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Yarn Market
Clarence D. Rogers, Technical Editor

Business Is Improving

Clarence D. Rogers, Technical Editor

The general feeling among most spinners seems to be that the overall tone has improved considerably in recent weeks.

“Business has continued to improve in the last few weeks,” responded one spinner. “All of our plants are running full-steam. Normally, we would say that things are going great, but that is not the case. Prices are still depressed. We’re not making any money.”

Another spinner said, “We are running full-capacity. Things are looking much better. In fact, we were not able to take an order last week. With all of this, we should be making money, but prices are still depressed. Maybe when the pipeline is replenished, prices will become firmer.”

U.S. yarn prices are and will be driven by global supply/demand, and U.S. spinners have a vested interest in world yarn supply/demand. So, we must strategically define what we want to be, and work to become what we want to be. We should work to be in the steak (filet mignon) market, not the hamburger market.

There are enough hamburgers out there in the world market. And if we want to compete, we had better be prepared to supply steaks.

Catalog Sales

It seems that we keep talking and hearing about imports. The other day, flipping through a major apparel catalog brought this question to mind — “How many items in this catalog were made in America versus those that were imported?” Well, a count revealed 60 items were imported and six were made in America.

After considering this for a moment, one might wonder: Why waste money printing “Imported” or “Made in America” for each item in the catalog? Why not print on the front cover “Goods sourced internationally”? After a few times of printing this message on the front cover, buyers or potential buyers would know this catalog includes only import items.

Maybe this is a little naïve. Consumers who use this catalog probably already know it includes mostly imported products. Do they care? Apparently not.

Know Your Customer

It wasn’t very long ago that some of our customers were vertically integrated — producing a certain volume of output and purchasing a certain volume — to meet their customer demands. This seems okay. In fact, one might argue that it is a good strategy. Build or expand to provide a percentage of expected demand. Later, when demand becomes soft, there can be a reduction in goods purchased and plants producing goods in-house will continue to operate.

Consider this: For the sourcing company, this may be okay. But if you are the supplier, you may get in trouble. As a supplier, you could become very dependent on the sourcing company. A partnership might develop with you to provide a certain volume of goods to the sourcing company.

You may invest, in good faith, to meet your “partner” customer’s demands. A few years ago, this might have looked like a great economic opportunity.

But look around and you might see how some of these partnerships have dissolved. And the heavily invested, supplier companies are in deep trouble, going or gone.

So, what is the message? Know your customer, its commitment, integrity and TRUST. With all of the opportunities for global sourcing, you may be next in line to be left out or cut off. It seems we see and hear more frequently, “We want to have others manufacture our goods, and we want to move toward marketing the finished products.”

The Government Plans To Help Us?

Is this true? There has been much discussion about a stimulus package to help speed our economic recovery. Seems like our leaders in Washington are talking about this almost every day.

Do you think the primary focus of these debates is on helping you? Well, maybe, but remember, this is an election year and these same people are back home campaigning, telling you how they have and are going to help you in this global market place.

The timing makes it appear the stimulus is directed toward speeding their return to Washington. They are protecting their incumbency. Do they ever think about protecting our industry or ensuring an equal playing field? Has history proven that trade helps all parties — or, does it help the dominant or most powerful player?

May 2002

 


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