Bowman Hollis To Distribute Conveyors

Charlotte-based Bowman Hollis Manufacturing Inc., an established industrial conveyor belting
distributor, will become a full-service distributor of conveyors. A major focus of the company will
be low-profile modular conveyors for automated assembly, packaging, vision systems, and plastic-
and metalworking.

Because of Bowman Hollis’ experience with belting, the company will bring more to the table
than the average conveyor distributor, according to Steve Broadwell, manager, sales and marketing. “
So many times, conveyor systems underperform due to improper belting choices. We are belting
people, and customers will not have this problem when dealing with us,” he said.

Bowman Hollis will target the Southeastern United States. It will represent Milford,
Ohio-based Conveyor Technologies Ltd., and Alpena, Mich.-based Omni Metalcraft.



November/December 2005

Dow Reichhold Raises Price

Effective Jan. 1, 2008, Dow Reichhold Specialty Latex LLC will increase the price of nitrile latex,
used in the production of gloves, by 3 to 5 percent worldwide.

The company attributes the increase to the continued rising costs of energy, logistics and
raw materials.

Karl Mayer Acquires Sucker-Müller Product Line From Moenus

Germany-based Karl Mayer Textilmaschinenfabrik GmbH has acquired the Sucker-Müller weaving
preparation product line from Germany-based Moenus Textilmaschinen GmbH. The acquisition, which
includes trademark and patent rights, will allow Karl Mayer to expand its Warp Preparation division
by offering a new product line under the Sucker brand.

Sucker will continue its manufacturing operation on a medium-term basis in Mönchengladbach,
Germany, as Sucker Textilmaschinen GmbH, retaining its global service and spare parts business and
25 employees at that location. Karl Mayer ultimately plans to integrate the business, which had
been its largest competitor, into the Karl Mayer Group.

November 6, 2007

DAK, Wellman To Raise Polyester Staple Prices

Effective December 1, Charlotte-based DAK Americas LLC will increase the price of its polyester
staple fiber products by 3 cents per pound. In addition, Wellman Inc., Fort Mill, S.C., will
increase the price of its Fortrel® polyester staple fiber products on December 1 by 3 cents per
pound.

Both companies attribute the price increases to continued high costs of such raw materials as
ethylene glycol.

November 6, 2007

Wellman’s Board Explores Strategic Alternatives

The Board of Directors of Fort Mill, S.C.-based fiber, plastic packaging and engineering resin
producer Wellman Inc. has engaged New York City-based investment bank Lazard Frères & Co. LLC
to help the company explore strategic alternatives prior to refinancing of its debt in 2008.

According to Wellman’s Chairman and CEO, Tom Duff, the company continues to streamline its
operations, with the expectation of lowering its costs in 2008 by $20 million to $25 million
compared with costs in the previous year.

For the third quarter (Q3) 2007, which ended September 30, Wellman lost $26.3 million, or 81
cents per share, from continuing operations; compared with a Q3 2006 loss of $37.9 million, or
$1.19 per share. For the first nine months of 2007, the company reported a loss of $66.1 million,
or $2.05 per share; compared with a year-earlier loss of $68.7 million, or $2.15 per share.

“Our financial results in the third quarter were negatively impacted by increased competitive
pressures as new PET [polyethylene terephthalate] resin capacities were fully introduced into the
NAFTA [North America Free Trade Agreement] market,” Duff said.

The company’s sale of its European recycled-based fiber business earlier this year
contributed to enabling it to reduce its outstanding debt by $21.2 million, according to CFO Keith
Phillips.

November 6, 2007

The Rupp Report: The Battle For Energy Has Just Begun

For decades, energy wasn’t such an issue for politicians, citizens or industry. However, with an
increasing consciousness of ecological issues and overloaded landfills, people — mainly in Europe —
started protesting for a “better and cleaner world.” Eventually, the first “Green” political
parties were founded in Europe, and in the beginning, the hype to be green was big. Even glamorous
show business stars participated and demonstrated their feelings on green issues.

However, environmental protection and not the worry over resources was primarily at issue.
Eventually, the first studies on climate change started to emerge in the public realm. Alternative
energy resources, mainly for cars, became a daily issue in the media. Japan as an island got the
message and started to produce cars that consumed less gas, as well as hybrid vehicles.



Changing Textile Markets


Also, textile markets are radically changing. Emerging countries in the Far East have started
more and more to intrude on international markets. This trend started in the 1960s — first with
Hong Kong in apparel, followed by Japan in textile machinery.

The situation changed dramatically when China started to be a production powerhouse for the
whole world, and not only in textiles. Hong Kong abandoned its production and became the gateway to
China. The energy consumption, and thus also the prices for energy, soared and destroyed most of
the Western textile production. The Western world claimed unfair processing methods regarding
environmental issues.



A Way To Survive


With today’s energy prices and the lack of clean resources such as water, many Asian
countries are realizing that environmentally friendly processing, energy savings and a gentle
deployment of resources are no longer a political issue, but the only way to survive economically.

This trend has also left its footprints in the textile machinery industry by kicking off a
lot of new developments in yarn and fabric forming, mainly in the finishing sector. Reduced energy
consumption and lower liquor ratios are just a few key phrases in today’s competitive marketplace.
At ITMA 2007 in Munich, many manufacturers of textile machinery showed their latest equipment
operating with less energy and natural resources.

Recently, a well-known supplier of sports fabrics mentioned in an interview that only by
using finishing machinery with a reduced liquor ratio and water consumption was he able to pay for
his investment in three years.

And, a famous Germany-based manufacturer of screws and tools — and more recently, solar
panels — said: “In the beginning, ecological issues were considered in my company to be a bonus for
the corporate image. Now we have realized that we can make a lot of money out of it.”

November 6, 2007

Textile Lobbyists Attack China Trade

At a hearing before the International Trade Commission (ITC), Washington lobbyists for the US
textile industry painted a bleak picture of trade with China, saying that the burgeoning trade is “
the single greatest trade problem confronting the United States as a whole and the US manufacturing
base in particular.” The ITC is conducting the hearing, “China: Government Policies Affecting US
Trade in Selected Sectors,” in order to evaluate the trade and investment implications of trade
with China and other nations in Asia.

The leading organizations representing textile and other manufacturers in Washington launched
a scathing attack on US trade with China, charging that China’s heavily subsidized manufacturers
are threatening to completely dominate world trade in textiles and apparel.

Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition
(AMTAC), told the ITC that China has been able to gain a dominant position in the global textile
and apparel marketplace because its government has “designed and implemented a sophisticated plan
including both general and specific subsidies to ensure that they can penetrate and destabilize key
markets.” He said it is time for the US government to acknowledge that it is virtually impossible
to compete with Chinese manufacturers who “have the benefit of lax environmental standards,
pennies-per-hour labor rates and substantial government subsidies.”

Cass Johnson, president of the National Council of Textile Organizations, testified that
China has 73 subsidies that prop up its textile sector including such things as subsidized land
grants, subsidized loans and loan forgiveness, brand development grants, exemptions from value
-dded taxes, raw material rebates and worker benefit exemptions. He also cited currency
manipulation as a major subsidy.

Johnson warned that with the Chinese textile and apparel safeguards due to expire next year,
textile and apparel manufacturers throughout the world “are in jeopardy.” He said that if China
follows past history, it will take over 65 percent of US and European Union apparel markets once
the remaining safeguards setting quotas in sensitive imports are removed. In addition, he said, the
economies of Central America, Sub-Saharan Africa, Pakistan, Sri Lanka, Indonesia and Jordan will be
particularly vulnerable once safeguards are removed.

Johnson cited the following key facts:

• With four times the size of any other country’s exports, Chinese textile and apparel
exports are growing at an annual rate of 20 percent.

• China’s $12-billion gain in apparel exports in 2006 was greater than the total exports of
46 of the top 50 exporters of apparel to the world.

• Through government intervention, China’s textile industry has invested $85 billion during
the last ten years with the biggest increases coming in 2006 and 2007.

Johnson called on Congress to pass “meaningful legislation” to address issues related to
China trade.



November 6, 2007

Employment – A Poor Indicator


D
on’t be fooled by some of today’s negative textile and apparel workforce numbers. Sure,
they look pretty bad when compared to those prevailing just a few years ago, but these declines —
about 27 percent over the past five years for textile mills and 36 percent in the case of apparel —
are only partly due to a fall-off in industry activity. Equally important contributors are strong
productivity gains, which suggest that even if overall production had remained steady over this
five-year period, there would still have been a sizable workforce drop.

Textile World
has done a few rough calculations and found that about half of these textile and apparel
work declines were due to growing efficiency gains. Points to keep in mind: If these productivity
gains had never occurred, the employment drop-offs would have been much less precipitous.
Conclusion: Reported employment numbers are flawed indicators of basic industry performance.
Industrial output, shipments and profits are much better barometers when it comes to overall
industry health. And while all three also have tended to tail off in recent years, they continue to
suggest these two industries aren’t going to disappear any time soon.

p18


The Productivity/Profit Connection


It might also be pointed out that today’s still fairly tolerable profit performance
can in large part be attributed to the aforementioned productivity gains. Specifically, higher
worker efficiency, when combined with surprisingly modest wage gains, have helped keep textile and
apparel unit labor costs under control. In textiles, for example, recent hourly pay rates have been
rising only about 3 percent annually. But that’s pretty much what comparable productivity gains
have been — thus suggesting that labor costs haven’t really changed much. And the picture is pretty
much the same for domestic apparel operations. All this, in turn, has to have a positive impact on
bottom-line performance — especially since employment costs in these two labor-intensive industries
are quite significant — accounting for 16 percent of the sales dollar in the case of textile mills
and 23 percent when it comes to apparel manufacturing.


A Longer Look Ahead


The textile/apparel prognosis over the really long pull also may not be all that
bad. At least that’s the view of analysts at economic forecasting firm Global Insight. Thus, in
2012, some five years from now, they see mill shipments of basic textiles falling about 17 percent
in volume — the equivalent of little more than a 3-percent annual drop, and under the declines of
some recent years. The outlook is much the same for more highly fabricated textile products, where
the average annual drop over the next five years is put at only 2.5 percent. Apparel isn’t likely
to fall out of bed either — with just above 5-percent annual declines anticipated through 2012.
Moreover, these two industries, while smaller than they used to be, are likely to remain strong and
fairly profitable. Indeed, according to Global Insight, average textile and apparel earnings over
the next five years are expected to stay surprisingly close to current levels.


A Still-Healthy Economy


Coming back to the near term, one big question mark remains: How will the subprime
mortgage fiasco impact general business activity — and, more importantly, textile and apparel
demand? Right now, a cautiously optimistic assessment would seem to be in order. True, housing
problems remain quite serious, but much of this is being offset by other more positive factors. The
Fed is providing new support by cutting interest rates, and a weak US dollar is finally beginning
to give exports a much-needed boost. Finally, consumers have shown few signs of cutting back — with
only a modest dip in overall purchases reported over the past month or two. Preliminary
third-quarter spending estimates would seem to back this up — with buying totals projected to have
grown by 3 percent annually. And this trend is likely to continue. Thus, the National Retail
Foundation is predicting a 4-percent increase in sales during this holiday buying season. And while
this is under last year’s 4.6-percent rate, it’s not bad given the recent negative business
talk.


November/December 2007

Bush Free Trade Agenda Running Into Trouble


A
s Congress heads toward its year-end recess, time and tide are running against the Bush
administration’s free trade agenda. Troubles for President George W. Bush started last June, when
the Democratic-controlled Congress refused to renew his Trade Promotion Authority (TPA) and started
to play a more active role in determining US trade policy. Three of the trade pacts that were
negotiated before the TPA expired — with Colombia, Panama and South Korea — are on hold for various
reasons and likely will not be acted upon this year, and in the case of South Korea, maybe never.

Colombia is being held up by congressional concern over labor and human rights violations.
Panama is on hold because the president of Panama is wanted in the United States on charges of
killing a US soldier in 1992. And South Korea faces strong opposition from automobile and textile
manufacturers, among others, who fear it will pave the way for more imports without any offsetting
benefits on the export side. Democratic congressional leaders in both the House and Senate have
indicated they have higher-priority issues to deal with. However, in a recent speech in Miami,
President Bush endorsed a letter former Secretary of Health and Human Services Donna Shalala sent
to Democrats in Congress that said: “Latin America is up for grabs. We fully recognize that asking
the US Congress to vote on these trade agreements is politically charged, but nonetheless rejecting
these agreements would be a set-back for US interests for generations. We must not walk away now.”&
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The Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), however, may be fully
implemented before a year-end deadline. Final approval of the pact has been held up over a
country-of-origin issue involving pocketing. When legislation approving CAFTA-DR was before
Congress, textile-state senators put a hold on it until the administration agreed to get agreement
from participating countries that the pocketing in apparel benefiting from the preferential trade
treatment had to be made in participating countries.

It is estimated that the pocketing in question amounts to a market in excess of $100 million for
US textile manufacturers.

The pocketing issue
has required a number of changes in the participating countries, and most of these
have been accomplished. When that issue is all wrapped up, President Bush can issue an executive
order implementing the pact without any further consideration by Congress.


Action On China Is Stalled

Congressional fervor to do something about burgeoning imports from China and a continuing growth
in the US/China trade deficit appears to
be cooling. While there are a number of bills pending in Congress in various stages
of consideration, Democratic leaders in both the House

and Senate have said Congress has higher priorities, and the chairman of the House
Ways and Means Committee has stated flatly there will be no further action on trade legislation
this year.

The push to act may have been tempered somewhat by the Bush administration’s
repeated assertion that it is using “direct, robust discussions with Chinese leaders” to address
issues, and that punitive legislation is

not the way to go. That approach was bolstered
by a letter addressed to
all members of Congress and signed by 159 of the nation’s leading retailers,
multinational corporations and trade associations representing importers of textiles and apparel
and other products. Noting that the global economy has provided “significant and important
benefits” to the US economy, the letter also recognized that trade with China is having an impact
on jobs and economic security.

The high-powered group of companies said, however, that the best way to address
problems in international trade requires eliminating barriers abroad and increasing the
competitiveness of US manufacturers. The letter said policies that single out individual countries
as responsible for the United States’ concerns “will not be effective and should be
rejected.”

The letter concluded: “Imposing unfair barriers to trade in the name of currency
valuation or product safety is not a solution to the underlying concerns, and it ultimately
undermines the important work that should be undertaken to prepare our economy and our workers for
the realities of the global economy.”

Textile manufacturers and others impacted by Chinese imports have been pressing for
legislation that would offset what they see as an unfair trade advantage resulting from China’s
refusal to re-evaluate its currency. The legislation that has the most support is the Fair Currency
Act, sponsored by Reps. Duncan Hunter, R-Calif., and Tim Ryan, D-Ohio. The act would define
currency manipulation as an unfair trade practice and make such actions subject to US
countervailing duty and anti-dumping laws. While these bills have considerable support, they
also

face strong opposition from importers.


Consumer Agency Will Get More Authority


As the flap over tainted imports from China continues to grow, Congress is likely to
expand the authority of and provide more funding for the Consumer Product Safety Commission (CPSC)
in a move that could have some implications for US textile manufacturers. Several bills that would
provide additional funding, expanded authority and staffing have been introduced in both the House
and Senate.


One, introduced by Senate Commerce Committee Chairman Daniel Inouye, D-Hawaii, and
Sen. Mark Pryor, D-Ark., calls for an 11-point program to broaden the scope of the agency and
provide protection for consumers, with particular emphasis on children. In introducing the measure,
Pryor said: “This comprehensive legislation is intended to give the CPSC adequate funding and
authority to keep dangerous toys and other products off our store shelves.” He said the agency has
been in “serious distress” after years of budget cuts and staff reductions.


In addition, Sen. Susan Collins, R-Maine, plans to launch an investigation into the
effectiveness of federal standards for children’s toys and clothing. She said the staff of the
Senate Committee on Homeland Security and Governmental Affairs will investigate whether the CPSC
has adequate authority and resources to do an effective job of checking on the safety of toys and
clothing, particularly those manufactured overseas. She added there already is evidence of some
toxic chemicals in Chinese-exported blankets and clothing. She said the investigation will look
into the “efficiency, economy and effectiveness” of all departments of the government.


A beefed-up and more efficient CPSC could have some benefits for US textile
manufacturers, who have been working for years to get a national flammability standard for filled
bedding products —comforters, mattress pads and pillows — that would preempt a number of state
flammability standards, which today complicate the marketing of those products. They also would
like to see “the right kind” of a mandated standard for upholstered furniture. Action in these
areas has been delayed as a result of limited CPSC staff and the fact they have not been high on
CPSC’s risk agenda. With more funding and staffing, CPSC could move forward on these items and help
the textile industry overcome marketing problems. It also would enable the commission to keep a
closer watch on imports that may contain toxic chemicals.


November/December 2007

Effective Marketing And Sales Begin With Good Writing


I
t’s the ingredient that proposals, letters, brochures and advertisements are made of,
and – other than speechmaking – perhaps the one thing with which many marketing and
salespeople are most uncomfortable.

Marketing is about effective and persuasive communication of the features and
benefits of your product or service, and the communications vehicle is writing. Sales letters,
proposals, press releases, catalogs, Web pages and advertisements all require writing that is
professional and convincing, and calls clients or prospects to action.

Writing is an essential skill for successful sales and marketing efforts, but not
all businesspeople or marketing professionals are good writers. Some find writing painful. Hiring a
professional copywriter always is a good idea, but strengthening your own writing skills is equally
as important.


Avoid Wordiness: Too often, businesspeople want to write manuscripts rather than
marketing materials. Remember the mantra, “Never use 10 words when five will do.” At last count,
consumers are bombarded with more than 3,000 marketing messages every day. That means you have just
seconds to grab the attention of your reader, so get to the point.


Use Proper Grammar And Punctuation: Nothing loses a reader more quickly than
misspelled words or incorrect subject/verb agreement. The Blue Book of Grammar and Punctuation is a
great reference available in printed and online versions. The Associated Press (AP) Stylebook,
another good reference used by professional journalists, includes a guide to capitalization,
abbreviation and spelling; and has a section on business guidelines

and style.


Proofread Your Work: Every writer needs an editor, so always have another set of
eyes read what you have written. Once you’ve composed copy and read it a few times, you likely will
not see mistakes. Ask your proofreader not only to look for misspellings or improper grammar, but
also to give feedback on the clarity and conciseness of the message. Does it hold the reader’s
attention? Is the copy convincing and easily understood?  Is it clear what you want the reader
to do?


Write For Your Audience: Writing, like talking, comes in many forms – formal
or informal, general or technical, detailed or concise. Defining your target audience before you
begin to write will help make the process easier. For example, if you are writing for those in your
industry, you can skip lengthy explanations and specific details about a particular process or
issue. If you’re writing for those outside your industry, you want to be informative, but avoid
using industry jargon or technical commentary that might confuse or bore the reader. Use copy that
describes a situation that could easily apply to

the wants or needs of your defined audience.


Use An Active Voice: If you want your copy to be more persuasive, write with an
active voice. An active voice emphasizes the doer or the agent of the activity. A passive voice
shifts the focus simply to what is happening rather than what or who is making it happen. The
passive voice has its place, but for sales and marketing purposes, it is vague, wordy and places
your customer at arm’s length. Here are examples of active and passive copy written for a website:
Active – When you click the button, we immediately generate your order and automatically send
you an e-mail confirmation; Passive – Once the button has been clicked, the order is generated
and an e-mail confirmation is sent automatically.

You can feel the difference in these messages. You feel the confidence and
accountability in the active voice. That is the voice with which you want to do business.


Communicate Features And Benefits: Most of us, when we read a brochure or watch a
television commercial, ask ourselves one simple question, “What’s in it for me?” Your writing must
communicate the features and benefits of your product or service to solve a problem, improve
productivity or otherwise make the user’s life easier.


Issue A Call To Action: Too often, marketing materials fail to ask for the sale.
Remember to clearly communicate what you want the reader to do – visit your website, call for
a free demonstration, or visit your booth at a trade show. Again, use active words that prompt
readers to take action and offer an incentive that makes them do it now.

November/December 2007

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