Textiles: Challenging Times Yield Opportunity


T
 he concept that tough times breed opportunity is true. In the midst of trying to survive,
making tough choices and dramatically changing your company, opportunity subtly avails itself.

In a marathon, running with the pack is comfortable – the pace is set, there is strategic
positioning in play, but no real change happens until a major physical challenge occurs. When the
pack hits the hill – sometimes known as the wall – all of a sudden, individuals get on the move.
The hill will claim its victims. Some will fall back and regroup, some will pull forward, and still
others will exit the race.

This is no time to be all hearts and flowers about US textiles. Global textile companies are
facing incredibly difficult business decisions. Those decisions are affecting the opportunity
landscape for those companies that can maintain during this period.

It might seem odd to suggest that this is a time of opportunity, but it truly is for those
companies positioned for a long view – yes, that might as well read companies that are
well-capitalized.

Take the example of a really interesting deal between Lubbock, Texas-based Plains Cotton
Cooperative Association (PCCA) and Guatemala-based Koramsa Corp. to establish a new company,

Denimatrix LP.

Koramsa, under the leadership of its well-known and revered President Carlos Arias,
developed a strong reputation for innovation and fashion in the jeans-manufacturing sector. The
recent economic environment took its toll on the company, but no one ever doubted the skill and
capability of the company or Arias.

Enter PCCA – and its American Cotton Growers (ACG) denim plant. PCCA has been a major denim
player for years and controls its process from cotton field through finished denim.

Why not extend that reach through the supply chain? You bet.

Hence, Denimatrix LP was established with PCCA’s purchase of key assets of Koramsa. PCCA
President and CEO Wally Darneille announced that Koramsa’s management team will stay in place, and
PCCA will keep producing denim at its Littlefield, Texas, plant.

It’s been reported that Denimatrix expects to offer retailers a 60- to 90-day advantage over
Asian and Middle Eastern supply chains and will be the first fully integrated vertical supply chain
in the Western Hemisphere – from cotton grown in Texas, to jeans manufactured and finished in
Guatemala City.

Arias announced he has orders in hand from two major brands and expects first units to go
out the door in early May.

Difficult times, yes – but if you’ve ever met or worked with the people associated with PCCA
or Koramsa, you have to cheer the gutsiness of this move. It gets back to collaboration,
partnership and innovation – only time will tell.

March/April 2009

Freudenberg Politex Opens Energy Cogeneration Plant

Italy-based Freudenberg Politex S.r.l. – a producer of staple and spunbonded polyester nonwovens
used in a variety of applications from roofing to garments, and a member of Germany-based
Freudenberg Group – recently inaugurated a cogeneration energy plant at its headquarters in
Novedrate. The plant, which generates 5 megawatts (mW) of electrical power and 4 mW of thermal
energy, reduces the environmental impact of the facility and makes it eligible for white
certificates of energy efficiency.

According to Freudenberg Politex, the plant is highly efficient and offers savings on
combustion and a reduction in carbon dioxide emissions of approximately 45 percent, or 14,000 tons
per year, when compared to traditional sources.

“The cost of utilities has risen constantly over the years and environmental protection has
assumed a much more strategic importance for industries,” said Dr. Riccardo Sollini, president and
CEO, Freudenberg Politex. “This is why the decision was made to install a cogeneration plant in
Italy, where the cost of energy particularly affects our business.”

March/April 2009

CPSC Issues Procedures For Seeking Exemption From Lead In Children’s Products Regulation

The Consumer Product Safety Commission (CPSC) has published its procedures for considering requests
for exemption from its regulation covering lead content in children’s products. Because textile
manufacturers contend their products are inherently lead-free, they may seek exemption from the
testing and certification rules under those procedures. In an announcement in the March 11 Federal
Register (74 FR  10475), the CPSC lays out details of how a request may be made.

On February 10, the CPSC issued a ruling prohibiting lead content in excess of 600 parts per
million in products used by children under 12 years of age. In commenting on the rule, US textile
and apparel manufacturers presented considerable evidence demonstrating that textiles do not
contain lead. The March 11 notice said the commission is issuing a “final rule for requests for the
commission to determine that a commodity or class of materials or a specific material does not
exceed lead limits.”



March 17, 2009

JS Humidifiers Introduces New Spray Humidifier

The Mistifier Plus is a new wall-mounted spray humidifier introduced recently by England-based JS
Humidifiers Plc – a global company that offers advice, design, supply, installation and maintenance
of specialist textile humidification systems.

JS Humidifiers reports the humidifier is suitable for small processing areas measuring up to
1,000 cubic meters. Once it is mounted on the wall using stainless-steel brackets and connected to
a water supply and drain, directional outlets on the top of the humidifier spray a rapidly
evaporating fine mist of water into the air to control humidity. The unit can be operated in a
simple on/off manner or a humidistat can be used to maintain a set humidity. According to the
company, the unit features low-energy spinning disk technology that consumes 230 watts per hour
while spraying up to 6.5 liters of water.

The humidifier was designed to be easy to maintain and hygienic, and includes such features
as a purge function and a siphon drain, which forces fresh water through the system when the power
is connected or disconnected; an auto drain system, which flushes the system every four hours when
it is not in use to eliminate the possibility of stagnant water developing in the system; an
anti-scale cartridge on the incoming water supply to reduce cleaning and maintenance; and a silver
ion dosing system to effectively manage more than 650 types of microbes.

March 17, 2009

Dow Announces Price Increases For Acrylates

Effective April 1, or as contracts allow, The Dow Chemical Co., Midland, Mich., will raise the
prices of glacial acrylic acid, butyl acrylate, ethyl acrylate, methyl acrylate and 2-ethylhexyl
acrylate — also known as acrylic monomers or acrylates — by 85 euros per metric ton in Europe, and
by $110 per metric ton in the Middle East/Africa, Latin America and Asia Pacific. The company cited
continuing inflation of raw material costs in announcing the increase.

March 17, 2009

INDA Offers Free Nonwovens Video, Glossary

The Association of the Nonwoven Fabrics Industry (INDA), Cary, N.C., is offering at no charge via
its website two educational resources to nonwovens companies and their customers.

“Nonwovens! What Are They?” is an eight-minute video covering nonwovens basics including
manufacturing process such as airlaid, drylaid, wetlaid, needlepunch, spunlace/hydroentangled,
spunbond and meltblown; as well as end-use applications including aerospace, apparel, automotives,
construction, electronics, filtration, geotextiles, healthcare, home furnishings, hygiene,
protective apparel and wipes.

The 69-page INDA Nonwovens Glossary is an easy-to-understand, comprehensive dictionary
containing definitions and illustrations of nonwovens technologies.

“Nonwovens reach into so many applications and end-uses. We want to make our educational
resources available to people in other industries who will benefit from our products,” said Rory
Holmes, president, INDA. “In addition, this video and the Nonwovens Glossary are an invaluable
resource for companies within our business to educate their own employees.”

March 17, 2009

Radici Yarn Receives UNI EN ISO 14001:2004 Environmental Certification

Italy-based Radici Yarn SpA – a manufacturer of nylon 6 and 6,6 partially-oriented yarn (POY),
fully-oriented yarn (FOY) and fully-drawn yarn (FDY); and part of RadiciGroup’s Fibres business –
has achieved UNI EN ISO 14001:2004 certification for the environmental management system at its
Villa d’Ogna and Pistoia manufacturing facilities.

Milan-based Certitex S.r.l. – a third-party certification organization for the textile and
apparel industry – awarded certification to the plants after assessing the processes of
polymerization, POY, FOY and staple fiber spinning and masterbatch production at the Villa d’Ogna
facility and the 6,6 POY spinning process at the Pistoia facility. Certitex also verified the
sorting, packaging and shipping processes at both sites.

“We want to make a tangible contribution to the safeguarding and improvement of our
environment and the use of its natural resources, while ensuring the total sustainability of the
Group’s manufacturing activities,” said Oscar Novali, managing director, Radici Yarn. “We are
committed to environmental protection and pollution prevention and they are fundamental components
of our business management system.”

March 17, 2009

Members Of Congress Seek Sweeping Changes In Trade Policies

A high-powered group of 54 members of the House of Representatives has written to President Barack
Obama calling for new directions in international trade that would correct what the say are past
mistakes and open doors to new opportunities.

The letter was signed by six committee chairmen; 17 sub-committee chairmen and members of the
Democratic and Republican Caucuses; and the  Black Caucus, Hispanic Caucus, Progressive
Caucus, Populist Caucus and Blue Dog Coalition of conservative Democrats.

The congressmen are highly critical of what they say is considerable damage that past trade
and globalization policies have brought about, and they outline eight areas in which they believe
trade policies can do a better job of serving US workers, consumers, farmers and firms. They cover
trade with China, improving product safety, renegotiating the North America Free Trade Agreement
(NAFTA) and the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), the pending
Colombia, Panama and South Korea free trade agreements (FTAs) and a “transformed agenda” for the
Doha Round of trade negotiations.

With respect to China, they mention addressing the “pervasive China currency manipulation
problem” and the “immense” trade imbalance with China. They call for targets and deadlines for
addressing that issue, which they say has “serious economic and security implications.” They also
are opposed to the US-China Bilateral Investment Treaty negotiations launched by the Bush
administration.

The congressmen call for new import safety policies that will ensure that food and goods
coming from China and other countries meet US safety and inspection requirements as a condition for
entering the US market.

They want to see NAFTA and CAFTA-DR renegotiated following an “inclusive policy review” in
order to determine what trade pacts must and must not include. They also call for a reversal of the
Bush administration’s “unilateral declaration” that the United States will join in negotiation of a
Trans-Pacific Strategic Economic Partnership with Singapore, Chile, New Zealand, Brunei Darussalam,
Australia, Peru and Vietnam.

Claiming that the FTAs with Colombia, Panama and South Korea are “more of the same trade
agreement model promoted by the previous administration,” the congressmen expressed their
opposition to all three for different reasons: Colombia because of human rights abuses; Panama
because it provides a tax haven; and South Korea because of what they say are “lopsided auto
provisions” and problems with “major financial service-sector deregulation and liberalization
provisions that contradict global efforts to regulate that sector.”

The congressmen said they want the United States to follow a new path that can help the
nation face its considerable economic challenges.



March 10, 2009

Obama Trade Agenda Calls For Change

The office of the US Trade Representative (USTR) has sent its annual report to Congress. The report
includes an overview of President Barack Obama’s trade agenda calling for some significant changes
from President George W. Bush’s extensive free trade initiatives.

While the report is long on generalities and short on specifics, it does signal a different
approach to international  trade that places more emphasis on efforts to improve the standard
of living for American families and workers  both here and abroad, and to safeguard the
environment.

The report says “pressing economic conditions require the discipline to respond to immediate
problems while staying true to our long-term goals.” The president’s approach will be to promote
adherence to the rules-based international trading system at the World Trade Organization (WTO) in
order to promote economic stability, while at the same time introducing new concepts – including
increasing transparency and “promoting broader participation in the debate to help revitalize
economic growth and promote higher living standards at home and abroad.”

The president says he will seek an extension of the expiring Trade Promotion Authority, also
known as “fast track,” but he plans to work with Congress to develop authority with proper
restraints that will make it clear to the American people and Congress just how he plans to use the
authority. He plans to develop benchmarks to measure the effectiveness of future trade agreements.

The report says the administration is in the process of developing a plan of action
addressing pending agreements in consultation with Congress. That is a reference to the Colombian,
Panama and South Korean free trade agreements, negotiated by the Bush administration, that have run
into considerable resistance in Congress.

The Obama administration says it will “promptly but responsibly” address issues surrounding
those three agreements and also will work with Canada and Mexico to identify ways the North America
Free Trade Agreement can be improved without having an adverse effect on trade. The administration
says if new negotiating authority is needed, it will seek that from Congress.

The administration believes issues regarding trade with China need to be addressed. Noting
that China no longer is a new member of the WTO, the report says the United States and other WTO
members hold China “fully accountable as a mature member.” It says that despite some recent
progress, several issues continue to cause particular concern. These include such issues as
international property rights protections and industrial policies designed to give China an unfair
advantage in international trade. The Obama administration plans to continue concerted efforts to
ensure China fully implements its accession agreements and adheres to fundamental obligations.

While promising that the United States will continue “robust meetings and dialogues,” the
report says the United States will not hesitate to invoke the WTO’s dispute settlement mechanism,
and when US interests are being harmed by unfairly traded imports from China, the United States
will enforce its trade remedy laws.

In addition, the report makes the observation that under China’s accession to the WTO, any
WTO member can take action to prevent market disruption or threatened market disruption by Chinese
imports until 2013.

With respect to the WTO, the Obama administration remains committed to  and will take a
leadership role in working toward a successful Doha Round of trade liberalization negotiations that
will result in new market openings and an increased flow of global trade. In order for this to
happen, the report says, it will be necessary to correct imbalances in the current negotiations,
and it emphasizes that increased trade must not be at the expense of workers.

In order to soften the blow to import-impacted workers and companies here at home, the
administration plans to promote greater use of Trade Adjustment Assistance programs that, among
other things, provide opportunities for retaining of import-displaced workers.

The entire text of the report is available on the USTR’s website:
www.ustr.gov.

March 10, 2009

Zimmer Announces Sale Of TecTex Machines To EcoFibre

Spartanburg-based Zimmer Machinery Corp. has has announced the sale of three needlepunching
machines produced by Italy-based TecTex S.r.l. to geotextiles manufacturer EcoFibre S.r.l., Italy.

All three machines have a working width of 295 inches or 7,500 millimeters, with features
including: super-rigid mainframes that do not require central support feet; a no-friction device
that controls the needles’ axiality; super-lightweight aluminum needlebeams, supports and forks;
temperature sensors on all bearings; a pneumatic clamping system with ultra-rapid air exit on the
release; feeding and exit systems on rails; a cooling system for bearings that lowers noise and
improves cooling; and multiple motorization on the batt-feeding system to optimize web drafting.

March 10, 2009

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