COTTON’S FUTURE: TECHNOLOGY KEY
Byline: Stuart Chirls
MEMPHIS, Tenn. — Innovations, ranging from genetically engineered seeds and computer-controlled fiber processing to new textile products designed for the global market, are going to be key to making the cotton industry competitive in the next century.
“The competitive advantage we have built up over the course of more than a hundred years can’t be given away,” said Anderson Warlick, president and chief operating officer of Parkdale Mills. “But we can no longer count on old sources for new innovations.”
Warlick was the keynote speaker at the 11th Annual Engineered Fiber Selection System (EFS) conference sponsored by Cotton Incorporated. The three-day meeting, which drew 360 growers, ginners and merchants, concluded Wednesday at the Peabody Hotel here.
Warlick said Parkdale, the world’s largest spinner of cotton yarns, is gearing up for an even more intensely competitive market in the years to come as global trade barriers continue to fall.
“Competition is going to be tougher than it’s ever been,” he said. “There aren’t going to be any patsies to kick around. Price will have no meaning anymore in terms of how a customer makes a buying decision. Quality will be the new price of admission.”
The new global trade regime under the World Trade Organization, Warlick said, “is going to open the U.S. market for textile and apparel products unlike anything we have ever seen.
“We must as an industry change and innovate, or we will be out of jobs. Change and innovation equals profit.”
The process of creating new products has changed, and Parkdale is spending more on new product development and technology than ever before.
Warlick said, “There is no other choice. We are constantly looking for new ways to produce, and less expensively. In our spinning operations alone the electricity costs per pound of yarn is more than the cost of labor.”
Warlick observed that in the past yarn innovations were concentrated around fibers, primarily synthetics. “Today, those products are mature, with commodity-type pricing that only serves to put more pressure on cotton prices.”
As for the consolidations and acquisitions sweeping the domestic textile business, Warlick said, “In the coming years, 30 percent of all profits will have to come from new products, and only 10 to 15 percent from mergers and acquisitions. People who resist even simple innovations will be made dinosaurs in the next century.”
But fiber and production is only half of the ongoing story in the cotton textile business.
“The most important element of the product chain is the consumer,” said J. Berrye Worsham 3rd, president and chief executive officer of Cotton Inc. “Apparel sales have been lagging [behind] the 3 percent real growth in consumers’ disposable income over the past several years. That has cost us $3 billion or $4 billion worth of retail apparel and home furnishings sales, or the equivalent of about 350,000 bales of cotton at the textile level.”
Worsham noted consumer interest in apparel has waned, particularly among baby boomers, which is spending increasing amounts on travel, computers and other retail segments. Consolidations among retailers also has changed the way apparel presents itself to the consumer.
“There are fewer brands, but more major brands,” Worsham said, “and that is creating a sameness in the market that takes the enthusiasm out of the shopping experience. And with the expansion in total retail floor space showing no signs of abating, “retailers are finding it even harder to keep prices up,” which makes stores less inclined to give space over to small or untested brands.
In an effort to reach beyond baby boomers, the newest edition of Cotton Inc.’s “Fabric of Our Lives” advertising campaign will begin airing in September with a series of commercials tailored to a younger, hipper audience.
The challenge, as Worsham sees it, “is how to convince consumers that they need another pair of jeans even if they already have six or seven in their closet. At the same time, we have to continue to find ways to make our processes less expensive. There are no secrets to success, but the prescription for failure is: This is the way we have always done it.”
Cotton Inc. will continue to refine its EFS system as an increasingly important tool for growers and processors in the U.S., where cotton accounts for about 74 percent of the total cost of production of one pound of yarn.
Introduced by Cotton Inc. in 1988, the EFS Fiber Management System is a network and software program that links the diverse segments of the cotton textile industry and, through the use of high-volume instrument (HVI) data, has become the industry standard for cotton management and analysis. As the growing array of synthetic fibers puts increased pressure on cotton, acceptance of the program has grown strongly; the system now has 225 licensees, up from 180 in 1997. Approximately 11.5 million bales of cotton will be processed using the EFS system in 1998, according to Cotton Inc.
The program is continuously refined, and Cotton Inc. keeps users and potential users abreast of developments. It includes:
MILLNet, a system to manage the acquisition, warehousing and use of cotton for mills.
QRNet, a mill/supplier electronic data interchange (EDI) translator designed for use among a mill, cotton merchant and third-party electronic mailbox.
CI-EDI, Cotton Inc.’s proprietary e-mail network that links mills and cotton suppliers.
GINNet, data analysis software designed to help ginners and cotton producers improve quality and yield, both constant problems for the industry.
“By using the system’s HVI data, a mill can closely track its blending of various grades of cotton fiber that it purchases,” said Emerson Tucker, an engineer with the Plains Cotton Cooperative Association of Lubbock, Tex., who helped develop EFS and was one of the presenters at the conference. “Without the HVI data, the cotton has to be blended by hand and will be less consistent as a fiber, as a yarn and ultimately, as a fabric. And that means greater expense for second-quality goods, customers’ claims and other costs. In textiles, fiber costs drive total manufacturing costs.”
Agricultural science is playing a vital role, too, and the conference covered new developments in testing equipment, fiber quality standards and methods of growing, including the use of narrower planting to increase yield.
Perhaps most important is the work being done in genetic engineering, where ongoing research is aimed at improving the quality of cotton long before its seeds are ever planted.
One conference participant, Linda Koonce, is a vice president and laboratory director of BioTex, a 13-person science research firm in Lubbock, one of companies working with Cotton Inc.’s research staff to create superior cotton through genetic engineering.
“We hope to be on the front line of new product introductions in this industry,” said Koonce, a biochemist who holds a handful of agricultural science patents.
Insects remain an age-old problem for the cotton business, creating a sticky residue in the fiber that makes spinning and weaving more difficult. Fighting the insects has become even more important because of stringent regulations governing the use of certain pesticides, and the bugs’ immunity to chemical warfare.
“Our research, while confidential, is aimed at developing genetically improved cotton that will offer producers enhanced yield or improved resistance to insects,” Koonce said. “What is most important for us is to provide the producer with technology that will lower the cost of production while increasing price and profitability.”
BioTex receives funding from Cotton Inc. and is developing new products under research contracts with several major agricultural sciences companies, including Monsanto.