Cotton Outlook Supply And Demand Forecasts: Lower Chinese Consumption Adds To 2012/13 Surplus

BIRKENHEAD, United Kingdom — September 20, 2012 — This month, Cotton Outlook has increased its
production forecasts for this season, with an addition of 48,000 tonnes, bringing the total to
25,276,000 tonnes. During the same period, the world consumption estimate for the season has been
lowered by 200,000 tonnes, to 21,980,000 tonnes, a change entirely attributable to China.

The adjustments result in a projected net increase in world stocks at the end of the season,
of no less than 3,296,000 tonnes.

Posted on September 25, 2012

Source: Cotlook Ltd.

The Rupp Report: A Gasp Of Relief For The Eurozone

Hardly ever in the history of modern Europe has a decision been as eagerly anticipated as the
judgment of the German Federal Constitutional Court regarding the European Stability Mechanism
(ESM). On September 12, the court announced that it has rejected the urgent request of several
plaintiff groups to abolish the ESM. The mechanism shall enter into force, however, under some
rigorous conditions.

A decision to block ratification of the ESM would have had unforeseeable consequences for the
eurozone in particular, but, without any doubt, would also send severe shock waves through the
global financial system and, consequently, would impact the global textile and textile machinery
industry. The problems with the European financial situation and its influences on the global
textile industry in general, and on the Asian textile industry in particular, have been discussed
in different Rupp Reports over the past few weeks.

European Stability Mechanism

In the Treaty Establishing the European Stability Mechanism (ESM), the following is stated:

  1. The European Council agreed on 17 December 2010 on the need for euro area Member States to
    establish a permanent stability mechanism. This European Stability Mechanism (“ESM”) will assume
    the tasks currently fulfilled by the European Financial Stability Facility (“EFSF”) and the
    European Financial Stabilization Mechanism (“EFSM”) in providing, where needed, financial
    assistance to euro area Member States.
  2. On 25 March 2011, the European Council adopted Decision 2011/199/EU amending Article 136 of the
    Treaty on the Functioning of the European Union with regard to a stability mechanism for Member
    States whose currency is the euro adding the following paragraph to Article 136: “The Member States
    whose currency is the euro may establish a stability mechanism to be activated if indispensable to
    safeguard the stability of the euro area as a whole. The granting of any required financial
    assistance under the mechanism will be made subject to strict conditionality.”

Germany Is The Top Payer

The ESM should completely replace its temporary predecessor, the EFSF, in mid-2013. Its
registered capital will total 700 billion euros, but no more than 500 billion euros may be assigned
in loans.

Germany’s liability for the ESM totals 27 percent in accordance with its capital share in the
European Central Bank (ECB). However, critics fear that the German liability could be even higher.

Germany, the largest member state, hasn’t yet ratified the ESM treaty. Without its
participation, the ESM can’t go into effect. The German association More Democracy, with more than
37,000 people, brought an action to block Germany’s ratification of the ESM and spare the country
from taking on “unlimited and irreversible liability risks.”

Difficult Decision

The final countdown is now starting: As the Chief Judge Andreas Vosskuhle explained, the
ratification process and the signing of the treaty by the German president can only be executed if
international law guarantees that Germany’s liability in the ESM is not more than 190 billion
euros. This limit can only be changed by the German parliament.

More Power For The Parliament

The chief judge explained in his verdict that the responsibility of the high court is
limited, and they had only to judge whether the treaty complies with German law, saying “the
appropriateness and reasonableness of the ESM must be decided by the German parliament.” He also
said that “even in an intergovernmental system of governance, the elected members of the German
parliament as representatives of the people must keep control over basic decisions on the budgetary
policy.”

Chancellor Merkel Satisfied

For German Chancellor Angela Merkel and her center-right coalition government, and to some
extent also for the docile opposition – the left-wing Social Democratic Party and the Greens, the
verdict comes as a great relief. A ruling from the court in favor of blocking the ESM ratification
would have jeopardized the euro rescue program, which was negotiated with painstaking diplomacy. If
German President Joachim Gauck signs the treaty by the end of June, Merkel can carry on her policy,
which she thinks is the right and only way. However, the 190 billion euro liability will drive the
German deficit to new heights. Serious news networks reported a few days ago that the deficit is
now 2 trillion euros.

A Good Idea — In The Beginning

As everybody knows, this European crisis is throwing a lot of shadows on the global economic
system because of its uncertainty. For the same reason, dark clouds are hanging over the global
textile industry. As some major textile machinery suppliers have confirmed repeatedly, there are
projects everywhere, but everybody is holding back on these projects. In the 1990s, when all these
European ideas and projects came into being, they all looked pretty good. Europe reached a state of
political stability and economic dynamism. But the economic integration of Europe, which was at the
time associated with building the internal market and increased permeability of the borders, was
not enough for the elite of European politicians. With the subsequent actions to integrate all
kinds of duties into one pot, the idea broke apart and brought on the current situation, affecting
the social and economic life and the long-term prospects of the EU.

A Relief For Europe

The German approval of the ESM was of utmost importance for the euro crisis management.
Without this green light from the main financial backer of the fund, the ESM could not be
implemented at all, which could have led to an even more profound crisis in the eurozone.
Currently, the financial resources of the temporary bailout fund, the EFSF, will soon be exhausted
– after reform programs for Greece, Ireland and Portugal have swallowed around 200 billion euros,
plus another 100 billion for Spain.

Banks Never Lose

Immediately after the verdict of the high court, the German stock index (DAX) rose
considerably, as did the value of the euro, which rose to US$1.29. It seems that the financial
players don’t bother too much about the restrictions. Obviously, these people are not interested in
sustainability and sincere reforms – they are more interested in the next cash injections.

All over Europe, the citizens are not happy with the situation, but they are not asked for
their opiniosn. On one blog, a German citizen wrote, “we’ll get Mediterranean relations, easy use
of money and loans. Overall, we get what no one in this country wanted to have.”

September 18, 2012

APDN, TCOE Launch Textile Anti-Counterfeiting Platform

Applied DNA Sciences Inc. (APDN) — a Stony Brook, N.Y.-based provider of DNA encrypted and embedded
authentication solutions — and the Textile Center of Excellence (TCOE) — a United Kingdom-based
nonprofit textile and apparel R&D organization — have launched an anti-counterfeiting platform
under APDN’s SigNature® DNA brand of anti-counterfeiting technology.

The platform will use ADPN’s SigNature DNA markers — botanically derived markers that may be
incorporated at any stage of the supply chain to track a product back to its original manufacturing
source — to mark and authenticate textile, apparel and accessories including wool and cashmere
yarns, polyester thread, fabric selvage, and woven and nonwoven labels. The markers are
authenticated in a laboratory and provide definitive, forensic proof of evidence accepted by courts
globally.

“SigNature DNA technology offers textile and clothing manufacturers a fool-proof and
affordable solution to the growing menace of product counterfeiting,” said Bill Macbeth, managing
director, Textile Centre of Excellence. “We are ready and willing to help brand owners and
manufacturers to boost their brand values and revenues by incorporating this unique protection into
their products.”

The companies will debut the platform at Première Vision Pluriel, to be held in Paris this
week.

September 18, 2012

A Not-too-bad Outlook

The near-term macroeconomic trend isn’t nearly as bleak as some of today’s purveyors of gloom and
doom would have us believe. For one, U.S. consumers have been making substantial progress in
bringing their financial houses back in order. In 2008, for example, their debt load had soared to
129 percent of disposable household income. But thanks to some significant 2011-12 belt-tightening,
this key ratio is expected to drop down to near 100 percent by next year — a level at which
consumers have generally been willing to spend a bit more freely.

Another encouraging sign comes from gasoline prices, which, despite some recent uptick,
remain well under earlier 2012 highs. Other things being equal, this, too, should leave a little
more for spending on apparel and other consumer goods. So should the fact that family incomes are
beginning to rise from a combination of a longer workweek and small pay hikes. In any event, hourly
earnings for private sector employees are now running some 2 percent above year-ago levels.

A further upward prod, meantime, should come from an improving construction outlook —
especially the bottoming-out of home prices. True, housing starts are still far from robust. But
some recent signs of improvement suggest that the worst is over. Clearly, all of the above
developments still don’t add up to anything even remotely resembling a strong business recovery.
But they do suggest that gross domestic product, the most all-inclusive measure of a nation’s
health, should continue to inch up over the next year or so, though only at a 2- to 2.5-percent
annual rate — still under the 3- to 4-percent pace needed to bring the jobless total down to
near-normal levels.

BFgraph


Textile And Apparel Trends


This cautiously optimistic projection should pretty much guarantee another positive year for
the textile and apparel industry.

Textile World
 , for example, is now forecasting small gains for both 2012 U.S. production and shipments
– continuing the pace of the first three quarters. Aiding this trend along is the growing desire on
the part of U.S. consumers to buy domestically produced goods. A new Cotton Incorporated Lifestyle
Monitor survey, for example, finds an impressive 55 percent of consumers now feel it’s “very or
somewhat important” to buy American-made goods. Reasons: They both want to support the U.S. economy
and feel that domestic apparel is higher in quality than clothing imported from other countries.
The new study also notes that better control of production is a further incentive for buying
American. As the report puts it: “If something goes wrong in the cutting room, a domestic
production manager can make a decision to cut or not. If it’s in China and someone isn’t watching,
they’re going to cut and sew — and you’re going to own it.”

Stressing the importance of a stepped-up buy-American trend, Lifestyle Monitor adds that it
isn’t necessary to bring back a huge amount of lost production. Indeed, recapture just 5 percent of
these imports this year, and another 15 percent in another five years — and things could be looking
a lot better. The study notes, for example, that it would take only a $64 increase in each
consumer’s purchases of domestic goods to generate some 200,000 new U.S. jobs.


Another Positive Sign


The fact that the latest import totals have been leveling off also adds to the overall
feeling that the trade picture isn’t all that bleak. Thus, incoming textile and apparel shipments,
calibrated on a volume or square-meters-equivalent basis, have remained virtually unchanged over
the past 12 months. That’s in sharp contrast to the big increases of earlier years. Contributing to
this rather significant shift is the fact that both production costs and prices of the United
States’ overseas suppliers have begun to rise. Indeed, about the only negative import news these
days comes from the fact that China — by far the United States’ major foreign source — has halted
any further upward revaluation of its currency. The Beijing yuan, for example, has actually showed
some fractional decline vis à vis the U.S. dollar over the past few months — a big reversal from
last year’s 4.7-percent appreciation.

Moreover, there’s little to suggest that this new China strategy won’t persist as that
nation seeks to bolster demand for its exports at a time when its economy seems to be slowing down
a bit. But even after factoring in this China shift,

TW
 still feels that today’s basically flat import pattern will spill over into next year.
And that’s not really all that bad. Reason: It means that the small increases in U.S. consumption
of textiles and apparel that we are currently projecting for the next year or so will probably be
coming from domestic rather than foreign sources.

September 2012

Orders Expected To Stay Strong Through Year’s End

Business continues to be strong for spinners in mid-September. Ring-spun yarns are in high demand,
as are a variety of polyester and blended yarns. Spinners and yarn brokers also report increased
sales of open-end yarns.

The recent surge in sales accounts for the most sustained period of brisk business for many
spinners since mid-2011, when a frenzied 18-month upcycle came to an end.

“Business has been good for some time, now,” said one spinner. “We started getting more
inquiries and orders back in July, and it has been pretty constant since then.”

A prominent yarn broker agreed: “My business has been strong since at least August. It’s
been a combination of factors, I believe. Retailers have thin stocks and are beginning to
replenish. The price of imported yarn has been increasing and the availability has been
diminishing, which brings more business back to this hemisphere.”

The outlook for the remainder of the year remains promising as well. “It looks like the
fourth quarter is going to be relatively strong, at least in comparison to last year,” said one
spinner. “I believe there may be a slight slowdown around the holidays, but I think it will pick up
again at the beginning of the new year. Hopefully, we are in for a pretty good run.”

Some spinners report that, while they have a steady pipeline of business, the size of the
orders remains relatively small. “We do a lot of short runs, a lot of changing out,” said one
spinner. “Everybody wants something just a little different, and, as always, they want it
yesterday. It puts a lot of pressure on the business to deliver.”

With the improved business conditions, order delivery times for many customers, as expected,
are increasing. “A few months ago, a two-week turnaround was about the norm, and you could get it
even faster in some instances,” said one buyer/broker. “Now, you are looking at six weeks or more
in some cases.”


Pricing Pressures Escalate


Despite the increase in both inquiries and orders, spinners are still dealing with
considerable price pressures. “We are fighting a constant battle to maintain margins,” said one
spinner with operations in both the United States and Central America. “Our customers want to place
the business. But they want it at a price that is just not sustainable for us right now. We have to
negotiate hard for every penny on the pound.”

The pricing pressure is particularly acute for smaller spinners, according to industry
sources and observers. “Large spinners have programs in place where they can accommodate business
at a price significantly less than what the rest of the industry can afford,” said one industry
insider. “A customer might call up a large spinner and say, ‘What’s your price on 30/1 combed
cotton?’ And the answer might be, ‘We are selling it for $2.10.’ Then, the customer says, ‘I want
5,000 pounds.’ And then the large spinner says, ‘I can’t sell you 5,000 pounds. I have 1,000
pounds, but that’s it. The rest of it is committed, unless you want to wait awhile.’ So, the
customer then calls a smaller spinner and asks the same questions. But the smaller spinner’s price
is $2.75. So, the customer tells the smaller spinner the price is too high and won’t place the
order. It’s a conundrum. At some point somewhere, the cycle is going to have to break. Most of the
industry can’t afford to sell yarn at those prices.”


Price Of Cotton Stabilizing


For the week ending September 14, the price for the base quality of cotton in the seven
designated markets measured by the U.S. Department of Agriculture averaged 70.19 cents per pound,
down from 71.59 cents per pound the previous week, but up from the 67.98 cents per pound reported
August 17. The price has been hovering in the 70-cents-per-pound range for the past several months,
after falling from record highs in early 2011. “Certainly, the fact that prices have stabilized
somewhat is a contributor to the increases in business most of us have seen,” said one spinner.
“Customers are beginning to realize that they can place orders and not be caught short. More than
anything, I think, our business just needs some stability over an extended period.”

September 2012

Polartec®, Norrøna Partner With REPREVE® To Create First-of-its-Kind 100-Percent Recycled Garment

LAWRENCE, Mass. — September 13, 2012 — Polartec partner brand Norrøna announces the release of the
100-percent recycled men’s and women’s /29 warm4 up-cycled Jackets, built of Polartec® Wind Pro®
fleece made entirely of REPREVE® 100 yarn. Polartec uses REPREVE 100 yarn from Unifi for over
50-percent of its domestic production.

The REPREVE yarn was made from recycled bottles collected in Norrøna’s home country, Norway,
in collaboration with Tomra and Norsk Resirk. About 40 plastic bottles were used to make each /29
warm4 up-cycled Jacket. By using PET bottles instead of the traditional use of crude oil in
production, Norrøna takes a step in the right direction towards reducing the carbon footprint of
the /29 warm4 up-cycled Jacket. It takes approximately 2 kg crude oil to produce 1 kg of raw
material in the traditional process.

The particular recycled Polartec® Wind Pro® fabric features a high loft interior, providing
increased warmth without weight. Polartec® Wind Pro® is four times more wind resistant than
traditional fleece, highly breathable, durable, and water repellent, making the /29 warm4 up-cycled
Jacket a very versatile product for the whole year.

“We are now launching our first sports garment made exclusively from returned bottles,” says
Norrøna owner and chief executive Jørgen Jørgensen. “The goal is to recycle up the value chain, so
that bottles can be turned into advanced sportswear.”

“For a long time, a fairly low proportion of recycled material was used; as little as 10
percent, says Chuck Haryslak of Polartec. “But after a while we were able to add more and more and
can now make a fabric without adding fresh polyester and without a loss of quality.”

“When Norrøna brought this idea to us, we were very excited about the opportunity to prove
out the concept that we can provide our customers with custom recycling solutions,” said Mark
McNeill, product development manager for Unifi.  “With our unique capabilities at the REPREVE
Recycling Center, we were able to offer Norrøna a REPREVE based product made from bottles collected
in their country with performance equal to virgin.”

Posted on September 18, 2012

Source: Polartec LLC

Mutoh America, Inc. Unveils The ValueJet 2638

PHOENIX — September 14, 2012 — Mutoh America, Inc., a leader in wide-format inkjet printers and
cutters, enhances its Eco-solvent line with the new ValueJet 2638 – 104″ printer.

Available for shipment in November, the 2638 is priced at $49,995 MSRP, including heavy duty
feed and take-up system, PhotoPrint SAi RIP software, media roll cradle, installation and one year
onsite warranty.

The 104″ seven color inkjet printer prints up to a blazing 1,168 sqft/hr, making it Mutoh’s
fastest ValueJet yet. The swift print speeds offer fast turnaround times on large print jobs. A
simple learning curve, easy-to-navigate control panel, convenient maintenance door and sheet off
function makes the 2638 exceptionally user friendly.

Optional one liter ink bags are available for high production environments, saving the user
up to 27% on overall ink costs.

Create trade show graphics, indoor signage, billboards, POP displays, fleet wraps and more.

The 2638 provides outstanding performance at a competitive price, making it the smart printer
choice for shops looking to expand applications, increase production and improve efficiency.

Smart Printing features include:

  • Intelligent Interweave (i2) print technique to eliminate banding
  • ValueJet Status Monitor (VSM) app for remote printer monitoring
  • Optional SpectroVue VM-10 spectrophotometer for easy profile making
  • Free ColorVerify process control system included and ColorVerify Pro capable

The ValueJet 1638 printer will be on display for the first time at the SGIA Expo in Las Vegas
from October 18th through 20th at booth #3413 in the convention center.

Specifications and Features

  •     Variable, drop on demand piezo drive method
  •     7 color or 4 color (CMYKx2)
  •     Max resolution of 1440 dpi
  •     Print on a wide variety of substrates up to 104″ wide
  •     Print speeds up to 1,168 sqft/hr (360×360 dpi)
  •     Versatile printing using Eco-solvent ink
  •     Optional one liter ink bags
  •     Heavy duty feed and take-up system
  •     Simple setup and easy operation, shorter learning curve
  •     SAi PhotoPrint RIP software
  •     Easy accessible service door for simple maintenance
  •     Automatic sheet off function
  •     Installation included
  •     Media roll cradle
  •     Standard limited one year onsite warranty
  •     Intelligent Interweave (i2) print technique to virtually eliminate
    banding
  •     ValueJet Status Monitor (VSM) available to monitor ink levels, heater
    settings, media roll end and print status from iPhone or  Android
  •     Optional SpectroVue VM-10 sepctrophotometer
  •     ColorVerify included
  •     Optional ColorVerfiy Pro



Posted on September 18, 2012

Source: Mutoh America Inc.

M&G Moving Ahead With Investment Of Its 1 Million Ton PET And 1.2 Million Ton PTA Plants At Corpus Christi, Texas

HOUSTON — September 12, 2012 — M&G Group, leading producer of PET for packaging applications in
the Americas and the market’s technological leader, announces today that it has purchased the land
in Corpus Christi, Texas where it will build its one million tons per year PET plant (2.2 billion
pounds) and accompanying 1.2 million tons per year (2.6 billion pounds) PTA plant.

The property has been purchased by the M&G Group from the philanthropic organization, The
Robert Driscoll and Julia Driscoll and Robert Driscoll, Jr. Foundation.  The land is
conveniently located on the northern side of the Viola Channel within the Port of Corpus Christi
providing good access to rail and navigable water.

“The final selection and the purchase of the land is an important step as it will allow us to
complete detailed engineering and permit filing,” commented Mauro Fenoglio, the Project Leader for
this important investment.

“I’m glad to have had the opportunity to personally reiterate to Governor Perry, during his
recent visit to Italy, our commitment to Corpus Christi, Texas for the world’s largest PET
integrated plant,” said Marco Ghisolfi, CEO of M&G’s Polymers Business Unit.  He added,
“The synergies of the location, adding to the unmatched size and integration efficiency of the
plant, will further remove logistic costs, making our operation by far the world lowest cost.”

“I always appreciate the opportunity to meet with employers that are looking to Texas as the
best place to grow their business, and I’m pleased M&G Group is finalizing its plans to create
hundreds of jobs for Texans in Corpus Christi,” Texas Gov. Rick Perry said. “The strong business
climate we’ve fostered in Texas continues to attract employers from around the world to create jobs
and opportunity in the Lone Star State because of our low taxes, reasonable regulations, fair
courts and skilled workforce.”

About the Project

The new plants will generate approximately 250 new jobs.  An additional 700 indirect
positions are anticipated and as many as 3,000 jobs likely will be created during construction.

The new PET single line plant will employ the same technology as M&G’s single reactor
Suape (Brazil) PET plant, including M&G’s revolutionary EasyUp™ SSP technology.  Corpus
Christi, Texas, is located 200 miles southwest of Houston, Texas, and 145 miles east of Laredo,
Texas.  It is strategically located on the Gulf of Mexico with a metropolitan population over
400,000.  The Port of Corpus Christi is the sixth largest port in the United States, in terms
of tonnage, and will soon expand significantly as a major trade gateway for Mexico and Latin
America with development of the La Quinta Container Terminal.  The Corpus Christi Port
Authority, to support the expected traffic growth, have also just announced a major rail expansion.

Posted on September 18, 2012

Source: M&G Group/PRNewswire

DAK Americas Increases PSF Product Prices

CHARLOTTE — September 13, 2012 — DAK Americas’ will increase the price for all Polyester Staple
Fiber (PSF) products $0.06 per pound effective October 1, 2012.

This increase is necessary due to the continued upward movement of raw material costs.

DAK is committed to the polyester staple fibers business and will continue to supply quality
products, services and innovation to its customers.



Posted on September 18, 2012



Source: DAK Americas LLC

Freudenberg Nonwovens To Restructure Staple Fiber Business At Headquarters

Freudenberg Nonwovens, a business group within the Freudenberg Group, has announced plans to
reorganize its staple fiber business at its headquarters in Weinheim, Germany. The company will
reduce production capacity, citing reduced demand in the apparel industry, which has been
substituting increasing amounts of lower-priced woven and knitted interlinings for traditional
staple fiber nonwoven products.

As part of the restructuring, Freudenberg Nonwovens will close a production plant, likely
impacting 52 associates. In addition, the company will introduce more flexibility and faster
response within the Weinheim staple fiber business by systematically realigning it with the
apparel, filtration, medical and industrial market segments, including simplifying cooperation
between sales and production and allowing each division to pursue its own strategy.

Going forward, the company’s Interlinings Division will focus on its core business and new
developments, including new products and applications such as elastic nonwovens for outer fabric
applications.

Established in 1936 in Weinheim, Freudenberg Nonwovens today operates 21 manufacturing and
processing facilities in 13 countries and employs more than 3,150 associates. The company’s 2011
sales totaled more than 660 million euros.

September 11, 2012

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