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Textile makers look to Caribbean
Feature: 3/12/2001



Reeling from competition from low-cost Asian garments, several US textile makers are taking a novel approach to help them survive - aggressively promoting trade with the Caribbean and Central America.

Textile makers are asking their customers - companies that make trousers, shirts and other garments - to convince major retail chains to buy goods made in the Caribbean and Central America out of US material. They're touting the advantages of a new law that removes tariffs on certain items made in the region.

They hope the campaign will increase sales of US yarns and fabrics - and halt the flow of regular plant closures and job losses. The Carolinas have been particularly hard hit, with layoffs announced at dozens of companies in recent months, including industry giants such as Burlington Industries and Pillowtex.

Last week, Unifi Inc., a Greensboro nylon and polyester yarn maker, approached garment-makers in the Dominican Republic, Honduras, Guatemala and El Salvador. The company is teaching them how to convince retailers, such as Ann Taylor, Dillard's and Saks Fifth Avenue, that clothes made in the region from US material are cheaper and faster to market than those made in Asia.

This year, Charlotte yarn-maker Celanese Acetate opened a "fabric library" in New York to show retailers and garment-makers the fabrics available through Central America and the Caribbean, hoping to steer them to US-made materials assembled there.

"In the past, we didn't meet with retailers and garment manufacturers, but now there's not a week when we didn't have them in here", said Ellen Sweeney, a Celanese Acetate spokeswoman. "People who in the past said they have used Asian imports have asked us if we can you connect them to Caribbean manufacturers".

Breaking with tradition

"Going directly to retailers breaks with traditional marketing practices for yarn-makers", said industry consultant Mary O'Rourke, managing director of the Jassin-O'Rourke Group in New York City. "Not since the early 1970s have yarn-makers marketed directly to retailers, and then it was to tell them about new kinds of synthetic fibres", she said.

This strategy shift was brought about by new tariff advantages of trading with certain countries in the Caribbean and Central America. Under legislation that took effect last year, garments assembled in the region out of US-made material can enter the United States duty-free. Garments made in Asia are subject to duties averaging 30 percent of the garment's cost.

About 22 percent of apparel sold in the United States is made in Asia, compared with 9 percent made in the Caribbean Basin, according to figures from the American Apparel and Footwear Association.

Textile companies say retailers are interested in buying clothes from places outside of Asia, particularly after September's terrorist attacks made shipping more difficult. But uncertainty over final rules of the legislation, known as the Caribbean Basin Initiative, as well as retailers' ignorance about its advantages, has hampered trade with the region, they say.

"All of this uncertainty has retarded or delayed the shifting of production from Asia to the Caribbean", said Carlos Moore of the American Textile Manufacturers Institute. So textile companies are stepping in to ensure retailers know about the programme.

Motivating the industry

At a meeting this month in Greensboro, Unifi officials urged about 70 of their customers - fabric makers, mostly - to work together to push trade with the Caribbean Basin for the good of the industry. "If we don't get out there as an industry and sell it and talk about it, it will never ever happen", said Stewart Little, the company's senior vice president of customer development. "We're just trying to motivate the industry, and we'll all benefit".

To qualify for duty-free treatment from the Caribbean Basin, companies in that region must import yarn or fabric from the United States and assemble the garments there before shipping them back to the United States for sale.

Textile industry officials say that process, as opposed to importing directly from Asia, is quicker, and in many cases cheaper - particularly with high-end garments made of synthetic fabric. It would also save US textile jobs, because US companies would make the material, as opposed to Asian companies, where labour costs are as low as 22 cents an hour.

Despite a sluggish economy, yarn and fabric exports to the Caribbean and Central America have risen since the new trade rules took effect. Compared with all of 1999, yarn exports to the Caribbean Basin in the first nine months of 2001 alone nearly doubled, to more than $195 million (£134 million). Fabric exports nearly doubled, too, to almost $887 million (£608 million) in the first three quarters of 2001, according to figures from the US Department of Commerce.

The 9-11 attacks might have opened the door to the Caribbean even further. Tighter customs scrutiny and beefed-up security on vessels from Asia have slowed transportation, and some retailers are less inclined to travel to that part of the world, industry officials say.

Ron Roach, vice president of sales with Contempora Fabrics Inc. of Lumberton, says he attended this month's seminar in Greensboro to explore ways to increase his business. The company employs 220 and knits women's wear and men's wear, as well as bridal wear and lingerie. "We're trying to stay alive, to see what's out there that we can take advantage of", he said.

At the Greensboro meeting this month, O'Rourke, the industry consultant, told the group it would need to work to expand trade to the Caribbean Basin. "The potential is there", she said, "and you have to go after it".
Author: John Gibbon
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