Amacoil Unveils Spool Flange Sensing Options

Amacoil Inc., Aston, Pa., now offers reflective and non-reflective optical flange sensing systems
for use with Uhing traverse winding drives. The reflective version is used with spools that are
brightly colored or made of light-reflecting material. The non-reflective version may be used with
spools of any color or material. Both systems feature opto-sensors that detect the spool flanges
and signal a pneumatic or electronic switch to reverse the direction of the winding drive. The
systems enhance spooling accuracy and eliminate the need to adjust end stops when spools of
different widths are used. Amacoil stresses that with either system, spools must not be warped or
have damaged flanges.

June 2005

Textile Groups Come Down On Both Sides Of DR-CAFTA

While US textile lobbying organizations are unified over the issue of textile quotas and the threat
Chinese textile imports pose to the US industry, their positions differ when it comes to regional
free trade pacts such as the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA).

The agreement has the endorsement of a coalition of trade associations comprising the NCTO;
National Cotton Council (NCC), Memphis, Tenn.; American Fiber Manufacturers Association, Arlington,
Va.; American Textile Machinery Association, Falls Church, Va.; Carpet and Rug Institute, Dalton,
Ga.; and the Cary, N.C.-based Association of Nonwoven Fabrics Industry. The coalition of textile
manufacturers, fiber producers and suppliers to the US textile industry claims to represent more
than $100 billion in annual production and sales within the US textile sector.

On the other side of the trade divide stands another coalition that includes AMTAC; the
National Textile Association (NTA), Boston; UNITE HERE, New York City; and The Domestic
Manufacturers Committee of The Hosiery Association, Charlotte. This coalition claims to include the
nation’s two largest textile trade groups (AMTAC and NTA), as well as the largest textile and
apparel labor union, among other organizations.

NCTO, NCC, AMTAC and NTA also are members of GAFTT.

US textile exports to the DR-CAFTA region in 2004 totaled more than $5 billion in yarn,
fabric and component parts. The pro-DR-CAFTA coalition believes the pact will offer “new export
opportunities to every US producer interested in these markets.” It also hailed the Bush
administration’s commitment to amend provisions in the agreement regarding cumulation, trade
preference levels and the rule of origin for nonvisible pocketings and linings.

The anti-DR-CAFTA contingent calls the agreement “a job killer just like NAFTA [North
American Free Trade Agreement],” charging that it will lead to further outsourcing of US
manufacturing jobs. It notes US textile and apparel manufacturing employment has shrunk by 890,000
jobs or 57.2 percent since NAFTA went into effect in 1994, and that the value of US textile and
apparel shipments fell from $158 billion in 1995 to $114. billion in 2003.

June 2005

Safeguard Requests Back On Track

The US Committee for the Implementation of Textile Agreements (CITA), Washington, has imposed
safeguards on seven categories of US textile and apparel imports from China and reinstated the
public comment period for five others under consideration. The action follows a Federal Court of
Appeals stay of the Court of International Trade’s injunction last December that halted
consideration of safeguard petitions based on the threat of market disruption.

The safeguards were imposed on cotton and man-made fiber knit shirts and blouses, trousers,
underwear, and men’s and boys’ woven shirts; and combed cotton yarn. CITA’s action limits further
growth this year of Chinese exports of these products to 7.5 percent. CITA and China now must
consult to negotiate growth limits. If no agreement is reached, the safeguards will remain in
effect until the end of this year, and must be reconsidered each year until 2008
(See ”
China
Textile Safeguard: Process Effect,” December 2004).

US imports from China in all 12 categories have grown exponentially since quotas were removed
January 1, thereby significantly increasing the bases for applying the quotas.

June 2005

Astrup Launches DuraTouch™ Leather Alternative

The Astrup Co., Cleveland, reports its new DuraTouch™ interior upholstery fabric looks and feels
like genuine leather. The new fabric is made with 100-percent expanded polyurethane on a
100-percent rayon substrate, and is available in 42 colors. Upholstery applications include
hospitality, residential, contract, marine interiors and recreational vehicles.

June 2005

Business Steady And Solid


S
 pinners continue to report good and stable running conditions. At least two mill
executives mentioned running full, seven-days-a-week schedules at all their plants. Yarn supplies
remain tight, and some mills actually are turning away business.

“Running conditions right now are pretty good, but I’m starting to see a little slowdown,”
said a multisystem spinner. “I think we will start seeing the effects of some of the Asian imports.
Business in the third and fourth quarter to the degree that we see is still unknown. A lot of that
depends on the [China] safeguards.”

The outlook seems solid across most markets. Automotive looks positive, with greater poundage
projected for the second half of 2005. Medical, apparel and industrial markets all seem to be
running well. Soft spots include upholstery and socks. Upholstery is struggling because of
increased upholstered furniture and upholstery fabric imports. Hosiery also has import issues,
especially for low-end cotton socks.

“We still feel pretty bullish,” said an open-end (OE) spinner. “We are looking at running
strong through the 4th of July. Our shipments are exceeding our production, and our inventory has
dropped 35 percent. We have got some replenishing to do. I’ve got programs that go on out well into
the third quarter.”

Cotton prices are beginning to move upward after dipping a bit. Short supply has kept yarn
prices up during the dip.


DR-CAFTA Support

Spinners surveyed reported strong export business with Central America. A ring spinner said
exports account for more than one-third of his business, with more growth expected. An OE spinner
said his company’s export business is stronger than ever, and looks likely to continue.

“Our export business in Central America continues to grow, with significant potential,” said
a specialty ring spinner. “But growth requires us to better manage the obstacles of customer credit
and product lead time.”

Recently, the National Council of Textile Organizations (NCTO), Washington, decided to
support the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA). Most of the
spinners contacted this month seemed to agree with that decision.

“We’re supportive of CAFTA with the [NCTO] amendments concerning pocket linings, [trade
preference levels] and cumulation,” said an OE spinner. “The whole point was Washington wanted to
hear one voice coming out of the textile industry, but it’s becoming fragmented again,
unfortunately,”
(See “
Textile World News,”
TW, this issue).

“In my mind, there will have to be some type of agreement with the Central American
countries,” said a ring spinner. “If you talk to someone in California, they are dealing with
Central America. If you talk to someone in New York City, they are dealing with Central America.
Someone in your backyard is probably getting fabric or shipping yarn down there.”


Little Phase-Out Fallout So Far

So far, spinners are not seeing much impact from the textile quota phase-out.

“Since the first of the year, we’ve had one major customer that has gone out of business,”
said a ring spinner. “Is that directly related to the textile quotas? I’m not sure. As far as
volume is concerned, we’ve been very pleasantly surprised. I don’t know if it is a function of all
the spinning production that has been taken out over the years or just a situation where we’ve been
able to put together some good orders.”

Another spinner said he has not yet seen any impact from the discontinuation of quotas, but
still feels “it has to be out there.”


CITA Too Slow

Most spinners voiced little interest in the China safeguards, viewing them at best as stopgap
measures. The sluggish pace set by the Committee for the Implementation of Textile Agreements
(CITA) in moving ahead on considering safeguards seems to have undermined confidence in CITA’s
decision-making process
(See “
Textile World News,”
TW, this issue).

“It’s a short-term fix if we can get it,” said one spinner. “Maybe it has created a
little bit of doubt among retailers about whether they can source everything they might want to
from China. That might explain the current level of business.”


June 2005

PicoJet Demonstrates New Ink-Jet Printhead

After five months in development, PicoJet Inc., Hillsboro, Ore., successfully demonstrated its new
PJ-N256 drop-on-demand ink-jet printhead. Using patented, ultrasonic bonding technology, the
stainless steel printhead was shown to be able to simultaneously fire its 256 jets at 10,000 drops
per second, creating a high-resolution, 300 dots-per-inch image.

The PJ-N256 also features a metal ink channel that enables the printhead to jet a wide
variety of aggressive ink chemistries; and the elimination of the use of epoxy and piezo ceramic in
the ink channel, allowing the printhead to jet fluids reliably without nozzle clogging.

June 2005

European Union And China Agree To Limit Textile Imports

In order to short circuit what could have been a contentious, ongoing controversy over textile and
apparel imports, the European Union (EU) and China have reached an agreement that will limit
imports through 2008. The action came after the EU was threatening to follow the US governments
actions and impose unilateral quotas on textiles and apparel using the safeguard mechanism
contained in China’s World Trade Organization accession agreement. The new agreement covers 10
product categories and will limit annual growth to between 8 and 12.5 percent between now and the
end of 2007. The final year will be subject to a somewhat vague phase-out plan. Products covered by
the agreement are pullovers, mens trousers, blouses, T-shirts, dresses, brassieres, flax yarn,
cotton fabrics, bed linen and table/kitchen linen.

In announcing the agreement, the EU Commission said the removal of textile quotas last
January was an important prize for progressive trade liberalization, adding that free trade in
textiles will provide global competitive disciplines that will improve productivity and lower
consumer prices. It said the competitive prices are being driven by China, whose formidable
production and export capacity will quickly reinforce its status as one of the worlds largest
producers and exporters of textile and clothing products.

Managing this transition presents a challenge both for China and its trading partners, many
of whom have textile industries of their own, the Commission reported. European textile producers
face tough competition from China. European industry has a huge capacity for innovation and
adjustment, but a sudden, steep and sustained surge in Chinese textile exports could be highly
damaging.The Commission said the agreement allows importers and retailers to plan and purchase in
China under conditions of maximum predictability and minimum market disruption, factors that appeal
to US importers of textiles and clothing who have strongly opposed to this country’s use of the
safeguard mechanism to impose new quotas on Chinese imports. The commission also said the agreement
provides a window for adaptation for producers in developing countries whose textile exports to the
EU were being displaced by a surge in imports.

Shortly after the announcement was made, Chinese Vice-Premier Wu Ti praised the EU for
reaching the agreement and criticized the US government for placing unilateral quotas on imports
before a voluntary agreement could be reached.Cass Johnson, president of the National Council of
Textile Organizations, said the EU-China agreement could pave the way for a comprehensive agreement
with the US government along similar lines.

June 2005

NSC, Orlandi Form Alliance

France-based NSC Group and Italy-based Orlandi S.p.A. are exploring a possible merger between NSC
subsidiary N. Schlumberger S.A. and Orlandi subsidiary Finlane S.p.A., which includes Italy-based
SantAndrea Novara S.p.A. and Cognetex, and Germany-based Seydel Maschinenfabrik GmbH into a 50/50
joint venture. The two companies would continue to maintain their distinctive identities as
producers of machinery for the long-staple market, as well as their own values and brands, while
sharing support services to improve customer service.

June 2005

Q1 Results


I
 ndustry activity, despite the huge jump in Chinese imports, managed to hold its own
during the first quarter of 2005. Thus, the dollar volume of fabrics and other basic textile
shipments over this period remained pretty much unchanged from year-earlier levels. Sales of more
highly fabricated textile products like carpets and home furnishings were even able to eke out a
small dollar gain.

Another reassuring sign: Prices have continued to creep up, helping to offset continuing
man-made and cotton fiber cost increases. Basic mill and mill product quotes at last report were
running close to 2 percent and 4 percent, respectively, above year-earlier levels. Preliminary
first quarter profits, due out shortly, should still be in the black.

p14_Copy_11


Inevitable Declines

It would be unrealistic to expect a continuation of this not-too-bad performance. Overall
textile activity should head down from here on in as soaring imports finally begin to have a
significant impact on domestic activity.

Compared to February levels, dollar shipments started edging down in March. Preliminary April
figures from the Institute of Supply Management (a grass-roots purchasing group) indicate this
slippage is continuing into spring. Second-quarter textile performance is likely to be
disappointing, and certainly substantially under first-quarter levels.


Drop Off

The big question is, just how disappointing? The answer depends on how much of an optimist you
are. A few still feel the wave of Chinese imports should begin to subside. These people blame the
huge import surge on one-shot pent-up demand following the recent ending of global quotas — adding
that gains soon will begin to taper off.

Not surprisingly, Beijing concurs — and now says April already shows some signs of slowdown,
with even more deceleration anticipated in coming months. But plenty of analysts disagree. They
point to both burgeoning Chinese capacity and that country’s recent negative responses to US and
European criticisms.

Time will tell who’s correct. For now,

Textile World
 tends to agree with recent predictions made by Global Insight. A few months ago, this
economic forecasting firm began calling for a sizable decline — with 2005 basic mill and mill
product shipments falling 6 percent and 5 percent, respectively.


Beijing Moves

Just how accurate these estimates are will depend on what eventual compromises will be made by
the contesting parties. On the Beijing front, China is making changes in its tariff system, wherein
the government has raised duties on fast-growing export items like shirts and cotton pants. The
system would set different tariff ratios for different textile categories.

Another option: Chinese moves to reduce or eliminate its implicit and explicit export
subsidies. Then, there’s growing belief China eventually will allow its currency to move up
vis-à-vis the dollar — something that would tend to raise the price of its textile and apparel
exports. But the question is, how much upward revaluation? Probably nothing earthshaking — with
little chance of the 25-percent or higher revaluation most economists say is needed to really have
a meaningful impact. 


US Reaction

US moves to counter the Chinese threat also are hard to pinpoint. There could be more moves like
Washington’s recent imposition of new quotas on seven categories of textile and apparel imports for
China
(See “
Textile World News,”
TW, this issue). Such safeguard moves could last only until the beginning of
2008 — and during this period, China still would be able to boost its textile exports by 7.5
percent a year.

Then there’s the new congressional bill that would impose a 27.5-percent tariff on all
Chinese products entering the United States if China fails to raise the value of the yuan.

Going out longer-term, the pending Dominican Republic-Central American Free Trade Agreement
(DR-CAFTA) bill presumably would guarantee US mills a market for their goods by allowing apparel
produced in that region to enter the United States duty-free as long as products include a
substantial amount of US-made fabric and yarn.

June



 2005





 

New Carpet Design Features Now Available On Alpha 360

The Alpha 360 double carpet weaving machine from Germany-based Schonherr Textilmaschinenbau GmbH, a
member of the Stli Group, now is capable of producing high-pile carpets of wool, acrylic,
polypropylene or blended yarns in up to eight pile colors and with a pile height of up to 30
millimeters per carpet.

Suggested application areas include bedroom, bathroom and area rugs; long-pile shaggy rugs;
and imitation animal fur rugs; among others.The carpets are reversible; and can be produced with
2×4 pile, and with different designs on top and bottom.

June 2005

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