NEW YORK — Executives from Invista sketched out the new management structure this week for their apparel unit, which will be broken into three geographic regions: The Americas, Europe and the Asia-Pacific region.
Invista was acquired April 30 by Wichita, Kan.-based Koch Industries Inc., which merged its KoSa polyester unit into the former DuPont fiber business. The combined entities had 2003 revenues of about $8.4 billion, and together, represent the world’s largest fiber company.
In an interview, Bill Ghitis, president of Invista’s apparel unit, named the division’s three regional vice presidents, all Invista veterans, who are:
- Greg Vas Nunes, for the Asia-Pacific region. He had been director of that region.
- Max Wiesendanger, for Europe. He had also been director for the Continent.
- Kent Smith, for the Americas. He was regional director for North America.
Three executives will report to Smith. They are Bob Dzielak, U.S. sales and technical service manager for direct customers; Ria Stern, marketing manager for retailers and brands, and Jeff Weber, commercial manager.
Dzielak last served as North American sales manager, Stern was global marketing strategist for ready-to-wear and Weber was North American product manager. Jon Penrice will continue as vice president of global marketing. Bob Kirkwood will serve as global director of research and development.
Ghitis acknowledged cost-cutting is one of his first assignments from Koch management.
“We will have the focus on profitability,” he said. “We will be looking at reducing waste wherever we have it in our business.”
Asked if that meant layoffs were coming, he said, “We will be reducing cost in the normal way.”
Still, he said cost-cutting would not mean abandoning efforts to market the unit’s brands, which include Lycra and Coolmax.
“Somebody who didn’t have a commitment to a brand wouldn’t invest in one,” he said. “Nobody would spend over $4 billion if it wasn’t for a really good reason.”
Koch’s acquisition of Invista was valued at $4.2 billion.
As evidence of the company’s continued commitment to marketing, Ghitis said a series of Lycra ads featuring singer Jessica Simpson, now appearing in Europe, would debut in the U.S. this fall.
He added that Invista is also preparing a consumer marketing campaign in China for its Lycra brand. In that market, the brand name will be pronounced “Laika,” he said, and its name in Chinese characters will mean “magical experience.”
“Cost reduction serves no purpose unless we can continue to deliver value-added products to our customer base,” he said.
Separately, Invista is one of three firms recently to disclose plans to raise its prices on nylon. Invista said last week it would be raising its prices on the fiber by about 10 percent a pound, while Honeywell Nylon Inc. also said it would increase charges by about 8 percent to 10 percent. Both increases are slated to take effect June 1. On Monday, Nilit America Corp. said it would increase prices by 8 percent to 10 percent on July 1.
Officials at all three companies said the price hikes were the result of soaring raw-materials costs. Most chemicals that go into nylon production are made from petroleum products. Citing similar concerns, polyester makers, including Invista, raised prices in January on polyester filament fiber.
“Continued high global raw material demand and low reserves exacerbated by geopolitical uncertainty are driving volatility,” Walter W. Hubbard, president of Honeywell Nylon, said in a statement. “These unprecedented raw materials costs continue to severely impact our production costs and our ability to remain competitive in the marketplace. We simply cannot sustain our textile fiber sales at the current operating margins.”
Ghitis said Invista’s increase would offset some but not all cost increases it had incurred. He did not rule out the possibility of future increases if costs remained high.
“We will be looking at the evolution of raw materials [prices],” he said.
Ghitis also said Invista has signed a marketing and development alliance with International Flavors & Fragrances, a $1.9 billion chemical concern. Neither company has made an investment into the joint venture. The purpose of the venture, the companies said in a joint release, would be to develop new textile-related technologies.
— With contributions from Evan Clark