FIRMS SEEK BOOST FROM CBI

Byline: David Grant Caplan

AVENTURA, Fla. — While offshore productions are taking a toll on the domestic textile industry, many executives attending last week’s annual convention of the Knitted Textile Association said trade parity with Caribbean Basin Initiative countries may be the industry’s economic saviour.
Doug Forman, owner of Norwood, N.C.-based knitter Roman Knit Inc., said his firm, over the last nine months, has experienced a 65 percent decrease in business — due largely in part to companies shifting production offshore.
“CBI maybe will help — it’s got to, if we’re to survive,” Forman said during the four-day conference, which wrapped up Sunday here at the Turnberry Isle Resort and Club. Celanese Acetate senior account executive Michael Gruedner, who divides his time between New York and Rock Hill, S.C., said the company has experienced a decline in orders because “People are looking to source from the mills and converters overseas more than the domestic ones because of price.”
Mary O’Rourke, managing director of the Jassin-O’Rourke Group, a New York-based textile and apparel consulting firm, warned that “over the next five years, we see the CBI region and Mexico increasing production, but principally at the expense of domestic production.”
She added that Mexico’s unit growth will slow down, “driven mainly by retailers and apparel companies shifting full-package sourcing to the CBI.”
To reap the benefits of CBI, O’Rourke said U.S. mills must “not only seek out the qualified manufacturers, but finance these full-package programs.
“The name of the game today to grow in that region is full-package apparel program,” she continued. “What we’re starting to see more of in the region to facilitate this is many of the textile companies are financing it.”
The banks and factors who have traditionally financed apparel production have so far not found a niche for themselves in Caribbean transactions.
But some attendees said they are hesitant to finance full-package garment production programs.
“It’s tough enough financing your own business let alone a full-package program,” said Howard Ellis, director of knits for New York-based converter Symphony Fabrics Corp. “It’s also not our area of expertise — but it is an interesting concept.”
Full-package financing also received a lukewarm reception from Martin Sohn, vice president of Newark, N.J.-based converter Safer Textiles.
“We have to take a serious look at it, but we don’t have enough knowledge of what’s involved, costwise and technologywise.”
Thomas M. Haugen, director of Hong Kong-based Li & Fung (Trading) Ltd., which has factories in Caribbean Basin countries, said Asian-owned factories in the CBI region have a competitive advantage over many of their local and U.S. colleagues.
“All are full-package programs, they are flexible on minimums and they are willing to do more complicated styles, like placard styles,” he said.
On the flip side, he maintained “no one can make decisions locally since they have to be done in places like Seoul and Taipei.”
While Asian-owned factories continue to offer the full package, locally owned firms are getting into the game. “We have found lately, within the last two to three years, there is a small base of local and regional business that are starting to develop full packages in the area and we feel they will be successful,” said Laura Bobadilla, market manager for the Guatemala City office of the J.C. Penney Purchasing Corp.
Haugen contended that many locally owned factories lack the expertise to manufacture complicated styles.
“The problem with Central America, like Mexico, is that it was built by the Levi’s and the Fruit of the Looms of the world,” he said, “everything was built around delaboring the product.”
Bobadilla, however, said the abundance of manufacturers in the region that focus on less-complicated items “is not an obstacle, because you still need basic items and if you want fashion items you have Guatemala.”
But Greensboro, N.C.-based Guilford Mills Inc. president and chief executive officer John Emrich, who was named at the convention to serve as the KTA’s president, said “the capabilities of the needle are excellent down there.”