A coalition of 13 fiber and textile trade associations has written U.S. Trade Representative Robert
Zoellick outlining their objectives and recommendations for consideration in connection with the
on-going World Trade Organization (WTO) trade negotiations. The associations are members of the
Textile Alliance that includes cotton and man-made-fiber interests, textile manufacturers,
machinery manufacturers and textile distributors. They told Zoellick their recommendations are
“critically important to the future health of our respective industry sectors” and urged government
officials to give these recommendations their “highest priority” in the negotiations.The basic
alliance recommendations were reduction and binding of textile and apparel tariffs by foreign
countries to the levels of tariffs in the U.S.; elimination of all non-tariff barriers; and
installation of a mechanism to permit retaliation against a country that establishes non-tariff
barriers in the future, except as permitted under the WTO safeguard and unfair trade provisions.The
alliance said any future trade agreements must be “balanced and fair and completely reciprocal,”
and that agreements must include rules of origin and customs enforcement that will prevent
transshipments of goods from countries that are not participants in an agreement.The associations
also emphasized that rules of origin in future agreements must be based on the NAFTA yarn-forward
rule of origin that requires use of yarn and fabric “wholly formed” in participating nations. They
said that benefits should be withdrawn from any nation that does not conform to these rules. The
letter tracks what the American Textile Manufacturers Institute (ATMI) has been saying for some
time, but the letter demonstrates a unified policy from a broad spectrum of textile
interests.Members of the American Textile Alliance are: American Cotton Shippers Association,
American Fiber Manufacturers Association, American Textile Machinery Association, American Textile
Manufacturers Institute, Georgia Textile Manufacturers Association, National Cotton Council of
America, National Textile Association, North Carolina Manufacturers Association, South Carolina
Manufacturers Association, Textile Distributors Association and the Carpet and Rug Institute.
October 2002
Textile Interests Set Agenda For Trade Talks
Coats Breaks Ground On Third Mexican Plant
Coats Breaks GroundOn Third Mexican PlantLondon-based Coats plc has begun construction of a new
industrial thread-manufacturing plant in Orizaba, Mexico. The new facility, expected to be finished
by the end of 2003, will be the companys third in Mexico.In announcing its Mexican expansion, the
company noted that over the past ten years, apparel companies have been moving more and more of
their operations to Mexico, Central America and the Caribbean Basin. To deliver the quick service
our customers demand, it is imperative that we offer in-country manufacturing and immediate
delivery, said Max Perks, chief executive for the Americas, Coats American, Charlotte.The
130,000-square-foot facility is located near water for use in dyeing and finishing processes, as
well as near major roadways. Coats will install a $1 million state-of-the-art water filtration
system to process waste water from the plant.Coats will hire and train approximately 300 employees
to work at the facility. Production capacity will be 250,000 pounds of thread per week.
October 2002
Business Is Moving Sideways
B
usiness activity remains relatively steady. Demand for air-jet yarns is strong, with some
softening in the ring-spun (RS) and open-end (OE) market. As one respondent reported, “Our business
isn’t up or down — it seems to be moving sideways.” This seems to hold with the rest of the
industrial sector, as the Institute for Supply Management reported that its index of business
activity remains at 50.5 for the month of August (an index above 50 signifies growth).
Several spinners reported that “orders are decent, but our margins are squeezed by current
pricing.” The return to profitability is further hindered by many spinners having to meet the debt
service associated with highly leveraged balance sheets. One major spinner expressed considerable
frustration with his competition. “Everyone is overreacting to normal demand drops by cutting
prices. We can keep some business, but when do we start turning a profit? We are tired of running
for fun.”
Much of the excess capacity in the domestic market is gone, and a substantial amount of the
inventory in the pipeline has worked its way down. Spinners report they are producing against
orders. With some softening in the market, they are concerned with building inventory.
As one spinner indicated, “It is time to be careful right now. We have scaled back some of
our manufacturing capacity over the last couple of months.”
The Good, The Bad And The Ugly
As the U.S. economy continues to falter, the dollar continues to weaken against other
currencies. This has helped to make domestic yarns more competitive. However, a review of import
data through June 2002 shows mixed results. When compared to June 2001 data, imports of category
300 carded cotton yarns are down, while combed cotton yarn imports are up. As one spinner reported,
“We can’t chase prices on Pakistani yarns. If we cut our prices, they simply cut more — it’s an
endless cycle.”
The recently enacted Trade Promotion Authority bill should provide some additional export
opportunities to the Caribbean Basin, because it maintains the yarn-forward rule contained in the
Caribbean Basin Initiative (CBI). The legislation also increases the caps for knit apparel and
quotas for T-shirts beginning in October 2002.
Raw material prices continue to creep up. Although cotton prices are down more than 3
percent from the averages reported last month, they are substantially up from the averages reported
six months ago. The OPEC nations, which control 40 percent of the world’s oil output, reported to
the World Petroleum Congress that they would “maintain oil prices at levels that are fair and
reasonable.” However, fiber producers are reporting increases in petrochemical prices.
With our current economic and political uncertainties, predicting consumer spending over the
next quarter will prove to be very tricky. Retailers reported very disappointing results from
back-to-school sales in a report released recently by the Federal Reserve. Some merchants are
holding orders until closer to the holiday season to give them more flexibility in changing trends.
So What Now?
As one spinner reported, “Business is getting more impersonal — more price-driven.
Fortunately, some customers are still looking for value-added yarn to help differentiate their
product from the crowd.”
This type of thinking may lead spinners to modify their business strategies going forward.
It is difficult, if not impossible, to be the low-cost producer of commodity yarns in a global
market. The shift may be to more specialization and working with customers in product development —
attacking the problem where they can be more responsive and deliver better service.
Editor’s Note: James L. Lemons, Ph.D., has joined the staff of Textile World as technical
editor, Yarn Market. Lemons is president of the North Carolina Center for Applied Textile
Technology (NCCATT), Belmont, N.C.
He obtained a B.S. degree in textiles from North Carolina State University (NCSU) and, while
working on a M.Ed. at the school, was awarded a grant in the amount of $1,500 to conduct a
five-month study about cotton yarn manufacturing costs and production rates.
Lemons also holds an M.B.A. from Virginia Tech and earned his Ph.D. from the University of
South Carolina. During his career, Lemons has worked for J.P. Stevens & Co. Inc., Dan River
Inc., Tultex and Kellwood Co., in addition to teaching at Virginia Tech and NCSU.
October 2002
Fiber Dynamics Management Group Gains Majority Share
A management group headed by Fiber Dynamics Inc.s president, James Heery, has acquired a
controlling interest in the High Point, N.C.-based company from Sommers Inc., Coral Gables, Fla.We
believe this transaction will allow both Fiber Dynamics and Sommers to concentrate on core
businesses, while we continue to develop our presence in the industrial markets with both new and
innovative products and services, said Heery.
October 2002
PACA Receives Military Order
PACA Receives Military OrderThe Protective Apparel Corp. of America (PACA), Jacksboro, Tenn., has
received a purchase order from the U.S. Army for its Countermine Ensemble, a protective suit to be
used by U.S. Army Engineers involved in land mine clearing and disposal.The purchase order, worth
$9.2 million, follows successful completion of research and development carried out by PACAs parent
company, DHB Industries Inc., Carle Place, N.Y., under a 1999 contract with the Army. The
Countermine Ensemble is made using a unique ballistic material that defeats fragmentation from
AntiPersonnel (AP) Mines, according to PACA.
October 2002
National StarchandChemical Introduces New Adhesive
National Starch and Chemical Co., Bridgewater, N.J., has introduced PUR-FECT LOK® 34-943A, a
polyurethane reactive hot-melt adhesive. The product specially formulated for vinyl laminating,
panel-bonding and assembly-bonding includes an additive that promotes adhesion between
difficult-to-bond substrates. In order to monitor the amount of adhesive that is applied, an
ultraviolet (UV) dye also is added to the adhesive, allowing the manufacturer to view the
application level with a UV light source. The product can be applied at material temperatures of up
to 250°F by spray, roll coater or slot coater adapted for reactive hot-melt adhesives.
October 2002
X-Tek Opens New U S Office
X-Tek OpensNew U.S. OfficeUnited Kingdom-based X-Tek Inc. has opened a second office in the United
States. The new head office in Tyngsboro, Mass., will act as the companys East Coast sales and
service facility. X-Tek manufactures a range of microfocus X-ray systems, from low-cost bench-top
models to the highest-resolution computed tomography (CT) systems. The X-ray machines can be used
for research and development, batch inspection and quality control purposes in various industries,
including composites, ceramics and plastics.
October 2002
Textiles Are Holding Their Own
M
ills, going into the last quarter of the year, aren’t doing all that badly, at least
relative to overall U.S. business performance. Latest monthly data, for example, show textile mill
output running 2 percent ahead of a year ago — actually a bit better than the near-flat level of
Uncle Sam’s overall industrial production index over the same period.
Look at projections for all of 2002, which factor in earlier declines, and the picture is
much the same, with both textiles and general industrial production expected to show only
fractional dips.
Where do we go from here? Clearly, incoming textile orders still leave a lot to be desired.
But by and large, current trends do suggest that the industry has turned the corner. And while 2003
will hardly be a boom year, mills are in a much better position than a few years back to survive in
today’s hotly competitive climate.
More Evidence Of Better Days Ahead
The above appraisal is based on more than wishful thinking. As one mill executive put it, “While
recent improvement hasn’t been dramatic, demand has clearly bottomed out, with small gains likely
into early 2003.” Equally encouraging, the Institute of Supply Management finds textile output has
been rising for several straight months.
As for specific fabrics, denim continues to move well, despite strong competition. Helping
things along is the trend toward lighter finishes, tinting, crosshatching, slubbing and engineered
stripes. True, khaki business remains slow. But sellers here hope to rev up demand with new
stain-resistant fabrics.
In general, higher-priced fabrics are now hitting the market in increasing volume. This, too,
should help over the longer pull.
Pricing Has Stabilized Too
Somewhat higher quotes on a few more basic fabrics are also beginning to show up. But perhaps
even more significant than any modest increase is the recent change in overall price direction —
from down to up. If there’s any doubt on this score, take a look at Textile World’s mill price
index, which suggests textile price averages have been slowly edging up now for more than half a
year.
Bellwether greige goods have helped contribute to this recovery, with the year-to-year price
lag in this key area now all but gone. On the other hand, it’s still difficult to post hikes on
many finished fabrics. And in denim, tags on basic grades remain at very low levels, despite fairly
good demand levels.
As for other textile areas, prices are beginning to creep up in the man-made fiber sector.
Quotes for polyester, for example, are now as high as 60 cents per pound — well above the low 50s
range of earlier this year. Other areas of man-made strength include lyocell, lightweight modular
rayons and acetate. Most yarns also have begun to move onto higher ground.
A Closer Look At Cotton
Cotton, the key natural fiber, also has edged up from earlier 2002 lows. But here, there’s
little indication of any further meaningful advances over the next few quarters. That’s because
supplies remain more than adequate, reflecting a recent upward revision in the new U.S. crop by one
million bales — up to nearly 18.4 million bales. And forecasts for another fairly large world
cotton crop suggest a continuing global inventory overhang that will keep a lid on any near-term
price rise.
Beyond that, prices could well depend on the extent of future buying by the Chinese. Should
that nation step up its purchases, prices could begin to edge up again — probably as early as
mid-2003.
Some Important Questions Remain
This cautiously optimistic prognosis isn’t without its potential problems. For one, imports
continue to come in at a disturbing clip. Indeed, they’ve been accelerating of late. Year-to-date
gains on a square meters equivalent basis again are running in the double-digit range, compared to
last year’s relatively flat incoming shipment pattern. On the other hand, a somewhat weaker dollar
may help slow the tide — at least over the longer pull.
Another important questionmark: What happens in 2005 when quotas are eliminated? Nearer term,
there are still some nagging questions about the economy and how it will affect textile and apparel
demand.
True, the combination of a housing boom and low interest rates have helped offset a still
very shaky stock market. But these can’t turn the tide alone.
Bottom line: There’s still little evidence of any quick return to pre-recession GDP growth
rates.
October 2002
SDC Forms Trading Company
The Society of Dyers and Colourists (SDC), United Kingdom, has formed SDC Enterprises Ltd. to
assume global responsibility for the development, sales and support of the organizations
fastness-testing and related products. SDCs technical team will continue to serve customers through
the new trading company. All profits from the enterprise will go to SDC, to be used to support its
color research and educational activities. SDC will continue to be directly involved in the
research and development of technical standards for the coloration industry worldwide.
October 2002
Technical Edge
T
he growth and expansion of technical textiles has shown promise in broadening fabric
possibilities and materials development – this means new markets, new business and diversification
for the textile industry. That’s hardly earth-shattering – but the interest in this area is really
gathering steam.
In “From Radomes To Mega Structures,” technical editor Richard Mansfield details the
development and use of fabric structures as viable alternatives to brick-and-mortar constructions.
Linking materials development, architectural demands and the companies that have made it happen
provides a profile of real industrial evolution.
When this year’s Industrial Fabrics Association International (IFAI) Expo comes to Charlotte
in late October, 30 percent of the anticipated 500 exhibitors will be showing for the first time.
Expected to draw more than 8,000 visitors, the exposition features a broad range of interests, all
targeting technical textiles and associated industries. In the past year, this segment of the
textile industry seems to have consistently attracted attention.
“Weaving On The Cutting Edge” examines weaving technical textiles with insight from major
weaving machinery producers. The message is clear that technical textiles push development and that
some machinery companies have gone so far as to establish technology groups inside their companies
to serve this niche. Wider machines, air jets, water jets, rapiers and projectiles all serve the
formation of specialty products ranging from ballistic materials to agricultural applications.
Interest is also growing globally as manufacturers point to the international interests in the
sector.
Technical textiles are not the solution for every textile company, but this segment’s
extension of the textile marketplace can’t be ignored – especially now. Woven, knit and nonwoven
products that incorporate the latest in fiber technology are stretching textiles’ reach in the
day-to-day world – impacting automotive, consumer product and structural design capabilities. The
technology, productivity and creativity of the textile industry are largely misunderstood – take a
look at technical textiles and things really come into focus.
October 2002
