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China’s Influence on Yarn Sector Grows

European spinners feel the heat, look to better compete.

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SHANGHAI — The speed with which Chinese manufacturers have been able to produce yarns with quality on par with those spun by European companies was a central theme at the Spin Expo yarn fair, held March 12 to 14 here.

European exhibitors said competition from China is stronger than ever and is compounded by the Chinese government giving subsidies to domestic manufacturers for yarns they export while slapping steep import taxes on yarns entering the country.

“Chinese spinners are growing a lot in importance,” said Livio Andrei, an export manager with Filatura Papi Fabio, an Italian yarn producer. “They are producing more or less the same kind of yarns that we are producing, the same level of quality using more or less the same materials. Five or 10 years ago, they used cheaper products. They were not good at marketing. They did not know how to sell abroad. Now they are skilled.”

Andrei said to stay relevant, Italian spinners need to focus on innovation and creativity. He also said they can try to compete by servicing clients who need small orders rather than bulk, which Chinese manufacturers tend to prefer, adding, “Chinese manufacturers don’t like to do a little of this or a little of that like we do.”

Cultivating clientele in China, specifically cash-flush Chinese brands seeking to differentiate themselves by using imported fabrics, is also a priority.

“China, for us, is a market that we expect to grow,” Andrei added.

European exhibitors were noticeably less busy than their Chinese counterparts, whose booths were bustling with mostly domestic customers. Gunther Lohr traveled from Germany to source yarn for women’s wear brands he owns. He said the Shanghai fair is “more interesting than other places in the world now.”

“In the past, you came over here only to have basic things, but at the moment I can see it is really a good step into fashion,” said Lohr, referring to Chinese products on display.

He said while Chinese yarns are pricier than before, they are still cheaper than those produced in Europe.
“It is very hard to get Italian yarns to China because it is too expensive,” said Holger Bache, who also attended the fair to buy for a German label. “They really tried to copy the Italian yarns very fast, so you have a very good selection of new, fancy yarns.”

“The hottest yarns still come from Italy,” he said. “But it only takes a year and then the Chinese will be able to copy them.”

Zhejiang Zhongding Textile Co. Ltd. is a case in point. The manufacturer’s display was sparkling white, modern and teeming with customers. Samuel Yang, a vice general manager at the company, based in Zhejiang Province near Shanghai, said business is booming.

“We do high-class products,” he said. “We have grown up very quickly. Our clients are big brands from both China and the United States. Our products are better than domestic competitors but maybe lower than Italian manufacturers.”

But for some Chinese spinners, business is not as robust. Jerry Liu, a manager with Jiangyin Zhenxin Wool Spinning Co., said exports for the Jiangsu Province-based company are down from last year.

“This year we have not received many orders from new clients,” Liu said. “We think there is more opportunity in the domestic market now.”

 

Todd & Duncan Ltd., a producer of cashmere yarn based in Scotland, has found a solution for the growing competition from China. In 2009, Ningxia Zhongyin Cashmere, a Chinese raw material producer, acquired the company. Bruce Cameron, Todd & Duncan’s sales director, said the acquisition has had mutual benefits. Ningxia Zhongyin helps raise Todd & Duncan’s brand awareness in China, while the Scottish yarn producer helps its Chinese partner grow overseas sales channels.

“We are in a good position,” Cameron said. “We actually ship a significant quantity of yarns back to China now.”

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