Textiles: Challenging Times Yield Opportunity

he concept that tough times breed opportunity is true. In the midst of trying to survive,
making tough choices and dramatically changing your company, opportunity subtly avails itself.

In a marathon, running with the pack is comfortable – the pace is set, there is strategic
positioning in play, but no real change happens until a major physical challenge occurs. When the
pack hits the hill – sometimes known as the wall – all of a sudden, individuals get on the move.
The hill will claim its victims. Some will fall back and regroup, some will pull forward, and still
others will exit the race.

This is no time to be all hearts and flowers about US textiles. Global textile companies are
facing incredibly difficult business decisions. Those decisions are affecting the opportunity
landscape for those companies that can maintain during this period.

It might seem odd to suggest that this is a time of opportunity, but it truly is for those
companies positioned for a long view – yes, that might as well read companies that are

Take the example of a really interesting deal between Lubbock, Texas-based Plains Cotton
Cooperative Association (PCCA) and Guatemala-based Koramsa Corp. to establish a new company,

Denimatrix LP.

Koramsa, under the leadership of its well-known and revered President Carlos Arias,
developed a strong reputation for innovation and fashion in the jeans-manufacturing sector. The
recent economic environment took its toll on the company, but no one ever doubted the skill and
capability of the company or Arias.

Enter PCCA – and its American Cotton Growers (ACG) denim plant. PCCA has been a major denim
player for years and controls its process from cotton field through finished denim.

Why not extend that reach through the supply chain? You bet.

Hence, Denimatrix LP was established with PCCA’s purchase of key assets of Koramsa. PCCA
President and CEO Wally Darneille announced that Koramsa’s management team will stay in place, and
PCCA will keep producing denim at its Littlefield, Texas, plant.

It’s been reported that Denimatrix expects to offer retailers a 60- to 90-day advantage over
Asian and Middle Eastern supply chains and will be the first fully integrated vertical supply chain
in the Western Hemisphere – from cotton grown in Texas, to jeans manufactured and finished in
Guatemala City.

Arias announced he has orders in hand from two major brands and expects first units to go
out the door in early May.

Difficult times, yes – but if you’ve ever met or worked with the people associated with PCCA
or Koramsa, you have to cheer the gutsiness of this move. It gets back to collaboration,
partnership and innovation – only time will tell.

March/April 2009