Martex Creates Eco-Wipers Division

Martex Fiber Southern Corp., a Spartanburg-based textile company specializing in textile
recycling and textile waste removal, has launched a new division, Eco-Wipers, to offer wiping
cloths made from preconsumer cloth waste reclaimed from apparel manufacturing operations. The
product line will include new colored, bleached and unbleached flat and fleeced knit wipers for
such end-users as food-service, janitorial and paint companies, as well as for the general public
through major retail outlets.

“We are aggressively seeking new customers,” said Jerry Satterfield, newly hired as vice
president of sales for Eco-Wipers. “I am confident that a strong market exists for our high-quality
products. Our commitment to providing an environmentally responsible product will also be a way to
reach customers who want to make purchasing decisions that add to the sustainability of our
planet.”

April 4, 2006

Two More Nations Join Central American Trade Pact

Two additional nations — Honduras and
Nicaragua — have officially joined the Dominican Republic-Central American Free Trade Agreement
(DR-CAFTA) in a move that should please both US textile manufacturers and importers.

Although DR-CAFTA was negotiated in 2004, the six Central American participants have been
slow in getting their respective governments to take the steps necessary to implement the
agreement. El Salvador was the first to come on board this past March, but still awaiting action by
their governments are Costa Rica, the Dominican Republic and Guatemala. Once the pact is fully
implemented, participants will enjoy duty-free access to US textile and apparel markets, providing
they use inputs made in one of the participating countries.

Saying the US government has worked “closely and intensively” with the participating
countries, US Trade Representative Rob Portman promised, “We will continue to work with the
remaining three DR-CAFTA partners to ensure timely and full implementation of the agreement.” That
could not happen too soon for US textile and apparel manufacturers and importers who see increased
trade with the Central American countries as an alternative to trade dominated by China and other
Asian nations.



April 4, 2006

Swift Galey Sells Denim Spinning Operation To Frontier

Atlanta-based apparel, home and hospitality textile manufacturer Swift Galey has sold its denim
spinning operation in Columbus, Ga., to Sanford, N.C.-based Frontier Spinning Mills Inc. Under the
terms of the transaction, the Columbus plant will continue to operate until mid- to late May 2006,
after which Frontier will relocate the machinery to plants in North Carolina, where it will spin
yarn to sell for Swift Galey’s denim fabrics. Approximately 200 employees will be affected by the
closing of the Columbus facility.

According to John J. Heldrich,
president and CEO, Swift Galey, the Columbus spinning facility is outdated and inefficient. He said
the company will continue to operate a large, relatively modern weaving/dyeing/finishing plant in
Columbus.

“The spinning facility is not cost-efficient by today’s standards, so we have formed a
partnership with Frontier, which has state-of-the-art, modern facilities. Henceforth, we will
purchase yarn from Frontier because that is more cost-efficient for us,” Heldrich said, adding: “We
are an innovator of product and have to stay competitive. This action will help provide for the
future longevity of the company.”

Heldrich said some manufacturing and administrative personnel currently at the older plant
will be able to transfer to the other Columbus facility.

Swift Galey still operates a spinning plant near Charlotte, where it spins yarn for its
khaki fabrics. In addition to operations in Georgia and the Carolinas, it maintains either directly
or through joint ventures manufacturing facilities in Canada, Mexico, China, Africa and the
Philippines. Its newest offshore ventures include the purchase of the majority interest in the
Mexico-based House of Lajat, which manufactures cotton and polyester/cotton textiles for
hospitality, sheeting and uniform applications; and two joint ventures in China with Lucky Textile
Group — one to build a denim-manufacturing plant, and one to operate Lucky’s existing dyeing and
finishing facility.

April 4, 2006

Lenzing Reports Increased Sales

Despite what it called “a difficult
fiber business environment,” Austria-based Lenzing AG reported its group sales for 2005, at 942.6
million euros, were 8.2-percent higher than its prior-year sales of 871.1 million euros, while its
earnings before interest and taxes (EBIT), at 81.8 million euros, were lower than its record EBIT
of 104.3 million euros the year before. Shareholders’ share of net income totaled 56.9 million
euros, compared with 67.7 million euros in 2004. Eighty-one percent of the group’s sales came from
its core fiber and pulp business.

The company attributed 60 percent of its fiber business expansion to systematic growth and
40 percent to consolidation following its 2004 acquisition of the Tencel Group from The
Netherlands-based Corsadi BV. Cellulose fiber production for the year increased by 9.5 percent to
approximately 454,000 tons. Although demand was good, falling fiber prices and increased production
costs, including 35 million euros in additional raw material and energy costs, affected the core
fibers business, Lenzing reported.

“[O]ur successful countersteering strategy produced a satisfactory result for Lenzing in
2005,” said Thomas Fahnemann, chairman of Lenzing’s Management Board. He added that the company
improved its textile market position through the development of new application areas, such as
Tencel®Active for sportswear applications, and global marketing strategies, such as the initiation
of cooperative relationships with brands such as Asics, Adidas and Nike.

The company also noted it increased its nonwovens market share and launched new products for
medical and technical applications.

Looking forward, Lenzing reported it continues to optimize costs to address raw material
issues and the market shift from Europe to Asia. It also expects to complete construction of a
viscose fiber plant in China around the end of 2006.


April 4, 2006

Quality Fabric Of The Month: Beyond Thread Count

Upland cotton research and marketing company Cotton Incorporated, Cary, N.C., has developed three textile finishing technologies to improve protection, comfort and other performance levels in cotton sheeting and top-of-bed products without altering cotton’s soft, comfortable hand
and easy-care characteristics. According to the company, the technologies offer added value beyond high thread counts touted of late by manufacturers and retailers when promoting the quality of various bedding products.


Enduring Comfort

The new endure™ finish — a variation of Cotton Incorporated’s Tough Cotton™ apparel finish — is formulated especially for home textiles. The company reports the finish strengthens the fabric, significantly increasing the durability of wrinkle-free, easy-care cotton sheets and other home textiles — not only improving abrasion resistance and color retention, but also controlling shrinkage and improving wrinkle resistance.

Although endure is initially targeted to bedding applications, David Earley, manager, textile market development for home products, noted that with some further development, the technology could apply to upholstery or decorative fabrics as well.

“Cotton doesn’t have the durability of some of the heavy-duty nylons or polyesters that really exhibit extended wear,” he said. “This would be a way to get cotton into those types of markets because you could extend the wear-life of the cotton fabrics by making them more abrasion-resistant and maintaining their original color longer.”

webreadypic2

Cotton Incorporated’s endure™, repel™ and Wicking Windows™ finishing technologies improve
various performance attributes of cotton sheeting and top-of-bed products.


Breathable Barrier

Stain and water repellency is the primary advantage offered by repel™, a hydrophobic finish that also renders the fabric quick-drying — an energy-saving plus. Earley pointed out that fabric treated with repel also retains its breathability and hand.

“Even though repel is water- and stain-repellent, it’s not a coating on the fabric,” he explained. “It’s a durable finish that’s applied and helps maintain the original breathability of the cotton. It creates a barrier that water and food molecules can’t pass through, but water vapor is small enough that it can pass through. If you do get a stain on the fabric, or water, it’s very easy to blot it away.”

Cotton Incorporated has shown repel initially as a finish for top-of-bed textiles such as duvet covers and comforters, but it too has potential applications in other home textiles, such as upholstery or decorative fabrics and tabletop textiles, according to Earley. In addition, repel may
be used in conjunction with endure to provide combined benefits of both finishes in a single product.


Cool, Dry Comfort

Wicking Windows™ moisture-management technology augments a cotton fabric’s comfort levels by transporting moisture away from the skin through the fabric to the opposite side, where it is dispersed over a wider surface area — while also providing quick-drying benefits. The finish, originally introduced for cotton athletic and casual apparel applications, also reduces the cling factor in cotton fabrics because the side next to the skin remains dry (See “Quality Fabric Of The Month,” TW, March 2005).

Earley said Wicking Windows could be applied to woven or knit sheets. “The key benefit is moving moisture away from the body to the other side of the fabric so that your sleep environment stays cool and dry and more comfortable,” he said. Comparing the finish’s benefit in sheets to that in apparel, he noted: “Obviously you’re not going to have as much moisture when you’re sleeping, but the human body does give off water vapor while you’re resting. If that amount of moisture can be controlled and moved away from the body, our thought is that it can contribute to a more comfortable sleep environment.”

Cotton Incorporated is developing marketing materials for all three technologies to help manufacturers and retailers promote products offering their benefits to consumers. Earley said a number of manufacturers have expressed interest in the technologies.


For more information about endure™, repel™ and Wicking Windows™, contact David Earley (919) 678-2220.


April 2006

 

Modeling For Success – Spinners Adapt To Changing Business Climate


T
 his month’s Yarn Market finds ring spun to be the hot commodity, with the other
yarn-forming systems running lukewarm at best.

“Ring spinning, particularly combed ring spinning, is the only thing that has any real
substance right now,” said an industry observer. “Open end is suffering. Air jet is suffering.”

“Carded and combed ring-spun are in a pretty short position right now,” said another spinner.
“I don’t know what is going to happen to open-end. There seems to be too much of it out there.”

The business outlook at the spinning mills varies from a few weeks to one spinner’s opinion
that things probably will be pretty stable until the end of 2008, when the China safeguards expire.

“The specialty ring-spun business is good in terms of order backlog, but from our customers’
perspective, we are not as responsive as we need to be,” said one spinner. “Speed is our primary
strategic advantage.”


A Changing Landscape

This month, spinners polled for this column are in agreement that the spinning business is
changing, and that their business models must change accordingly. Approaches include recognizing
the need to partner and package, striving for flexibility, and migrating to specialty products.

“The old business model was to make a lot of yarn and sell it to about 100 different
customers,” said an industry observer. “Now there aren’t 100 different customers out there.
Spinners need to partner with knitters, finishers and cut-and-sew companies, and put packages
together so there is one voice going to the retailer.”

The physical layout and automation systems of many mills predispose them to the old
ton-and-gun approach, which no longer makes sense in today’s high-speed, low-volume environment.
Spinners are looking for ways to adapt operations to run more yarn counts and blends.

“The surviving US spinners have learned to accept change as their strategic identity,” said a
specialty ring spinner. “The product changes with shorter cycles and smaller volume, the customer
base changes, and customers’ customers change. Increasingly, our focus is toward speed and
efficiency, understanding that each order stands alone.”

The ultimate solution to avoid being trampled in a commodity marketplace is to specialize and
find a niche. Of course, the niche must pay better than the commodity business and have some
significant barrier to entry in the form of expertise, equipment, patent or trade protection.

“We’ve moved to more differentiated specialty products,” said a multisystem spinner. “More
and more, we are seeing that the commodity-type products are gone. The products that remain are
specialty, value-added products.

“Our model has moved to a more flexible operation with a changed back end so we can supply
more blends and more SKUs,” he continued. “It’s a strategic change to specialty products, quicker
turns and smaller runs.”


The DR-CAFTA Dance

Spinners expressed some confusion and dissatisfaction with the implementation progress of the
Dominican Republic-Central American Free Trade Agreement (DR-CAFTA). The trade agreement was
supposed to go into effect January 1, but it became stalled over a variety of issues including
intellectual property rights. This has caused the six Central American nations involved to make
legal and regulatory changes, adopting the agreement one by one.

“It’s a big disservice to the industry,” said one mill executive. “This waste of time and
effort is encouraging people to go directly to Asia and other parts of the world. People sourcing
product can’t wait for this to sort itself out.”

However, in the long run, most spinners still expect DR-CAFTA to be a winner for them.

“Our export business continues to become a larger percentage of our business,” said a
specialty ring spinner. “We are optimistic for continued growth as the apparel industry fully
benefits from the CAFTA legislation.”


Homeland Security Hookup

Legislation introduced recently by Rep. Robin Hayes, R-N.C., known as the Berry Amendment, would
require the Department of Homeland Security (DHS) to use American suppliers for uniforms, tents and
other textile products. This requirement could be a big plus for US spinners.

“This bill would extend the Berry Amendment sourcing requirements to Homeland Security and
other parts of the government,” said one spinner. “That would be huge for us. We have already seen
some benefit on some products that were slipping away, and gotten more attention from the
government. The publicity has generated some inquiries.”

On the pricing front, spinners are having a tough time passing rising fiber costs on to their
customers. This is the uphill battle that never goes away.

“It always amazes me how quickly the [yarn] price goes down, but how hard it is to get the
price back up,” said one spinner. “We have definitely seen a 10-cent increase in cotton prices
since August of last year. I don’t think we’ve seen a 10-cent increase in our yarn prices. I have
seen prices reluctantly begin to come up. Unless there is a real shortage in the market, it is
really difficult to get a price increase.”


April 2006

Apparel Executive Sees New Opportunities

The head of a major apparel trade association today outlined what he sees as domestic and
overseas market opportunities for US apparel companies stemming from the Doha Round of trade
liberalization negotiations.

In a keynote address at Prime Source — an apparel sourcing meeting in Hong Kong — Kevin
Burke, president of the Arlington, Va.-based American Apparel & Footwear Association, said a
reduction in tariff and nontariff barriers to trade could open new opportunities in what he
described as fast-growing markets in countries such as China, India and Brazil. He said this would “
move world apparel trade forward — to the benefit of US apparel firms and supplier countries
worldwide, as well as consumers.”

While noting the decline of apparel jobs in the United States from 2.2 million in 1974 to
627,000 today, Burke said today’s US apparel industry is largely focused on marketing brands of
products designed, sourced, distributed and sold by US workers that are manufactured elsewhere.
Burke said now that textile and apparel quotas for all intents and purposes have been removed, US
apparel manufacturers have “more opportunities to source the best products at the best price in the
best amount of time under the best working and environmental conditions.”

He said the “bottom line” is US apparel firms now have a wider variety of high-quality,
reasonably priced clothes that can be profitable.

He called for an end to all US clothing duties, which average about 13 percent; and
elimination of nontariff barriers such as labeling requirements, customs measures, product
standards and distribution restrictions, which are employed by overseas countries.

Describing these restrictions as “ridiculous,” Burke said, “If we are good enough to make a
product there, we should be able to sell our product there.” 

March 28, 2006

Customs Service Seizes Illegal Textile Imports

The US Customs and Border Protection
(CBP) is making some progress in combating illegal imports of textiles and apparel from China, but
it’s a drop in a bucket compared to what US textile manufacturers see as a major problem given
growing Chinese imports.

CBP announced that so far in fiscal year 2006, it has seized more than $20 million in
illegal apparel imports, mostly from China. This is due in part to the employment of 45 additional
personnel to help bolster textile law enforcement efforts. Although the seizures are not all that
significant in the overall scheme of things, they are a key element in negotiations of free trade
and other bilateral agreements. Insistence on strict customs enforcement has played a role in
getting the support of members of Congress and manufacturing and importing interests.

Janet Labuda, director of the customs enforcement and operations division, said that CBP
maintains a “robust trade enforcement program,” and its import specialists will continue to review
textile shipments in order to enforce compliance with laws and regulations governing imports,
including mislabeling and other forms of quota circumvention.

While textile industry trade officials have welcomed the beefed-up enforcement program and
hope to see more announcements that could help deter illegal trade, they remain much more concerned
about legal imports of Chinese textiles and apparel, which in 2005 amounted to more than $22
billion. 

March 28, 2006

Eastman Announces Restructuring

Kingsport, Tenn.-based Eastman
Chemical Co. has announced it will realign its existing divisions, including its Voridian fibers
and polymers division, into two business groups effective April 1, 2006, to take better advantage
of growth opportunities. The chemicals and fibers business group will comprise performance
chemicals and intermediates; fibers; and coatings, adhesives, specialty polymers and inks. The
polymers business group will comprise polymers and specialty plastics.

“This structure, which is built around related technologies and assets, brings a stronger
focus on the capabilities within our core businesses,” said Brian Ferguson, chairman and CEO. “
Eastman will also be in a stronger position to drive growth opportunities as we work with our
customers to bring their own product innovations to market faster.”

Ferguson noted in particular that bringing together Eastman’s various polymers segments into
one business group will bolster its integrated polyester strategy, whereby production assets and
intermediates are used to develop innovative copolyester products for new markets. Integral to that
strategy is the company’s IntegRex polyethylene terephthalate resin production process, launched in
2004.


March 21, 2006

Importers Oppose Any New Textile Restrictions In WTO Negotiations

As another round of preliminary discussions designed to develop a framework for WTO trade
liberalization negotiations later this year gets underway in Geneva this week, a coalition of
textile and apparel importers issued a new appeal to avoid any new restrictions on imports.

In a letter to US Trade Representative Robert Portman, five trade associations representing
major textile and apparel importers said they are willing to support textile sectoral negotiations
provided they are not used to limit market access, but instead to encourage greater trade
liberalization. The letter was signed by the heads of the Arlington, Va.-based American Apparel and
Footwear Association, the Washington-based National Retail Federation (NRF), the New York
City-based United States Association of Importers of Textiles and Apparel, the Princeton,
N.J.-based Travel Goods Association and the Arlington, Va.-based Retail Industry Leaders
Association.

The letter said: “We are steadfastly opposed to any attempt to use a separate sectoral
negotiation to exempt textiles and apparel from the general Non Agricultural Market Access (NAMA)
formula in an attempt to maintain special protection for this sector. We remain strongly opposed to
any effort to resurrect a quota regime or extend the China safeguard process past 2008.” With
respect to tariffs, the organizations support a so-called “zero-for-zero” formula whereby the
United States would bring its tariffs down to zero if other countries do likewise.

US textile manufacturers have strongly supported a sectoral approach to the nonagricultural
negotiations, but for different reasons. They would like them to result in minimal tariff
reductions and a permanent safeguard mechanism that could be employed when imports threaten to
disrupt US markets.

NRF President Sandra L. Kennedy said the United States must “set the standard” to reach a
comprehensive result in the NAMA by rejecting calls for a restrictive apparel and textile sectoral.

This week’s meetings in Geneva are part of a process to finalize the formula for dealing with
the broad trade liberalization negotiations. Government trade officials hope to complete that phase
of the process by the end of April.


March 21, 2006

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