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

BASF Teams With Taiwan Textile Institute

Shanghai-based BASF (China) Ltd., a
part of Germany-based BASF AG, has signed a partnership agreement with the Taiwan-based Taiwan
Textile Research Institute (TTRI), which offers research and development and other services to the
Taiwanese and East Asian textile industry. As part of the agreement, BASF will customize its
water-based Lurapret® textile coatings for specific applications, in the hopes of providing new or
improved product properties to customers in that region.

In addition, the two partners will provide technical services and support to the region’s
textile industry.

The partnership with TTRI will give BASF a “competitive edge” in the market, according to
Fransis Chadikun, head of Performance Chemicals for Textiles, BASF Greater China. “In return,”
Chadikun added, “the advantages of customized Lurapret textile coatings in quality, efficiency and
eco-friendliness will enable our customers to achieve a better market position.”

Shin-Chuan Yao, president, TTRI, said the two organizations would develop symposiums related
to technical coatings, laminating and hot-melt applications. “Most importantly,” said Yao, “ … the
cooperation will serve as the front lines in the effort to help upgrade Taiwan’s industrial
technology, design and manufacturing ability in the coatings, lamination and hot-melt industries.”&
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March 21, 2006

PGI Posts Record Sales

North Charleston, S.C.-based
nonwovens producer Polymer Group Inc. (PGI) reported record net sales of $948.8 million for fiscal
year 2005, a 12.3-percent increase over fiscal year 2004 sales. The company cited higher volumes
sold into both consumer and industrial markets, and improved price/mix of sales, which partially
offset the effects of increased raw material costs. Fourth-quarter (Q4) 2005 sales, at $240.4
million, were 7.6 percent higher than year-earlier Q4 sales.

The company posted a gross profit for 2005 of $161.5 million — 5.2-percent higher than its
year-earlier profit. Q4 2005 gross profit was lower than in Q4 2004, due primarily to raw material
price increases occurring in the wake of the major hurricanes that battered the US Gulf Coast last
summer.

PGI’s 2005 $7 million net income was 48.9-percent higher than 2004 net income.

James L. Schaeffer, CEO, noted PGI’s expansion efforts during 2005 will help the company
continue its growth into 2006 and beyond. The company installed a spunmelt line at its
Colombia-based facility and a chemical bond line in China. It also began construction of two large
projects in the United States and China that are slated for completion in 2006.


March 21, 2006

Lees Expands Manufacturing Plant

Kennesaw, Ga.-based Lees Carpets, a
division of Calhoun, Ga.-based Mohawk Industries Inc., is to invest $26.6 million to expand its
manufacturing plant in Glasgow, Va. The expansion of the facility, which comprises 33 acres under
one roof and employs more than 1,200 people, will create at least 25 new jobs and require
retraining for 150 existing jobs.

The Glasgow plant, located in Rockbridge County in Virginia’s Shenandoah Valley, is a fully
integrated facility, from yarn manufacturing and dyeing to tufting and finishing carpet including
modular and broadloom carpet for commercial applications. Earlier this year, the facility received
ISO 14001:2004 certification for its environmental management system.

“We are pleased to announce the expansion project for our Glasgow Facility,” said Lane
Leonard, plant manager, who declined to provide details of the planned expansion. “Since 1935, Lees
and Rockbridge County have had a strong relationship. The loyalty and talents of the thousands of
people who have supported Lees, and now Mohawk, were important criteria in our site selection
decision. This expansion ensures the continued growth of the commercial carpet operation in Glasgow
for years to come.”

The Virginia Economic Development Partnership and the Rockbridge Partnership worked together
to secure the project. A $40,000 grant from the Governor’s Opportunity Fund is providing Rockbridge
County with assistance related to the project; and a $100,000 grant from the Virginia Investment
Partnership program provided an incentive to Lees to close the deal. The company will receive
training and retraining assistance from the Virginia Department of Business Assistance through its
Workforce Services Jobs Investment Program; and rail access funding is available to the company
from the Virginia Department of Rail and Public Transportation.


March 14, 2006

Carolina Mills Exits Finishing, Weaving

Carolina Mills Inc. reports it will
now focus on its yarn manufacturing and sales business domestically and internationally as well as
opportunities outside of the textile sector, leading to the closure of the Maiden, N.C.-based
textile manufacturer’s Finishing Division and Weaving Division. The company expects to lay off
about 223 employees as a result.

Valdese, N.C.-based Plant No. 9 — a dyeing and finishing facility for industrial, apparel
and upholstery fabrics — will close by April 30, 2006. Likewise, Newton, N.C.-based Carolina
Specialty Fabrics, Plant No. 3, which manufactures woven fabrics for apparel, commercial and
industrial products, is set to close by May 31, 2006.

“It is clear that the continuing flood of low-priced imported products and skyrocketing fuel
costs have irreparably damaged the domestic customer base for our woven fabrics and fabric dyeing
and finishing services,” said Steve Dobbins, president and CEO. “Therefore, we have no choice but
to exit these market segments.”


March 14, 2007

Hayes Seeks To Expand Buy America Law

Robin Hayes, R-N.C., has introduced
legislation that will require the Department of Homeland Security (DHS) to procure items directly
related to security from domestic manufacturers. Under the so-called Berry Amendment, the
Department of Defense (DOD) and the Coast Guard already are required to do so to the extent
domestic manufacturers can meet their needs.

In introducing the new measure, Hayes said: “Expanding our ‘Buy America’ rules to DHS is a
matter of matter of national security. Currently, the Berry Amendment seeks to guarantee the United
States military has a ready mobilization base of US manufacturers — a critical national security
requirement. I believe it is imperative that we expand this requirement to include the Department
of Homeland Security for the same reasons.”

For years, Hayes, along with other textile state representatives and senators, has been
instrumental in getting the DOD “Buy America” provisions through Congress, something that has been
of considerable benefit to domestic textile and apparel manufacturers.

March 14, 2006

AFA Awarded Appalachian Regional Commission Grant For Domotex Program

The Dalton, Ga.-based American
Floorcovering Alliance (AFA) recently received a grant from the Appalachian Regional Commission — a
federal/state partnership that works with the people of Appalachia to create opportunities for
self-sustaining economic development and improved quality of life. The grant is to be used for AFA’s
export initiative program for Domotex 2007 in Hannover, Germany.

Domotex, a leading floor covering trade show, is an important venue for floor covering
companies to showcase their products in an international setting. AFA states that the grant will
help create and sustain jobs in northwest Georgia, particularly small companies who find it
difficult to participate in international trade shows.

“From our many years of experience at Domotex, we know that if small Georgia companies can
afford to go, it will generate sales, expand their overseas distribution and create jobs,” said
Wanda Ellis, executive director, AFA.

To secure the grant, Ellis worked with Robert Erwin, International Trade Center consultant,
University of Georgia Small Business Development Center; Rick Martin, senior international trade
specialist, Georgia Department of Economic Development, International Trade Division; and the staff
of the North Georgia Regional Development Center, Dalton.


March 14, 2006

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