Innovative Spinners Look For Opportunities
By Jim Phillips, Contributing Editor
Those companies with neither the resources nor the inclination to respond to competition from an increasingly integrated global marketplace may find the going tough again in 2008 — and more than a few will likely turn out the lights and lock the doors for a final time.
For those that do have the resources and capabilities to respond to the changing marketplace, numerous opportunities exist to create positive returns. As we look ahead to the balance of 2008, following are some growth opportunities yarn spinners have identified.
Nothing captures the market’s attention quite like a product that fills a previously unmet need. “It’s important that we keep looking at the market and see where we can establish a competitive edge,” said one specialty spinner. “We look to try to make products that no one else can or will. It has kept us running steadily over the past year. Our margins are good because our customers cannot
get our products from anyone else.”
The Business Model Is Changing
No doubt the business model for the US textile industry, including yarn spinners, is changing. In the gradual shift from commodities production to specialty and niche-market manufacturing, companies are faced with deciding what activities to get rid of, where partnership opportunities are available and which, if any, operations to expand.
“It’s hard for an old-schooler to realize that you don’t just start up and run as much and fast as you can,” said an industry observer. “The market won’t support that anymore — hasn’t for years. Yet, there is business out there, but it’s harder to find and hard to get.
It requires a commitment to quality and a commitment to service. Yarn manufacturers have to be able to process and turn around orders faster than ever before. Quality and speed to market — those are the only two real differentiators these days unless you have a truly unique product.
“Being successful in today’s market is more than just developing products and providing good service,” he said. “Spinners have to decide what businesses they can be in and, especially, what businesses they shouldn’t be in. Just because you’ve always run a dyehouse doesn’t mean that dyeing your own yarn is the most efficient way to do it. Perhaps there’s a partner that can do it better and cheaper. And, yes, maybe that partner isn’t in your hemisphere.”
The Global Market Challenge
Many spinners that have adapted to the changing needs of the global marketplace are emerging as strong players. Those spinners that have a strong export strategy are, generally, in a better position to weather the ups and downs of the domestic marketplace.
“It was just a matter of survival for us,” said one spinner. “Many of our old customers, the ones we grew this business around, have closed up shop. It was either look for new markets or close our doors, too.”
As exports become an increasingly significant share of spinners’ business, lead time and quality are key to gaining this business.
“Lead time is often the most important thing — more important in some instances than price,” a specialty ring spinner said.
Said another: “We’re never going to win on price, but we can often compete when lead times are critical.”
Many spinners agree it’s time for the US industry to realize the status quo just won’t cut it any more.
“Every day, it seems, I have fewer customers than the day before,” said one spinner. “It is a matter of putting in some legwork to find where the customers are and what they need.”
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