ATLANTA — Despite impending war, an ailing economy and the ongoing shift of apparel production to China, Material World, a textile trade show focused on the Western Hemisphere, goes on.
With its first spring event set for March 17-19 at the Miami Beach Convention Center, Material World is becoming a biannual show targeting primarily Western Hemisphere manufacturers. The next edition of the show is expected to feature significantly larger technology, trend and sourcing areas, rounding out the show’s fabrics, trimmings and supplies offerings.
Show organizers and exhibitors concede that the current climate is not conducive to big business investments. Impending war could bring instability to various global hot spots, potentially disrupting shipping lanes or production. But the bigger concern is that war, and worries about war, will further dampen consumer confidence, inhibiting spending and reducing demand. Most companies, rather than making big decisions now, are stuck in a "wait-and-see" mode.
"The market hates uncertainty," said exhibitor Alan Brooks, president of New Generation Computing, a Miami-based technology firm. "You can plan for bad, or plan for good, but it’s hard to prepare for ‘don’t know.’"
Just as daunting is the impact of the dissolution of quotas for China, and all 145 World Trade Organization members, set for Dec. 31, 2004. As Asia becomes more alluring for production, U.S. companies are looking to balance global sourcing strategies.
Global trade agreements, such as the recently passed Andean trade pact, and the proposed Free Trade of the Americas, can give South American countries trade benefits similar to NAFTA. But industry experts say Western Hemisphere production has to increase efficiency dramatically to compete with Asia. U.S. companies, rather than owning off-shore factories, are now outsourcing more operations, requiring contractors to evolve from sewing facilities to full-package producers.
So, where does Material World fit in?
"We acknowledge the war and the economy as big concerns, but we’re still positive that business can be successful," said Tim von Gal, a partner in Urban Expositions, the Atlanta-based trade show producer of Material World, along with 20 other trade shows for various industries. Von Gal hinted at further expansion for Material World, an upcoming mega event for next year, that should be announced soon."The next step is to prepare for 2005," he said. "A vast number of Latin American contractors are in a good position, with new trade advantages, to grow."
Around 250 total exhibitors, about the same number as last October, are expected to participate. Attendance is expected to be around 3,500 buyers, equal to last October’s show. While buyer and exhibitor numbers are the same, space has increased and educational events have been added.
"We have to create a learning environment that offers more than just product exhibits, as technology is not something people can just look at, feel and buy," said Rick Ludolph, president of Productive Solutions, a Marietta, Ga.-based business-to-business consulting firm, which plans to participate in the new Technology Solutions area of the show. Ludolph is also chairman of the Supplier Resource Division of American Apparel & Footwear Association, which helped organize the area. AAFA also cosponsors Material World.
Key initiatives of the show include product development technology that provides collaboration within the supply chain, which is now decentralized and scattered around the world, as U.S. companies outsource more functions.
Ludolph, and others, emphasized that, in the current uncertain business climate, U.S. manufacturers, retailers and brand managers, want more from existing technology, rather than investing heavily in new systems.
"They want to see tangible, quick paybacks and [good return on investment] in their outsourcing models," he said.
For this need, tech exhibitors, such as Intentia, SAP and New Generation Computing are adding features, such as portals to existing software, that can gather more information.
Sourcing opportunities, particularly in Latin America, are expected to be another growth area at the show.
The Atlanta-based American Apparel Producers Network co-sponsors Material World. The group now has 200 members from 28 countries. The majority of international members represent four Central American countries, along with the Dominican Republic and Haiti.
At the show, AAPN will recruit new members and aid Latin American companies in developing full-package programs, which has become a necessity.
"Only a few companies really do full package now," said Mike Todero, managing director of AAPN. "Money, to set up front-end and back-end operations, is a problem, and getting quality fabrics is difficult."Todero added that Latin American countries should be less territorial, and more unified, to compete as a block against Asia.
"There’s too much division and competition between countries, and a lack of regional organization," he said, adding that tremendous opportunity still exists, especially for small runs and quick turns of lifestyle apparel production.
One step toward a more united front is an expanded Andean Pavilion, a 5,500-square-foot booth of around 60 manufacturers from three South American countries — 37 from Colombia, around 20 from Peru and the remainder from Ecuador.
The passage of the Andean trade pact in November is responsible for quadrupling the number of South American exhibitors here, compared with the October show, said Sylvia Reyes, director of textile and apparel sourcing for ProExport, the Colombian trade bureau. The agreement eliminates quotas and duties for South American textile and apparel exports.
Reyes said she expects the volume of Andean total apparel exports to the U.S. to increase dramatically, particularly from Colombia and Peru. Colombian U.S. apparel exports, at $800 million in 2002, could double in the next two years, she contended. ProExport will host a breakfast seminar on the status of the new agreement at the show.
Converter Gail Strickler, president of New York-based Saxon Textiles, said that Latin American countries need to play up their strongest advantage — quick turns, to compete with Asia’s vast labor pool and cheap prices.
Currently, Saxon ships 15 to 20 percent of the fabrics she sells to Latin American countries, up from 5 percent in 1999.
She’s also begun to sell Asian-made fabrics, which now represent 20 percent of her business, up from zero a few years ago. When China’s quotas drop in 2005, she expects that number to rise to 50 percent.
"I don’t want to see everything go to Asia, with the total demise of production for the U.S. and our neighbors," she said. "Asia requires hard work, more time, and we’re concerned about knockoffs there. But with price consciousness so rampant now, companies are often willing to sacrifice quality and exclusivity for price."
While 30 percent of her business is in the consumer apparel market, Strickler has developed her sales to niche markets, such as uniforms, for airlines and hotel industries.At Material World, she will show new domestic and Asian-produced goods, including high-tech fabrics with waterproofing and breathable qualities, as well as stretch corduroy for fashion applications.
Exhibitor Trimmings, a Miami producer of heat-transfer embellishment, including rhinestones, metallics and Swarovski crystal embellishment, targets smaller, high-end clients seeking novelty and innovation, such as floral and tattoo motifs. While Susan Shavin, vice president, stresses quality control that her domestic company offers, she fears price pressure will only increase as quotas drop. Sales for 2002 decreased 10 to 15 percent, with similar declines projected for 2003.
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