DHL Announces North America Trade Lane Initiative

DHL, Plantation, Fla., has created a
North America Trade Lane Initiative to expedite cross-border shipments for US, Canadian and Mexican
companies.

The program features enhanced DHL facilities, infrastructure and fleets, including new
international gateways and expanded border operating centers (BOCs). The BOCs now include under one
roof everything needed to expedite customers’ cross-border shipments including advanced technology
inspection equipment, fast-track customs clearance systems and specially trained staff.

The first five years of the new initiative will see DHL open several expanded BOCs to enable
customer shipping across the US-Canada and US-Mexico borders. Locations will include Juarez,
Matamoros, Nuevo Laredo, Reynosa and Tijuana, Mexico — with companion US locations just across the
border. The company also will expand its facilities in Canada.

Other features include additional bilingual customer service representatives; additional
representatives to assist customers with cross-border shipping solutions; and efficiently bundled
services such as Break Bulk Express, which enables customers to combine separate packages into a
large shipment to expedite customs clearance. DHL breaks the bundle shipment back into its
individual components and delivers them separately.

In addition, future improvements will include ground network and fleet enhancements,
additional North American flights, specialized call center operations and additional BOCs along
both borders.


April 10, 2007

Will New Trends Help Lift The Market?


T
 his is a month of transition for Yarn Market as

Textile World
 says goodbye and good luck to long-time contributor Alfred Dockery. Alfred’s
contributions to these pages have been significant over the years, and he will be sorely missed by
both the staff and readers of Textile World.

For the sake of continuity, it pleases me to be asked to rejoin

TW
 and be the shepherd of this column. I will endeavor to capably fill Alfred’s rather large
shoes and maintain the standards set by Al and his predecessors James Lemons, Clarence Rogers and
Karl Rudy.

As

TW
 readers know all too well, the past few decades have seen market conditions and
regulations emerge that have put US textiles at a competitive disadvantage with much of the rest of
the world. The focus today is on innovation and specialty products — on finding that particular
niche that a company can fill better, faster, and more efficiently than anyone else.

In the future, Yarn Market will begin to look at some of the new things spinners are doing
not only to remain competitive in a difficult world market, but also to pave the way for new
avenues of growth, product development and customer acquisition. In addition, of course, this
column will continue to report on things — such as news and rumor within the traditional spinning
industry, yarn prices and trends, operating conditions and scheduling—- that have made this one of

TW
 ’s most popular columns.

As for new trends sweeping the industry, one of note is the current focus by retailers on “
value added.” According to one noted ring spinner, apparel retailers are constantly searching for
that value-added attachment. “The more popular approaches have been performance fabrics, and even
more recently, the ‘green concept.’” “Green,” of course, is the consumer craze today and refers to
yarn manufactured from organic cotton and recyclable fibers.

Interestingly enough, this green manufacturing is not anything new to the industry. As is
often the case, product development sometimes runs well ahead of consumer preferences. Almost 15
years ago, Martin Color-Fi introduced a product called NatureTex®, a line of post-consumer recycled
polypropylene fibers targeted for automotive, marine and recreational vehicle carpet. At the same
time, Wellman Industries had a similar product on the market.

Today, however, a more environmentally conscious consumer not only is more receptive to these
types of innovations, but also is demanding them.

And while the manufacturing of organic products may provide an opportunity for some, for
others, it’s like chasing the rainbow and looking for the pot of gold at the end.

“Manufacturing organic products may be great for a company like Parkdale that has the
resources to do it,” said one specialty ring spinner of heavy-count cotton. “But for a small
company like us, it may not be feasible. We’ve had a few inquiries from some of our customers, but
we’ve stayed away from it. We just can’t justify the cost. If you stay with US-certified organic,
which is what the customer wants, it can be very expensive.”

The same spinner points to studies recently released into the market that indicate a green
certification is more hype than benefit. “It’s not like the ’60s,” he said. “Cotton is no longer
the chemical-saturated commodity it used to be.”

Regardless of what value-added products are currently in demand, spinners are still not happy
with the state of the market so far this year. “I still sense a softness in the market,” said one
spinner. “When business is good, we run six days, eight hours a day. In normal business times, we
run five days, eight hours a day. Right now, we’re running just under a full five-day schedule. We
haven’t seen the sixth day in quite a while.”

Said another: “Our business has not reflected the demand that we expected, based upon the
same period last year. There have been brief periods during the first quarter that yielded positive
signs; however, there has been no sustained market enthusiasm.”

As for what the future holds, it’s a mixed bag. “Right now, I have to say I see a few more
negatives than positives in the market,” said the specialty ring spinner. “I’ve been hitting the
road — down to Mexico, for example — trying to make some things happen. But I haven’t found
anything that makes me smile. My biggest problem is that I have a dwindling customer base. The
companies I have traditionally sold to — they’re almost all gone.”

Another spinning executive, however, expressed guarded optimism: “Based upon a high level of
development and samples, as well as customer expectations, we remain optimistic that the delayed
business development this quarter will offer opportunity for improved order backlog into the third
quarter.”

As far as prices are concerned, things seem to be pretty much status quo at the moment. “
Everything is pretty much stable right now,” said one Georgia spinner. “Our costs are pretty much
stable. Our suppliers are pretty stable. Because of market conditions, we don’t give raises
anymore. The only thing that is really hurting us is the cost of power — it’s gone sky high.”

With the market still somewhat flat, it’s safe to say the next quarter will be one in which
many spinners will continue to mark time and position themselves for what they hope will be
increased business activity in the last half of the year. Regardless of market conditions, as
evidenced by the current clamoring by retailers for organic products, there are still opportunities
out there for the aggressive and innovative spinner to make some noise.


April 10, 2007

Another Look At Demand


R
 ecent Wall Street volatility is raising new questions about consumer spending — on
apparel as well as other products — over the next three to six months.

TW
 ’s feeling is that fears have been overblown and stock investors have been way too
bearish about the near-term outlook. Reasons: An imposing array of still-strong business
indicators, including the continuing absence of inflationary pressures, Fed statements that
interest rates will remain low, little or no unemployment — almost anybody who has skills can find
a job — and still-rising real or inflation-adjusted pay levels. Add in basically high consumer
confidence, and all the above would seem to suggest that the recent 3- to 4-percent annual rate of
increase in consumer spending will persist.

Moreover, with sales of autos and other big-ticket items slowing down a bit, families should
have a little more available for purchases of apparel and related items. And that’s pretty much
what seems to be happening. Thus, factory shipments of both basic textiles and more highly
fabricated mill products actually rose in January — the latest month for which data are available.
Even more encouraging, the Institute of Supply Management’s March 1 report finds new orders for
both textiles and apparel inched up. Other things being equal, this grass-roots survey of
purchasing executives would seem to suggest the industry’s activity will hold up tolerably well
through spring. One final positive note: Textile inventories remain low, making it increasingly
likely that any new orders will quickly be translated into new production and shipments. True, when
the dust finally settles on 2007, textile activity might still be down a bit. But as of now,

TW
 remains cautiously optimistic, holding onto our beginning-of-year forecast for only about
2-percent overall slippage.


Few Real Cost Concerns
Another upbeat sign is the absence of any strong upward cost pressures. This is
clearly true in the case of fibers, as supplies remain more than ample. Cotton stocks, for example,
at the end of the 2006-07 year are projected to be near 8.8 million bales up substantially from the
previous years 8.3 million level. More significantly, the US Department of Agriculture puts this
years stocks-to-use ratio at 46 percent the highest such reading in 18 years.

Clearly, this is not the scenario for any significant near-term price advance. Best bet: Spot
cotton tags will hold in the upper 40 to lower 50-cents-per-pound range pretty much where they were
a year ago. And the picture for wool is pretty much the same, with prices expected to back and fill
around current levels. Nor do wage costs seem to be presenting any worries. As pointed out last
month, the very modest 2-percent increase in pay rates over the past year have been pretty much
offset by still-rising productivity to the extent that unit labor costs remain pretty much
unchanged. To be sure, some other costs most notably transportation and overhead have continued to
inch ahead. But increases here wont be nearly enough to make for any meaningful increase in overall
textile production costs. Finally, add in the fact that textile prices have been steady to slightly
firmer over recent months, and earlier fears of an industry-wide cost/price squeeze have all but
disappeared.

April07bfchart


Profits Hold Their Own
Throwing all the above into the computer hopper suggests the industry’s
bottom-line prognosis isn’t all that bad.

TW
 ’s forecasts call for another tolerably good year on both the earnings and profit margin
fronts. So do new projections by economic forecasting firm Global Insight. Economists at that
group, using their own definition of profits — revenues less material and labor costs — also see
industry earnings holding up. In the case of basic mill items, the Global Insight number is put at
$5 billion for 2007 — unchanged from this past year. Moreover, the firm’s analysts even see some
small gain for the following year. Their profit numbers for more highly fabricated textile products
are also upbeat. This year’s $10.9 billion estimate is only fractionally under that of 2006. And
even this small decline is expected to be recouped the following year. Finally, even the United
States’ hard-hit apparel industry should do okay. Indeed, Global Insight actually anticipates some
improvement for the current year, with the profits number moving up close to 9 percent from $10.6
billion in 2006 to $11.6 billion this year. In short, the multifaceted US textile/apparel complex
continues to do a lot better than many had anticipated.


April 10, 2007

Lenzing Opens Second Viscose Fiber Facility In Asia

Austria-based Lenzing AG has opened
its second viscose fiber production plant in Asia — its sixth site worldwide.

Launched with an investment of 65 million euros (US$87.3 million), Lenzing (Nanjing) Fibers
Co. Ltd., China, is a joint venture with China-based Nanjing Chemical Fibre Co. Ltd., which holds
30 percent of the new facility’s shares. Lenzing holds the remaining 70 percent.

Lenzing (Nanjing) has a production capacity of 60,000 tons of viscose fiber per year,
increasing Lenzing’s total capacity to 560,000 tons annually. Expansion is expected to occur as the
market demands. The plant currently employs 540 associates.


April 10, 2007

Ten Cate Expands Artificial Grass Activities With Mattex Acquisition

The Netherlands-based Royal Ten Cate
has completed its acquisition of the United Arab Emirates-based Mattex Leisure Industries for $178
million.

Mattex, a manufacturer of artificial grass fibers, will be incorporated into TenCate Thiolon
Middle East LLC, a new company that will be wholly integrated into Royal Ten Cate’s Grass Group.

The company expects the new business to make a strong contribution to its net profit as a
result of TenCate Thiolon’s low cost base and favorable local tax regulation.


April 10, 2007

Megtec Unveils Process Heat Recovery System

Megtec Systems, De Pere, Wis.,
reports its new Process Heat Recovery System reduces operating expenses by capturing waste heat
generated by process dryers, ovens and air pollution control systems to heat areas of a plant or
process.

Compatible with existing or new product lines, the easy-to-install system delivers heated or
cooling air according to ambient conditions. The system also features automatic heating or cooling
in response to preset conditions. Other features include: simple interface with existing building
climate controls; automatic interface with oxidizer or other heat source; prevention of
condensation formation from the regulated air stream; and automatic system volume modulation for
maximized energy recovery.


April 10, 2007

Quality Fabric Of The Month: Wool Is The New Cool

Cocona™, TrapTek LLC’s patented innovative technology that incorporates activated carbon derived from recycled coconut shells into fibers and yarns, has received accolades as a natural, sustainable technology that provides evaporative cooling and moisture management, and traps odors and ultraviolet (UV) rays within the activated carbon’s pore structure. The technology was developed in 2002 by Gregory W. Haggquist, Ph.D. — the Longmont, Colo.-based company’s founder — and made its consumer market debut in 2006 in knitted cycling apparel developed by United Knitting, Cleveland, Tenn., and Bethel, Conn.-based Cannondale Bicycle Corp.

Last year, Burlington WorldWide (BWW), a business unit of Greensboro, N.C.-based International Textile Group Inc., received exclusive rights to develop, license and market woven fabrics using Cocona technology, first offering a line of man-made fiber fabrics primarily for activewear, and then adding cotton blends and entering more mainstream markets. Just recently, it added a collection of wool-blend fabrics to its Cocona line, which now includes about 20 man-made, 15 cotton and six to 10 wool styles.

According to Nelson Bebo, vice president of Burlington Labs, BWW’s research and development division, BWW, with its global reach, has been working with TrapTek for 18 months to two years, and Burlington Labs was instrumental in bringing the Cocona technology into commercial yarn and fabric markets.

“TrapTek came up with some pretty interesting intellectual property (IP), but it was just a small IP company and needed help in commercializing the technology,” Bebo said.

qfom_Copy_5

The nanoscale pore structure of activated coconut carbon used in Cocona adsorbs moisture, odors
and UV rays, which are then released during laundering using a scent-free detergent and dyeing
using a heat source.


The Cocona Story

The Cocona technology imbedsactivated carbon from coconut shells into polyester or nylon polymers. The coconut shells, recycled waste from the food industry, are burned at 300°C followed by a 1,000°C steam-activation process. The activated carbon thus produced is imported by suppliers to water and air filtration, wastewater treatment, and other such industries. The microscopic, ultrafine particles that are too small for those applications are just what TrapTek needs to incorporate into its fiber and yarn.

“Not only are we using a green material, but we’re recycling what would have been thrown into landfills,” said Jonathan Erb, a principal at TrapTek. “This is encapsulated to provide a durable surface that allows the activated carbon to go through the very rigorous processing of polyester or nylon fibers and survive that process. The protective coating actually comes off during the course of fiber extrusion, and that releases activated carbon to be very much a part of that fiber.”

According to Erb, the coconut shell’s hardness, created by the nanometer-scale pore structure, gives it an advantage over softer activated carbon materials, which have fewer and bigger pores. The coconut pore structure is very complex, and the size of the pores is very even, he said. These pores adsorb moisture, odors and UV rays and through the exothermic adsorption process cause moisture to evaporate quickly. TrapTek says activated carbon from coconut shells
exhibits a greater exothermic reaction than any other known substance, and garments containing Cocona activated carbon show 45-percent greater wickability and significantly higher drying rates than garments offering conventional moisture-management technologies.

Cocona fabrics and garments are rejuvenated and trapped odors removed by laundering using scent-free detergents and drying using a heat source and no dryer sheets. Bebo said 60 to 70 percent of odors are removed during washing, and the heated drying causes the remaining odors to vibrate and move out of the pores.

Erb said most alternative moisture management fabric treatments are topical chemical applications, “whereas ours is integral to the fiber, which can be combined very nicely with other fibers such as man-made, wool or cotton to give new attributes to those fabrics.”

In blends, the ratio of Cocona to other fibers is based increasingly on end-use profiles, Bebo said. “For knit socks, you might want more Cocona than for everyday apparel to get the full benefits of the technology as it relates to odor control. In most applications, the percentage of Cocona is based on fabric weight, and 40 percent tends to be ideal for the types and weights of fabrics BWW does. As a fabric goes up in weight, the percentage could go down so the weight stays
the same,” he explained.

CoconaWool
Burlington WorldWide’s Cocona Wool fabrics are offered in a range of weights and constructions
suitable for military and service uniforms, business suits, dress apparel and everyday wear.

 


BWW’s Cocona Wool 

Bebo noted the Cocona technology, combined with the sustainability movement, makes it a natural especially for better brands participating in the activewear market, but it also has moved into mainstream, everyday apparel. He said BWW offers its man-made and cotton-blend Cocona fabrics in both of those markets.

The new wool fabrics, offered in a range of weights and constructions, are targeted to military and service uniform sectors, as well as for business suits, other dress apparel and everyday wear — and even possibly “as an item in a golf collection,” Bebo suggested. Some also offer a bit of stretch.

“There’s been lot of innovation lately in wool, whether it be wrinkle-free, washable,
stain-repellent — as with BWW’s new Invisible Barrier™ technology — or whatever,” Bebo said. “ Everything is focusing on the technology to drive easier care, better performance. With wool, for example, take the cool suit: How do you make a wool suit more comfortable? You can take Cocona yarn, blend it with wool, and get performance benefits including exceptional moisture wicking and evaporation to add comfort — plus you have the sustainability story.”

For more information about Cocona, contact Jonathan Erb (720) 652-9726, Ext. 105, jon@traptek.com. For more information about BWW’s Cocona fabrics, contact Nelson Bebo (212) 621-4046, nelson.bebo@burlington.com.



April 10, 2007

Congressmen Seek Aid For Import-Displaced Workers

US Reps. Robin Hayes, R-N.C., and Mike McIntyre, D-N.C., have introduced legislation that would
expand government assistance for textile, apparel and other workers who lose their jobs as a result
of import competition. While retraining and other assistance have been available to workers under
the Trade Adjustment Assistance Act of 1974, the congressmen feel that program is no longer
adequate in view of the burgeoning job losses resulting from trade globalization.

In introducing the Trade Adjustment Assistance Reform Act, Hayes said: “The Trade Adjustment
Assistance (TAA) Act is a good program. I worked hard to expand this program and make it better in
the past, but we must make additional changes to help textile and apparel workers in this
increasingly competitive global marketplace. While it is good that these workers are going to get
extended unemployment benefits, we all know that an unemployment check is no substitute for a
paycheck. When workers are displaced, we want to give them the skills to successfully re-enter the
workforce.”

The legislation would provide automatic eligibility for TAA benefits for textile and apparel
workers. Currently, the Department of Labor rules on each TAA application in 40 days; increases the
Health Coverage Tax Credit from 65 percent to 80 percent; simplifies the health tax credit
application process; and increases TAA funding authorization from $220 million to $440 million.

Hayes said his legislation eliminates considerable red tape and will serve to get job
training benefits to the unemployed faster than ever before. He says it also removes obstacles that
have prevented some workers from receiving TAA benefits.

The bill has nine initial co-sponsors — Reps. G.K. Butterfield, D-N.C., Bob Etheridge,
D-N.C., David Price, D-N.C., Howard Coble, R-N.C., Sue Myrick, R-N.C., Patrick McHenry, R-N.C.,
Heath Shuler, D-N.C., Melvin A. Watt, D-N.C., and Brad Miller, D-N.C.


April l3, 2007

Crown Crafts To Sell Churchill Weavers Assets

Crown Crafts Inc. — a Gonzales,
Louisiana-based distributor of infant bedding, bibs and bath items — has announced it will sell the
Churchill Weavers name; intellectual property; yarn inventory; looms; weaving, sewing and laundry
equipment; and domain name and website to Wilford Morris, owner of Lafayette, Ind.-based Walcot
Weavers, for $275,000. Walcot Weavers manufactures hand-woven baby blankets, throws and window
blinds.

“We are very pleased that we were able to purchase the Churchill brand, which will be
combined with Three Weavers and Grace Richey Clarke under the Walcot Weavers umbrella,” said
Wilford Morris. “We are excited to continue the long heritage of Churchill Weavers.”

A small share of Churchill Weavers archives and antiquities, as well as property in Berea,
Ky., were sold to another individual for $110,000.

These sales are in addition to the previous sale earlier this year of a large share of
Churchill Weavers’ finished goods inventory. Crown Crafts has received orders for the remainder of
the finished goods, with all Churchill Weavers products expected to be shipped by the end of this
month.


April 3, 2007

Avery Dennison To Acquire Paxar

The Boards of Directors of Pasadena,
Calif.-based Avery Dennison Corp. — a developer and manufacturer of pressure-sensitive labeling
materials; office products; and retail tag, ticketing and branding systems — and White Plains,
N.Y.-based Paxar Corp. — a developer of identification solutions to the apparel and retail industry
— have approved an agreement whereby Avery Dennison will acquire all outstanding shares of Paxar
for $30.50 a share in a cash transaction valued at $1.34 billion. The transaction is expected to
close by the end of 2007.

“Combining with Avery Dennison provides substantial benefits to our customers while
delivering compelling value to Paxar shareholders,” said Rob van der Merwe, chairman, president and
CEO, Paxar Corp. “In particular, the broader capabilities of the combined company will better meet
customer demands for improved quality, product innovation and speed of delivery.”

Customer benefits also include the combined companies’ ability to better serve customers in
Europe, Latin America, Asia and the Middle East due to complementary geographic territories.

Avery Dennison and Paxar report they will develop an integration plan with the goal of
retaining systems and people from both companies, although overlapping positions will be
reduced.


April 3, 2007

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