Deputy United States Trade Representative (USTR) Demetrios Marantis — who is responsible for U.S.
trade negotiations and enforcement in Asia and Africa; and USTR global initiatives on trade and
development, labor and the environment — was in Los Angeles last week to meet with apparel and
textile manufacturers and other local businesses involved in international trade. The meetings
focused on how U.S. trade initiatives and customs enforcement can help boost exports and realize
President Barack Obama’s goal of doubling U.S. exports by 2015.

Marantis visited three factories including women’s apparel brand Karen Kane, which houses
its design, screen printing, research, pattern making, cutting, shipping, production and customer
service departments in its 130,000-square-foot headquarters in Vernon, Calif.; denim apparel
manufacturer New Fashion Products Inc., which produces up to 56,000 units per week in vertically
integrated facilities in Los Angeles and Mexico; and Blue River Denim Inc., an independent denim
finisher that works with many popular jeans companies and uses special processing such as laser
etching and ozone water-free laundering. Following the factory tours, Marantis participated in a
roundtable discussion with Los Angeles-based textile and apparel companies to learn of challenges
those companies face in dealing with various U.S. trading partners.

Following the meetings, Marantis spoke with Textile World about the Korea-United States Free
Trade Agreement (KORUS), which was enacted last month, and the Trans-Pacific Partnership (TPP), for
which a 12th round of negotiations will take place in Dallas in May.

With regard to U.S.-South Korea trade, Marantis said that between 2005 and 2011, U.S.
textile and apparel exports to South Korea grew by 73 percent from $241 million to $418 million,
and U.S. imports of South Korean textiles and apparel declined by 51 percent from $1.9 billion to
$928 million. Areas of high U.S. export growth include tailored men’s and women’s apparel, knit
shirts, sweaters, dresses, filament yarn and nonwoven fabrics. Marantis also noted that under
KORUS, 70 percent of Korea’s tariffs on U.S. textile and apparel imports have now been removed,
with the rest to phase out over the next five to 10 years. “Our exports to Korea were already
growing, and I think KORUS will help level the playing field and give U.S. products a competitive
edge over products from other countries. I’m hopeful that our exports of textiles and apparel to
Korea will grow significantly as a result of the agreement,” he added, repeating government
statistics that Korea represents a $1 trillion economy and that U.S. exports to Korea are expected
to grow by $10 billion to $11 billion per year and support 70,000 U.S. jobs overall.

Marantis also spoke about the TPP and the expectations and concerns of importers and U.S.
textile and apparel manufacturers. “There are both opportunities and challenges,” he acknowledged.
“For importers, it provides new sourcing opportunities in [TPP partner] Vietnam, and for
manufacturers, it provides a new platform for exporting. There are sensitivities with Vietnam,
given that it is a potential export powerhouse and what that means for U.S. manufacturers. We’re
trying to achieve a balance that will allow us to recognize the sensitivities in this sector and
also ensure that new opportunities for both sourcing and exports are realized. One way we’re trying
to do that is to ensure that we use the yarn-forward rule of origin in this agreement.” He added
that with the yarn-forward rule in place, tariff benefits will extend only to TPP parties and not
to third parties, and the agreement will create trade and sourcing patterns integrated from fiber
to end product all within the TPP region. “I am hopeful that as TPP is concluded, we will have this
balance that will include something importers can rely on vis-à-vis new sourcing opportunities,
have tools in place to address the sensitivities our sector has and create regional trade flows in
a way that helps to boost U.S. textile and apparel exports,” he said.

April 10, 2012

South Africa-based Sappi Ltd. — a wood pulp and paper producer with operations in South Africa, the
United States and Europe; a joint venture in China; and sales offices worldwide — is investing $170
million to convert its Sappi Fine Paper North America kraft pulp mill in Cloquet, Minn., for
production of chemical cellulose that will be processed into rayon for textile applications such as
fabrics and disposable nonwoven products. Construction is set to begin this month, and completion
is anticipated in May 2013. Once converted, the mill is expected to produce 330,000 metric tons of
chemical cellulose annually.

Cloquet Mill, established in 1898, underwent a major upgrade in the 1990s. According to Mike
Schultz, project director in charge of the conversion, it is the most modern pulp mill in North
America and produces pulp using batch cooking technology, which is suited for making chemical
cellulose, rather than continuous cooking, another pulp-making technology that is not suitable for
making chemical cellulose. “We will still have the ability to make kraft pulp if we choose to, but
the intent will be to begin producing chemical cellulose as quickly as we can and produce as much
as the market will support,” he said.

The pulp will be shipped primarily to China, Indonesia and India, where it will be processed
into rayon fiber for various textile applications. Schultz said there currently is not a market for
the pulp in the United States, but if domestic opportunities should open up, the company will be
ready to supply that market as well.

Sappi’s Southern Africa division currently is producing chemical cellulose at its Saiccor
Mill in South Africa. With an annual production capacity of 850,000 metric tons, that mill is the
largest producer of chemical cellulose worldwide, according to the company. Conversion of a second
mill in South Africa is underway, and once that conversion, along with the Cloquet Mill conversion,
is completed, the company will be able to produce more than 1.3 million metric tons of chemical
cellulose per year.

The chemicals used in the processing of the pulp will be recovered and reused, Schultz noted.
In addition, byproducts of the process can be used in other products, for example, pickling salt
and sweetener for gum, among other products.

April 10, 2012

WASHINGTON — March 30, 2012 — United States Trade Representative Ron Kirk has welcomed the formal
adoption today by the Parties to the WTO Government Procurement Agreement (GPA) of the outcome of
the negotiations to revise the GPA.  Ambassador Michael Punke represented the United States in
Geneva today. The results of the GPA negotiations had been approved at the Ministerial-level
meeting of the WTO Committee on Government Procurement in December 2011, subject only to technical
verification and legal review.  The action today reflected the completion of the technical
verification and legal review of the revised GPA.

“The revision of this major procurement agreement will provide U.S. firms with new and
expanded opportunities to sell their goods and services to foreign governments,” said Ambassador
Kirk. “This revision demonstrated the ability of the WTO, through hard work, dedicated effort, and
the spirit of collaboration and compromise, to reach agreements that strengthen and clarify
international rules and expand the international trading system.”

In Geneva today, Ambassadors reiterated the commitment of their ministers to seek prompt
acceptance and implementation of the revised GPA within their respective jurisdictions.  The
revised GPA will enter into force when two-thirds of the 15 GPA Parties have deposited their
instruments of approval.  It is hoped that the revised Agreement will enter into force within
approximately one year.

The 15 Parties to the GPA are:  Armenia, Canada, the European Union (and its 27 Member
States — Austria, Belgium, Bulgaria, Czech Republic, Cyprus, Denmark, Estonia, Finland, France,
Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands,
Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, and the United Kingdom), Hong
Kong China, Iceland, Israel, Japan, the Republic of Korea, Liechtenstein, the Netherlands with
respect to Aruba, Norway, Singapore, Switzerland, Taiwan (Chinese Taipei), and the United States.

The revised Agreement expands the procurement covered under the GPA to provide U.S. goods,
services, and suppliers with new opportunities to participate in central and sub-central
procurement in the other GPA Parties.  The revised Agreement also includes a significant
improvement of the text of the Agreement by modernizing the text to reflect current procurement
practices and clarifying its obligations.

In addition to the approval of the revised GPA, the Ambassadors approved several future work
programs, including a work program aimed at facilitating participation by small and medium sized
businesses in GPA procurement.  The work programs will be initiated when the revised GPA
enters into force.



Posted on April 10, 2012

Source: USTR

ALEXANDRIA, Va. — April 9, 2012 — TRSA has launched its Hygienically Clean certification program to
recognize textile services companies’ commitment to cleanliness through third-party, quantified
biological testing and inspection. The certification process eliminates subjectivity by verifying
that textiles cleaned in these facilities meet hygiene standards appropriate for any type of
business that uses garments, linens, towels, floor mats,mops and other professionally laundered
items.

A specific designation for laundries with medical work (Hygienically Clean – Healthcare) is
available and another will soon be offered for those who serve restaurants and other businesses
where food safety is paramount (Hygienically Clean – Food Service).

To attain a Hygienically Clean certification, a laundry must deploy best management practices
(BMPs) and pass bacteriological testing and facility inspections. Tests use the United States
Pharmacopeial Convention (USP) 61protocol:

– Allows a minimal amount of bacteria to remain after textiles are laundered

– Pass/fail criteria of less than or equal to 20 colony forming units (cfu)

A laundry is not required to use particular processes, chemicals or BMPs to achieve
certification-whatever tactics management feels are necessary can be used to achieve TRSA’s Minimum
Performance Specifications as measured by bacteriological testing.  But BMPs must be
documented in a written quality control manual.

“Managers in many types of workplaces are becoming more conscientious about the sanitation of
their processes. They want to be more confident that they are taking every step possible to prevent
human illness in their facilities and their customers’. TRSA’s Hygienically Clean certifications
help achieve this objective by ensuring textile products laundered for businesses meet key
disinfection criteria,” explained TRSA President & CEO Joseph Ricci.

To approve laundries for Hygienically Clean certification, TRSA inspects them to review their
documentation and observe their BMP deployment. After this initial on-site inspection, facilities
are examined on a 3-year basis.Bacteriological testing begins with one evaluation in each of the
first three months the laundry is certified, then one every six months.

Hygienically Clean certification is the second such TRSA program to be unveiled in recent
months, following the February launch of the Clean Green designation. It recognizes companies that
meet TRSA requirements for achieving efficiencies in water and energy conservation and adopting
best management practices for reusing, reclaiming and recycling resources. Dozens of commercial
laundry operations are expected to apply for the certifications in the next 60 days.



Posted on April 10, 2012

Source: TRSA

Germany-based flat knitting machinery manufacturer H. Stoll GmbH & Co. KG is projecting
increased sales of its three-system high-performance knitting machines based on a production trend
it is seeing involving the use of three efficient, combined knitting systems rather than the two
systems typically used. According to the company, the three-system programs can knit nearly every
pattern in much less time than conventional programs, and machine utilization is improved owing to
a reduced number of machine strokes and to optimized pattern programs that shorten knitting time.

Stoll reports that the three-system program enables economical production even for fabrics
knitted using complex processes because the various combinations eliminate empty rows and the
pattern programs are adaptable to the greater variance. Shortened run times contribute to increased
productivity without increasing energy consumption, mechanical stress or maintenance costs.

The three-system program also offers advantages in the production of two- and three-color
jacquard knits with different structures, textures and shapes; and also for intarsia knits. Stoll
notes that its M1plus pattern software helps users develop complicated patterning by coordinating
the staggering of the yarn carriers required for intarsia patterns.

In full-fashion knitting, the three systems enable possibilities such as: the use of two
systems to knit while the third is used to transfer; and the use of one system to knit while the
other two are used to transfer.

April 3, 2012

BOULDER, Colo. — April 3, 2012 — Outlast Technologies, the leader in heat and moisture management,
announces the company has been acquired by Golden Equity Investments, (GEI), a Colorado private
equity firm that invests in operating businesses.

Outlast customers and partners can expect to receive the same levels of service and quality
products to which they have become accustomed. This acquisition will enhance an already robust
supply chain allowing Outlast to maintain its position as an industry leader in phase-change
technology, benefitting Outlast’s customers and partners worldwide.

The Outlast workforce and leadership teams will remain in place and all of Outlast’s sales,
distribution and licensing operations worldwide will continue with business as usual. Outlast
operations in North America, Europe and Asia will remain unchanged.

The company will keep the Outlast name, but as part of the transaction,Outlast Technologies
will be converting to an LLC to fit GEI’s structural requirements.

Posted April 3, 2012

Source: Outlast Technologies

One of the major players in the weaving machines sector is the Swiss/Italian manufacturer ITEMA
Weaving. In the string of interviews with opinion leaders at ITMA 2011 in Barcelona, Spain, the
Rupp Report talked to Sales and Marketing Director Fabio Mazzucchetti. ITEMA Weaving includes the
well-known brands Sultex, Somet and Vamatex. After some rough seasons for the whole industry, the
company seems to be sailing in quieter waters, which means back to success.

Good Show

“Yes,” Mazzucchetti said, “we are very happy with the outcome of ITMA 2011 in Barcelona. The
visitor’s frequency was very good, and I would say that the quality of the visitors was even higher
than in Munich four years ago. The only thing we are really not happy with is the fact that another
ITMA will take place in Shanghai in June 2012.

So the next question about the pace of the ITMAs was more or less needless. Mazzucchetti
said clearly that to have an ITMA Europe and ITMA Asia each every four years in alternation with
each other would be much better. “I don’t think that every two years will give more benefit,
neither to the visitors nor to the manufacturers,” he said.

As reported also by other exhibitors, ITEMA Weaving welcomed the most visitors from India,
Latin America – and there mainly from Brazil — and also from Europe — led by Italian and Spanish
visitors. However, in spite of the report of many European visitors, the Asian markets today are
more important for the company. “Absolutely,” Mazzucchetti commented. “Sixty percent of our sales
are the result of orders from Asian countries, and only 40 percent are divided among sales from the
rest of the world.”

Successful New Products

ITEMA Weaving showed many machines in its booth. Of particular interest were the new Sultex
A9500 air-jet weaving machine and the new Vamatex Silver 501 rapier weaving machine. “The response
to these products was much better than expected,” Mazzucchetti said. “We are very happy,
particularly with the feedback for the Sultex A9500. Up to now, we were not that strong in this
segment.” ITEMA explains that it reduced the total parts of the machine by 30 percent, which
results in a simplified machine concept requiring less maintenance. The A9500 is said to offer a
unique shed geometry. The slay can be driven by conjugated cams or by a crank mechanism, depending
on the requirements of the customer.

The other highlight mentioned by Mazzucchetti was the new Vamatex Silver 501 rapier weaving
machine, a “strategic evolution of the highly successful Silver HS model,” he added. Equipped with
a newly developed electronic platform, the machine was developed particularly to handle demanding
styles or heavyweight denim at the highest production speeds. The company reports that key
developments of the drive and transfer systems should provide a more robust machine that insures a
consistent, high-speed transfer at the lowest vibration pattern.

To complete the highlights, Mazzucchetti also mentioned the new electronic platform that was
developed for all new weaving machines to be introduced to the market. This common platform
features a Windows CE-driven, full-color touch screen as the user interface. The networking feature
enables both serial-VDI (virtual desktop infrastructure) and ethernet connectivity.

It is quite astonishing to hear that ITEMA weaving is successful with air-jet weaving
machines. What is the reason for that? Mazzucchetti says that many countries are currently
investing in air-jet weaving machines “and today, we have a very good product to offer.”

Market Situation

Is the current financial situation (September 2011) distorting the business? “Yes, of
course,” Mazzucchetti said. “We are faced with a very difficult and sometimes strange situation: We
have the orders from our customers in hand, but some of them are postponed. The situation in
general is doubtful, as I mentioned before. The expectations are good; however, if countries like
India and Turkey are holding back their order, there are some doubts about the future.”

As is usual with the follow-up of ITMA 2011 stories, the Rupp Report contacted Mazzucchetti
recently to hear the latest news following September 2011. The most evident question was: Has the
demand since Barcelona dropped or risen further? “Well,” he said, “most of the demand raised at
ITMA did materialize, but at the same time, the overall market enquiries have been somewhat lower
than what was expected.”

Changing Marketplaces

Regarding the most important countries with regard to ITEMA Weaving sales since ITMA 2011,
Mazzucchetti replied that most of the above-named countries remained important, and also North
Africa, Southeast Asia and Turkey. Are they still the same countries as last year? “Only up to a
certain extent,” he said. “China is not on the list, but there is some activity; and the Indian
subcontinent, particularly India, also is not mentioned. The reasons were already explained in
Barcelona.”

At the moment, shirtings and some home textiles are the top-selling segments for mills that
are operating ITEMA weaving machines. Mazzucchetti described the sales ratio between traditional
and technical textiles as being about 80:20 in favor of traditional textiles.

Expectations For The Future

And what is Mazzucchetti anticipating for 2012? “Well, it won’t be that easy,” he replied
during ITMA. “If China doesn’t move in a more positive direction, some suppliers will be in
trouble.” Today, some months later, the answer is quite similar: “The year 2012 doesn’t look
promising. There are still too many countries in which the situation is not clear and financing is
still quite difficult. In many cases, the failure within the textile industry to make the
repayments is very high, and thus, banks are reluctant to give new credit. On top of that, garments
are still sold in pretty much lower quantities than before and export from the main
textile-producing countries is slow. Even the denim industry is still struggling a lot. However,
the expectations are better for the second half of the year.”

And as an Italian, what is he expecting from the next ITMA Europe in November 2015 in Milan?
“I don’t see any problem that the event takes place in November. This is just another excuse to
argue,” he said. And in spite of his comments at the beginning of the discussion, he continued that
“there is no doubt at all that ITEMA Weaving will be an exhibitor at ITMA Asia 2012 in Shanghai.”

Editor’s Note: In last week’s Rupp Report discussing the Rieter Group’s 2011 annual results and
market strategy, Rieter Chairman Erwin Stoller was misquoted in reference to the production
location and the intended market for the company’s Air-Jet J 20 spinning machine and Rotor Box S
60. These machines are produced in Europe for the premium market segment and not in India and China
for the mid-market segment. The editors regret the error, and the report has been corrected (See: ”
The
Rupp Report: Rieter: To Be Fit For The Next Upswing,”
TextileWorld.com, March 27, 2012).

April 3, 2012