SHANGHAI — Spinners and weavers turned out in force at SpinExpo Shanghai, despite recent uncertainty surrounding a U.S.–China currency agreement, and wider trade war rhetoric. Closer to home, the Chinese government revealed last week it will strengthen efforts to prevent and control pollution and boost environmental protection, with the country intensifying efforts to reduce air, water and soil pollution. These laws follow the shuttering of some polluting textile manufacturers last year.
The three-day fair, held at the Shanghai World Expo Exhibition and Convention Center, clocked 12,671 visitors, with an additional 3,369 re-entries. Of these attendees, 3,191 were international visitors. These figures were up 5 percent on last year’s spring/summer session, or 12 percent when including reentries. There was also growth in skilled and professional brands from China attending the fair, as well as an increase in small designer labels, according to the organizer.
“The percentage between local and out-of-China visitors is not changing much. We witnessed a growing number of Japanese and Europeans, a stable number of U.S. buyers, and a little growth in China visitors. We are a middle-level segment of the textile industry and our exhibitors still target exports,” said SpinExpo organizer Karine Van Tassel.
The more stringent environmental laws do not come as a surprise to many producers across the supply chain, with clampdowns already being put in place last year. Many factories in the country have already adopted green practices to stay in business and not have production halted by local authorities. The manufacturing upgrade in the country has had the bonus of attracting international buyers looking for sustainable products, particularly European fashion companies.
“We have three advantages for our customers: firstly, we have our own dyeing factory, our factories are very green and we have a good lead time,” said Eric Bao, a manager at Wuxi Shilead Spinning, a local company known for its early investment in eco-friendly practices and innovative yarns.
Wuxi Shilead Spinning’s customers are European, high-street fashion brands, such as H&M and Zara, that require environmentally friendly yarns at a low price. In order to keep prices down, Wuxi Shilead Spinning has acquired factories in Cambodia and Bangladesh where it can produce sustainable yarns at lower costs, when necessary.
“Mostly the acrylic yarn [is made in Cambodia and Bangladesh], but just very basic quality — like cotton, viscose. In Bangladesh, they are short of water and short of the dyeing stuff, so we can only do a little there,” said Bao.
Other exhibitors at the fair said customers are still extremely price-sensitive, even when it comes to environmentally friendly yarns. “We have the green capsule collection. We think that is the direction, but not many buyers are willing to pay extra for this kind of product. They say, ‘We want, we want!’ But then, when they are about to put down one dollar more they say, ‘We don’t want any more!’ At least, that is the majority, of course. Some are a bit more sensible,” said Andrea Pisani, managing director of Italian yarn producer Filivivi.
“The margin is always so thin and they always try to reduce the purchasing cost of the materials rather than increase. [This will change] if there is a strong demand from the final user or they have really to invest in a marketing campaign to promote sustainability,” said Pisani.
Price sensitivity is a recurring issue for spinners at the fair, although the tough price competition has spawned innovation and creativity in the industry.
“It has been three years that consumers are price-sensitive. We did witness a difference in the way visitors worked the show, trying to broaden their network instead of going only to the supplier they know. With the increase of prices of raw material, everybody needs to become more professional and work harder to find alternatives to what they already know. The sourcing search today is quality, price, and creativity, at least in our exhibition,” said Van Tassel.
One spinner looking to differentiate and add value through technology and sustainability is UPW. The company is looking beyond just the sustainable manufacturing of its yarns to the cleaning up of its supply chain through minimizing wastage and cutting down on carbon emissions.
“All of our yarns in UPW are sustainable at a certain level, from the fiber that is either recycled or a renewable fiber, to more natural fibers. So, even in the company, we recycle a lot of water. But now with the whole supply chain, we are thinking of the development stage. On how we can make development come down in terms of wastage as well as carbon emission,” said John Yau, assistant manager of sales and marketing at UPW.
The company has created a database, using Shima Seiki’s Apex Three design system, whereby all of UPW’s yarns have been scanned in, allowing labels using the design system to work on stitch development or design color combinations in-house, cutting down the cost and carbon footprint of flying samples back and forth as well as reducing the wastage of sample stock.
“[Designers] can do shorter development times, but nearer to the store drop. After a week of development back and forth, making the decision on the computer, and the line review, what they can do is to quickly order the sample yarn directly and that would be delivered to the factory and knitted up very quickly,” said Yau.
There was much talk of off-shoring production to South and Southeast Asia during the fair. Not only because of the U.S.-China trade war, but also due to currency issues and continued downward pressure on prices from international brands. This has pushed many Chinese manufacturers to open factories overseas, as labor costs and overheads increase, and as environmental laws are levied in the country. But increasing competition from these developing economies doesn’t necessarily mean all low-cost manufacturing will be priced out of China.
“China won’t only be for high-end manufacturing, I think, because China can still produce the biggest quantity. They have the biggest capacity, so they can’t only produce for the high-end,” said Leila Guo, marketing manager of Italian knitting machine manufacturer Santoni.
“We have so many different machines. Some machines we sell outside of China, but these are the very basic style. China is still very strong because all the resources here are so complete that you can find anything you want, no matter if it’s for yarn, or for trim, or for sewing, or for knitting,” said Guo.
Fair organizer Van Tassel agreed. “Many brands have tried to produce in these countries, and some came back to China because of a better skill in production. The only country that is a real competitor is Bangladesh; other Asian countries are more targeted for small quantities or more simple products.”
In terms of the U.S.-China trade war, most spinners remain relatively shielded from the direct impact, with garment manufacturers taking the brunt. Others, that relied on imported U.S. raw materials have decided to remove the uncertainty from their supply chains and draw on new research to compete.
“Knowing that there is a trade war, this season we have actually avoided using a certain fiber from America, if we can do, and substituting with a different fiber. Through yarn engineering, we are able to give the same sort of good-quality yarn, so that is what we try to leverage as best we can,” said Yau.