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Textile Manufacturing: Global Cost Trends From A U.S. Perspective: Weaving

Part Four of a four-part series published on TextileWorld.com over the past few months

By Brian John Hamilton, Ph.D.; William Oxenham, Ph.D.; and Kristin A. Thoney, Ph.D.

Introduction
A study into factors affecting the potential competitiveness of the U.S. textile manufacturing industry was undertaken, and a series of brief articles has been produced highlighting some of the major findings. Earlier parts in this series have shown that changes to fiber prices offer differential global advantages in spinning, with the United States becoming more competitive as fiber prices increase (See “ Textile Manufacturing: Global Cost Trends From A U. S. Perspective: Staple Spinning, TextileWorld.com, April 16, 2013). It was subsequently shown that the advantages of the lower yarn costs can offer major advantages in knitting, for which the raw material is by far the dominant cost component (See “ Textile Manufacturing: Global Cost Trends From A U.S. Perspective: Knitting, TextileWorld.com, June 25, 2013). In this final part of the series, the potential benefits to weaving are explored.

The main sources of secondary data that were utilized in this paper were surveys conducted by the International Textile Manufacturers Federation (ITMF), Switzerland. The survey reports used were the ITMF International Production Cost Comparison reports (1991-2010) and the ITMF International Textile Machinery Shipment Statistics reports (1990-2010).

Weaving Machinery Capacity Data
The yearly weaving machine capacities for the countries included in this research are displayed in Figures 1 and 2 for the years from 1990 to 2009. Figure 1 exhibits shuttleless loom capacity, while Figure 2 shows shuttle loom capacity. Figure 1 shows that shuttleless loom capacity presents a more exaggerated version of the pattern seen for rotor spinning machinery in the first part of this series. The U.S. is the leader among these countries in capacity throughout the 1990s, but the turn of the century and the discontinuation of World Trade Organization (WTO) safeguards led to a surge in China. The U.S. dropped to the middle of the pack, while China rose every year through the most recent year in the ITMF International Textile Machinery Shipment Statistics report. By 2009, China‘s capacity was more than 10 times greater than that of any other country shown in the figure.

Figure 2 shows that shuttle loom capacity follows a different pattern altogether from shuttleless loom capacity. In this case, China had by far the largest capacity from the earliest year reported, but then actually shows a slow decline in capacity. Meanwhile, the other countries also declined, so China maintained its lead in shuttle loom capacity.

NCSUshuttlelesscapacity

Figure 1: Country Shuttleless Loom Capacities By Year
Data Source: ITMF International Textile Machinery Shipment Statistics (1991-2010)


Click here to view Figure 1 in a new window.


NCSUShuttleLoom

Figure 2: Country Shuttle Loom Capacities By Year
Data Source: ITMF International Textile Machinery Shipment Statistics (1991-2010)


Click here to view Figure 2 in a new window.

Weaving Cost Trends

The total cost of weaving, including yarn input cost, for each country is displayed in Figures 3 and 4. Figure 3 shows that for weaving with ring yarn, the U.S. has improved its global position with regard to cost-competitiveness. In 2003, it was the second-most expensive country for weaving ring yarn, whereas it was the third-least expensive in 2010 — and only $0.001 per meter more than Korea — after being surpassed by Turkey, China, and Brazil. This pattern is very similar to that of weaving with rotor yarn in Figure 4.

NCSUWeavingwRing

Figure 3: Weaving With Ring Yarn Costs By Year
Data Source: ITMF International Production Cost Comparison (2003-2010)


Click here to view Figure 3 in a new window.


NCSUWeavingwRogor

Figure 4: Weaving With Rotor Yarn Costs By Year
Data Source: ITMF International Production Cost Comparison (2003-2010)


Click here to view Figure 4 in a new window.

Components of Weaving Cost
The weaving cost components provided in the 2010 ITMF International Production Cost Comparison report are raw material, interest, depreciation, auxiliary material, power, labor, and waste. Please note that the “raw material” for weaving refers to the costs of purchasing yarn. For the sake of brevity in this paper, only the results for weaving with ring yarn are shown below, but weaving with rotor yarn had similar results.

Figure 5 shows the total cost of weaving for each country in 2010, broken into cost components. A bold red line was placed on the top of the U.S. bar in order to gauge its cost relative to the costs for other countries.

Figure 6 shows what the total weaving cost for each country would become if the raw material cost were doubled, which was shown in Part 1 to be a consequence of an elevation in fiber costs, like the cotton price increase in 2010-11. This figure shows the clear advantage gained by the U.S. compared with the majority of its competitors in the face of a large increase in yarn cost. Other factors that would have an impact would be those that may have regional variations, such as different rates of increase in labor costs or power costs. Hamilton discusses these factors more fully in his Ph.D. dissertation titled “Short- and Long-Term Opportunities for US Textile Manufacturing.”

NCSUWeavingRing2010

Figure 5: Cost Components For Weaving With Ring Yarn
Data Source: ITMF International Production Cost Comparison (2010)


Click here to view Figure 5 in a new window.

NCSUWeavingRing2010B

Figure 6: Cost Components For Weaving With Ring Yarn (Raw Material Doubled)
Data Source: ITMF International Production Cost Comparison (2010)


Click here to view Figure 6 in a new window.

Conclusions
This paper shows that the U.S., while losing worldwide share in woven fabric production, has been slowly gaining in global cost competitiveness in weaving. Additionally, the cost structure of U.S. weaving provides the opportunity for the U.S. to benefit from global increases in fiber prices.This series of articles has indicated that while the U.S. manufacturing base may have shrunk, there is a trend for U.S. manufacturing costs to be more globally competitive. This is a significant development, and the scenarios tested show that higher fiber prices will afford relatively greater advantages to the U.S., making it even more competitive. This would suggest the possibility of successfully growing the U.S. primary textile manufacturing base, and, indeed, there seems to be some indication that there are initiatives in this direction, including an announcement in December 2012 that India-based company Sarla Performance Fibers would build a new plant in South Carolina.

References
Hamilton, B.J. (2012). “Short- and Long-Term Opportunities for US Textile Manufacturing.” PhD Dissertation, North Carolina State University.

ITMF. (1990-2010). International textile machinery shipment statistics.


ITMF. (1991, 1995, 1997, 1999, 2001, 2003, 2006, 2008, 2010). International production cost comparison: Spinning, texturing, weaving, knitting.


TheTandD.com (2012). “Sarla Performance Fibers coming to Colleton with 100 new jobs.” The Times and Democrat. December 7, 2012. Retrieved from: http://thetandd.com/business/sarla-performance-fibers-coming-to-colleton-with-new-jobs/article_3f9838d0-40a0-11e2-b2d8-001a4bcf887a.html



Editor’s note: Brian John Hamilton, Ph.D., is product developer – Domestic Lifestyle at New Balance Athletic Shoe Inc., Boston. William Oxenham, Ph.D., is Associate Dean, and Kristin Thoney, Ph.D., is Associate Professor at North Carolina State University’s College of Textiles, Raleigh, N.C.

August 20, 2013

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