local language and understand the culture of the local market. We have a harmonised approach to delivering services to our customers, leveraging the largest independent owned network of inspection operations in the world.

CONTACT: [email protected]

TRADE NEWSLETTER

TRADE NEWSLETTER P. 22014

CHINASGS-CSTC Standards Technical Services Co. Ltd. was founded in 1991 as a joint venture between SGS Group and China Standard Technology Development Corp. under the State Administration of Quality Technical Supervision.

China is the world largest consumer of cotton, with between 7,200 and 7,512 thousand tonnes of consumption. The outlook for the 2014/2015 season is estimated to be between 7,800 and 7,947 thousand tonnes.

AURORA XIE

GUANGZHOU TEAM

(L–R) Apple Luo, Eastman Feng, Sam He, Green Zhang

NINGBO TEAM

(L–R) Jimmy Dai, Jessie Zhao, Elva Ma, Ready Jiang

QINGDAO TEAM

(Back L–R) Alan Wang, Wall Liu, Easter Li, Angel Liu, Vivian Wang, Andrew Du, Shawn Zhu (Front L–R) Jennifer Liu, Crystal Zhang

WUHAN TEAM

(L–R) Tab Chen, Wenmy Wang, Joe Zhang

SHANGHAI TEAM

(L-R) Frank Fang, Tina Feng, Allen Ai, Aurora Xie, Dudley Guan, Cathy Lin, Eric Wang, Hami Shi

TINAJIN TEAM

(Back L-R) Qingmin Xu, Hongwei Feng, Feiyang Qin, Fudong Ding (Front L-R) Cherry Meng, Fiona Li

With more than 30,000 employees, SGS operates a network of over 380 offices and laboratories in the Asia Pacific Region.


INDIASGS India was founded in 1950 in Mumbai (formerly Bombay). At that time, it was known mostly for it’s export-inspection services. Since then, it has grown to include quality control, inspection, testing, verification and monitoring services.

India is the worlds second largest consumer of cotton, with between 4,879 and 5,117 thousand tonnes of consumption. The outlook for 2014/2015 is estimated to be between 5,074 and 5,389.

UDAY KHARAT

MUMBAI TEAM

COIMBATORE TEAM

(L–R) K.S. Sathishkumar, R. Arun, D. Kannan, S. Krishnakumar, K. Maheswaran, M. Ravichandran

(Back L–R) Ashok Patkar, Sushil Renose, Devendra Sawant, Anil More, Shekhar Kasar, Pranay Patil, Gajanan Shelatkar, Sunil Nandoskar, Tejas Gawade, (Front L–R) Ganesh Pawar, Swati Surve, Luciano Rebello, Shrikant Potphode, Preeti Wariar, Poonam Bichare, Mitesh Pathare

INTERNATIONAL BACK OFFICE TEAM

(L-R) Frank Fang, Tina Feng, Allen Ai, Aurora Xie, Dudley Guan, Cathy Lin, Eric Wang, Hami Shi

AHMEDABAD TEAM

(Back L–R) Siva Prasad, Pradeep Singhal, Uday Kharat, Mirza Alam, Jashudan Gadhvi, Sandeep Jamdade (Front L–R) Manjari Mishra, Manish Baranwal, Minti Khambhati, Ujiwal Roy, Ishita Gaijar

BANGLADESHSGS Bangladesh, Ltd, was founded in 1974 and is located in Dhaka, Chittagong and Khulna.

Bangladesh imported between 800 – 904 thousand tonnes in the 2013/2014 season. It is estimated that they will also rise in 2014/2015 to import between 830 – 958 thousand tonnes.

HASAN SIDDIKI

DHAKA TEAM


(L-R) Md. Rustam Miah, A. K. M. Maksudul Karim Chowdhury, K. M. M. Hasan Siddiki, Md. Atiqullah, A. K. M. Fazlul Haque, Akther Hossain, Ruhul Amin Khan, SM Shakilur Rahman, Syed Shofiqul Islam, Abdullah Al Madani, Md. Altaf Hossain, Md. Abu Hanif Shohag, Md. Rashed Iqbal Siddiqui, Abdullah Al Mamun

VIETNAMSGS Vietnam Ltd has been providing services in Vietnam since 1989. In September 1997, they became the first international independent inspection, testing and certification company to be granted a 100% Foreign Owned Company License in Vietnam.

Vietnam imported between 575 – 697 thousand tonnes of cotton in the 2013/2014 season. They are estimated to slightly increase to 600 – 708 thousand tonnes in the 2014/2015 season.

THAI HA NGUYEN

HO CHI MINH CITY TEAM

(L–R) Si Nguyen, Minh Bui, Anh Vu, Hue Nguyen, Oanh Tran, Linh Phan, Uyen Nguyen, Vuong Ngo, Nhan Bui, Tuyen Nguyen, Thai Minh, and Thoi Nguyen

THAILANDSGS Thailand was established in 1951, the head office is now located in Bangkok.

Thailand imported between 300 – 332 thousand tonnes of cotton in the 2013/2014 season. It’s estimated that they will remain constant with between 300 – 343 thousand tonnes in the 2014/2015 season.

SUCHAI PREEDAWANPEN

BACK OFFICE TEAM

(L–R) Mr. Parinya Yongsab-a-nan, Ms. Monruethai Klinsukon, Mr. Prasert Junjaiwong (General Cargo Manager), Mr. Vitoon Binraman

INDONESIAPT SGS Indonesia has been providing services in Indonesia for more than 15 years and in July of 1995 was the first independent inspection company to be granted a 100% Foreign Owned Company License.

Indonesia is estimated to import between 577 – 620 thousand tonnes in the 2013/2014 season. They are predicted to slightly exceed that number in the 2014/2015 growing season with 599 – 630 thousand tonnes.

NORO HUTOMO

JAKARTA TEAM

Philia Sampaguita and Erick Prihadi


INSPECTION TEAM

(Front L–R) Mr. Chairat Duangnui, Mr. Siriwat Preedanon, Mr. Siwabordint Sukchai, Mr. Suwit Kamaed, Mr. Thanapat Salitichai (Middle L–R) Mr. Noppadol Puengpandee, Mr. Sunan Chaigan, Mr. Pornsak Thongmee, Mr. Suthep Pasupong, Mr. Navaphol Chuntikul, Mr. Akapon Boontawee (Back L–R) Mr. Preecha Laongchum, Mr. Chan Seeyalai, Mr. Waravuth Chunjit, Mr. Amnuay Kongjampa, Mr. Somsakdi Nedsuk, Mr. Khanit Sangthong, Mr. Nutapong Atipatha


SOUTH KOREAIn South Korea, the SGS Group was established in 1955. SGS Korea provides added value by helping maintain client’s reputation for quality by reducing the commercial risks.

South Korea imported between 270 – 283 thousand tonnes of cotton in the 2013/2014 season. They are estimated to remain constant with amounts around 280 – 294 in the 2014/2014 season.

JIMMY LEE

TAIWANSGS Taiwan was established in 1952.

Taiwan is expected to remain steady with consumption between 191 – 210 thousand tonnes for both the 2013/2014 and 2014/2015 seasons.

LINDA WU

TAIPEI TEAM

(L–R) Mr. M. H. Chen / Mr. Irving Yang/ Mr. C. S. Chung/ Mr. H. T. Tung/Mr. Eddie King/Ms. Helena Hsieh/ Ms. Linda Wu/ Mr. K.W. Tsai

ANYANG TEAM

(L - R) Hae-chung Park, Chang-ki Lee, Jin-woo Park, Kun-pil Lee, Bon-young Gu

SOUTH AFRICASGS South Africa has been in business for over 30 years.

South Africa is also expected to remain steady with consumption between 19 – 23 thousand tonnes in the 2013/2014 and 2014/2015 seasons.

SUDESH MAHILALL


EGYPTSGS Egypt has been providing supervision services for cotton imports since 1994.

Egypt is expected to remain steady with imports for both the 2013/2014 and 2014/2015 season to be between 90 - 131 thousand tonnes.

SHERIF FAKHRY

DURBAN TEAM

(L - R) Niresh Bisunath, Deon Narainsamy, Anesh Lutchman, Sudesh Mahilall, Sharvin Sewpersad, Boy Boy Dube

ALEXANDRIA TEAM

(L - R) Anwar Ahmed, Ahmed Momtaz, Sherif Fakhry, Abdullah Shahat

With more than 32,000 employees, SGS operates a network of over 820 offices and laboratories in Europe, Africa and the Middle East.


PAKISTANSGS Pakistan was founded in 1952.

Pakistan is the 4th largest producer and 3rd largest consumer of cotton and is also the largest exporter of cotton yarn in the world. A rise in imports is expected in 2014/2015 to be between 2,395 – 2,555 thousand tonnes compared with 2,330 – 2,425 during the 2013/2014 season.

MAZHAR IQBAL SHAIKH

KARACHI TEAM

TURKEYSGS Turkey was founded in Istanbul in 1933 as a private inspection company.

Turkey imported between 1,372 and 1,400 thousand tonnes of cotton in the 2013/2014 season and have increased to between 1,415 – 1,430 thousand tonnes in the 2014/2015 season.

MÜGE GÜR

ISTANBUL TEAM

(L–R) Cem Kucukcil (inspector), Selcuk Durmaz (inspector), Basar Aydin (technical coordinator) and Bekir Durak (inspector)

TEKIRDAG TEAM

(L–R) Osman Nuri Albayrak (inspector), Atilla Cetin (inspector), Murat Suna (inspector), Mehmet Isbah (inspector) and Basar Aydin (technical coordinator)

INSTANBUL BACK OFFICE TEAM

(L–R) Alime Oglakci, Nihan Calik, Alparslan Cam, Cem Orhan, Metin Bal, Goktug Bayraktar, Muge Gur, Serhat Ozaydin, Furkan Turan, Basar Aydin, Orkun Gur, Mustafa Keles and Yavuz Cakir

(L–R) Mazhar Iqbal Shaikh, Dr. Naushad Zafar, Faisal Nisar, Awais Ansari, Idrees Sheikh, Bushra Nazir


BRAZILSGS Brazil was established more than 70 years ago. The team is fully qualified to answer all your needs.

Brazil is the 5th largest consumer of cotton. They have seen a slight decrease in consumption with between 850 – 914 thousand tonnes consumed in the 2013/2014 season and 830 – 871 thousand tonnes in the 2014/2015 season.

ALEXANDRE FONTOURA

(L–R) Frank Willian, Willian Gomes, Alison Renan, Fernando Zotesso, Fernando Almeida, Denir Fernandes, André Luiz

(L–R) Mariana da Matta, Dayane Gonçalves, Luis Robles, Suellen Proença, Renata Bonna, Márcia Pereira, Giane Herberts, André Gianesella, Renato Bueno, Thiago Barreto

(Back L–R) Artur Alencar, Karine Oliveira, Antonio Araujo, Ricardo Vieira, Alisson Figueiredo Raimundo Araujo and Clecio Dultra.

(Front L–R) Luciano Conceição, Jose Aparecido, Arnaldo Trage, Luciano Almeida e Jessica Silva

BARUERI TEAM

MATO GROSSO DO SUL TEAMS

With more than 17,500 employees, SGS operates a network of over 440 offices and laboratories in the Americas.


TRACE COTTON FIBRES FROM THE PLANT TO THE END PRODUCT

Cotton producers are keen to replicate the success of traceability programmes in agriculture and forestry across the global cotton fibre market. Traceability in the cotton fibre market ensures that cottons identified under a specific scheme, comply with its ethos and principles, as well as defined quality, safety and social responsibility criteria. Differentiating themselves in this way, opens the door to more profitable production and markets.

Increasingly, producers, manufacturers and retailers want to promote products based on geographic origin, quality, safety and social responsibility. Traceability enables the supply chain to verify the history, location, or application of an item by means of a documented and recorded identification system. In the cotton fibre industry, this entails applying unique identifiers to bales and tracing their progress throughout the supply chain.

Despite the success of traceability in other industries, the textile industry and its production chain has struggled to put effective programmes in place. Traceability in agricultural production, for example, is already very common. For instance, consumers are invited to scan barcodes on food packages to learn where the meat, fruits or vegetables are produced and by whom.

WHY IS IT NOT COMMON YET IN THE COTTON FIBRE INDUSTRY?

Traceability of seed cotton from the field to the ginning factory is possible, and necessary to achieve a good and even quality in bales when cotton is handpicked. The module in mechanical harvesting is an identifiable unit belonging to a part of a cotton field and can be clearly identified. As soon as a cotton bale enters a spinning mill it effectively loses its identity, and is only identifiable by tracing documents and written declarations.

The production of cotton yarn frequently involves a mixture of fibres of different growths and origins. The resulting yarn is traded to knitters and weavers who will buy a product that meets their requirements at the best price and

quality, as necessary, to produce the fabric. This means that the fabric can consist of several different yarns.

In the finishing of the fabric, an additional production stage complicates the process and the documentation. In many cases, cut and sew operations make garments out of patches of fabrics from potentially different batches. In the textile production chains ‘tolling’, meaning outsourcing selected production stages, is very common. Often, the buyer of the final product is not even aware of where production has taken place. As a result, finished garments on the shelf may look the same but, potentially, they are produced by different suppliers, from different fibre supplies, origins and locations around the world.

TRACEABILITY OPTIONS

The foremost ways to identify a product in the supply chain, from its raw material to the finished product, are:

• Chain of Custody (CoC) verification.

• Identity Preservation (IP) certification.

• Mass Balance (MB) accounting.

Each method has different ways to identify and verify the origins of the fibres used in a given textile.

CHAIN OF CUSTODY (COC)

CoC certification follows the path fibre products take from the field to the consumer, including all processing, manufacturing, transformation, storage and distribution links. The CoC


certification plays an important role in ensuring the traceability of fibres from origin, through the entire supply chain, to final product. This enables companies to provide third party verification of the claims they make to their customers.

CoC certification involves three key elements:

Accurate and reliable information on quantities of materials purchased, produced and sold: A central part of any CoC system is to gather, record and verify information on quantities and volumes of materials involved. Linking and cross-checking the quantities at subsequent stages of the supply chain, provides evidence of any accidentally or intentionally caused irregularity and discrepancy which then can be addressed and corrected.

Management of critical control points (CCPs): CCPs are managed by systems, usually based on the principles of identification, segregation and documentation. This is handled separately at each point along the supply chain, or where material from a certified or controlled source could become mixed or replaced by material from uncertified or uncontrolled sources.

Adequate training and supervision of personnel: A fundamental component of an effective CoC system is to have adequately trained personnel, who will follow the established procedures for CoC control. Uncontrolled sources do not meet the requirements necessary for product inclusion.

CoC certified and verified garments can be labelled as compliant to the relevant standard(s).

IDENTITY PRESERVATION (IP)

IP certification goes a step further and protects speciality cottons, like organic fibres, or brands that identify the fibres as being produced for a specific cause and traded and manufactured separately.

As a rule, IP schemes define the presence of these cottons in a garment, either as a declaration of percentage, or as the entire product. Often, CoC certification is required in addition to the strict separation of cargoes. In the textile industry meeting cotton fibre quality requirements for a final garment remains challenging. In many cases, to guarantee the quality of these textiles, they can only be manufactured in an integrated textile manufacturing environment, from yarn to final garment.

MASS BALANCE (MB)

Used widely in engineering and environmental analyses, mass balance (MB), also known as material balance, is an application of conservation of mass to the analysis of physical systems. By accounting for material entering and leaving a system, mass flows can be identified which might have been unknown, or difficult to measure without this technique. The exact conservation law used in the analysis of the system depends on the context of the problem, but all revolve around mass conservation, i.e. that matter cannot disappear or be created spontaneously. Based on this explanation, MB is considered useful for the textile industry.

MB in the textile industry assumes that the supply chain does not allow physical separation, as this would prevent flexibility of procurement for quality and price, as well as timing of the production of fibres, among other reasons. Mass balance accounting allows use of common price risk management tools at the same time as preventing additional, uncontrolled financial pressures and other burdens.

These systems are combined with CoC certification and applied to a specific CCP such as the gin, the spinning mill and MB accounting throughout the textile industry. MB accounting verifies inbound and outbound information, either physically recorded in documents or provided over a web-based application.

The attraction of handling and using fibres under this system is that it allows purchase and sale of cottons that are produced and sold in different qualities, without jeopardising the product claims desired and required by manufacturers, retailers and consumers.

AN SGS CORPORATE NEWSLETTER FOR AGRICULTURAL …

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