At a hearing called by the Consumer Product Safety Commission (CPSC) to develop priorities and
strategies for the coming year, Kevin Burke, president and CEO of the American Apparel &
Footwear Association, outlined the role apparel manufacturers can play in promoting product safety.

Burke said the newly-enacted Consumer Products Safety Improvement Act (CPSIA) presents
difficulties in understanding and implementation, but he praised the additional funding for CPSC,
the addition of three commissioners and a “positive dialogue” focusing on improved product safety.
However, he said, implementation of the CPSIA has been a “considerable challenge that has exacted
extraordinary costs and has resulted in some companies getting out of the children’s wear
business.”

Burke pointed to four lessons that he believes should be considered as implementation of the
act moves forward:

• “It takes time to phase in new product safety regulations. For our industry it can take nearly
  a year for a single garment to travel the supply chain. New regulations must give industry enough
  time to adapt the supply chain so we can understand and clearly communicate changes to our
  industry.
• “Regulations should take effect prospectively and only after there is clear and 
  comprehensive regulatory guidance from the commission. The retroactive application of regulations
  unfairly punishes businesses for making products in good faith, especially when they were made in
  compliance with a previous product safety standard.
• “All product safety standards should be designed to mitigate and protect against specific risks
  and be clearly supported by data and facts. Understanding new safety regulations involves
  understanding how they will address a specific hazard. Without that, the standards seem arbitrary,
  and that perception undermines the standard’s effectiveness and acceptance.
• “Product safety standards that work best are those that are created through transparent and
  predictable process. The product safety community involves a range of stakeholders, all of whom
  need to participate. If one group appears to be shut out, the final result may not be predictable
  or accepted by all. This, in the long run, results in a product safety regime that is not
  sustainable. Product safety should be based on fact, and not politics.”

September 1, 2009

For certain, the last 18 to 24 months will become a time to remember in the history books. The
worst financial crisis since 1929 pushed the world economy into unexpected problems.

Volatile Cotton Season 2008-09

The same period was also volatile for the cotton industry. According to the International
Cotton Advisory Committee (ICAC), 2008-09 was a remarkable season for the world cotton industry in
many respects. According to ICAC, there were at least eight reasons this season was different:

•    World cotton mill use fell for the first time in a decade, due to a drop
in demand for textile products caused by the global economic and financial crisis. The estimated
13-percent drop was the largest registered since World War II.

•    World cotton area declined after a large increase in cotton prices during
the preceding season. Cotton remained less attractive for farmers than competing crops, partly due
to higher production costs and partly due to less interesting prices.

•    Production declined to the lowest levels in many years in a number of
countries, including the United States, Turkey, Greece, Egypt, Mali, Peru, Spain, Paraguay, Togo,
Israel and South Africa.

•    Extra-fine cotton production dropped by 42 percent to 430,000 metric
tons, the smallest crop in at least six decades.

•    World cotton trade declined sharply. The 24-percent annual decline was
the largest registered since World War II. The drop in imports was driven by China and Pakistan.
The drop in exports was driven by India. US exports declined only slightly, and their share of
world exports reached 45 percent.

•    The Cotlook A Index declined for the first time since 2004-05. It
declined from an 11-year high of 73 cents per pound in 2007-08 to 61 cents per pound in 2008-09,
driven by an increase in the stocks-to-mill use ratio in the world not including China.

•    International cotton prices were very volatile. The Cotlook A Index
fluctuated between 50 and 80 cents per pound during the season, an interval equal to 50 percent of
the season average. The Cotlook A Index had not been as volatile in more than 20 years.

•    Government support to cotton farmers increased significantly. Combined
government purchases in China, India and the United States, at support prices, accounted for 20
percent of the 2008-09 crop. Large portions of these purchases have since been sold back to the
market.

More Cotton In Demand

On the other hand, the Bremen Cotton Report reports that along with the ending of the work
holidays in most areas, spinning mill demand perked up. Virtually all growths for which offers were
available were traded. The delivery terms were not only fixed for short term, but also for the
second quarter of 2010. The cotton quotations in New York had shown a slightly weaker tendency
during the reporting period, however without having been indicative. At the end, they had returned
to the level of the previous week.

In the Upland range, the conclusion of contracts was registered as follows: Central Asian
sorts for prompt, further in the third and fourth quarters of 2009, and in the first quarter of
2010; Greek descriptions for the same period of time; West African styles for prompt, for the
fourth quarter of 2009, and for dates in the first and second quarters of 2010; Brazilian cotton
and Israel Acala for prompt, and for the fourth quarter of 2009.

In the long-staple and extra-long-staple range trading was as follows: Egyptian Giza 86 and
88 for prompt, and further in the fourth quarter of 2009; Israel Pima and US Pima for the fourth
quarter of 2009, and for the first quarter of 2010; and Sudan Barakat for the fourth quarter of
2009.

Giant Merger

Allenberg Cotton Co., one of the world’s leading cotton trading houses, is planning to merge
with Dunavant Enterprises Inc. Several news agencies, including Bremen Cotton Report, state that
Joseph T. Nicosia, CEO of Allenberg, as well as William B. Dunavant III, president and CEO of
Dunavant, confirmed they are in negotiations. In case of settlement, the continuously existing
business entity would carry on under the name Louis Dreyfus and Allenberg.

Allenberg Cotton is a division of Louis Dreyfus Corp. Its head office, Louis Dreyfus S.A.S.,
is located in France. The cotton trading company is based in Cordova, Tenn., near Memphis, Tenn.
Annual sales are projected at more than 1.5 million metric tons, or 7 million bales. Dunavant, one
of the largest privately owned cotton trading companies, is also based in Memphis. Its annual sales
amount to approximately 1.3 million metric tons, or 6 million bales.



September 1, 2009

Houston-based Kraton Polymers LLC – a global producer of engineered polymers and styrenic block
copolymers (SBCs) – has introduced Nexar™ polymers for use in applications including water
desalination, industrial separation and enhancement of high-performance textiles and apparel. The
polymers provide permselectivity in coatings and membranes, allowing moisture to flow in one
direction while preventing other substances such as potentially harmful chemicals from passing
through. According to Kraton, the nonporous membranes offer benefits including high strength in wet
and dry environments and improved performance as temperatures rise; and they will not clog or lose
performance abilities over an extended period of time.

“We are pleased with the positive customer responses we have received since we introduced
Nexar polymers,” said Jim Dieter, vice president of marketing development, Kraton. “The early
success of Nexar polymers is a good indication of the interest in an innovative moisture-management
system that is compatible for high performance athletic apparel, outdoor survival equipment (tents,
sleeping bags etc.), military uniforms and biochemical garments. We strongly believe Nexar
polymers’ superior performance is unmatched by the competitive materials currently available in the
marketplace.”

Kraton reports that Nexar polymers can easily be applied as either a single- or
multi-laminate process using current commercial equipment.

September 1, 2009

Dallas-based Greenology USA LLC has selected SmartSilver™ – a nanoscale silver antimicrobial
additive developed by State College, Pa.-based NanoHorizons Inc. – to provide permanent
antimicrobial properties to its Do No Harm™ line of medical scrubs. The scrubs contain recycled
fibers that are Oeko-Tex®-certified free from hazardous levels of more than 100 substances believed
to be harmful to human health.

“In order to live up to the Do No Harm ideal of scrubs that do no harm to the planet, to
patients, or to the medical personnel themselves, we needed to select our antimicrobial additive
with great care,” said Jim Noble, vice president, sales and marketing, Greenology. “SmartSilver met
every performance and sustainability criteria we set.”

“SmartSilver was developed originally for the medical market,” said Dr. James Delattre, vice
president, global marketing, NanoHorizons. “Now that SmartSilver additives are available for
textile and apparel applications, partnering with Greenology to launch a line of antimicrobial
scrubs is the perfect extension.”

September 1, 2009

Garden City, N.Y.-based Gehring Textiles Inc. – a manufacturer of warp- and circular-knit fabrics
for markets such as aviation and aerospace, military, fire prevention, utilities, medical equipment
and apparel, outdoor apparel, and activewear, among others – and Ashland, Ore.-based Massif
Mountain Gear Co. – a supplier of flame-resistant (FR), high-performance outdoor apparel for
markets such as military, law enforcement, and fire prevention, among others – are collaborating to
develop and supply a new generation of FR fabrics and apparel to global military forces. Gehring
will supply the newly developed fabrics exclusively to Massif, which will use them for military
apparel, headwear and gloves. The companies report they have begun developing several products that
will provide the military with improved protection and performance.

“This is an exciting collaboration between two product focused companies with a penchant for
innovation,” said Skip Gehring, president, Gehring. “Our shared expertise in fabric development
coupled with Massif’s outstanding garment development and customer service capabilities will enable
this team to invent the next generation of protective apparel for our troops.”

Gehring also will provide certain styles of its current line of FR fabrics to existing
customers. Last year, the company purchased Norton, Mass.-based Tweave Inc., a manufacturer of two-
and four-way stretch woven fabrics, and the first weaving mill globally to produce spandex fabrics
(See ”
Gehring
Textiles Acquires Tweave,” November 18, 2008). That acquisition has expanded Gehring’s
manufacturing capabilities for the markets it serves.



September 1, 2009

The Consumer Product Safety Commission (CPSC) has decided to exempt virtually all textile products,
including natural and manufactured fibers, from the lead testing requirements of the Consumer
Products Safety Improvement Act (CPSIA).

In making the announcement, CPSC Chairman Inez Tenenbaum said the staff had reviewed hundreds
of test reports submitted by interested parties and concluded that most textile products are
manufactured using processes that do not introduce lead or result in an end product that would
exceed the CPSIA lead limits. The blanket exemption does not apply to all products that may be
altered by dyeing or printing, but the commission said the exemption could apply in most
circumstances. Specific guidelines for those processes will be outlined in a forthcoming Federal
Register notice.

A notice published by CPSC on its website listed the following exempt textile fiber products:
•    natural fibers – cotton, silk, wool, hemp, flax, ramie, linen, jute,
kenaf, bamboo, coir, sisal, kapok, alpaca, llama, mohair, cashmere, angora, camel, horse, yak,
vicuna, qiviut and guanaco.

•    manufactured  fibers – rayon, nylon, lyocell, acetate triacetate,
rubber, polyester, olefin, nylon, acrylic, aramid, azion and spandex.

Components of apparel products such as buttons, snaps, zippers, trim and fasteners are not
exempt.

Tenenbaum said this determination does not address every issue of every manufacturer using
these kinds of materials, and the commission will take action on component testing in the future to
clarify what is required of products made up of some component materials.

August 25, 2009

With 115,000 square meters of display space reserved in 10 halls, the 2009 Intertextile Shanghai
Apparel Fabrics show will take place again at the Shanghai New International Exhibition Center
(SNIEC), October 20-23, 2009. As one of China’s premier textile trade events, the show brings
together exhibitors and prospective buyers in an organized manner and offers suppliers a trade
platform for conducting business directly on-site.

Last year, more than 49,000 visitors from 85 countries and regions attended the well
organized show, including key buyers from apparel fabrics-related importers, wholesalers,
manufacturers and designers. With its diversified and extended product range, Intertextile Shanghai
Apparel Fabrics provides an important business framework for textile trade in China.

Gate To The Domestic Market

Organizers report the show is an ideal business platform for entering the Chinese market.
Each autumn, thousands of textile fabric manufacturers show their latest designs and fabrics,
including group exhibitors Invista, Lenzing, Dow and Cotton USA, which will demonstrate the various
functions of their materials throughout the event. In addition to featuring key suppliers from
China and abroad, the exhibition will have special overseas pavilions: Germany will present a
series of high-tech fabrics; Japan, high-quality fabrics; Italy, sophisticated designs; Korea,
fancy womenswear and Taiwan, functional fabrics.

Among the many fabric mill suppliers participating in Intertextile Shanghai Apparel Fabrics
are exhibitors from several European Union (EU) countries including Austria, Belgium, France and
Great Britain. As mentioned, Italy and Germany will be present in country pavilions. The event in
Shanghai plays an important role in contributing to textile trade between Asia and the EU.

Chinese Market Remains Stable

Despite the global economic crises, China’s domestic consumption continues to rise, and its
growth is expected to remain stable at a rate of 6.5 percent, resulting in a marketplace rich with
opportunities for apparel fabrics suppliers and manufacturers. China’s customs statistics reported
a rise of 12.91 percent in 2008 over 2007 in textile imports from the EU. This segment of the
textile and garment industry in China reflects the growth in consumer wealth demand for
higher-quality fabrics.

Support From The Government

Reinforcing the region’s commitment to furthering trade is the Chinese government’s pledge to
continue buying from the EU. China is sending buyer delegations from the textile and garment sector
to visit fabric mill suppliers across the EU.  Led by the China Chamber of Commerce for Import
& Export of Textiles (CCCT), the trips will include important industry discussions on imports,
investment and brand cooperation. Many experts believe the Chinese government’s support and
cooperation are necessary in order to restore growth, expand trade and to help boost the overall
global financial system. It also signifies the Chinese government’s essential role in maintaining
and developing international trade.

Intertextile Shanghai Apparel Fabrics 2009 is organized by Messe Frankfurt (HK) Ltd and the
Sub-Council of Textile Industry, CCPIT-Tex and the China Textile Information Centre. More
information is available at
textile@hongkong.messefrankfurt.com.

Source: Messe Frankfurt (HK) Ltd.

August 25, 2009

The South Carolina Department of Commerce and the Economic Futures Group of Spartanburg County have
announced that Polysols Inc. – a subsidiary of Germany-based Polywert GmbH, a manufacturer of
nonwoven heat and sound insulation materials using recycled polyester fiber – is investing $1
million to establish its new manufacturing facility in Spartanburg County. Polysols’ plant will
recycle polyester fiber production waste materials into new products, the first of which will be
equine footing material. The enterprise is expected to create 10 new jobs.

“We are pleased to locate our first US facility in the Upstate of South Carolina,” said
Christoph Bock, treasurer and member of the Board of Directors, Polysols Inc. “Spartanburg County
is an excellent fit for our company, providing us with an excellent business environment, an
excellent labor force and great market access. We appreciate all the support we’ve received from
state and local officials.”

“We are extremely pleased that Polysols Inc. is locating a new facility here,” said Carter
Smith, executive vice president, Spartanburg County’s Economic Futures Group. “Polysols decision to
locate their facility in Spartanburg County adds to our growing list of ‘green’ companies, as their
process reduces wastes that could end up in a landfill. Their decision also demonstrates our
community’s ability to attract quality companies providing excellent job opportunities for the
citizens of Spartanburg.”

August 25, 2009

Germany-based Zschimmer & Schwarz GmbH & Co. KG – a producer of high-performance chemical
auxiliaries for textile, fiber, ceramic, leather, fur and other applications – has acquired
Italy-based T.E.M.A. S.p.A.’s Colormix business, which supplies tintometric solutions and
integrated color management systems for the textile, ceramic, paint and inks industries. The
acquisition will strengthen Zschimmer & Schwarz’s global position in the ceramic auxiliary
industry.

Colormix – including all product development, manufacturing and customer service operations –
will be integrated into ZS Tech Srl Technology Solutions in Sassuolo, Italy. All Colormix
specialized personnel and its customer base are included in the acquisition. 



August 25, 2009

Charlotte-based nonwovens manufacturer Polymer Group Inc. (PGI) has announced it will sell its
wholly owned subsidiary, FabPro Oriented Polymers LLC, to an affiliate of Tricor Pacific Capital
Inc., a private equity firm with offices in Chicago and Vancouver, British Columbia, as part of
PGI’s strategy to focus on its core nonowovens business in the hygiene, medical, wipes and
industrial markets.

Kingman, Kan.-based FabPro was established in 1975 as a greenfield operation for Exxon
Chemical Co. and was acquired by PGI in 1998. FabPro manufactures high-performance polymers and
man-made fibers for agricultural, construction, and commercial applications. The sale will include
its manufacturing plants in Kingman and Clearfield, Utah; and a converting facility in Guntown,
Miss.

“We are proud to add a high-quality asset like FabPro to our portfolio,” said Brad Seaman,
Tricor Pacific Capital. “FabPro has top leadership positions in the agriculture and construction
segments in North America and recognized brand names. We are eager to assist the management team in
executing their growth plans and see strong growth potential as synthetic fibers increasingly
replace steel and wire in many applications.”

The transaction is expected to be completed before the end of September.

August 25, 2009