ATLANTA — Just as the changing rules of world trade are causing apparel companies to rethink the way they source textiles and garments, the Material World trade show is growing to reflect the changing trade scene.

Buyers of fabric, fiber, components, as well as sourcing, technology, logistics and related services will face a range of options for their strategic sourcing plans at this month’s edition of the show in Miami Beach, Fla.

Looming large is the impending end of quotas on textiles and apparel, which the 148 nations of the World Trade Organization plan to drop on Dec. 31, 2004. While quota-free production is expected to make Far Eastern production —particularly from China — more alluring, pending U.S. bilateral and multilateral trade deals also promise to shore up the benefits of sourcing in the Western Hemisphere.

Sourcing executives have stressed that rather than rushing to shift all their production to China or any other nation, they intend to maintain balanced and diversified production networks.

The show runs Sept. 29 through Oct. 1 at the Miami Beach Convention Center. It will be the fifth edition of the show, which began in 2000 and last year added a spring edition, which included the Technology Solutions section. Starting in spring 2004, and running every three years, Material World will include SPESA Expo, sponsored by Raleigh, N.C.-based Sewn Products Equipment and Suppliers of the Americas. This fall’s Material World event, minus the equipment suppliers, focuses on fabric, fiber and components, technology, sourcing and logistics, all related to the sewn products industry.

“We’re developing three separate events to three audiences,” said Tim von Gal, executive vice president with Atlanta-based Urban Expositions, which produces and manages the show. “With SPESA Expo, Technology Solutions and the core offerings of Material World, we’re covering all aspects.”

The September show will feature around 375 exhibitors targeting buyers, sourcing managers and information-systems personnel in both retail and wholesale companies. Attendance is projected at 3,500.

Material World’s sourcing pavilion features exhibitors from 20 countries, including several groups from countries that gather together in exhibits sponsored by their governments. The majority of exhibitors will be from the Western Hemisphere, including Central and South America and the Caribbean, but this year’s show is also expected to feature 12 new Asian exhibitors, and more European companies.“We’re moving from a regional to a global presentation, with a wider breadth from around the world,” said von Gal.

The trend area of the show, which forecasts design and fabric innovation, has grown each year, to a multimedia presentation enhanced by technology, music and lighting. Cotton Incorporated will also present its fall 2005-winter 2005 trend forecast during the show.

At a pre-show conference on Sunday, Sept. 28, from 1 to 4 p.m., a panel of industry experts from companies including VF Corp. and Kellwood Co. will tackle the big picture in sourcing, in a panel called “Survival in the Post-2005 Environment.”

VF plans to continue to adapt to rapid shifts in global sourcing, according to panelist Jeff Streader, vice president of global sourcing at the Greensboro, N.C.-based company’s imagewear unit, which makes career apparel for companies such as American Airlines and FedEx.

Sourcing practices at VF have changed rapidly in recent years, he said.

In 2003, 54 percent of VF product will be produced internally, down from 72 percent in 2000. Production has moved dramatically since 2000, when 30 percent of product was made in the U.S., 45 percent in Mexico and the Caribbean and 25 percent in the rest of the world. Today, only 6 percent is made in the U.S. Mexico and the Caribbean represent 56 percent, while 38 percent is produced in the rest of the world. By the end of 2004, Mexico and the Caribbean will fall to 50 percent, as the rest of the world, especially the Far East, will represent the balance. VF has beefed up its Hong Kong sourcing hub, doubling staff there from 100 to 200, since 2000.

“With margin pressures, we need to balance the supply chain, reduce cost and diversify sourcing,” said Streader. “Our best model is in three production tiers — China, South Asia (India, Bangkok and Pakistan), and Mexico-Caribbean.”

Sourcing is the big issue for the American Apparel and Footwear Association, a co-sponsor of Material World for the past two years. AAFA board members attend Material World to meet with suppliers and contractors and discuss collective strategies.Kevin M. Burke, president and chief executive officer of the AAFA, said manufacturers’ sourcing plans have become crucial to success.

“The real issue is trade, trade, trade,” he said, alluding to pending deals like the Central American Free Trade Agreement.

“Many members are still [producing] in Central America, but they’re looking elsewhere, deciding how much production to leave in Central America, which has the advantage of proximity, and how much to seek out in the Far East, which also has the advantage of fabrics and trims,” he said. Although Central America’s business climate has vastly improved in the past five years, he said, improvement is still needed in everything from infrastructure to government cooperation.

Burke said that business in the region had slipped somewhat recently, more as a result of general economic malaise in the U.S. than from competitive pressure from Asia. He said CAFTA is needed for continued development of Western Hemisphere production.

The U.S. and five Central American countries are still in the process of negotiating the proposed CAFTA deal. Once atreaty agreement is reached, it would be subject to Congressional approval. Burke predicted it would eventually come down to a very close vote, given the current aggressive lobbying tactics of the domestic textile industry.

“In addition to apparel and textile issues, there’ll be fights on labor and agriculture issues,” he said.

Burke said his members attending the show will also be on the lookout for logistical services to increase speed-to-market and new technology, such as radio frequency identification.

“Wal-Mart is already looking into it, and Wal-Mart is the bellwether of all retail,” he said. “Our challenge is to learn what technology will be used and be agreeable to all retailers.”

Technology exhibitors preparing for the show said they were aiming to convince foreign contractors, particularly those in Latin America, that investing in technology can help them make the jump from being basic sewing factories to become full-service providers. That, they argue could make Latin American suppliers more competitive against their Asian counterparts.

“The challenge, just a few years ago, was just to make sewing labor more efficient and reduce labor costs,” said Fred Isenberg, vice president of sales at New Generation Computing, a Miami firm that will participate in the AAPN roundtable. “Now Latin American contractors have to be what U.S. companies used to be — they have do everything from design to distribution.”Technology can not only be used to track every stage of production, but link everything and make it visible to the customer in real time through the Internet, said Isenberg.

The changing nature of manufacturing is evident in the American Apparel Producers Network, an Atlanta-based contractors’ association and one of the larger exhibitors at Material World. Membership, once restricted to U.S. companies, declined during the Nineties. The group opened itself to Latin American contractors two years ago, which caused membership to surge. With 200 members now, AAPN opened membership to all last year, and will recruit in Asia later this year.

AAPN will host a party the night before the show at the Ritz Plaza, which is expected to draw 220 guests, following a Sunday afternoon roundtable discussion for sourcing managers. The program will address ways to make contracting operations in Latin American countries more efficient and attractive to big U.S. companies, who continue to outsource more aspects of production. The goal is to encourage Latin American producers to transform themselves into full-package producers.

“Everybody [in Latin America] talks about the importance of full-package production, but offering full-package production now only gets people in the door,” Isenberg said. “These companies need to develop front-end capabilities, like product development, design and pattern making and more middle management. They need to become a regional block — the near south — with fewer border laws and rules and more cooperation.”

The assortments of many fabric, fiber and component vendors headed to the show reflects the increasing use of high tech materials in the mainstream of the apparel industry.

Karen Deniz, business development manager at Optimer Performance Fabrics, a Wilmington, Del.-based textile research and development company, said demand for performance fabrics is no longer limited to activewear.

“People want clothing to work harder, not just for workouts,” she said. “Properties such as moisture management that were first attacked by the activewear companies are now showing up in intimate apparel, yogawear and casual sportswear. There’s a lot of cross-marketing going on.”

Gail Strickler, president of Saxon Textile Corp., a New York textile converter, said that crossover extends to products originally intended for safety or medical uses.“Antimicrobial, antiviral and antibacterial performance fabrics are now used in activewear and outerwear,” she said. In fashion fabrics, velvet and corduroy with two-way stretch and new fabrics with distressed looks are selling well, said Strickler.

Business has been tough this year, added Strickler, especially during the first half of the year, as retailers were stuck with excess inventory.

“We don’t see a drastic change coming,” she said. “Retailers are still terrified, and they don’t know who they want to be, so consumers are confused.”

Eclat, a Los Angeles textile company specializing in circular knits, will show at Material World for the first time, looking to tap into south Florida’s burgeoning design and manufacturing community, said April Booth, national sales manager.

“Miami has the potential to be the next Los Angeles,” she said, referring to that city’s healthy apparel-manufacturing trade. “There’s not much growth in New York knitwear designers, with the exception of the biggest companies, but Miami is a promising market.”

The activewear industry, with growing demand for performance fabrics that have wicking and antibacterial properties, has driven sales for Eclat this year. With sales running 20 percent over last year, 2003 was the best year in the past decade for the 25-year-old company, said Booth.

“There’s no slowdown in the activewear market,” she said. “Our challenge is maintain quality, purchase yarn in volume and offer low minimums.”

In the product-identification industry, companies such as Bell Label Co., a Lewiston, Maine-based producer of hangtags and labels, are grappling with increasing demands of big retailers.

“We’re smaller, but we can be more flexible than the biggest companies that have grown through recent mergers and acquisitions,” claimed Gordon Kingdon, sales director. After a tough first half, Kingdon said he sees business starting to turn around. Companies are interested in labels both as a design element and as a propriety device that can help track product, he said.

“Just recently, we’re seeing new design and new projects, as companies are more willing to invest,” he said.As companies shift production around the world, they are also outsourcing more services, including logistics and distribution, said Jose Aguirre, vice president of a Miami-based freight forwarder named MIF, EGL that merged with Houston, Tex.-based Eagle Global Logistics last year.

“More people are using freight forwarders as an extension of their logistics operations,” said Aguirre. “We offer off-shore expertise with U.S. Customs’ rules, which vary country by country, and which have changed due to security requirements in place since Sept. 11, 2001.”

His company does 40 percent of business with Western Hemisphere manufacturers, said Aguirre, who added that the passage of CAFTA would help the region by standardizing practices throughout Latin America.

“For all of these small countries to compete with Asia in the next few years, they have to act more as one region,” he said. “Standardized rules can help make a level playing field.”

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