MILAN — Italian spinners are bracing for a volatile market in the second half of the year.
Heading into the three-day Pitti Filati yarn fair, which opens July 4 at Fortezza da Basso fairgrounds in Florence, executives said they were concerned that the soaring price of raw wool, worrisome exchange rates and even uncertain weather patterns will counteract the otherwise strong market for high-end yarn.
"Unfortunately the market is not serene,'' said Eugenio Parravicini, general manager of Manifattura Sesia. "These are difficult economic times, wool is expensive and the quality is not optimum because of the drought that afflicted Australia."
To cope with market sensitivity, many firms have trimmed their industrial processes, while production moves toward high-end yarns with technological attributes.
Since Zegna Baruffa changed ownership a year ago, the firm has consolidated its three dyeing plants into one, cut 10 percent of the workforce and focused on high-end yarns. President Alfredo Botto Poala said that in order to survive the company needed to streamline its business to offer clients personalized service. Zegna Baruffa is on track to maintain its 2006 sales of 127 million euros, or $170 million at current exchange. However, Botto Poala added that he expects the amount of kilos sold to decrease.
"From December, raw wool has jumped in price by around 30 percent because of increased demand from Chinese buyers," Botto Poala said. "It's really a lot, and together with the rate of exchange, it will force us and, I am sure, other yarn manufacturers to increase prices."
Filatura di Grignasco, Luigi Botto and Cariaggi also have made significant structural changes in the past year.
At Filatura di Grignasco, two production factories have been relocated into one facility, which was recently equipped with a new and more efficient dyeing plant.
"The single factory offers an integrated production process and will help our position in Italy, equipping us to create yarn that has added value," said Riccardo Osella, general manager of the Biella-based Filatura di Grignasco.
The changes are expected to generate revenue gains by 2008, Osella said. The company had a volume of 37 million euros, or $49.5 million, last year.Cariaggi invested 10 million euros, or $13.4 million, last October in its Cagli-based factory for machinery, personnel and a new dyeing laboratory that results in speedier time to market. Chief executive officer Cristiana Cariaggi said restructuring finished in February and the firm had already reaped benefits from its more efficient plant. Cariaggi is on track to hit sales of 70 million euros, or $93.8 million, compared with sales of 63 million euros, or $84 million, last year.
After financial restructuring in 2005, Luigi Botto changed its collection to focus on technological yarns. Of the 20 new yarns to be presented at Pitti Filati, most have been spun with the firm's patented XT process. The technology creates a more durable, cleaner yarn that can be spun quicker, reducing the time to market, said Arianna Leone, vice president of Luigi Botto.
"Technology is our philosophy and our objective is to position the product more high end," Leone said. "Every yarn manufacturer in Italy has had to make changes in order to stay on the market. It's an evolution that had to happen if you look at the past five years."
To deal with market uncertainty, yarn collections for the fall and winter seasons of 2008 and 2009 will play it safe. Ultrafine, smaller-count, elegant yarns spun from noble mainstays merino wool, cashmere and mohair will be presented at classic and fancy spinners stands.
"Our fantasy yarns are ultrafine this season," said Federico Gualtieri, export director of Filpucci, which will celebrate its 40th anniversary at Pitti Filati next week. "When knitted, they resemble gauze-like blends of wool, cashmere and mohair with a little bit of alpaca."
More than half of the collection to be shown at Pitti is made up of new yarns that include a wool mixed with a nylon yarn to give a rubber-like hand and Quaranta, a new viscose yarn dyed in shades of plum and brown, Gualteri said. Since opening its Chinese factory near Shanghai two years ago, Gualtieri said the firm has strengthened its relationship with U.S. clients.
"We'll show them the Italian-made yarn collection alongside the Chinese-made collection and often they'll like an Italian product and realize that they can actually afford it," he said. "It's really opened up business potential with American clients who previously never bought from our Italian mill."At Igea, the collection will be split into two facets.
"We see the market dividing between those finer knits meant to be worn against the skin and the bigger yarn counts for outerwear knits," said Stefano Borsini, president of Igea. "Both are compact, ultrasoft noble fiber-based yarns."
Super-shiny yarns of previous seasons were reinterpreted with more understated mohair, merino and nylon blends, he added.
Manifattura di Sesia has developed a line of yarns with global weather changes in mind. The Four Seasons collection includes carded pure cashmere and wool yarns, alpaca blended with wool and cotton, and camel hair blended with cotton.
"We designed them especially for today's winters, which are milder, but also for being comfortable in indoor heated areas," said general manager Parravicini.
Extrafine merino wool is the basis of Grignasco and Luigi Botto's new collections.
Grignasco blended 16.5 micron merino wool with silk and gave other pure merino yarns delave effects. Merino wool also was incorporated into Grignasco's eco-friendly Bioline as a blend with bamboo and cotton in caramel, coffee and dark chocolate hues.
Luigi Botto used 14.5 micron merino wool taken from the lamb's back coat and spun it through the mill's XT four-ply process. Among Luigi Botto's new yarns is XT4 High Twist, a resistant, antipilling merino wool with a crepe hand, and XT Obsession, a three-ply cashmere and cotton blend yarn that also has antipilling properties.
Zegna Baruffa renewed its classic superfine merino yarn Cashwool with a twist. Cashwool Supermelanges spun and dyed with new technology shows a highly blended and deeper gradient of mélange colors in natural and gray tones.
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