US Textiles: Making A Silver Lining


A
t a time when almost everyone is barraged with news of the shakiness of financial
markets, the daily presidential election stump speech sound bites and another storm heading into
the Gulf of Mexico – some textile companies have ignored the noise and looked for ways to leverage
all the negative news.

Yarn Market Editor Jim Phillips reports in this issue of

Textile World
that spinners may have a strong finish in 2008. Shipping costs, uncertainty and short time
frames on retailers’ programs may bode well for spinners – particularly those with well-developed
CAFTA ties. The tightening supply of ring-spun yarn looks like it may even be helping open-end
spinners move ahead.

The issue also features a news roundup of some of the textile industry’s leading
manufacturers. Large and small, long-lived and brand-new – and from a variety of industry sectors –
each company is investing, acquiring and/or expanding at a time when so many have counted US
manufacturing out.

At least three foreign-owned firms recently have announced intentions to make significant
investments in plants and equipment in the United States. Investing in US manufacturing to gain
proximity to raw materials and markets  – an interesting turn of events – illustrates the
potential for a long-term shift in sourcing strategies.

Grupo Zaga S.A. de C.V., a Mexico-based conglomerate owned by the Zaga family, and several
North Carolina textile executives have formed Lacassine, La.-based Zagis USA to produce open-end
cotton sales yarn and plans to invest $75 million in two facilities. Phase one is planned for
completion in 2008, with phase two slated to begin in early 2009. Brazil-based Santana Textiles,
South America’s largest denim fabric manufacturer and the fifth-largest such producer in the world
with four plants in Brazil and one in Argentina, plans to invest $170 million in a denim
manufacturing plant in Edinburg, Texas. And Brazil-based nonwovens producer Companhia Providência
Indústria e Comércio has announced it will build a spunbond nonwovens facility covering 215,000
square feet on 43 acres in Statesville, N.C. The company expects to receive machinery for the
facility’s two production lines, with a combined production capacity of 40,000 metric tons per
year, by February 2009.

As fall comes quickly, IFAI Expo rolls into Charlotte in late October. The show rotates
annually among locations, but Charlotte often adds a special lift due to the number of nearby
textile operations. Additionally, the organizers have a full slate of activities for members and
visitors interested in industrial and technical textiles as well as applications. The Industrial
Fabrics Association International (IFAI) told

TW
editors that the association expects some 8,000 visitors from more than 60 countries to
attend, with close to 470 exhibiting companies and more than 90 industry experts leading workshops,
symposia and other programs.

Although not all US textile manufacturers have been able to adjust to the challenging
economic times facing the market, for those that have, the story of finding a silver lining needs
to be corrected. Few found anything, but as manufacturers, they made it.

NCSU MIST Lab Tests Protective Garments

The North Carolina State University (NCSU) College of Textiles, Raleigh, N.C., has opened a
state-of-the-art Man-In-Simulant Test (MIST) facility at the College’s Textile Protection and
Comfort Center (T-PACC). The facility was funded by a $2 million US Department of Defense grant
secured by Rep. Bob Etheridge, D-N.C.

The new facility enables testing of complete protective ensemble suits in nontoxic chemical
vapors that are similar to toxic chemical and biological agents, and will provide test results and
analysis more quickly than other such facilities, according to NCSU. Testing will be conducted on
mannequins and on human subjects performing first-responder-type tasks in a controlled environment.
Analysis of adhesive pads worn underneath the garments being tested will reveal vapor penetration
levels through the fabric and at the garments’seams and closures.

The MIST facility willbe supervised by T-PACC Director Dr. Roger Barker and joins the
center’s facilities for mannequin-testing of thermal protective and comfort properties of apparel.
The facility provides a readily accessible lab to test prototype firefighter turnout gear developed
by Barker, who had received a grant in 2003 from the Department of Homeland Security to develop
such a suit with improved protection from heat and toxins as well as enhanced comfort and
durability.

“The new MIST lab will be integrated into our existing garment testing facilities and
increases our ability to provide accurate studies of protective gear in a more timely manner,”
Barker said. “This facility complements all of the research we engage in and will accelerate the
development process for new types of protective gear.”



September/October 2008

Republican Platform Focuses On Broad Range Of Issues

The platform adopted at the Republican National Convention last week calls for a wide range of
government initiatives dealing with national security, energy policy, the environment, education,
taxes and government reform, including an outline of how a McCain-Palin administration would deal
with international trade and competitiveness in a global economy.

The 64-page document’s preamble says it is “grounded in our heartfelt belief that our
principles, our policies and our vision will lead our American family, not just through present
dangers, but to a horizon of prosperity and liberty mankind has only begun to explore.”

Calling for “Free and Fair Trade,” the document says “greater international trade,
aggressively advanced on a truly level playing field will mean more American jobs, higher wages,
and a better standard of living” and  “it is an instrument of national security.” Pointing out
that 95 percent of the world’s customers are outside of the United States, the platform says “we
need to be at the table when trade rules are written to make sure that free trade is indeed a
two-way street.”

The Republican Party leaders say a new administration will encourage multilateral, regional
and bilateral agreements that reduce trade barriers that today limit market access for US products,
commodities and services. The platform calls for reinstatement of the president’s trade promotion
authority, which trade officials believe is an essential element in reaching any future trade
agreements. It also says trade agreements that have already been signed and are pending before
Congress — such as those with Colombia, Panama and South Korea — should be debated and voted on
immediately.

The party pledges to take stronger action to protect intellectual property rights against
pirating and to aggressively oppose the direct or indirect subsidies by which some governments “
tilt the world playing field against American producers.”

The platform says that while the Republican Party welcomes the emergence of a “peaceful and
prosperous China,” it adds that China must fulfill its World Trade Organization obligations,
particularly related to protection of intellectual property rights, elimination of subsidies and
repeal of import restrictions. It adds that China’s full integration into the global economy
requires that it adopt a flexible monetary exchange rate and allow free movement of capital.

The platform pledges to continue close associations throughout the Americas including “
mutually beneficial” trade agreements. It also calls for expanded trade with African nations.

Another section urges using education reform and the tax code to promote competitiveness.
Among other things, it calls for reforming and making permanent the Research and Development Tax
Credits. It also advocates modernizing the government’s retraining and unemployment adjustment
assistance programs and making greater use of community colleges in retraining programs.

In a section entitled “Keeping Good Jobs in America,” the platform calls for a major
reduction in the corporate tax rate, which it says is one of the highest in the world, so that
American companies can stay competitive with their foreign counterparts and invest in modern,
job-producing facilities at home.

September 9, 2008

The Rupp Report: Communication Saves Money

The US Open came to an end last Sunday. The US Open is one of the four Grand Slam tennis
tournaments. But this is only half the truth. It could not come to an end yet, namely because
another hurricane stopped the tournament. The final took place 24 hours later. So, probably, many
ticket holders for the final were not be able to attend — they had to go to work on Monday, instead
of seeing a dream final.

It Rains

In the middle of the second semifinal, the players left the court because it started to
rain. This is actually quite normal for an outdoor sports event, which does not take place in
halls. In the end, outdoor sports are still dependent on the weather. However, since television
networks have more power than ever, they already dictate when and where a sports event will be
broadcast. Probably another event is on the schedule for the next day, which in fact was the case
for the US Open. Of course, the TV networks are the most important tool to transport the message “
US Open” to the world. So a lot of problems and logistics must be settled. You don’t believe me?
Check it out.

It Is Expensive

Now, one can read in the newspapers that the organizer of the tournament, the US Tennis
Association (USTA), wants to build a roof — “within the next years” because this seems to be very
difficult and also very expensive. The USTA calculates expenditures of about $100 million. I’m
sure, dear reader, you know, what’s coming now? Yes, of course, the use of technical textiles would
reduce expenditures and construction time substantially. But, very probably, these people think
only in tons of concrete, too.

Textile Constructions

But how should they know? They probably have no idea about a roof membrane construction that
can be pulled with ropes over a slim and lightweight steel skeleton — as is already in use in many
stadiums, primarily in Western Europe, where slowly but steadily one has recognized the advantages
of technical textiles. Constructions applying textiles are some of the oldest architectonic forms
in human history. Today, because of their outstanding economic and ecological advantages, textile
constructions are an indispensable element of modern architecture.

The physical principles in the development of textile fabrics follow the same physical
principles contained in the formation of soap bubbles or the human skin with regard to minimum
energy conditions between their own weight and external forces such as wind and snow; as well as
the lowest possible tension, expansion and resulting membrane curvature. For this reason, the
design of textile roofing represents a very large and special challenge to engineers, and as a
consequence, membrane constructions still represent an innovative possibility in modern
architecture.

Get The Right People Together

It takes many different parties to build a roof with a modern membrane construction for a
sports stadium. Just to name a few, there are the fiber and yarn producers, weaver, finisher,
maker-up, contractor, and, of course, the owner of the stadium. So the job is to bring these people
together. A successful job can only be done if the owner and the architect know that a membrane and
not concrete is the ideal material for the roof covering. The challenge is to inform all
participating parties of the possibilities of technical textiles.

Tell It Like It Is

The technology and technique of producing fibers, yarns, and woven and knitted fabrics, as
well as their further processing into technical textiles, have to be communicated. The biggest
hindrance to technical textiles communication in all production stages is the enormous variety of
application fields. It is particularly important in the technical textiles sector, therefore, to
communicate downstream from the end product and not from the machinery side.

Also here, you need the right tools to get information and to communicate with the industry.
How does the stadium proprietor or his general contractor know that you are just the right partner
or maker-up? Correct, you have to build up a market image through competence, and become a credible
supplier, and take your product literally to the market.

Textile Industries Media Group
’s magazines are just one tool to get information for these promising textile applications.
Another tool is to check out our website
www.TextileWorld.com. You will find a lot of
information about nonwovens and technical textiles. More and more, traditional textile
manufacturers are producing tailor-made fabrics for industrial applications. Referring to our
latest data, more than 22,000 people per month on average are clicking on this website to get the
latest information about technical textiles.



September 9, 2008

SchäferRolls Acquires Samco

Germany-based SchäferRolls — a supplier of proprietary roll covers and rolls services used in a
range of industrial applications — has acquired Farmington, N.H.-based Samco Inc. — a company in
the business of roll rebuilding and recovering for the pulp, paper and converting industries — and
formed SchaeferRolls Inc.

The new company will operate out of Samco’s existing manufacturing and service facility in
Farmington, which will be upgraded and expanded, with all existing Samco employees, product lines
and technology incorporated into the new business. SchaeferRolls will add a new dual chamber oven;
a CNC controlled roll grinder, a composite cover application station and a new Vac-U-Blast station;
and upgrade the polyurethane and rubber production lines, with completion expected in the third and
fourth quarters of this year.

Former Samco Inc. stockholders Bradley Moore and Jeanine Lewis, will serve as SchaeferRolls’
president and vice president, respectively. J.T. Fisher has been appointed director, sales and
marketing; and Janko Lukezic has been named technical director. The company will add more sales and
service engineers to support the new expanded product and service offerings as they enter the
market.

September 9, 2008

Milliken Eliminates Transparencies

Spartanburg-based textile and chemical manufacturer Milliken & Company is continuing its “With
Respect for our Earth” green initiatives by outlawing the use of transparencies and transparency
machines for presentations made in internal meetings.

“A company like Milliken, which thrives on facts, data and analysis, can literally use a ton
of transparencies in the course of a year,” said Richard Dillard, director of public affairs,
Milliken. The company will switch to using laptop projectors for all of its presentations, saving
not only on the cost of transparencies but also the cost of disposing of them and the raw materials
used to produce them. “The film used for making transparencies is petroleum-based, so the
initiative also contributes to reducing dependency on oil during a time of high energy costs,”
Dillard said.

The company will donate used equipment and supplies to nonprofit agencies through United Way,
and to local schools.

September 9, 2008

The Rupp Report: Incentives For The Pakistani Textile Industry

The whole Asia-Pacific Rim is under economic pressure. Most of the countries are suffering a heavy
downturn in their industries in general, and in the textile industry in particular. This is also
the case for Pakistan, one of the giants (not only) in home textiles production.

According to official sources, the Pakistani government is not very happy with the
performance of its textile industry. That’s why the so-called Economy Monitoring Committee (EMC) is
considering supporting the suffering textile industry with a package, which should be discussed
later this week.

However, another committee, the Economic Coordination Committee (ECC) was faster than the
EMC, raising the issue in the cabinet. The majority of the ECC members have the impression that the
rupee had devalued by 22 percent in one year’s time, and the ultimate advantage of this had gone to
the exporters. That’s why they are asking for a special package, some sources mentioned. The major
reason for this action was that the All Pakistan Textile Mills Association (APTMA) had the idea
that the government “should do something” that they think is reasonable for the troubled textile
industry.

Consequently, the ECC articulated its displeasure over the performance of the textile sector
but also decided that any action concerning the textile industry should be discussed by the EMC
first. It was mentioned that the EMC would submit its suggestions to the ECC in its next meeting.
The proposal, if approved, would be a complete negation of the budgetary proposals for the period
2008-09 to extend zero subsidies for research and development support to the textile sector. The
budget for 2007-08 had envisaged zero subsidies on R&D. However, some interested groups
successfully lobbied the previous government to extend 19 billion rupees for the purpose.

New Incentives Package

In the new incentives package, the ministry proposed that duty drawback may be granted to the
industry on domestically acquired inputs including taxes on energy — that is, gas and electricity.
The drawbacks would only be allowed to those products that do not require further value addition.
The drawback on locally acquired inputs would not affect the eligibility of the exporters to claim
the normal duty drawback. According to the ministry, the drawbacks would be allowed to
manufacturers and exporters having in-house facilities at least for cutting and stitching, and will
cover shipments made with effect from July 1, 2008, to June 2009. The ministry has proposed that 30
billion rupees may be allocated to cover R&D expenditures during the financial year 2008-09.

Another proposal from the ministry was that this drawback scheme for locally acquired inputs
may graduate into an investment support fund. This initiative would facilitate balancing of the
value chain in the textile and apparel industry, upgrade technology, bring the unorganized sector
into the organized sector, generate employment and create economies of scale.

Investment Promotion Fund

The investment promotion fund would reimburse 5 percent interest on investments in machinery
to the targeted textile and apparel sectors and cover imports effected through letters of credit to
be established from July 1, 2008. The fund would be operational for five years and would be
reviewed thereafter. The ministry has suggested that the scheme may also be announced, with the
name of the drawback scheme, to encourage investments that would not have financial implications in
2008-09. However, any claims may be covered from the amount allocated in the budget.

Tax Credit Facility

Another important proposed incentive is said to be a 20-percent tax credit facility on
investment under the drawback scheme. Furthermore, it was also proposed that reimbursement of
interest on loans to the textile industry for 2007-08 may continue for another year at the rate of
5 percent. It was also mentioned that the textile industry has also required separate power tariff
for it, but it is unlikely to be approved by the government.

September 3, 2008

Reliance Backs Out Of Unifi Deal

Reliance Industries USA Inc. — the US arm of India-based Reliance Industries Ltd. — has backed out
of its agreement with Unifi to purchase Unifi Kinston LLC, a polyester manufacturing facility
located near Kinston, N.C. As a result, Unifi retains the right to sell the Kinston facility assets
for up to two years.

Reliance had planned to invest $215 million in a manufacturing operation for production of
polyethylene terephthalate resin used to make specialty polyester yarns and plastic containers, and
employ 204 workers.

September 3, 2008

Lurgi Zimmer Awarded Contract For PBT Plant In China

Lurgi Zimmer GmbH, a company of Lurgi GmbH, Frankfurt/Germany, has been awarded a contract for a
PBT plant for Xinjiang Blue Ridge Tunhe Chemical Industry Company Ltd., Changji City China. PBT
(Polybutylene Terephthalate) is a special Polyester polymer used for sophisticated textile
applications and engineering plastics.

The new plant will produce Polybutylene Terephthalate (PBT) chips with pure Terephthalic Acid
(PTA) and Butanediol (BDO) as raw materials, employing Lurgi Zimmer’s continuous polycondensation
process including THF recovery. THF (Tetrahydrofuran) a side product of the process is used as
solvent and basis for other polymers. The plant will be located in the province of Xinjiang and
will go on stream in 2009. The order value is undisclosed.

Lurgi Zimmer will provide the technology, engineering, procurement of equipment, and
supervision services. It will be the fifth PBT plant with Zimmer® polycondensation technology in
China and emphasises the leading position of Lurgi Zimmer in this market segment worldwide.

Press Release Courtesy of Lurgi Zimmer GmbH

September 3, 2008


 

Burke Mills To Liquidate Assets

Burke Mills Inc., Valdese, N.C. — one of the largest fully automated dyehouses in North America —
has announced that it has issued the WARN Act Notice to its employees and will lay off all but a
skeleton administrative staff on Nov. 1, 2008.

The company’s Board of Directors has adopted a plan of liquidation that will be submitted to
shareholders for approval at a special meeting to be held in late September.

Press Release Courtesy of Burke Mills Inc.

September 3, 2008

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