MATERIALS COSTS WEIGH ON ATMI PARLEY
Byline: S. Gray Maycumber
PALM BEACH, Fla. — Beneath the abundance of smiles at last week’s annual meeting of the American Textile Manufacturers Institute here, there was still plenty of concern about raw material costs. Most mills were struggling to get customers to pay higher prices, and most said they were being successful to some degree. But the problem, they said, was that the increases were being accepted slowly and were not really large enough to cover the fiber price hikes they were experiencing.
While mills did not want to go into details about this, and especially on how well they were covered on cotton, because negotiations were ongoing, they all rated the price situation as a highly serious problem — with cotton at an all-time high, and polyester staple continuing to go up. Some mills said fiber producers were discussing another polyester staple increase in June.
A major barrier to getting higher fabric prices, mill executives said, was that the apparel and home furnishings pipelines were full, due to slow retail sales. Consequently, so was the fabric pipeline. Retail was the focus of the problem, mills said.
On cotton, Walter Montgomery Sr., chairman and chief executive officer of Spartan Mills, summed it up best. “Cotton prices today are the highest I have ever seen in my entire life.” Montgomery is 94.
William Farley, chairman and ceo of Fruit of the Loom, vertical apparel producer, said he believes he is the largest cotton buyer in the U.S. textile industry.
“I have told my division heads, we have three priorities: One, raise prices. Two, raise prices. Three, raise prices. I realize that this is a hard thing to do, especially with the large mass retailers, like Kmart, which is one of our largest customers,” Farley said.
Charles Hayes, chairman and ceo of Guilford Mills, a knitter, said, “We are passing along the cotton and polyester prices. Buyers of quality fabrics are willing to pay the increases. Commodity fabric producers are having trouble. The textile industry is maturing and is not quibbling over pennies.”
“We are getting them up,” said Joseph L. Lanier Jr., chairman and ceo of Dan River. “We get our prices or we don’t sell.”
“We are absorbing a lot of the polyester costs so far,” said Allen Mebane, chairman and ceo of Unifi, “but we can’t go on doing this forever.”