Congressmen Seek Support For Textile Agenda

Leaders of the Congressional Textile
Caucus are circulating a letter to their colleagues seeking support for the textile industry’s
agenda. Their goal is to get enough signatures to put pressure on administration trade officials to
act favorably on key issues.

A letter to US Trade Representative Rob Portman underscores the economic importance of the
industry and expresses concern over what is being reported about the Doha Round of trade
liberalization talks and the accession of Vietnam to the World Trade Organization (WTO). The letter
says: “We believe that unless the US government takes specific steps, these talks will likely cause
large job losses in the US textile and apparel sector. We are committed to working with you to
ensure that the concerns of this industry, which contributes $75 billion through textile production
and $2.7 billion through apparel to our GNP [gross national product], and is the third largest
exporter of textile products in the world, are addressed at this critical juncture.”

The letter calls for sectoral textile negotiations in the Doha Round and “substantially
equivalent” concessions that would ensure fairer and more open opportunities for both the United
States and its trading partners. It expresses concern the current talks are framed in a fashion
that will produce an “uneven outcome.” The letter says sharp cuts in US textile tariffs will “
almost certainly dismantle our various preferential trading programs that are dependent on
zero-duty arrangements.”

With respect to Vietnam, the letter says: “Like China, Vietnam has a large and subsidized
textile sector that utilizes anti-free market principles to under-price producers here in the
United States and elsewhere. Just as with China, the United States must insist on a textile
safeguard system or an extension of the current quotas until these unfair subsidies are removed.”

The congressmen warn “failure to address these concerns will substantially impact our view
of the administration’s legislative trade agenda from this point forward.”

Although a tentative agreement has been reached between the United States and Vietnam,
domestic manufacturers believe they have opportunities to modify any final agreement. They are
seeking congressional support to get the agreement changed before it is finalized on a bilateral
basis, and it will be subject to multilateral negotiations in the WTO. This is likely to remain a
highly contentious issue for some time.


May 23, 2006

Maya Apparel Buys, Renovates Honduran Plant

City of Commerce, Calif.-based Maya
Apparel Group Inc., which acquired knitwear designer and apparel sourcer Indosheen’s assets last
year and now does business under the Indosheen name, has bought and begun renovating a
170,000-square-foot manufacturing facility in Honduras.

Calabasas, Calif.-based Buxbaum Group, which has a controlling interest in Maya Apparel,
expects the facility to produce 300,000 to 700,000 units a month once it is completely on-line.
Maya will contract additional volume to other Honduran plants. The renovation will add special
services, incentive programs, and amenities such as air conditioning and an on-site medical
facility for the plant’s 400 employees. A group of local professionals will oversee quality control
at Maya’s facility and the contract plants, and will coordinate international shipping as well as
potential changes resulting from international commerce laws.

“Ownership of this facility will allow us to gain a greater degree of control over
production in order to ensure on-time delivery, as well as provide a level of quality that will
meet the most stringent criteria, including those of major retailers like Target, Wal-Mart and
Federated Department Stores,” said David Gren, president, Maya Apparel.

Additionally, the plant purchase and renovation are part of Buxbaum Group’s planned
turnaround of Indosheen, which previously had a structure that was not capable of handling the
manufacturer’s rapid growth, according to Gren.

“To take the company to the next level, we infused Maya with capital, hired additional
customer service personnel, and dramatically changed the operations and production procedures of
the business,” said Paul Buxbaum, chairman and CEO, Buxbaum Group.

“Until Indosheen’s infrastructure can be built, annual sales volume will be capped at
approximately $25 million,” Gren added. “After that, growth will proceed at a measured pace, with
sales expected to reach the $50 million to $60 million range in about three years.”


May 23, 2006

Dow Hikes Polyglycols, Surfactants Prices

Effective June 1 or as contracts
allow, The Dow Chemical Co., Midland, Mich., will increase North American list and off-list prices
on certain specialty chemicals polyglycols and surfactants products by 2 to 15 cents per pound.
According to the company, the increase is due to higher energy and hydrocarbon costs, as well as
competition for raw material and delivery costs.


May 23, 2006

Kent Manufacturing Orders Saurer Machinery

As part of its modernization program,
yarn spinner Kent Manufacturing Co. Inc., Pickens, S.C., has purchased as part of its modernization
program the Zinser Model 451 worsted ring-spinning machine, Volkmann Model VTS-08 two-for-one
twister and Schlafhorst Autoconer Model 338D MPV automatic winding machine from Charlotte,
N.C.-based Saurer Inc. — a Canadian and US representative of Switzerland-based Saurer Group.

The Zinser 451 worsted ring frame’s ServoDraft feature allows users to quickly and easily
change the yarn count and twist using the machine’s EasySpin computer control system, while the
compact Volkmann VTS-08 twister is easy to operate, according to Saurer Inc. The Schlafhorst
Autoconer 338 MPV offers flexible, multicount winding capability.


May 23, 2006

Industry Leaders Outline Trade Agenda

The National Council of Textile
Organizations’ (NCTO) Board of Directors has outlined an international trade agenda that industry
officials believe is vital to the survival of the industry and the 1.5 million US jobs in textiles
and apparel.

At the association’s annual meeting last week, its leadership called for government actions
in connection with the Doha Round of trade liberalization talks, some fixes in the
Central America-Dominican
Republic
Free Trade Agreement (CAFTA-DR) and
actions to modify or kill Vietnam’s effort to join the World Trade Organization (WTO). Those
attending the meeting fanned out across Capitol Hill to seek congressional support for their
demands.

The association’s board adopted what it called a new position regarding support for trade
agreements. While NCTO has supported a number of bilateral free trade agreements (FTAs) and
CAFTA-DR, the board said it would not support and could actively oppose upcoming FTAs and other
trade agreements if, in the judgment of the industry, they “compromise the integrity and intended
trade benefits of current and future agreements.” These include decisions on the pending Peru and
Colombia FTAs and the Vietnam WTO accession.

With respect to CAFTA-DR fixes, both textile manufacturers and importers feel the pact is
not working out as planned. Because not all of the six signatories are on board, the duty-free
provisions have not yet kicked in for all of the countries, creating problems where there is
coproduction in the CAFTA-DR region. The NCTO board also cited problems with the treatment of
pocketing and linings and called for “quick legislation” to correct the problems associated with
the pact, which both importers and manufacturers viewed as a means to prevent China from taking
over the US market.

In connection with the Doha Round, the industry is continuing to press for textile sectoral
negotiations whereby textile issues would be considered separate. Importers are opposed to sectoral
negotiations, and the US government has not yet taken a position.

Textile industry leaders are particularly upset over the agreement in principle reached by
the US and Vietnamese governments, although it is strongly supported by US importers of textiles
and apparel. While US Trade Representative Rob Portman has assured domestic manufacturers that
Vietnam will phase out its subsidization of textile and apparel manufacturing, the domestic
industry is highly skeptical. Vietnam’s textile and apparel quotas would be removed upon Vietnam’s
accession to the WTO. The US textile industry is insisting that a safeguard mechanism be instituted
or quotas extended until Vietnam has demonstrated it is not subsidizing its industries. NCTO
Chairman Jim Chesnutt, CEO of New York City-based National Spinning Co. Inc., said the Vietnam
agreement in its present form “is absolutely absurd and has the potential for undercutting the
benefits of CAFTA.”


May 23, 2006

Saurer To Acquire Day International’s Textile Products Group

Dayton, Ohio-based Day International
Inc. has agreed to sell its Textile Products Group to affiliates of Switzerland-based Saurer AG for
an undisclosed price. Closing, subject to regulatory approval, is expected by mid-June.

Day International is a manufacturer and distributor of highly engineered consumable products
for digital, flexographic and offset printing processes. The company’s Textile Products Group — a
major supplier of consumable, precision-engineered rubber cots, aprons, compressive shrinkage belts
and other fabricated rubber products used in yarn spinning and glass-fiber-forming applications —
employs approximately 270 people at its production facilities in Greenville and Germany, and sales
offices in Italy, Turkey and Hong Kong. In 2005, it realized sales totaling approximately $45
million.

Day’s textile products are sold directly to spinning mills globally and to textile machinery
original equipment manufacturers. Cots and aprons are marketed under the brands Accotex® and
Daytex®. Its Superba® rolls are used to seal tunnels used in carpet yarn processing.

“Day views this transaction as an opportunity to focus on our core image transfer business
while aligning our Textile Products Group with a successful, market-leading global company that is
focused on providing its customers full-service textile solutions,” said Dennis Wolters, president
and CEO, Day.

According to Day spokesman Dwaine Brooks, the acquisition by Saurer is a good fit for the
Textile Products Group. “We were wanting a good situation for our associates in the group, one of
whom has been with us for 65 years,” he said. “We feel good about the whole deal.”

The acquisition is expected to further strengthen Saurer’s components business, enabling the
company to offer a complete solution to influence ring-spun yarn quality.


May 22, 2006

Ciba To Launch High IQ™ Branding Paradigm

Switzerland-based Ciba Specialty
Chemicals’ Textile Effects Segment reports its new High IQ™ label for textile colors and effects
will clearly describe a number of the company’s innovative apparel effects and effect combinations,
such as Lasting Color and Cool Comfort, resulting in added value for the entire textile chain and
the consumer.

“The proliferation of labels and hangtags on garments in stores can be confusing, especially
as the information they contain is often expressed in complicated technical language,” said Eric
Marohn, global head, Special Effects. “The new High IQ labels will give clear consumer benefit
statements, thus enhancing convenience and confidence in garment selection and purchase.”

The Textile Effects Segment will continue to help textile mills manufacture fabric to High
IQ specifications, and will provide brand owners and retailers with point-of-sales
materials.


May 9, 2006

Suessen Delivers 1.5 Millionth EliTe® Compact Spindle

Germany-based Spindelfabrik Suessen
GmbH has sold the 1.5 millionth EliTe®Compact Spindle to India-based Super Spinning Mills Ltd.
(SSML), which counts 50,000 such spindles and 12,000 EliTwist®Compact Spindles among its total
capacity of more than 150,000 ring spindles. The landmark spindle will be installed on a Lakshmi
G5/1 ring-spinning frame.

SSML, part of the Sara Elgi Group, operates four divisions: Agriculture, Spinning, Weaving
and Garments. The three units comprising the Spinning Division produce carded and combed cotton
weaving and knitting yarns ranging from Ne 6 to Ne 140 using a range of spinning processes
including compact single, core spun, EliTwist and fancy. The company also spins organic cotton on
Suessen’s EliTeCompactSet system.

Suessen has sold 500,000 EliTeCompact Spindles since late 2005. The company introduced the
spindles at ITMA ’99 in Paris.


May 9, 2006

CAFTA-DR Implementation Bogging Down

Central America-Dominican Republic
Free Trade Agreement (CAFTA-DR) has run into serious problems, and new legislation may be needed in
order to fix them. Although the pact was approved by the US Congress last year, it cannot be fully
implemented until the governments of other participating countries ratify it, and therein lies a
problem that is causing considerable concern to textile and apparel manufacturers and importers.

Thus far El Salvador, Honduras and Nicaragua have ratified the agreement, but the Dominican
Republic, Guatemala and Costa Rica have not. The Dominican Republic and Guatemala have problems
with agriculture and intellectual property protection requirements, as well as textile and apparel
issues, but it is hoped those issues can be resolved by mid-summer. Costa Rica has the most
problems, so it is likely to be some time before it will come on board.

Among other things, CAFTA-DR provides duty- and quota-free treatment to textile and apparel
products, provided the inputs are made in participating countries. Where the problem has arisen is
if an apparel maker in, say, El Salvador, which has ratified the agreement, wants to use thread,
yarn or fabric from Costa Rica, which has not ratified the agreement, the apparel products would
have to pay the full applicable US import tariff. That situation has caused many US apparel
importers to shy away from CAFTA-DR because if they have to pay duty on Central American imports,
it is cheaper in the long run for them to source their products at lower prices in China and pay
the duty.

Officials at the Washington-based National Council of Textile Organizations say it may be
necessary to get legislation approved by Congress that would provide some sort of a duty rebate
once Central American countries qualify and would permanently fix the coproduction problem. They
are looking for a way to attach amendments to another piece of legislation that could clear
Congress relatively soon.


May 9, 2006

Oxford To Sell Womenswear Group

Atlanta-based apparel producer and
marketer Oxford Industries Inc. has agreed to sell its Womenswear Group to a division of Hong
Kong-based Li & Fung Group for approximately $37 million cash upon closing plus additional cash
proceeds of approximately $30 million from retained accounts receivable and in-transit inventories,
for total after-tax cash proceeds of approximately $67 million. Closing is anticipated on or about
June 2, 2006.

“Our Womenswear Group has made a significant contribution to our success over the years, and
the decision to pursue its sale has been very difficult,” said J. Hicks Lanier, chairman and CEO,
Oxford. “However, we believe this divestiture is an important step in the ongoing strategic
repositioning of our company. This transaction will result in a significant improvement in our
balance sheet and enable us to continue to invest in the growth of our key consumer lifestyle
brands as well as to pursue the acquisition of similar businesses.”


May 9, 2006

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