Export Strategy Positions Spinners To Thrive


T
 imes change, and with its passing some old friends succumb to its various challenges. In
the textile industry, a companys viability is incumbent upon its willingness to adapt to market
challenges.

For this month’s Yarn Market, calls were made to some old spinning friends. Sadly, many of
those companies are no longer in business. Its easy to point at the current trade situation as the
cause for almost all demise within the industry, but this is not the case. Many companies fail
because they are static too set in their ways to change or too slow to recognize and respond to
changes in the market.

The good news is that those who have adapted to the changing needs of the global marketplace
are weathering the storm and emerging as strong players. This month,

TW
 talked to several spinners that have responded to the changing needs of what can at times
be a rather fickle consumer market. The common thread that emerged from conversations is that those
spinners with an aggressive export strategy are positioned to thrive. Those that do not have the
resources or desire for geographic diversity seem to have a harder time.


Going Full Blast

“Were going flat out,” said one South Carolina spinner. With both ring and open-end (OE)
production going full blast, and prices remaining stable, this spinner sees no end in sight.
“Orders look good and have ever since the last part of last year. We’ve been running full-tilt
since Christmas.”

Indeed, demand seems high for ring and OE cotton, and for cotton blends both aimed primarily
at the apparel market.

“We’re exporting a whole lot of product right now,” said another ring spinner. “Were
exporting mostly to Central America and can sell it just about as fast as we make it.”

Said a low-country ring-spinner: “Exports make up a significant portion of our total business
volume, and we expect demand for cotton to continue to be strong to the next quarter.”

Prices seem relatively stable across the board.
“We’re getting about in the
mid-$0.80s for 18/1 open-end carded cotton,” said one OE spinner. Ring spun carded cotton is
going for about $1.68 for 24/1.

In value added, in addition to the current trend for recycled and organic fibers, consumers
seem to be taking a particular interest in soft-hand cottons, which is providing a particular boon
to properly equipped OE spinners.


Scraping By

“We’re scraping by at the moment,” said one specialty cotton spinner. “It is certainly not
anything to write home about, but were not quite ready to close the doors yet. There just doesnt
seem to be anything really exciting happening in our markets.”

Projecting out the rest of the year, spinners with healthy production seem confident it would
last through at least the third quarter. “Theres no end in sight,” said one. “Were selling
everything and we have no inventory.”

One OE spinner observed that the T-shirt market for his company has been slower than
anticipated, but this has been more than offset by an increase in the demand for other apparel
yarns. “The nice thing about being relatively small and flexible is the ability to quickly respond
and deliver what the customer wants,” he said. “Normally, for example, we shut down the operation
for a week at Christmastime. This past year, we were able to shut down part of our plant, but had
our OE business running throughout the holidays. This schedule has continued right on through the
year.”

Of primary concern to several spinners was the increasing cost of energy. Just when it seemed
some prices have begun to stabilize, theres been a significant increase in energy prices. ”
This might be bad news for us down
the road, if things don’t get back to normal soon,” said one spinner. “If we raise prices,
we might lose some business. If we dont raise prices, we might see our small margins get even
smaller.”

Overall, the OE and ring spinners with strong export businesses are optimistic that 2007 will
continue to be a strong year. As one spinner said, “You have to go where the customers are.” For
now, those customers are in Central America and the Caribbean.


May/June 2007

DuPont Artistri Launches Grand Format Model

dpfnewsDuPont Imaging Technologies, Wilmington, Del., introduced the DuPont Artistri 3320
grand format digital textile printer to the North American market at the recent International Sign
Association International Sign Expo in Las Vegas.

“The Artistri 3320 adds 3.3-meter-wide printing capabilities that create new applications for
the digital printing of textiles,” said Mike Lazzara, global product manager, DuPont Artistri. “We
are now able to deliver beautiful printing on textile media as wide as 3.4 meters [more than 11
feet] with a printable area of 3.3 meters [more than 10 feet].”

The printer is available as part of an integrated system, which also includes accompanying
ink and software.

May/June 2007

ASM Tekstil Selects Xetma Vollenweider Finishing Line

ASM Tekstil, Istanbul, Turkey, recently purchased a complete finishing line from the German-Swiss
Xetma Vollenweider Group. The line, consisting of seven machines, will be used by ASM to finish
warp knits including man-made leather and polyester velvet fabrics. Target markets for the products
include apparel and home textile manufacturers both in Turkey and abroad.

Xetma Vollenweider worked with ASM to provide a complete line that met its needs. Technical
features of each machine provide ASM with quality and flexible production, according to Xetma
Vollenweider. This tailored service, along with technical support in concept development, led ASM
to select Xetma Vollenweider as a business partner.

May/June 2007

May/June 2007

Fiberweb plc, London, has promoted

Dave Rousse
 to president, Fiberweb Americas.

Tarrant Apparel Group, Los Angeles, has appointed

David N. Burke
 CFO.

ogle

The
Association of the Nonwoven Fabrics Industry (INDA), Cary, N.C., has appointed

Steve Ogle
 technical director.

The Hermann Group, Germany, has promoted

Thomas Hermann
 to CEO, Sales & Finances. Hermann will continue his role as president and CEO of
Hermann Ultrasonics Inc., Bartlett, Ill.

Uwe Peregi
 will serve as executive vice president and general manager, Hermann Ultrasonics Inc.

Culp Inc., High Point, N.C., has appointed

Kenneth R. Bowling
 CFO.

Woolmark Market Intelligence, the marketing arm of The Woolmark Co., Australia,
has appointed

Roberto Cardellino
 as its Uruguay-based agent.

Formed Fiber Technologies Inc., Auburn, Maine, has appointed

Mark Bennett
 president and CEO. Bennett succeeds

David MacMahon
 , who has retired. MacMahon now serves as vice chairman of the company’s Board of
Directors.

Atlanta-based
Interface Inc. has named

Harold Paisner
 to its Board of Directors.

Polymer Group Inc., Charlotte, has appointed

Veronica M. “Ronee” Hagen
 CEO and member of the Board of Directors.

Jones Apparel Group, Bristol, Pa., has named

Wesley R. Card
 CFO.


crisp

Valdese Weavers, Valdese, N.C., has promoted

Joel R. Crisp
 to vice president, Global Operations.

Springs Global US Inc., Fort Mill, S.C., has named

Derrick Anderson
 vice president, sheet merchandising; and

Rich Langone
 vice president, creative development.

The American Textile History Museum, Washington, awarded

Ed Stevens
 , museum chairman emeritus, the President’s Distinguished Service Award at its President’s
Society Dinner.

Albemarle Corp., Richmond, Va., has named

John Dabkowski
 vice president, business development;

Luc van Muylem
 vice president, polymer additives; and

Steve LeVan
 , vice president, flame retardants.

VF Corp., Greensboro, N.C., has appointed

Aidan O’Meara
 president, VF Asia Pacific.

Outlast Technologies Inc., Boulder, Colo., has named

Sachiko Sasayama
 to its sales operations team,

Ashley Tilman
 marketing assistant,

Carolyn Pettz
 customer service representative, and

Jamie Nash
 administrative assistant.

The Precision Textiles division of
Precision Custom Coatings LLC, Totowa, N.J., has named

Edward Kowalski
 vice president, emerging markets.


Howard Dietch
 has joined
Official Pillowtex LLC, New York City, as manager and overseer of the Cannon and
Cannon Royal Family brands.


Richard Farb
 has joined
Gerber Technology, Tolland, Conn., as strategic product data management/product
lifecycle management account manager.

Mayer & Cie. GmbH & Co. KG, Germany, has named

Karl-Heinz Dommes
 and

Marcus Mayer
 managing directors.

Finetex Technology Global, Diamond Bar, Calif., has named

Youngho Woo
 COO.


Per Bringle
 has joined
Eton Systems AB, Sweden, as North American area manager.

Duluth, Ga.-based
Delta Apparel Inc. has elected

Elizabeth J. Gatewood, Ph.D.
 , to its Board of Directors.

Kellwood Co., St. Louis, has promoted

Jesse C. P. Zee
 to chairman, and

Gerald “Gerry” Rhoads
 to managing director, Smart Shirts Ltd. The company has named

Stephen R. Beluk Jr.
 vice president, internal audit, Kellwood; and

Michael T. Gilson
 senior vice president, finance, Smart Shirts.


Prof. Dr. h. c. Josef Kurz
 , deputy director of the
Hohenstein Institutes, Germany, and head of its Global Strategies Division,
recently celebrated 50 years at the institutes.


prillman

Karl Mayer Textilmaschinenfabrik GmbH, Germany, has appointed

Dr. Martin Prillman
 managing director.

Unifi To Close Dillon Plant

Unifi Inc., Greensboro, N.C., plans to close its recently acquired Dillon, S.C., texturing plant
and consolidate operations at its Yadkinville, N.C., facility. The Dillon plant employs 355 people
and is equipped with 42 texturing machines. The move, expected to be complete by the end of July,
is expected to bring annual savings of some $5 million.

The decision follows a previous decision to close Unifis polyester dyeing plant in Mayodan,
N.C., and consolidate that operation at its Reidsville, N.C., polyester dyeing plant.

“Our largest facility in Yadkinville of over 800,000 square feet has both the footprint and
equipment to accommodate the volume currently run in South Carolina,” said Bill Lowe, COO and CFO.
“We continue to streamline our product mix and look to maximize our facility utilization rates to
lower manufacturing costs to compete in the marketplace.” He added that Unifi will move some of the
Dillon texturing machines into existing plants.

The company expects to add some 120 employees to its workforce at Yadkinville to handle the
increased production at that facility.


May/June 2007

More China Questions


T
 he still-unresolved China trade dispute is heating up again. Two recent examples:
Washingtons filing of two cases against Beijing at the World Trade Organization; and the imposition
of duties on two Chinese paper makers that allegedly have received substantial government
subsidies. If nothing else, the new moves can be regarded as a clear-cut signal to the Chinese that
significant remedial action is needed and quickly. It also is seen as an administration move to
placate the growing number of Congressional trade critics.

A look at the latest import numbers, especially in textiles and apparel, would seem to
justify a more aggressive approach. Thus, while overall US textile and apparel imports on a
square-meter-equivalents basis are up only 4 percent so far this year, gains from China continue to
go through the roof, gobbling up a bigger and bigger share of the US market.

Incoming shipments of textiles and apparel from China have jumped 28 percent vis-is
comparable year-earlier levels. And thats all on top of last years big double-digit jump.


Changes Shaping Up

What happens next While its hard to nail down the specifics, its clear that more new moves
are likely on the part of both the United States and China. More should become clearer in late May
when a delegation of Chinese officials, led by Vice Premier Wu Yi, arrives in Washington for more
talks. High on the agenda: US demand for further upward revaluation of the yuan, with the US trade
spokesman noting the absence of any really meaningful movement on this score over the past two
years.

To be sure, no one really knows how far the Chinese will move on the currency front. But,
they do seem a bit more willing to ease tensions in other ways most notably by purchasing more
US-made goods. Indeed, the Chinese now seem willing to buy billions of dollars more in US products,
including $500 million worth of cotton. Moreover, they recently opened their big trade fair to
foreign countries, allowing sellers from the United States and elsewhere to promote their goods for
import into China. And in still another move, they say theyre reducing tax rebates on outgoing
shipments of textiles and other products.

 
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Reappraising The Big Picture

Additional questions also are popping up as to how strong the US economy will be
this year and equally important, how this will impact domestic textile and apparel activity. There
also are growing questions as to how the housing slump and drop-off in capital spending will affect
2007 growth. True, this could mean some fractional downward revisions in overall gross domestic
product. But

TW
 does not think the slippage will be all that significant. Reason: Any declines in the
aforementioned weak sectors should be offset by a still-robust service sector an area that many
tend to forget now accounts for 84 percent of all payrolls.

Bottom line: Consumer demand should remain tolerably buoyant, with maybe even some pickup
possible by fall and winter. As such,

TW
 continues to project only minimal declines in overall textile and apparel demand for this
year not that different from last years performance.


A Longer Look Ahead

Go still further out into the future, and

TW
 is equally optimistic, expecting only continuing very modest declines in overall industry
activity. Recent Global Insight long-term forecasts tell the story. In basic textiles, analysts see
annual declines in real or physical volume terms averaging only 2.9 percent a year over the 2008-12
period. And in the more highly fabricated mill product sector, declines are expected to be even
smaller with annual slippage of only 1.9 percent.

On a less rosy note, industry employment totals over this five-year period are projected to
suffer somewhat larger losses. By 2012, Global Insight puts combined basic textile and textile mill
product employment at around 261,400 workers suggesting about a 5-percent annual average dip. Two
factors are behind this larger decline: the aforementioned modest slippage in mill activity; and
continuing productivity gains.


May/June 2007

Vietnam Import Monitoring Creates Dispute

Retailers and other importers of textiles and apparel have sharply criticized the US Department
of Commerce’s (DOC’s) program to monitor imports as having a chilling effect on trade, while
textile manufacturers say it can provide a meaningful way to deal with subsidized imports that
disrupt the market.

At a hearing conducted by the DOC, battle lines were sharply drawn as the government moves
forward with its commitment to monitor textile and apparel trade and self-initiate anti-dumping
cases if it is determined that imports are undercutting US production of similar products by
selling them at prices below the cost of production.

The Washington-based National Council of Textile Organizations (NCTO) said it is highly
supportive of the program. Testifying on behalf of NCTO, Vice President Mike Hubbard said: We
believe the new program can provide a meaningful remedy to address subsidized apparel imports from
Vietnam that result in prices that are often below the cost of production. He said since Vietnam is
a non-market economy with state-owned production enterprises, it can rapidly increase its
production of apparel and offer it “at prices clearly aimed at market domination.”

Hubbard said information gained during the discussion of Vietnam’s accession to the World Trade
Organization showed that Vietnam subsidizes its textile and apparel sector in a number of ways,
including export subsidies, wage controls, preferential interest rates and tax refunds. “The most
startling example of this investment largesse,” Hubbard said, is $891 million invested in Vinatex,
which is world’s 10th-largest apparel producer and wholly-owned by the Vietnamese government.
Hubbard said the Vietnam government plans to invest another $1 billion in the company from 2006 to
2010. The textile lobbying association said it is highly unlikely, if not impossible, that Vietnam
could shift from such a centrally controlled and managed company to a market-based system in a
relatively short time. Hubbard concluded by saying because of Vietnam’s past record, “we believe
there is a distinct possibility that dumping will occur,” and the monitoring program is the best
way to address that problem.

On the other hand, Eric Autor, vice president and international trade council for the National
Retail Federation, Washington, said that even though the monitoring is just getting underway and
has shown no results, US retailers have sharply curtailed their orders for apparel from
Vietnam.

“Implementation of the monitoring program has had a chilling effect on apparel sourcing from
Vietnam,” Autor said. “Pending orders from Vietnam have plummeted. At least one prominent retailer
has ceased all orders from Vietnam, another has cut its orders by 80 percent, and many others have
cut their orders substantially. “

Autor said trade remedy investigations inject a high degree of unpredictability into sourcing
decisions and that the mere threat that an anti-dumping investigation could be undertaken on a wide
range of apparel products is “a serious matter and one which is forcing apparel retailers to shift
their sourcing elsewhere.” He urged the Commerce Department to narrow the scope of its monitoring
program to only those products made in the United States where there is clear evidence that imports
from Vietnam are causing injury.

The Arlington, Va.-based American Apparel and Footwear Association (AAFA) urged the DOC to
refrain from initiating anti-dumping actions against Vietnam unless the action is “warranted by a
specific set of facts and supported by US apparel manufacturers.” AAFA’s Executive Vice President
Stephen Lamar said the DOC should make it clear that self-initiation of anti-dumping investigations
would occur only if the department determines there is a dumping of a particular product, US
domestic production of that same product is being harmed by that dumping, and US domestic producers
of the same product support the initiation of an investigation.

Lamar said a monitoring website established by the DOC to track Vietnamese trade is “confusing”
in that it lists categories of products being monitored “without any context, discussion or
methodology.”

With respect to the program itself, Lamar said: “We believe there is little support or interest
in this monitoring program among domestic apparel producers because much of what is produced
domestically does not compete against Vietnamese imports.”


May/June 2007

Textile Manufacturers To Seek Countervailing Duties Against Chinese Imports

US textile manufacturers plan to take
advantage of a new government policy to consider using countervailing duties (CVDs) against
illegally subsidized goods from nonmarket economies. At the annual meeting of the National Council
of Textile Organizations (NCTO) in Washington April 24, NCTO Chairman Smyth McKissick, Alice
Manufacturing Co., told Textile World his organization “definitely” sees the CVD policy as another
tool in the industry’s efforts to combat a flood of imports from China.

In a major reversal of policy, the US Department of Commerce on March 30 announced that it
would, for the first time, use the CVD anti-subsidy law against China. While the case involves a
manufacturer of coated paper products, David Spooner, assistant secretary of commerce for import
administration, said applications covering imports of other commodities could be considered. US
antidumping and countervailing duty laws are recognized by the World Trade Organization.

Although CVD cases generally are complicated and time-consuming, NCTO believes they are
worth pursuing because it believes Chinese textile and apparel products are heavily subsidized and
are costing the US industry thousands of jobs. While anti-dumping laws provide another avenue of
relief, the government has held that US textile manufacturers have no standing in cases involving
apparel. Since the US apparel industry has shrunk so much, there has been very little activity on
that front.

In an address to the NCTO members attending the annual meeting, McKissick put high priority
on legislation that would levy punitive tariffs on goods from countries that manipulate their
currencies to gain advantage in international trade. NCTO is pushing the Fair Currency Act of 2007
that would define “exchange rate manipulation” as a prohibited export subsidy and permit use of the
CVD law to seek relief from injury caused by imports that benefit from the subsidy offsetting any
advantage.

In citing “progress” in dealing with trade issues, McKissick told NCTO members that free
trade agreements (FTAs) recently negotiated with Peru, Colombia and Panama have the “very best rule
of origin we have ever had.” He said they have a yarn-forward rule with no tariff preference level
that would allow non-participating countries to benefit from the agreements, and they call for
strong Customs enforcement. He also gave general praise to the South Korea FTA, although details
have not yet been released. One area of possible concern is that 61 percent of textile and apparel
tariffs will be eliminated immediately upon enactment of the agreement, and textile manufacturers
are uneasy about which products will by duty free and which ones will continue to have tariff
protection.

McKissick also was bullish on the FTA with Vietnam because of the government’s monitoring
program and a commitment to self-initiate anti-dumping actions if it determined that Vietnam
textiles or apparel are being dumped on the US market at unfair prices.

As the meeting concluded, the textile executives headed for Capitol Hill to shore up their
relations with members of Congress. McKissick said this is a continuation of a number of
activities, which underscore the fact that “our industry is being heard, and we are able to
influence policies that help shape our industry and the ways we do business.”


April 24, 2007

Dow Reichhold Selects Name For New Technology

Research Triangle Park, N.C.-based
Dow Reichhold Specialty Latex LLC has chosen PolySâf™ Antimicrobial Polymers as the name for its
technology platform, used to produce emulsion polymers offering a variety of tailor-made
antimicrobial functionalities.

“The PolySâf name references the tunable polymer platform, the sustainable antimicrobial
feature through the use of the acronym SAF, and the safety component provided by antimicrobial
protection in general,” said Douglas Johnson, global marketing manager.

“Our technology includes polymers that have inherent antimicrobial properties,” Johnson
said. “In addition, we can provide an emulsion polymer that integrates commonly used active
ingredients into an end-use product.”


April 24, 2007

Lenzing Group Builds Viscose Fiber Plant In India

With India its most successful market
after China for viscose fiber, the Lenzing Group, Austria, has entered into a cooperation agreement
with the Modi Group to build a new viscose fiber plant near Mumbai, India. A preliminary investment
of US$200 million will cover the first phase of construction, which is expected to take two years,
with the first production scheduled for 2010-11.

The facility, located in an industrial park in Maharashtra State, will have first-phase
production of 80,000 tons of viscose fiber per year and will employ between 700 and 800 people.
Once completed, the new facility — Lenzing’s seventh production plant — will have more than doubled
the company’s total production capacity within 10 years.

Modi Fibers Ltd. will contribute the land and local experience to the joint project, while
Lenzing will own the majority share and bring its production and technical expertise to the
project.

“After the successful startup of our plant at Nanjing, China, this is the next logical step
of our expansion focusing on Asia,” said Thomas Fahnemann, chairman of Lenzing’s Management Board. “
It was above all the strong demand from Indian customers that facilitated our decision to produce
fibers locally in India.”

“We are happy to have found in Lenzing, the technological leader in viscose fiber
production, our long-term partner for the Indian textile and nonwovens industry,”said Satish Modi,
chairman, Modi Group.

A Lenzing branch office in India currently supports customers in that area, but the plant
will allow India-based companies to buy Lenzing Viscose® fiber without paying high import duties.
In addition, only one viscose supplier currently exists in the Indian fiber market, a situation
that hampers industry growth.

“With Lenzing, we expect a substantial improvement in the supply situation of the rapidly
expanding Indian textile and nonwovens industry with high-quality fibers,” Modi added. “The Indian
industry will greatly benefit from this project.”


April 24, 2007

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