From the Sector

National Council of Textile Organizations (NCTO) President and CEO Kim Glas is testifying on “Supply Chain Resiliency and the Role of Small Manufacturers” before the Small Business Committee’s Subcommittee on Economic Growth, Tax, and Capital Access.
 
In written testimony submitted to the committee, Glas provides an overview of the incredible resiliency of the U.S. textile industry during the COVID-19 pandemic, the impact of the ensuing economic crisis, existing options available to small manufacturers to access capital, and policy recommendations to strengthen the entire industry domestic supply chain.

“One silver lining associated with the immense challenges posed by the COVID-19 crisis is that it afforded the domestic textile industry an opportunity to demonstrate its enormous resiliency, flexibility, and overall value to the U.S. economy,” Glas says in the testimony. “Despite the fact that there was virtually no [full] U.S. production of textile-based PPE prior to the pandemic, the heroic actions of domestic textile manufacturers resulted in the ability to supply homegrown PPE at the height of the greatest healthcare emergency our country has faced in the past 100 years.”

“As we exit the current crisis, rational federal policies are once again needed to ensure a stable overall environment where small businesses can compete and thrive, and targeted initiatives are required to ensure that domestic supply chains for critical materials, such as PPE, exist in the United States,” Glas notes.

Glas details five key policy recommendations supported by 20 trade associations and labor groups, representing the entire domestic supply chain aimed at strengthening the integrated U.S. textile sector:

• Strengthen Buy American procurement rules
• Provide funding assistance for companies to reconstitute domestic supply chains important to U.S. national and healthcare security
• Key contracting reforms
• Streamline the SBA loan application process
• Provide additional funding for workforce training

Please view the full written testimony by NCTO President and CEO Kim Glas here.

National Council of Textile Organizations (NCTO) President and CEO Kim Glas sent a letter to Acting Director of the Office of Management and Budget (OMB) Robert Fairweather, requesting the agency reconsider and approve a proposal to direct U.S. Customs and Border Protection (CBP) to collect Section 301 penalty duties on billions of dollars of Chinese goods currently shipped duty free under Section 321 de minimis waivers.

“There has been an exponential growth of shipments to the United States in recent years that qualify for Section 321 duty-free treatment,” Glas said in the letter. “U.S. manufacturers of textiles, apparel and other consumer goods that routinely sell for less than the $800 de minimis threshold increasingly find their markets and workforce threatened by this tariff avoidance scheme.”

The letter details how the current Section 321 provision is now being coupled with e-commerce to provide billions in duty avoidance on these imported products, including:

• Increased import price pressure on domestic manufacturers of various types of consumer items that routinely sell for less than $800 such as – apparel, footwear, home furnishings, toys, consumer electronics, flatware, auto parts, etc.
• An inability to properly identify and block the importation of adulterated products posing a health and safety risk to consumers.
• An inability to properly identify and block imports of counterfeit products that violate intellectual property laws.
• Enhanced ability of countries like China to access the U.S. market, despite their failure to provide reciprocal access to their markets and their persistent illegal and unfair trading practices.

“Imported merchandise from China that enters under a Section 321 waiver is exempt from all normal tariffs and any penalty duties assessed under the current 301 case. This unreasonable and unnecessary duty exemption severely undermines the purpose and value of the existing Section 301 determination against China as an effort to address its longstanding predatory trade practices,” Glas stated.

“The Biden administration should undertake an exhaustive review of this problem to develop the policy changes needed to mitigate the damaging impact of Section 321 waivers on U.S. workers and manufacturers,” Glas added. “In the interim, it is critical that the OMB and CBP take reasonable steps, such as denying Section 321 benefits to goods covered under the existing China 301 determination [tariffs]. Doing so would be a valuable first step toward limiting the dangerous and growing exploitation of this tariff waiver mechanism.”

National Council of Textile Organizations (NCTO) President and CEO Kim Glas issued a statement today on the White House announcement that President Biden will sign an executive order today, “ensuring the future of America is Made in America by all of America’s workers.”  Further, NCTO launched a new industry video campaign today that outlines steps the Biden administration and Congress must take to re-shore the production of personal protective equipment (PPE) and the entire supply chain for critical products. The video can be found here: MakeAmericanPPE.

National Council of Textile Organizations President and CEO Kim Glas said:
“We commend President Biden for taking action in his first days in office to strengthen our domestic supply chain and manufacturing base with a “Made in America” executive order directing the federal government to spend taxpayer dollars on American-made goods produced by American workers using American-made components.

Increasing the domestic procurement threshold and the price preferences for domestic goods under the current Buy American law will bolster domestic production and stimulate more investment in U.S. manufacturing.

We believe it is critical that taxpayer dollars are used to invest in American manufacturing and our workforce. It is essential that we close loopholes in our Buy America laws, expand application and product coverage of domestic content rules, and close unnecessary contract waivers that undermine American manufacturing and its workforce.
 
We look forward to working with the Biden administration and Congress on immediately strengthening our domestic procurement laws. The COVID-19 crisis was exacerbated when foreign supply chains broke down leaving our frontline workers vulnerable, underscoring the vital need for America to manufacture essential medical products at home. We look forward to working with the Biden administration on implementing this Executive Order, and with members of Congress to push critical bipartisan legislation to help ensure this onshoring effort is fully realized.

We also sincerely thank Senator Sherrod Brown (D-OH) and Representative Kathy Manning (D-NC) for their leadership in sending a recent letter to President Biden, requesting the president prioritize “Made in America” personal protective equipment (PPE) purchases and outlining key steps the administration can take to produce and procure quality American-made PPE for frontline workers.”

• Monforts customer Kipaş has been selected as the sole denim manufacturing partner in the €6.7 million European Union-funded New Cotton Project, involving the brands adidas and H&M, working in a consortium with suppliers, innovators and research institutes.

Kipaş, based in Kahramanmaraş, Turkey, is currently installing its third Monforts Montex stenter along with a third Monfortex compressive shrinkage system in a combined configuration dedicated to denim production.

This follows the successful installation and commissioning of the second Montex and Monfortex lines at the Kahramanmaraş plant in 2018, which Kipaş Vice Chairman of the Board Ahmet Öksüz said had immediately exceeded expectations.

“We performed a very thorough technical investigation based on the latest Industry 4.0 analysis before the purchase, to determine what we needed, and the Monforts technology met all our requirements,” he said, in an interview with Textilegence magazine. “The Monfortex is equipped with a variety of features not found on classical shrinkage machines and the production can be monitored from beginning to end. It also exceeded our expectations in energy cost savings.”

Kipaş subsequently received a special certificate from Monforts in recognition of its exceptional utilisation of the technology to its full potential.

The latest Montex stenter now being installed at Kipaş is a 12-chamber unit with a working width of 2 metres featuring all of the latest automation features. The Monfortex unit, also with a working width of 2 metres, is in a ‘double rubber’ configuration, comprising two compressive shrinkage units and two felt calenders in line. This allows the heat setting of elastane fibres and the residual shrinkage of the denim to be carried out simultaneously, for a significant increase in production speeds.

“Around 90-95% of denim fabric production now contains elastane fibres and the Monforts system has allowed us to simultaneously increase our production and quality in this respect,” Mr Öksüz said.

Regenerated cotton
For the next three years within the New Cotton Project, Kipaş will manufacture denim fabrics based on the cellulose-based fibres of Infinited Fiber Company of Finland, made from post-consumer textile waste that has been collected, sorted and regenerated.

The patented technology of Infinited, which is leading the consortium of 12 companies, turns cellulose-rich textile waste into fibres that look and feel like cotton.

“We are very excited and proud to lead this project which is breaking new ground when it comes to making circularity in the textile industry a reality,” said Infinited co-founder and CEO Petri Alava. “The enthusiasm and commitment with which the entire consortium has come together to work towards a cleaner, more sustainable future for fashion is truly inspiring.”

Take-back programmes
Adidas and H&M will establish take-back programmes to collect the clothing that is produced, to determine the next phase in their lifecycle. Clothing that can no longer be worn will be returned to Infinited, for regeneration into new fibres, further contributing to a circular economy in which textiles never go to waste, but instead are reused, recycled or turned into new garments.

The aim is to prove that circular, sustainable fashion can be achieved today, and to act as an inspiration and stepping stone to further, even bigger circular initiatives by the industry going forward.

The EU has identified the high potential for circularity within the textile industry, while simultaneously highlighting the urgent need for the development of technologies to produce and design sustainable and circular bio-based materials. Making sustainable products commonplace, reducing waste and leading global efforts on circularity are outlined in the European Commission’s Circular Economy Action Plan.

Fashion brands produce nearly twice as many clothes today as they did 20 years ago and demand is expected to continue growing. At the same time, the equivalent of one garbage truck of textiles is landfilled or burned every second. Most of the textile industry’s environmental problems relate to the raw materials used by the industry – cotton, fossil-based fibres such as polyester, and viscose as the most common man-made cellulosic fibre, are all associated with serious environmental concerns.

• World Cotton Day on 7 October Highlights the Importance of Cotton for Development Policy

Bremen - Stemming from a 2019 initiative of the African Cotton-4 countries Benin, Burkina Faso, Chad and Mali, World Cotton Day will take place this year on 7 October. The event is organised by the Geneva-based World Trade Organisation (WTO) and is supported by the Food and Agriculture Organisation of the United Nations (FAO), the United Nations Conference on Trade and Development (UNCTAD), the International Trade Centre (ITC) and the International Cotton Secretariat (ICAC). The Bremen Cotton Exchange is also involved.

“Cotton is often underestimated because it is so natural. Behind it are millions of people, for example many farmers, field workers, employees in ginning factories, logistics providers and traders. We want to honour their achievements,” said the President of the Bremen Cotton Exchange, Stephanie Silber.

According to the WTO, the aim of World Cotton Day is to highlight the global economic importance of cotton and to raise awareness of the raw material by recognising the work of everyone involved in its cultivation, processing and trade. At the same time, within the framework of international cooperation, it is hoped that supporters and investors can be found to aid with technological and economic progress within the cotton value chain.

This time, the entire world cotton community will be involved in World Cotton Day on Wednesday, 7 October 2020. A wide variety of campaigns and events are taking place everywhere to draw attention to the importance of cotton and its possible uses.

Cotton is one of the most relevant agricultural raw materials in the world. Around 26 million tonnes of it are harvested annually. Approximately 150 million people in almost 80 countries around the world live from the cultivation of the natural fibre. A large number of these live in developing countries, where cotton cultivation is of particular importance as a cash crop.

Cotton is known as an agricultural product that is turned into a textile. The raw material is indispensable in fashion and clothing – and has been for thousands of years. But the use of cotton now goes far beyond textiles. For example, cosmetic products such as hand creams and hair shampoo are made from the oil of cotton seeds. The raw material is also used in the manufacture of banknotes, furniture and technical textiles, as well as in medical technology.

Against the background of the current discussion on sustainability and sustainable consumption, the role of natural fibres is becoming even more important. Cotton is biodegradable and a renewable resource. It can be grown again and again in agriculture through cultivation in crop rotation. This secures incomes and enables efficient value creation within the global production and processing chain.

The Bremen Cotton Exchange will actively support World Cotton Day with cross-media coverage. In addition, in time for World Cotton Day, three thematically different, emotionally appealing short films about cotton will be launched. They are aimed at consumers as customers of the textile and clothing trade and provide information about the benefits and properties of cotton and answer questions about its sustainability. In keeping with the times, they will be published via virtual media.

• A new partnership is born in the name of responsible innovation, relationships and a new twist in the fashion system

C.L.A.S.S., the international hub for responsible innovation founded by Giusy Bettoni, and SFASHION NET, the portal dedicated to micro critical fashion companies created by Guya Manzoni and Marina Savarese, join forces to give active support to micro enterprises and bring a wave of fresh air in the fashion system.

When you speak the same language and are moved by the same values, it is easy to meet on a common path. You can decide to walk alone, or to continue together in the same direction. This is what has happened since the meeting of C.L.A.S.S. and SFASHION NET, two realities, the first consolidated over time and the second recently born, which speak of responsible innovation, beauty, design, tradition, ethics and smart communication.

And who have decided to combine skills and ideas in the name of a revolutionary vision of fashion.

Micro companies and independent designers, the daily bread of SFASHION NET, will become the final addressees of a series of specialized services and courses developed by C.L.A.S.S. and will benefit from special conditions for finding materials in small quantities available on the Smart Source and ad hoc consultancy. All this to support the growth of these brands that have always moved on the wave of sustainability and ethical production, but often encountering many problems.

Online activities will alternate with offline meetings, because relationship is what makes the difference, even in the world of fashion.

“The spirit and values of the new generation of designers are what makes us optimistic about tomorrow’s fashion system. For this reason, together with SFASHION NET “every year” we will choose 1 or 2 creatives that are more in line with our common values and we will promote them at 360°, on all our channels and with a targeted communication activity starting from the collections that will be presented in February”.

• Sales and recurring EBIT significantly decreased in first half of 2020

As expected, the second quarter of SGL Carbon was impacted by the Corona pandemic, but not to the extent predicted in May when the quarterly statement for the period ended March 31, 2020 was published. Sales in the three months as per end of June decreased approximately 23 percent year-on-year, whereas Group recurring EBIT was at around 2 million euros and thus higher than anticipated. In total, SGL Carbon reached Group sales of 457 million euros in the first half year. This corresponds to a decrease of around 19 percent year-on-year. The decline is due to a pandemic-related overall weaker business development as well as expected declining developments in the market segments Battery & other Energy (GMS) and Textile Fibers (CFM) due to capacity adjustments. Group recurring EBIT was down approximately 71 percent to 11 million euros.

At a glance*:

• Sales in the second quarter approximately 23 percent below prior-year period; Group recurring EBIT of around 2 million euros was slightly better than anticipated at the presentation of the results of the first quarter 2020
• Group sales in the first half year 2020 at almost 457 million euros and thus around 19 percent below the prior-year period; decrease in sales due to pandemic-related overall weaker business development as well as expected declining developments in the market segments Battery & other Energy (GMS) and Textile Fibers (CFM)
• Group recurring EBIT down approximately 71 percent to 11 million euros
• As a result of measures taken at an early stage and contrary to the normal seasonal trend, cash and cash equivalents at nearly 154 million euros as of June 30, 2020 developed very positively compared to the end of 2019
• According to the full year forecast published on July 28, 2020, SGL Carbon expects Group sales to decline by 15 to 20 percent and a slightly positive operating recurring EBIT
• Dr. Torsten Derr, CEO of SGL Carbon: "My ambition is to achieve lasting success with SGL Carbon. Over the past two months, we have been conducting a comprehensive analysis of our processes, structures and markets. Based on this, we will identify the options that will enable us to sustainably increase our profitability. The Corona pandemic is forcing us to act even faster."

*Please read the attached document for more information

•  Historically difficult market environment – trade tensions put textile value chain under pressure in 2019
•  Prices for standard viscose at a historic low
•  Positive development of the specialty fiber business with a revenue share of already 51 . 6 percent
•  Strategic investment projects are progressing according to plan
•  sCore TEN targets for 2024 defined – EBITDA of EUR 800 mn

Lenzing – Despite a generally difficult demand environment for textile fibers and a drastic drop in prices for standard viscose, the Lenzing Group recorded a solid business development in 2019. The disciplined implementation of the sCore TEN corporate strategy and the accompanying focus on specialty fibers once again helped to mitigate the effect of unprecedentedly low standard viscose prices.

As a result, revenue dropped by 3.3 percent from EUR 2.18 bn to EUR 2.11 bn in 2019, driven by lower selling prices as well as standard fiber volumes. Due to positive mix effects and more resilient specialty fiber prices, the share of specialty fibers increased from 45.5 percent to 51.6 percent of revenue. The earnings development was largely influenced by the decline in revenue, but also by negative currency effects on material and personnel costs. EBITDA (earnings before interest, tax, depreciation and amortization) fell by 14.4 percent from EUR 382 mn to EUR 326.9 mn. The EBITDA margin declined from 17.6 percent to 15.5 percent. Net profit, at EUR 114.9 mn, was 22.4 percent lower than in the previous year at EUR 148.2 mn. Earnings per share amounted to EUR 4. 63 ( 2018: EUR 5 . 61 ).

Retailers invest in emotionalisation and digitalisation +++ Top theme: linking online with offline shopping +++ Focus on sustainability +++ Accompanying Stages and Specials received very well

The World’s No.1 Retail Trade Fair, EuroShop 2020, drew to a close on Thursday (20 February 2020) after five successful days in Düsseldorf: 2,300 exhibitors from 57 nations reported of very good leads and concluded business deals. Furthermore, lively follow-up business is expected. 94,000 visitors travelled to the Rhine to gather information on the line-up of products, trends and concepts for retailers and their partners featured in 16 exhibition halls.  

“We are delighted that EuroShop once again successfully proved to be the most relevant platform for the global retail community when it comes to trends, inspirations and networking. Our exhibitors deserve the highest praise for their loyalty. With their innovative power they again proved the major attraction for an entire industry,” said Erhard Wienkamp, Managing Director at Messe Düsseldorf, voicing his great satisfaction with EuroShop 2020 results.

Exhibitors especially applauded the high international attendance at EuroShop. 70% of the EuroShop audience travelled to Düsseldorf from abroad. Large delegations came for example from Brazil, Australia and New Zealand. Trade visitors from a total of 142 countries attended EuroShop 2020.

“This high level of international interest clearly documents the dynamism of the global retail world and the exceptional position EuroShop enjoys as its economic engine,” said Michael Gerling, Chairman of the EuroShop Advisory Board and CEO of the EHI Retail Institute Cologne.

“The success of eCommerce is a real encouragement for retailers: they have understood they have to give their shoppers good reasons beyond the ranges to enter their stores. This competition has taken retail as a whole to the next quality level. Investment is being made in shop fitting so as to create customer journeys,” explains Gerling who adds: “Beyond this, retail digitalisation is booming. It enables retailers to offer their shoppers even more services and link online and offline channels, on the one hand, while simplifying process flows, logistics and lots more, on the other.” At EuroShop 2020 digital transformation was therefore a key focus, also in terms of achieving the highest energy efficiency and sustainability possible.

Exhibitors underlined the high level of expertise among visitors at the event, especially their pronounced decision-making powers, because 70% of the trade fair guests were in international top management. Many of them also used their visit to EuroShop to learn about best practice cases and forward-looking trends in retail at the in total eight Stages. The varied programme of lectures held on the individual Stages on such topics as Retail Technology, Architecture and Store Design or Expo & Event was well attended across the board. Meeting with the same high level of approval were the numerous Specials at EuroShop, including the Start-up Hub, the Designer Village and Premium City.

Numbers speak for themselves here: 96% of trade fair visitors were satisfied with their visit to the trade fair. Just as many confirmed the outstanding position of EuroShop as a trend barometer, networking platform and largest event for the retail sectors.

Due to the current situation associated with the Coronavirus 19.000 visitors less attended this time than at the record event 2017.

The next EuroShop will be held in Düsseldorf from 26 February to 2 March 2023.  

The National Council of Textile Organizations (NCTO) lauded Senate passage today of the U.S.-Mexico-Canada Agreement (USMCA).

“We are pleased the Senate voted swiftly to approve USMCA--a trade deal that we expect to significantly bolster textile exports to Mexico and the Western Hemisphere,” said NCTO President and CEO Kim Glas.

Mexico and Canada are the two largest export markets for the U.S. textile and apparel industry, totaling nearly $11.5 billion for the year ending Nov. 30, 2019, according to government data.

“USMCA is a win for the textile industry,” Glas said. “The improvements it makes to the North American Free Trade Agreement (NAFTA) will only serve to generate more business for domestic producers and create more jobs and investment in the U.S.”
NCTO worked with the administration during negotiations on USMCA and secured several provisions in the trade deal including stronger rules of origin for certain textile inputs and increased U.S. customs enforcement.

U.S. textile executives are ramping up to take advantage of the modifications in USMCA and some plan to build new business or expand existing business in areas such as pocketing, sewing thread and narrow elastics.

“Our member companies, making some of the most advanced textiles in the world, have long supported USMCA and are eagerly awaiting implementation of the trade deal,” Glas added. “We urge quick implementation of USMCA and thank the administration and Congress for their hard work to get the deal across the finish line.”

The USMCA updates and modifies the NAFTA and makes significant improvements, including:

• Creation of a separate chapter for textiles and apparel rules of origin with strong customs enforcement language.
• Stronger rules of origin for sewing thread, pocketing, narrow elastics and certain coated fabrics.  Under the current NAFTA, these items can be sourced from outside the region – USMCA modernizes this loophole and ensures these secondary components are originating to the region.
• Fixes the Kissell Amendment Buy American loophole, ensuring that a significant amount the Department of Homeland Security spends annually on clothing and textiles for the Transportation Security Administration is spent on domestically produced products.