”

T
oday’s industrial infrastructure is designed to chase economic growth. It does so at the
expense of other vital concerns, particularly human and ecological health, cultural and natural
richness, and even enjoyment and delight…. The waste, pollution, crude products, and other
negative effects [of most industrial methods and materials] are the consequence of outdated and
unintelligent design.”

So state architect and designer William McDonough and chemist Michael Braungart, Ph.D., in
their book “Cradle to Cradle,” in which they champion the importance of design in developing
environmentally intelligent, sustainable products and business strategies, looking to the natural
world to find practical approaches to reaching that goal.

Their strategies offer hope to companies that struggle to comply with government
regulations, helping them realize the economic growth they seek, in addition to providing product
differentiation. Manufacturers are surviving in today’s challenging and fiercely competitive global
business environment because they have reduced costs related to energy, waste disposal and
regulatory compliance. And their products are competing in the marketplace quality-for-quality on
price, performance and aesthetic appeal as well.

Cradle To Cradle

“Sustainability is a destination, which is called cradle to cradle,” McDonough told

Textile World
in a recent interview. Through Charlottesville, Va.-based McDonough Braungart Design
Chemistry (MBDC), McDonough and Braungart have consulted with corporations worldwide, including
such textile manufacturers and suppliers as Cargill Dow LLC, BASF Corp., Shaw Industries Inc.,
Rohner Textil AG and others – helping them chart a new course by reevaluating their operations and
setting goals to implement eco-effective, and even restorative, practices. These companies are
turning “strategies of tragedy” into “strategies of change,” redesigning products to use more
eco-friendly chemicals and processes, eliminate much of their pollution and waste, and also provide
food for future manufacturing appetites and for the earth.

McDonough and Braungart contrast the cradle-to-cradle, regenerative life cycle of
sustainable products with the cradle-to-grave concept of products whose components cannot be
separated and perpetually recycled into virgin-quality materials and ultimately end up as waste.
But even the idea of waste must be reevaluated in this context. In a cradle-to-cradle cycle, “waste
equals food,” McDonough and Braungart assert. It provides nutrition in a biological, compostable
cycle or in a closed-loop, technical, manufacturing cycle.

Biological Or Technical Nutrition

“On the biological nutrient side, we have propitious, biological, organic products, and that
means we have to go right back to their origin and their processing,” McDonough said. “We also have
biodegradable materials made from petroleum products. What’s exciting will be biological nutrient
fibers made from secondary agricultural products – PLA [polylactide], for example, made from straws
and stalks, not from kernels. Otherwise, we’re making our fabrics out of food.

“As for petrochemical-based materials, we see them going either into biologically based
products that break down into carbohydrate or into technical services products, like polyesters and
nylons,” he said. “The biggest message to the ecologically concerned markets is how critical it is
that we have man-made products in cradle-to-cradle life cycles.”

Minnetonka, Minn.-based Cargill Dow’s NatureWorks™ PLA biodegradable polymer resin is
derived from fermented corn sugars. It also will be chemically recyclable into new virgin-quality
resin once the infrastructure is in place to process it, according to Michael O’Brien, Cargill
Dow’s communications leader.

In its production, PLA reduces the use of fossil resources by up to 50 percent over
petrochemical-based polymer production. Greenhouse gas emissions are reduced by 15 to 60 percent.
Cargill Dow projects these reductions eventually could reach 80 to 100 percent.

The company is using grants from the US Department of Energy (DOE) to fund further research
and development. One grant is being used to help develop technology to derive PLA from non-food
parts of the corn plant. Another is helping Cargill Dow explore changing its energy feedstock.
“This opens the door to allow us to make our own energy from renewable sources,” O’Brien said.

Nylon 6: Closing The Loop

One example of technical nutrition is closed-loop nylon 6 recycling. For McDonough, its
eco-effective,  cradle-to-cradle – as opposed to merely eco-efficient – nature means its
consumption can be celebrated rather than decried as being wasteful. “Here is a material that is
durable, color-retentive, stain-resistant, lasts as long as you’d ever want it to – and, in fact,
lasts as short as you want it to,” he said. “The fact that you can turn it back into itself means
guilt disappears, and if you want to change your carpet from blue to pink after three years, we
don’t care because all you do is create jobs.”

BASF, Mount Olive, N.J., established its Ontario-based 6ix Again® recycling program in 1994
to depolymerize used nylon 6 carpet fiber into caprolactam and water. The caprolactam is then
repolymerized into virgin-quality nylon 6 polymer. BASF recycles carpet containing its own BASF
Nylon 6ix® products, including SAVANT™ advanced engineered fiber containing 50-percent recycled
content, Ultramid®, Zeftron® and solution-dyed Zeftron 2000; and any other nylon 6 carpet, as well
as upholstery fabrics made from solution-dyed Zeftron 200 nylon. It also accepts and processes
nylon 6,6 and backing systems. Tim Blount, BASF’s carpet products marketing manager, reports the
program has diverted millions of pounds of nylon from landfills.

“In today’s sustainability-conscious commercial marketplace, there is increased interest and
demand for fully renewable high-performance products,” Blount said. “Our carpet mill customers, as
well as the architect and design and specifying communities, are showing a high level of interest
in the environmental attributes of the products we manufacture, as well as in ensuring a proper
infrastructure for managing carpets once they have reached the end of their useful lives.”

Carpet Face And Backing: Separate Pathways

Dalton, Ga.-based Shaw Industries Inc. offers carpets using BASF’s SAVANT fiber and, through
its Shaw Commercial Division, produces its own EcoSolution Q™ nylon 6 fiber for other carpet
products. Steven L. Bradfield, vice president, environmental development, said most of its nylon 6
products, which comprise well over half of its total commercial carpet production, contain a
minimum of 25-percent recycled content. Its annual consumption of recycled nylon 6 totals more than
20 million pounds. In addition, Shaw’s total manufacturing operations recycle 75 percent of its
production waste.

Bradfield said carpet must be seen in terms of both its face and its backing. “If you look
at carpet as just a single entity that you’re going to melt down and turn into something, then that
something is not going to be the same carpet it was before. If you take the idea that it’s a face
and a backing, there are carpets at Shaw that we can actually separate and return to their original
pathways,” he said.

Bradfield pointed to Shaw’s EcoWorx™ polyolefin thermoplastic carpet backing as an example.
“[It] flows directly onto the back of the carpet cloth. It’s a non-PVC [polyvinyl chloride]
backing, and it’s our largest-volume tile or six-foot backing – over 50 percent of our volume in
these product types,” he said. “EcoWorx meets or exceeds PVC testing and performance in every
category. We developed EcoWorx for greater backing choice, for reducing material environmental
impacts, for its lower long-term cost, and for its compatibility with nylon 6 breakdown.”Shaw is
ramping up capacity for EcoWorx production to provide all of its backing for carpet tile and
six-foot modular carpet, and plans eventually to provide it for its high-performance broadloom
carpet as well. The company also is evaluating its manufacturing processes, energy flux and raw
materials to further develop its cradle-to-cradle strategy.

Fabrics “Safe Enough To Eat”

Businesses can incur significant expense in order to comply with environmental and safety
regulations. McDonough holds up Switzerland-based Rohner Textil as an example for US textile
companies facing the need to cut costs in this country or go offshore.

MBDC worked with Rohner and New York City-based DesignTex, a division of Steelcase, to
develop a biodegradable upholstery fabric that would be “safe enough to eat.” At the time, Rohner,
which had been complying with all the Swiss environmental regulations, found its fabric trimmings
had been declared hazardous waste that could no longer be disposed of locally, and so had to be
shipped to Spain.

The new fabric, Climatex® Lifecycle™, combines organically grown ramie with wool, and is
dyed and finished using 16 nontoxic dyes and 22 auxiliaries and processing chemicals from
Switzerland-based Ciba Specialty Chemicals Inc. Effluent tested since production began is cleaner
than the water coming into the plant, and the fabric trimmings can be processed into felt for
upholstery interliners or gardening mulch. As McDonough and Braungart tell the story, “Not only did
our new design process bypass the traditional responses to environmental problems (reduce, reuse,
recycle), it also eliminated the need for regulation, something that any businessperson will
appreciate as extremely valuable.”

“Rohner was able to cut its costs by 20 percent because it got rid of regulation and was
able to remove all sorts of restrictions on the way its people could function,” McDonough said. “It
could get rid of protective equipment; it doesn’t have a percentage of its building allocated to
hazardous materials storage; and it doesn’t have any cost of hazardous waste being shipped to
Spain.” The mill’s products also have been very successful in the marketplace.

“What was the other way to save costs for a company like Rohner?” McDonough asked. “Go
offshore. And then, what happens to all those people with all that expertise in Switzerland? This
is a critical agenda for the US textile industry. It can move into an unregulated event and compete
with other places that are unregulated, but instead of being unregulated because nobody’s paying
attention, it’s unregulated because it’s not hurting anybody. It’s a great way to differentiate
quality.”

Rohner licenses its Climatex technology to other textile makers, including Victor Innovatex,
Canada, which supplies DesignTex with Climatex LifeguardFR™, a fire-retardant (FR) fabric using
wool and Austria-based Lenzing AG’s Redesigned LenzingFR™ cellulosic fiber treated with
Switzerland-based Clariant’s nontoxic FR finish. Climatex fabrics also are available from Carnegie,
Rockville Centre, N.Y.

Interface: An Epiphany

Ray C. Anderson, chairman of Atlanta-based Interface Inc., relates his company’s journey
toward sustainability in his book, “Mid-Course Correction: Toward a Sustainable Enterprise: The
Interface Model.” From its beginnings in 1973, Interface had sought simply to comply with
environmental regulations, but in 1994, Anderson read “The Ecology of Commerce” by Paul Hawken and
experienced an epiphany. In that book, Hawken calls on business and industry to take the lead in
reversing the environmental damage that has been wrought on Earth.

Anderson challenged Interface to play a premier role in the sustainability movement,
ultimately “putting back more than we ourselves take and doing good to Earth, not just no harm – by
helping or influencing others to reach toward sustainability.” Since 1996, Interface has reduced
its environmental footprint by one-third and cut operational waste by as much as half in some
facilities, saving $209 million; reduced harmful emissions and increased its energy efficiency,
reducing nonrenewable process energy by 18 percent; and reduced water consumption per unit of
modular carpet production by 68 percent.

Eight Interface facilities generate renewable energy on-site or purchase green power. In
2001, green energy sources – including solar, wind, landfill gas, biomass and hydroelectric –
provided 8.5 percent of the company’s power needs worldwide. Two facilities in the United Kingdom
purchase all of their electricity from green sources. By mid-2003, the company’s plant in Canada
expects to be totally powered by wind.

The company also has committed to using closed-loop, recycled raw materials and to reducing
the amount of petroleum-derived raw materials, as sustainable technologies fall into place. Use of
non-petrochemical-based materials in Interface products has increased by 24 percent since 1994.
Interface Fabrics Group plans to introduce new PLA fabrics in its Terratex line by the end of this
year, according to Wendy Porter, director of environmental management.

Product designer David Oakey said one-third of Interface product now contains recycled
content. Oakey designs products to reduce waste, sometimes creating random designs, such as those
found in Interface’s Entropy™ line of carpet tiles, in order to reduce leftover materials.

Anderson is firm in his belief that industry must find ways to become sustainable. “If we
don’t figure out how to do it, the industrial system will collapse,” he warns. He believes
Interface’s green initiatives are helping it survive in the current economic climate, stating,
“Sustainability has transformed Interface into a company that is doing well by doing good.”

Products Of Service

One solution to reducing landfill waste involves selling the service of a product – in
effect leasing the product to the customer and retaining ownership of its components, while
servicing and upgrading it as often as desired within a defined period of use. In describing a
product of service, McDonough encourages a rethinking about the nature of a product. “The concept
has to be transparent to customers in terms of their options. Even though they buy the product,
it’s effectively like a lease because the company wants it back as technical nutrition,” he
explained. The product must be designed to be cradle to cradle, and the manufacturer’s relationship
with the customer is optimized and maintained because the product is returned for reprocessing, he
said.

Reaching The Destination

MBDC’s Design Protocol for creating cradle-to-cradle products recognizes levels of
environmental intelligence ranging from simply being free of a known toxic substance to being fully
eco-effective – “pure innovation,” McDonough said, citing as examples “a new kind of floor covering
or a whole new way of making carpet that is designed to be cradle to cradle from scratch – or a new
textile made from agricultural secondaries grown organically without petrochemical fertilizers and
using wind power for processing.”

But, he added, “The perfect product is going to be a pioneer in its own territory. The
perfect carpet – designed with all new materials that are totally without all the residuals of all
the wrong components – would never be given points in the marketplace or by green industry
standards, because it didn’t exist when the industry did a consensus process.

“We’re looking for the highest performance around sustainable criteria,” he continued, “not
the lowest common denominator that can be used as a threshold for entry into the club of hope.
We’re looking for champions and fierceness.”

March 2003

B
urlington Industries Inc., Greensboro, N.C., was renowned for its wooden-walled
factories, built that way so the company could easily expand the plant to meet demand. This virtual
wall strategy served Burlington well for decades, as it grew to become the world’s largest textile
maker. Today, though, a much different, smaller Burlington is betting on a virtual strategy of a
different sort, going beyond the wall to the entire factory.

A significant part of Burlington’s strategy involves not making anything, but offering other
companies’ textiles. The strategy grew out of a 1998 investment in a specialty chemicals startup in
Emeryville, Calif. Burlington now owns 51 percent of the startup, Nano-Tex LLC, which happens to be
a virtual specialty chemicals company, contracting out its manufacturing. The key to the company is
its technology. Working at the molecular level, Nano-Tex founder David Soane and his team of Ph.D.
chemists have applied a number of new treatments to improve the way fabrics wear. It has more than
122 patents either in hand or pending. It has four products – the apparel stain repellent
NANO-CARE®; NANO-DRY®, which wicks moisture from the skin; NANO-PEL™, a stain repellent targeted
towards non-wrinkle-resistant fabrics; and NANO-TOUCH™, which wraps a nano-layer of cellulose
around man-made fabrics, creating clothes with the natural feel of cotton, but with the durability
of man-mades.

Burlington decided not to keep Nano-Tex products to itself, but rather to license them
broadly. It created Burlington WorldWide to help license Nano-Tex products to other mills, and in
turn to market the products of those mills. These two entities represent Burlington’s main
potential for growth. They also seem to represent a major reason for Omaha, Neb.-based Berkshire
Hathaway Inc.’s takeover bid, judging from an announcement in which Warren E. Buffett praised
Burlington management for its strategy and globalization efforts
(See ”
Textile
World News,”
TW, this issue). If so, Burlington will continue towards a future driven
partly by technological vision and partly by necessity. For instance, NANO-CARE targets cotton, and
Burlington, having spun off its cotton business, does not make cotton textiles. So it must convince
other textile makers to use its treatments.

“If you can convince someone to buy from a virtual company, convince someone to mix the
chemicals for you on a virtual basis, then what you’ve got is good,” said George W. Henderson III,
Burlington’s chairman and CEO. But making these new companies full-fledged manufacturers was
impossible. “We needed to pay down debt.”

Debt has dogged Burlington since the late 1980s, when it used a leveraged buyout to avoid a
hostile takeover. The company had several decent years in the 1990s, including a record year in
1998. But then the business turned abruptly. Like many US textile makers, Burlington was betting on
the North American Free Trade Agreement (NAFTA) to drive business to Mexico, and built factories
there. No one expected the peso’s late 1990s rise against the dollar, but when that happened and
when Asian currencies fell some 40 percent against the dollar, the economics of the US textiles
business were sealed. The lowest-cost manufacturing would now be in Asia, and that was increasingly
where US garment makers were sourcing their clothes.

Burlington had no money to build mills in Asia. The next two years were nightmarish for most
of the US textile industry. Burlington itself lost $31 million in 1999, and in 2000 would take a
$530 million charge for restructuring related and impaired goodwill charges on sales of $1.6
billion. It lost another $91 million in fiscal 2001. In December of that year, Burlington filed for
bankruptcy protection.

When it emerges from bankruptcy, gone will be more than half a billion dollars in sales;
product lines such as bedding and window consumer products and residential upholstery; and
thousands of workers. What will remain are businesses Henderson thinks the company can defend,
which will include some consumer apparel and interior furnishings. The only remaining business that
might gain manufacturing capacity is Lees Carpets, which benefits from the heaviness of carpet and
the fact that plants produce finished products, reducing labor costs.

In Henderson’s new plan, Nano-Tex’s chemicals would allow Burlington to sell to Asian mills,
the very mills that were destroying its profit margins. Burlington would provide them with
distribution and marketing to American garment makers.

“We offer three things: the Burlington name, which has good recognition and association with
quality; the technology; and the ability to buy and sell fabric through Burlington distribution,”
Henderson said. “Nano-Tex walks in with technology in one hand, and distribution in the other,” he
added. “It’s been a very effective and compelling way to partner with mills [in Asia].”

Henderson thinks this new Burlington will be in a better position to compete when the World
Trade Organization (WTO) mandate against quotas takes effect in 2005.

It’s unusual for a textile maker to not sell its own textiles. But virtual manufacturing is
not unusual in other businesses, and, indeed, is the practice for apparel makers such as Vanity
Fair and Liz Claiborne.

“Vanity Fair has been very successful in transforming itself into a branding and marketing
company,” noted James K. Weeks, dean of the University of North Carolina at Greensboro’s Bryan
School of Business and Economics. Weeks said that textile technology, not manufacturing, will
become the US textile industry’s main competitive weapon in the future.

That would mark a shift in the business landscape, said Gary Moore, former senior research
engineer at the Institute of Textile Technology (ITT), Charlottesville, Va. “We’ve been more
concerned with fashion than functionality, trying to predict the whims of teenagers,” Moore said,
adding that most technology development has focused on manufacturing techniques, but Burlington’s
Nano-Tex unit exemplifies a developing trend in the textile business.”Technical textiles, smart
textiles, functional textiles – those are our only way of raising our margins,” Moore said.

New technology has saved Burlington before. Its founder, Spencer Love, bet his fledgling –
and failing – company on rayon in 1924, when it was still an experimental fiber. The bet not only
paid off, it helped turn Burlington into one of the biggest textile makers in the world, and
spawned the famous wooden wall strategy. Later, when Henderson ran Lees Carpets, new
stain-repellent technology turned that business from a money-loser into Burlington’s most
profitable unit.

The question is, will nanotechnology do the same? That answer will come from two factors: how
well the company develops and how effective Burlington WorldWide is at selling its products.

Burlington WorldWide was formed in early 2001. Peter Liu joined as president in June of that
year. Based in Hong Kong, Liu has built a 15-person marketing and product development team, which
works with partner mills in the region and also seeks new business.

Liu says Burlington WorldWide is Burlington’s “Asian engine room.” The product development
team designs products based on customer specifications, regardless of what Burlington might make in
its mills. Asian mills “see that Burlington has existing customers and existing business and can be
key in rebuilding the company,” said Liu.

Henderson transferred Burlington’s 30 apparel sales people in Greensboro to the Burlington
WorldWide banner. They sell Burlington’s apparel products, of course, but now also sell fabric from
partner mills that use Nano-Tex products.

Ken Kunberger signed on as president of Burlington WorldWide’s North American unit in October
2002. Kunberger said Burlington WorldWide now has licensing deals in place with 15 Asian mills,
which have resulted in product wins at Lands’ End, Eddie Bauer and Tropical-TSI. Those deals
generated only 1 million linear yards of fabric in December 2002 – tiny numbers, considering that
Burlington’s owned and operated plants produced 100 million linear yards of fabric last year. But
it’s a start.

“Our business plan is to maintain our owned and operated facilities to support our customers’
sewing in the United States, Mexico and the CBI region, and to drive growth through the Asian
partner platform,” said Kunberger.

“We planted a lot of seeds in 2002, and started to take some business. We hope to see in 2003
real growth,” Kunberger added. Three years from now, his goal is to see the Asian unit generate
$100 million in sales.

It’s obviously too early to say how the strategy will work. It is clear that Nano-Tex
continues to attract customers. Last June, the roster looked like this: Eddie Bauer used NANO-CARE
in its high-end khakis, as did Vanity Fair’s Lee brand. Dockers, Savane, Haggar and some
private-label brands sold pants treated with NANO-DRY. Some Serta mattresses and cubicle fabrics
from Steelcase’s DesignTex unit used NANO-PEL. Dockers also used NANO-TOUCH, the synthetic fabric
that has the hand of natural fibers. Big names like the Gap, Old Navy, Liz Claiborne and Casual
Corner also have been added.

Also in place is the beginning of a branding strategy that Henderson says will be Nano-Tex’s
version of Intel Inside. The branding strategy is built around a cute cartoon named Adam, a pun for
atom. But to really build the brand will require spending the requisite dollars. Those won’t be
available until the company can raise money, which means an IPO or  additional round of
funding. It isn’t clear when Wall Street might be receptive to a company like Nano-Tex. It does
help that Nano-Tex in December hired a dedicated CEO, Donn A. Tice, formerly president and CEO of
Winterland, a worldwide provider of licensed merchandise. Previously, Henderson was CEO.

Finally, there’s the market Burlington’s picked. Textiles, though far from being Wall
Street’s darling, is a huge business.

“The textiles market touches everybody – everybody needs to wear clothes,” says Avi Nash,
chemicals analyst at Goldman Sachs. Nash said Nano-Tex’s early acceptance is encouraging. On the
other hand, Nano-Tex doesn’t have much of a track record. It still needs to expand its customer
base and product offerings. It remains unclear whether customers, particularly men, will care
enough about tech-textiles to buy new khakis.

By going to Asia, Nano-Tex opens itself up to copying, and imitators are already cropping up.
In fact, both China and Taiwan have government-backed institutes trying to apply nanotechnology to
textiles.

Nano-Tex also faces fierce competition from DuPont, which is pushing new versions of its
Teflon® product for clothes. Dockers uses several types of Nano-Tex products for its man-made and
wool products, but uses Teflon for its cotton products, all sold under its own name, Stain
Defender. Nano-Tex has also been slow to bring its fifth product, NANO-FRESH™, to market.
NANO-FRESH uses special molecules to capture human body odor, so clothes can be worn several times
and still not smell (when the molecules are exposed to detergent, they release the body odor). It
has huge possible applications in athletic wear. But the product was supposed to be available in
late 2002, and the company now says it won’t be available before the middle of this year.

The Nano-Tex process does not require textile mills to buy new equipment. But it still
presents special complications for mills, meaning Nano-Tex and Burlington WorldWide must carefully
manage quality control from licensees, which could potentially slow adoption of its treatments.
Veteran plant workers at Burlington’s Hurt plant, which is a test-bed for Nano-Tex, said Nano-Tex’s
chemicals require more precise temperatures than other specialty chemicals. And, it takes time –
and plenty of ruined fabric – to get the process down.

Ultimately, though, Henderson thinks Nano-Tex treatments will become as common as
wrinkle-free ones. “If you use your imagination, and it’s the way khaki pants come, that’ll be
huge. If they’re followed up by shirts, there are four shirts sold for every pair of pants. You’ve
got to step back and say, from a consumer point of view, ‘Why not?'” Henderson said.The answer to
that question will help determine the future for Burlington and perhaps the rest of the US textile
industry.

Editor’s Note: Michael Fitzgerald is an Oakland, Calif.-based freelance journalist whose
writing has appeared in the Economist, MIT Technology Review, Business 2.0, Worth, San Francisco
and other magazines. Fitzgerald also appears frequently on such networks as CNN and CNBC.

March 2003