Day International Acquires Armstrong39 S Textile Business

Day International Group Inc., Dayton, Ohio, has announced the completion of its acquisition of the
textile products operations of Armstrong World Industries Inc., Lancaster, Pa.Day International
will continue to market a variety of items for the spinning industry.The sale of the textile
products business enables us to focus more of our resources on our core operations, which we feel
leads to greater value for our shareholders, said George A. Lorch, chairman and CEO,
Armstrong.”We’re very proud of our TPO (textile products operations) people and the position of
leadership they have attained within their industry. We appreciate the loyalty and support from all
the TPO employees and customers.”Dennis Wolters, president and CEO, Day International, said: “This
acquisition strengthens our worldwide textile operations providing us with a broader range of
products while continuing to provide value-added service to our customers.”

December 1999

TSSE Still Fighting Growing Pains

While improvements were evident, questions remain about the show’s future. The
Textile Supplies and Services Expo (TSSE), which ran from October 19 to 21, at the Palmetto Expo
Center, Greenville, S.C., saw an increased number of attendees from 1998, although the numbers were
not has high as was hoped.The reaction of many exhibitors was positive, as many felt the contacts
they did make at the show could possibly lead to sales.According to J. Robert Ellis, president and
director, Textile Hall Corp., there were 1,705 attendees at the three-day show. This was a 41.5-
percent increase from last years Textile Industry SuppliesandServices Exhibition and Conference
(TISSEC), which had 1,205 attendees. While this was a noticeable increase, it fell well below the
3,000 attendees the show had hoped to draw.I was disappointed in the number of attendees, although
it was up about 40 percent over last year, said Ellis. Most exhibitors I talked with seemed to have
a good show although some said otherwise.Impressions from the exhibitors were mixed. Many felt that
the number of quality attendees was much higher than the previous show. We looked at it as a
positive show. We found some new leads and customers, said Mark Reese, vice president of sales,
Lawson Hemphill. The quality of the attendees was excellent; there were a lot of decision-makers at
the show. I would say we probably have 30 percent more leads at this show than the last one.Also
making good contacts and customers at TSSE was Lois Foster, Kellett Enterprises: I had no problem
with the show. The people that came by the booth had quality visits.Many exhibitors also sited the
improved show hours, which this year ran from 8:30 a.m. to 4:30 p.m., as another positive change
that allowed more people to attend the show. The traffic was better this year than last year and
the quality was better. Tuesday was good, but Wednesday and Thursday were slow, said Jeff Davis,
Alexander Machine. I would really like to see this show make it.For many of the smaller companies,
the TSSE show was an opportunity to show products and services that were not at the larger shows
such as ITMA 99.We felt like it was a good small show, said Steve Haygood, Briggs and Shaffner. I
thought the organizers did a good job promoting the show. We hated to see that it wasnt more
excepted by the industry though.There were some concerns over the show, many hinging on timing and
attendance. This years TSSE show fell not only in an ITMA year, but also within a few weeks of
other larger shows such as Bobbin Americas, in Atlanta, and the IFAI Expo, in San Diego.A concern
that resonated throughout many of the exhibitors was with the number of shows this year, combined
with the current state of the textile industry, many companies could not afford to

December 1999

Learning The New Golden Rule

Sustainable development can be defined as building value without impacting the opportunities of
future generations to do the same. Sounds a bit like the Golden Rule and, in essence, it is. Future
generations will be pleased if we leave them a clean natural environment, opportunities for
development and a future vision for their children. Corporations are looking at the benefits of the
triple bottom line of profits, environment and community, as equally important in building
long-term value. Sustainable PhilosophyThe philosophy of sustainability that has been
developing since the 1960s is based on the idea that environmental stewardship and total quality
management are one in the same. Integration of all business processes into one unified vision of
success, comes as our information driven world produces better tools to measure and observe the
effects of change on ever larger systems.When our businesses become more like nature, operational
losses move closer toward zero. This maximizes efficiency, which in turn increases profits. Seems
simple, but its not. From A Textile Point Of ViewThe textile industry is one that has great
opportunities to build truly sustainable value. Visionary textile com-panies are designing their
businesses to thrive in a dynamic market that will con-tinue to grow with a population of informed
and savvy consumers.

Striving for zero operational losses increases profits and also leaves a cleaner environment
for future generations.The textile industry has always been on the leading edge of changes. It was
the first industry to emerge from the cottage into factories, thus beginning the Industrial
Revolution. It is an industry that has always followed its sources of raw materials and developing
economies, seeking greater efficiencies and lower costs. The reasons for the migration of U.S.
textile manufacturing from the Northeast to the South was based on the proximity to the cotton crop
and the ready, low-cost labor after the Civil War.So the industry moves today, with whole segments
of textile production leaving the United States and following lower labor costs as the raw material
supply chain becomes global.The first indicators of the real value of designing textile businesses
based on the principals of sustainable development were seen in the 1990s. Polyester fleece fabrics
made from recycled soda bottles, organic cotton farming, low-impact dyeing and finishing with
process water recycling, dyeing with supercritical CO2 and carpet fibers and backing being recycled
are all movements toward a sustainable business model. Commerce itself is even being redefined.
Interface Inc., Atlanta, a forward- thinking textile company, believes that owning carpeting is not
necessary to achieve a floor covering that is clean and is always serviced. It is the function of
what is wanted, not the thing itself. Commerce is being designed to pay for function and utility.
Automobiles, clothes and computers provide function and utility. We do not need to own the thing to
get these services. This simple redesign of commerce produces opportunities to increase durability,
eliminate non-recycled raw materials and increases efficiency in design as things are produced that
are built to last forever.Burlington Chemical Co., Burlington, N.C., an ISO 9001 specialty chemical
manufacturer that serves the textile industry, adopted the principals of sustainable development
two years ago. It was decided to focus on these goals as a way to build value in the company over
the long term and to increase the ultimate efficiency of the company.Burlington Chemical believes
that value can be defined as:Value = Cost + Benefits;Benefits = Efficient control of
complexity.Using these two equations, it is easy to see that when there are no benefits, costs or
price is the only factor that drives value. Controlling complexity as a benefit diminishes the cost
or price issues in the equation. The higher the benefit the less important the cost. Aiding In
The ControlIt was decided in 1987 that a class of surfactants call Alkyl Phenol Ethoxylates (APEs)
were indicated in foaming and aquatic toxicity problems. There were known alternatives based on
proven safer chemistry, but were a bit more expensive. Burlington Chemical decided as a policy not
to use these APE products to remove one variable from the aquatic toxicity issues facing its
customers. This has saved the company and its customers millions of dollars in environmental costs
by taking the simple natural solution of using less toxic materials when available.BurcoCare a
product stewardship testing program produces biodegrad-ability, aquatic toxicity and biomass
toxicity data on all Burco® products. This readily available information controls the complexity of
information gathering and questions concerning chemistry.Burco SA-200 is the first reactive dyeing
alkali to be manufactured directly from CO2 sequestered from the atmosphere. Tons of this
greenhouse gas was converted in a product used in textile dyeing using a patented technique that
mimics the actions of corals and plants. It is the first true liquid carbonate dyeing alkali. The
majority of the Burco products from synthesis are based on vegetable derived chemistries and have
high yields producing little or no toxic by-products.Rehance®, a new printing process, has been
developed to replace plastisol printing of textiles. This eliminates PVC and phthalates from
decorated textiles and reduces the weight of the prints by 200+ percent. It is a breathable,
durable and iron able screen-printing technique that builds value in cellulose textiles.At
Burlington Chemical, more than 80 percent of all its shipping containers are recycled. Trees are
planted each year to use the CO2 produced by driving company transports. Programs in recycling and
reuse of resources are active throughout the company. A Smart Tank virtual inventory
management system using ERP software is controlling inventory costs and cash flows for customers.
Managing information is managing complexity and building value. Also, Health/Safety and
Environmental Affairs and the ISO Quality group were merged within the company.

Visionary textile companies are designing its businesses to thrive in a dynamic market
containing informed and savvy consumers. Gaining MomentumThe efforts of organizations
worldwide to define sustainable value, thus improving the efficiency of commerce and sustaining
society are gaining momentum. It is not the program of the week or the newest hot topic out of
business schools, but a way to build continuous value for the stakeholders of corporations by
mimicking the efficiency of nature.Nature is a system that has millions of years of continuous
improvement as evolution and is the best model that we have for true efficiency. The value of
building corporate goals based on producing smarter products that contain less stuff, can enable a
higher quality of life for everyone. The textile industry is at a crossroads. The opportunities to
build value in apparel, commercial and industrial textiles are great when viewed within the context
of the principals of sustainable development.

DuPont Lycra Realigns Leadership

DuPont, Wilmington, Del., has announced that it has realigned its management structures and
resources of its Lycra® business by end-use segment rather than by region.According to the company,
that realignment will enable its global position to be leveraged in ways that benefit both DuPont
and its customers in local markets around the world.This reorganization will upgrade our global
supply and sourcing capabilities, as well as our ability to observe and respond to market trends
and customer needs, said Steve McCracken, president of Lycra and vice president of DuPont.We will
be better able to utilize our global strengths to bring greater advantages locally. Ultimately,
that means being able to deliver enhanced value and create new growth opportunities for us and our
customers.The company expects direct and downstream customers to benefit from improved service,
enhanced technical and marketing support and greater access to global trade connections.As a result
of this realignment, our customers will be able to take fuller advantage of out extensive resources
and be better positioned to meet the fast-growing consumer demand for the kind of enhancement that
Lycra brings to cloths, McCracken said.DuPont also announced that it formally opened its latest
Lycra plant in Singapore. This S$170-million plant uses the most advanced technology for Lycra
production.

December 1999

Math Technology Technique

During a recent CItdA (Computer Integrated Textile and Design Association) conference in New
York City, textile and clothing designers were asked the question Which comes first design or
computer skills The quest was to determine from the perspective of todays creative professionals,
which is the foundation for success and which is the value added skillset.Sentiment rang strongly
among the nearly 100 attendees that a computer design program does not a designer make. Not only do
todays designers view the computer as a tool with which they can express their design skills, but
an increasing number understand both the importance and opportunity that integrating
computer-aided-design (CAD) with computer-aided-manufacturing (CAM) can provide. The designer that
can not only push the design envelope, but can push that envelope all the way through the
production process is the designer that will make his or her mark in the design world. The
consummate example of the technology-driven designer is Jhane Barnes, the award-winning menswear
designer who weaves her own personal formula of thread, warp, weft, color, surface design, computer
technology and math to produce her textiles. Math, you ask From Math To MenswearWhile most
designers will look at a rainbow, a shape, a flower or any other concrete object for inspiration,
Jhane is driven by more obscure stimuli such as patterns in fractal books, symmetries, algorithms
or the angle of light reflecting off of an object. Its how she plays these inspirations against the
computer and the loom that tells an interesting story.Though a star in her own right, one of Barnes
childhood celestial aspirations was to become an astrophysicist. Her love for math and science were
in stark contrast to her love for designing and making her own clothes, a skill that provided for
some early recognition and success that sealed her destiny. She became frustrated early in her
career by her inability to find the kind of textiles she was looking for and says she learned the
art of weaving from books, mills and by making mistakes. The 45-year-old designer began using
computers in the early 1980s, when she was among the first to own a weaving program that allowed
her Atari computer to drive her handloom.She is emphatic about her belief that the technical
weaving skills she developed in those early years are not only the foundation of her success, but
the missing formula for many of todays designers.Most textiles happen accidentally because the
designer doesnt have the technical production knowledge and the mills dont have the creative
capabilities to accurately interpret the design sketch, Barnes said.By designing with the use of
computer software that allows her to control both the design and the production processes, Barnes
has complete control over the outcome of products that will proudly bear her name.While she and her
staff of 10 designers have used many of the surface design and weaving applications on the market,
she is fiercely loyal to both the applications from and the relationship with Designer Software of
Syracuse, N.Y. She makes intense use of their flagship programs Surface Magic and WeaveMaker, and
has substantially influenced the way the software has been developed.To understand the
relationship, it is important to understand the driving force behind Barnes design inspirations.
When she is in the creative process, she thinks about not just color, yarn, pattern and texture,
but about symmetries, rules and generators.Symmetry is a mechanism for superimposing the entire
plane on itself without changing the original motif or pattern. The 17 symmetries that exist for a
two-dimensional infinite plane such as fabric include design concepts like mirroring, sliding,
rotation and repeat. By combining her knowledge of design and symmetry, Barnes will create rules
that will define the actual construction of a design. Rules define such items as the size of
squares or circles, the width of lines, the number of colors, the size of the repeat, the float in
the weave and the symmetry to be applied. These rules, which are constantly evolving and being
added to her proprietary copies of Surface Magic and WeaveMaker, include instructions such as
shearing stripes where the odds shear but the evens stay put, repeatedly reducing the size of a
design on itself, or guiding the rearrangement of a design motif with a space filling curve, which
was inspired by a math book on fractals.These symmetries and rules must be written into software
that will not only produce the desired visual effect and allow Barnes to apply color to the
results, but provide weaving direction based on such technical details as the number of harnesses,
the number of colors, the weave construction, etc. Since the number of harnesses is contingent on
the mill in which the fabric will be produced, this variable is not often known during the design
process. Barnes applauds the flexibility of WeaveMaker, which allows her to see the effect on a
design as, for example, the number of harnesses is changed. She also exploits this capability, as
the software allows her to design as if there were an unlimited number of harnesses, a virtual
dobby loom if you will.While she knows she must eventually reduce the number of harnesses to match
production, the freedom to temporarily suspend real world limits in the initial design process only
enhances her creativity and provides the opportunity to develop the unusual designs that have
become her trademark.Much of her work actually starts in Surface Magic, a very inexpensive ($185,
Macintosh and Windows) surface design program for pattern or jacquard design development on knit
and woven fabrics. Features include: automatic pattern creation, automatic repeats, absolute color
control, resolution control, the ability to define the shape of the individual pixels, masking and
layers.The software supports the ability to create proprietary pattern generators, a feature that
Barnes has exploited more than most. She has also taken full advantage of her relationship with
Designer Software by assisting them to develop their products around the intuitive and creative
thought processes of a designer. She doesnt like to read a users manual, and rarely does.When
Designer Software owners Dana Cartwright and Bill Jones talk about their relationship with Barnes,
the tone in their voices resembles that of proud parents. Their relationship goes back to 1992,
when she first discovered their software at a trade show. Since then, each has had a profound
influence on the other.As the chief software architect, Cartwright is responsible for adding
features to the software, such as the saving of thumbnails or the addition of weave capabilities.
Jones, a mathematician, is responsible for writing the software pattern generators that Barnes
dreams up from her unique integration of symmetries and fractals. The three provide an unusual
combination of skills that, by all accounts, provides for a free flow of creative inspiration in
all directions.Barnes recently completed a project that was a unique honor. When the State of Ohio
developed an initiative to improve both the interest and test scores in math of middle and high
school children, their search for real world applications led them to Barnes.In co-operation with
Ohio teachers and Designer Soft-ware, Barnes has developed a series of lesson plans that will teach
students how to apply math in the world of textile design. It is supported by a 20-minute video of
Barnes working at her computer and at the mills. It also includes a series of work books that will
assist students in applying math to real world weaving situations.In the world of apparel and
textile designs, where knock-offs are so common, one might think it was an actual business process.
Designers and manufacturers alike have learned to guard their creativity and work product. The
question remains, why would Barnes be so willing to tell the world how she does what she doesBarnes
explains that the process of sharing her unique insights only serves to boost her creativity. While
she herself has trained many of her staff, she has found her style and technique to be often
imitated, but never duplicated. Step-By-Step Designing

1. The first step is created using a scheme (pattern generator) that automatically arranges a
check design after selecting the repeat size, the number of colors and the number of stripes. The
blending of the stripes in each direction is constructed using a technique involving the Quadratic
Formula.

2. In Step 2, the “slice” filter progressively shears the rows and columns of pixels in a
systematic way.

3. In Step 3, the “space filling curve” filter works like a multiple-reduction copy machine.
It takes the existing picture and reduces it down to a fraction of its size in five different
shapes and puts it back together.

4. The weave structure is added to the final pattern and the warp and weft colors are “woven”
into this fabric simulation.
Editor’s Note: Teri Ross is a writer, speaker and consultant on new technology for the sewn
products industries. She is owner and president of Imagine That! Consulting Group, publishers of
the award-winning techexchange.com. She can be reached via e-mail at tross@techexchange.com or
phone at (612) 593-0776.

December 1999

Gretchen Bellinger Introduces New Silk Taffeta Line

Gretchen Bellinger Inc., Cohoes, N.Y., has introduced a new line of silk taffeta known as Vanity of
Vanities.This silk taffeta line is available in five colors,all of which have gold undertones. It
is woven in Italy from 100-percent silk. Circle 301.

December 1999

Taconic And Dollfus Muller Form Joint Venture

Taconic, Petersburgh, N.Y., and Dollfus Muller, France, recently announced that the companies have
formed a joint venture agreement.The agreement includes the development, manufacture and sales of
PTFE coated fiberglass, kevlar and kevlar/glass belts to the rotary screen print, relax drying and
vapor textile finishing markets.We are truly delighted to have a joint venture agreement with
Taconic, said Oliver Rogues, vice president of business development, Dollfus Muller.Louis P.
Batson, Greenville, S.C., will serve as the exclusive sales and distribution company in the United
States and Canada.

December 1999

Watch 2000


 

January 1, 2000. While it is arguable as to whether or not it is the actual beginning of the
next millennium or whether that honor is bestowed to January 1, 2001, when the clock strikes
midnight on January 1 millions if not billions of people will be filled with at least a small sense
of fear.Why Y2K should answer at least part of that question. While its effect will remain unknown
for several months to come, there are other issues that will also have far-reaching effects.Some
events, such as the next presidential election are widely known, while others are taking place with
relative obscurity. These events may vary in impact, but taking a closer look at how they will
effect you and your company might be a wise idea. Open Broader ProvisionAn issue that could
have a major impact on the textile industry is the NAFTA provision opening U.S. borders to trucks
from Mexico and Canada. These trucks are currently allowed to be within 3 to 20 miles of the border
for commercial purposes. The economic impact of this provision is uncertain. What is certain is
that the concern over safety, as well as the lack of federal truck inspectors, has forced the
government to re-think whether or not to open borders on January 1.Published reports have stated
that of the 3.9 million trucks that entered the United States from Mexico in 1998, approximately 45
percent failed U.S. inspection. Of the 5.8 million trucks from Canada, 17 percent failed
inspection.The lack of stringent safety requirements by Mexico, and to a lesser degree Canada, will
place an increased burden on U.S. border inspectors, who were able to inspect only 0.6 percent of
trucks crossing the border in 1998. Internet And E-CommerceThe expanding Internet, which has
changed almost every facet of American life, will continue to have a staggering influence on
business and government. E-commerce is creating increased competition in manufacturer-to-consumer
and business-to-business purchasing.As a current television commercial states, 16 million people
get on the Internet for the first time every day. Drawbacks to the Internet and e-commerce, such as
computer viruses, hackers and lawsuits will hinder, but not impede its expediential
growth. Bills Effecting IndustryIn the textile industry, the Caribbean Basin Trade Enhancement
Act and African Growth and Opportunity Act (also known as the sub-Saharan Act), will have
long-reaching effects if finalized by Congress.Another bill that will have a lesser effect on
industry is the Computer Equipment Common Sense Depreciation Act. This act states that any computer
or peripheral equipment used in manufacturing can be depreciated over two years rather than five
years. This bill goes into effect January 1, 2000. Uncertain Financial MarketsThere is some
question as to the state of the financial markets in the days leading up to, and the days
following, the first of the year. Many experts believe that the financial markets will be not only
be thin, but also quite volatile in price fluctuation from about December 31, 1999 to January 7,
2000. This effect on stocks, bonds and other securities is directly linked to the unknown effect of
the Y2K bug on the computer systems that control financial and government
institutions. Jublilee 2000Jubilee 2000 is a proposal to “forgive” the debt of the world’s 40
poorest countries on January 1,2000. Lawmakers say that while its cost will be almost unfelt by the
average American (about $1.20 a year for three years) it has the potential to save approximately
20,000 lives a day in these countries. This debt relief proposal is currently being debated in
Congress. Stay InformedThe key to staying ahead of the business curve is staying well
informed. As more information is made available, managing it becomes even more crucial. It is
crucial to not get blind-sided by important issues in the year 2000.
(For more on these issues, see ATI, January 2000).

December 1999

Hurricane Floyd Disrupts U.S. Economic Activity


Hurricane Floyd Reduces Utility Output; Factory Output Down After
August Rise

Industrial production declined 0.3 percent in September, as Hurricane Floyd reduced utility
output and held back motor vehicle production and other goods. But even after adjusting for the
hurricane, the industrial output gain would have been small compared to increases of 0.4 percent in
August and 0.6 percent in July.

Factory output was down 0.2 percent after rising 0.5 percent in August. In the third quarter,
industrial output grew 3.7 percent at an annual rate, nearly matching the second quarter pace. The
operating rate of industrial capacity eased to 80.3 percent in September from 80.7 percent in
August.

The U.S. trade deficit of goods and services narrowed in August to $24.10 billion from $24.89
billion in July. Exports shot up 3.7 percent to $82.03 billion, up for the third month in a row,
while imports advanced 2.0 percent to $106.12 billion.

Business sales surged 1.3 percent in August, as durable goods sales jumped 1.5 percent on top
of a 1.0-percent rise in July. Non-durable goods shipments grew 1.1 percent. Business inventories
rose 0.3 percent. As a result, the August inventory-to-sales ratio dipped to 1.32 from 1.34 in
July.  

p19a_1796


Financial Markets Are Uneasy With The Federal Reserve Leaning Toward
Further Tightening

The evidence from latest set of economic reports is that the American economy, after two
interest rate hikes, is beginning to slow down. While the latest inflation readings appear to be
excessive there is no broad-based increase in prices. Nevertheless, with the Federal Reserve
leaning toward further tightening, financial markets are uneasy.

While economic activity and hiring was disrupted by Hurricane Floyd in the East Coast, the
loss of 8,000 nonfarm payrolls in September and the creation of only 103,000 jobs in August is a
clear indication of a slowing economy.

It is estimated that without the hurricane, nonfarm employment would have risen by 50,000
jobs in September. This is a major pullback from the dizzying pace of 654,000 jobs added in June
and July. Factory jobs continued to decline in September, falling by 21,000 jobs and bringing the
loss to 532,000 in the last year and a half period. The September jobless rate at 4.2 percent was
unchanged from August.

The Producer Price Index for finished goods shot up 1.1 percent in September, the largest
gain in nine years. Excluding energy, food, tobacco and automobiles, the price index was up just
one-tenth of a percent, hardly a sign of widespread price acceleration.

Consumer prices rose 0.4 percent in August. Energy costs accounted for 1/4 of the rise. The
core inflation was 0.3 percent after rising just 0.1 percent in August.


Textile Payrolls Fall After August Increase; Output Remains Slightly
Below Last Year’s Numbers

The textile industry’s payrolls fell 0.3 percent in September after edging up 0.1 percent in
August. The volatile jobless rate for textile mill workers dropped to 3.4 percent from 5.2 percent
in August.

Textile output rose 0.3 percent in September. Despite strong U.S. economic activity textile
output remained slightly below the year ago level. The utilization rate for textiles improved to
82.8 percent of capacity from 82.5 percent in August. Shipments by textile producers declined 1.0
percent, giving back most of the 1.5-percent gain in July. Inventories increased 0.3 percent. The
August inventory-to-sales ratio rose to 1.55 from 1.53.

U.S. retail sales rose just 0.1 percent in September after surging 1.5 percent in August, the
largest gain in six months. Excluding autos, retail sales were strong, rising 0.6 percent. At
apparel and accessory stores, sales fell 0.9 percent. For the third quarter, total retail sales
were up by a startling 10.5 percent from a year ago.

Producer prices of textiles and apparel edged up 0.1 percent in September, reversing declines
for five straight months.

Prices moved up 0.4 percent for gray fabrics and rose 0.1 percent for finished fabrics and
carpets. Prices declined 0.2 percent for processed yarns and threads.

p19b_1795

November 1999

Cotton Season Interesting


T
 he jury is still out on how the cotton crop was affected by the combination of high
temperatures, low rainfall and Hurricane Floyd. There is some concern in the industry as to staple
length, particularly for the Delta cottons.

According to a respondent in this area, initial tests report that the staple length is
somewhat shorter than normal for Delta cotton while the micronaire in most areas is above the base
of 34. An exception in Memphis which is running slightly below the base at 33.6.

The demand for ring-spun yarns continues according to most spinners. So much so that one
spinner said: “This market is stronger than I’ve seen it in years, and this holds true for both
single and plied yarns. If this demand continues, I anticipate an increase in ring-spun yarn prices
in the immediate future. As a matter of fact, we have already increased ring-spun yarn prices in
certain cases.”


Still In Pits

The area of most concern to virtually every cotton spinner is the open-end (OE) yarn market.

The most encouraging note came from one such spinner who said: “At least the pricing for this
product has not deteriorated any further and seems to have stabilized. Our volume is good for OE
yarns but we are still looking for ways to make money from it.”

This is the feeling of many spinners of OE yarns. This spinner went on to say: “If we can get
some of this low-priced cotton, we may be able to make some money next year.” Customers want a
lower price now because cotton prices are low.


Cotton 101

Speaking of low-priced cotton brings up a point mentioned by many spinners when discussing this
subject. Many customers and nearly none of the retailers realize the diversity of cotton in all of
its physical properties. In other words, cotton isn’t just cotton.

For a spinner to get a commitment for the cotton he needs to produce his product, he must
contract for the quality and quantity he needs well in advance of when he needs it. That
essentially means he can’t go to the market place and buy the grades of cotton he requires today at
any price. His commitment must be made at the time (and price) the grade is available. The cotton
market isn’t like the yarn market where you as a customer can make a spot purchase at 30 to 50
cents off of the market price.


Start-Up Yarn

One spinner of open-end yarns said: “ There’s a category of yarn known as ‘start-up yarn.’ Now
what I want to know is how can you make a start-up yarn for six months. If it takes you that long
to start up a spinning frame, you better get out of the business now.”

He went on to say: “Some people in this business are getting pretty desperate. To show you
how desperate — they will quote a small-volume customer the lower prices usually reserved for the
large-volume buyer. They are essentially taking more business at lower prices in the hope of
getting more business.

“I’m concerned, too, about the bankers who are in so deep to some of these mills that they
are afraid to pull the plug, and the bankers I know are quite concerned about the condition of this
industry. Some of these spinners cannot even service their debt, yet they continue to make yarn for
spot sales.”

Apparently there are some spinners who only sell “Spot sales yarn.” Now if this is true and
you are spinning nothing but spot sale yarns, it is not hard to explain the six-month sale of
start-up yarn.

According to spinners, a lot of the T-shirt manufacturers have moved off-shore or to Mexico.
A number of them felt this was a good move — for the yarn spinner. Of course, when they left, they
took with them the yarn production they formerly purchased domestically.


Supply Problem Solved

The solution to the OE problem is pretty simple in the eyes of many spinners — Make less yarn!
Until this happens the situation will only get worse.

Another major change will have to occur in the attitude of mill owners and managers which is “
make it and they will buy it.” Satisfy the law of supply and demand and you solve the problem.

p17_1797



November 1999

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