Aurora Specialty Textiles Group in Expansion Mode in Industrial Textiles

Aurora Specialty Textiles Group, Inc., a global leader in coating, dyeing and finishing of woven, non-woven and knit fabrics, has proven that resilience and an innovative spirit can propel a company to new heights, even during one of the most challenging times in the industry’s history.

Aurora was originally founded as a cloth prep facility in Aurora, Illinois in 1883. The company has since evolved and flourished as a domestic manufacturer, transitioning first into textile dyeing and finishing in the 1920s, then into textile coating capabilities in the 1950s.

In 1977, Aurora was purchased by Meridian Industries, Inc., a privately owned manufacturing holding company comprised of five operating entities, including Majilite, Meridian Specialty Yarn Group, Inc., Kleen Test Products Corporation, and Kent Elastomer Products Inc.

The company continued to expand through the following decades and in 2015 invested in a new state-of-the-art, wide-width coating and finishing line and a new facility in Yorkville, Illinois that dramatically expanded their ability to serve customers and new markets.

Today, Aurora offers a complete portfolio of products, including digitally-printable textiles, specialty home products, tape-backing products and technical textiles for a wide variety of industries.

Aurora President Marcia Ayala, who joined Aurora in 2006 and was named president in 2019, is leading the company on a rebranding drive, while also navigating myriad challenges, from rising raw material prices and transportation costs to a global supply chain crisis.

“The company has rebranded itself and really expanded and grown from the point of view of its manufacturing capabilities,” Ayala said.

As part of the rebranding effort, Aurora has engaged heavily on social media channel LinkedIn, posting company news and updates weekly. In addition, Aurora is currently in the process of upgrading its website.

“It has made a difference,” Ayala noted.  “We do see that we are getting more inquiries as a result of our presence and engagement on LinkedIn.”

These initiatives have helped Aurora maintain and grow business in an uneven economy roiled by the COVID-19 pandemic that has impacted the entire U.S. manufacturing and retail sectors.

Aurora’s product offerings and services are extensive.

The company’s products cover a wide range of applications, from pressure sensitive tapes with a fabric backing, like gaffer’s and athletic tapes, to digitally printable textile applications such as canvases, banners and window displays and wall coverings. Other applications include power transmission belting, military, abrasives, healthcare and safety, and protective outdoor coverings.

In addition, Aurora has a range of textile finishing capabilities including fabric preparations such as bleaching, scouring, singeing and brushing/vacuuming; dyeing capabilities; pad applications to apply treatments such as fire retardant, water-repellent and anti-microbial; coating capabilities for a range of water-based coatings; and calendering, sanding and converting services.

 

Navigating the Pandemic, Rising Raw Material Costs and a Global Supply Chain Crisis

“Like many businesses, when the pandemic first hit, our business slowed considerably and was down in 2020,” Ayala said. “While we hunkered down, we continued to manufacture throughout the pandemic. We never shut down.”

Ayala said Aurora had some businesses that were resilient and remained consistent throughout the pandemic, though areas such as athletic tape and gaffer’s tape were impacted as sporting events and entertainment shut down at the height of the pandemic in 2020.

Demand and business rebounded in 2021, but with it came a whole new set of challenges triggered by a global supply chain crisis that has resulted in skyrocketing costs for freight, cargo, raw materials and chemicals.

“Transportation costs alone have doubled and tripled depending on where you are shipping it from,” Ayala said. “The challenge now is mitigating price increases as much as we can and meeting customer demand.”

“We have had to change the way we do business because of rising prices and longer lead times for raw materials. We implemented a longer time frame for forecasting and customer product demands, we are qualifying secondary suppliers, and we are requoting prices frequently due to the volatile and increasing prices of raw materials,” she added. “In some cases, we have been told from our suppliers that prices are only good for 24 hours. It has been going on for the past year and I don’t see any end in sight in the near future.”

But one challenge Aurora has managed to dodge is the labor shortage crisis that has plagued broad swaths of the manufacturing and retail sectors. Aurora employs 73 people and operates in a 120,000 square-foot facility.

“We have had very little turnover, across the board. Most of the turnover has been retirements.  I think people enjoy working here and we have a very good culture focused on employee engagement, continuous improvement and input on ideas,” Ayala noted.

 

Emerging Markets

Looking ahead, Aurora hopes to expand its offerings to the military market: “We are looking at how we can act as a subcontractor to companies that need fabric finishing or coatings, like durable water repellants or anti-microbial finishes. This is a business that we have already grown, and we are looking to expand it,” she said.

She said government procurement business under the Berry amendment is extremely important and is a topic that will be highlighted on Aurora’s newly designed website.

“Our sweet spot is Berry compliant business where we offer our coatings, bleaching, and finishing services to companies that already have fabric procured, and we can add value,” Ayala said.

“Another area Aurora is exploring, one that would fit well with its core competencies, is outdoor protective fabrics for end products like boat covers and canopies, where it can offer a wide range of polyurethane coatings or water resistance coatings,” she added.

 

Sustainability

Aurora, a Meridian Industries, Inc. company, is ISO 9001 and ISO 14001 certified, and an industry leader in sustainable manufacturing practices.

The company moved into its state-of-the-art facility in 2015 and has made a significant investment on sustainability upgrades at its plant in Yorkville.

Among the upgrades to Aurora’s new facility, the natural gas and electricity components were designed to significantly reduce its manufacturing carbon footprint.

The move from its original plant in Aurora to the new plant in Yorkville led to a reduction in natural gas and electricity consumption of 4,134 metric tons of CO2. That is the equivalent of 465,178 gallons of gasoline per year or 4,523,015 pounds of coal burned, according to the company.

Over $1 million was invested in new equipment alone, including Variable Speed Drives to adjust motor speed to match demand (to prevent operating equipment running at constant full speeds), new higher efficiency boilers powered by gas, and a Building Automation System (BAS) that allows the company to schedule equipment to turn on and off automatically through a central computer, which helps reduce energy consumption.

As members of the Valley Industrial Association (VIA), which serves manufacturers throughout Northern Illinois, Aurora said it has begun sharing its sustainability management ideas with other manufacturing operations in the region and is helping them to identify ways to save energy and water resources and also reduce waste.

Aurora is a finalist in all six VIA benchmark categories, including innovation, culture, operations, safety, social responsibility and workforce development. The VIA’s “Spark Awards” will be held on April 27.

 

Onshoring/Nearshoring

 Ayala said she is very supportive of onshoring more weaving and manufacturing.

“It has been an advantage for us to be a domestic manufacturer, because of the global supply chain crisis and the issues with imported products over the past two years,” she noted. “People are starting to see more value in having domestic suppliers because of reliability, a shorter supply chain and lower costs from a transportation perspective.”

Ayala said her customers also find value in promoting products that they can label as manufactured in the U.S.

She said free trade agreements, such as the U.S.-Mexico-Canada Agreement (USMCA) have been beneficial and led to new exports to Canada, though over 90 percent of Aurora’s products and services are consumed domestically.

“Free trade agreements spur more domestic production of fabrics and yarns,” Ayala said.

Aurora hosted U.S. Trade Representative Katherine Tai and Congresswoman Lauren Underwood (D-Ill.) on a tour of its facility and a roundtable discussion featuring women-led manufacturing firms and union representatives in late August last year. The event was hosted by Ayala and Bruce Pindyck, chairman and CEO of Meridian Industries, Aurora’s parent company.

The visit came at a critical time as Congress was debating the bipartisan Infrastructure Investment and Jobs Act. The bill, which Congress ultimately passed, includes support across Illinois communities for public transit, improvements to roads and bridges, and improved passenger and freight rail and programs.

“The fact that Ambassador Tai was willing to visit small manufacturing companies like ours and talk to us about what is important to us was impressive,” Ayala said.

“When we went on the plant tour, she was interested in our manufacturing capabilities and asked questions about what was impacting our business and how trade policy impacts our business.”

“I asked her if it was typical for a U.S. trade representative to come on a tour of a small company and talk trade policy and she said it was her own innovation and practice—to meet with manufacturers and workers around the country—instead of putting out trade policies without asking industry first how it would impact us,” Ayala said. “That made such an impression.”

 

Vice President Kamala Harris Shines Spotlight on Parkdale Mills Investment at White House Roundtable

Vice President Kamala Harris highlighted investments in northern Central America and the U.S. by Parkdale Mills and six other companies at a White House roundtable on December 13, part of the administration’s Call to Action to the private sector to promote economic opportunity in the region to address the root causes of migration.

Parkdale Mills, one of the largest manufacturers of spun yarn and cotton consumer products it he world, will make a multimillion-dollar investment in a new yarn spinning facility in Honduras, as well as an additional substantial investment to support existing operations in Hillsville, Virginia. This investment will help customers shift one million pounds of yarn per week away from supply chains in Asia and China and enhance U.S. and CAFTA-DR co-production resilience an dincrease regional product offerings. The new investment will create hundreds of jobs in Honduras and further support hundreds of employees in Parkdale’s Hillsville operations.

Parkdale Chairman and CEO Andy Warlick attended the Vice President’s roundtable and outlined the importance of onshoring and nearshoring, particularly in the midst of a global supply chain crisis that is forcing retailers and brands to recalibrate supply chain strategies to mitigate risk.

The co-production chain with Central America is vital to the employment and investment in the region and the U.S.

Here are some compelling facts:

  • There is $12.5 billion in two-way textile and apparel trade between the U.S. and CAFTA-DR countries, representing $3.5 billion in U.S. textile exports to the region, which resulted in $9 billion in CAFTA-DR textile and apparel exports to the United States, based on pre-pandemic trade flows in 2019.
  • The benefits of this important two-way trading structure help employ 500,000 textile and apparel workers in the CAFTA-DR region and 600,000 workers in the United States.
  • Eighty percent of all U.S. spun yarn exports go to the CAFTA-DR region, while 65 percent goes to the Northern Triangle, three CAFTA countries that Vice President Harris and the administration are examining closely.
  • Two-thirds of U.S. textile exports to the CAFTA-DR region go to the countries of the Northern Triangle. In return, 70 percent of CAFTA-DR textile and apparel exports to the U.S. come from the countries of the Northern Triangle.
  • For every $1 of U.S. textile exports, we receive approximately $2.70 in textile imports from the Northern Triangle.

This supply chain is predicated on the strong yarn forward rule of origin and other textile rules in the CAFTA-DR agreement.

Recently, administration officials from the U.S. Trade Representative’s office and the Vice President’s office met with the U.S. textile industry to reaffirm the importance of rules of origin in nearshoring production chains, helping address labor and environmental challengers and mitigating supply chain risk.

Remarkably, as supply chain issues out of Asia are on the front page, some importers are seeking so- called “relief,” and proposing to weaken the yarn forward rule of origin and other provisions in the agreement. Changing any aspect of the textile rules embedded in the CAFTA-DR agreement would give Chinese yarns and fabrics and those from other countries that are not signatories to the trade pact backdoor access to the CAFTA-DR market and jeopardize hundreds of thousands of jobs that in U.S., CAFTA-DR region and the entire Western Hemisphere.

Warlick highlighted to the vice president the critical co-production chain with the CAFTA-DR region and stressed that this supply chain is quicker, more transparent, more reliable, more sustainable, and free of the forced labor that has been widely documented in Xinjiang, China.

In terms of sustainability alone, a container coming from Central America versus China cuts greenhouse gas emissions by 80 percent. On average, apparel exported from China produces 51.8 kgs of C02 per ton, compared to 18.1 Kgs of CO2 from CAFTA-DR.

Warlick offered a vision for the future of the U.S. industry and this critical co-production chain with Central America and the Western Hemisphere as a whole.

The CAFTA-DR region represents about 7 percent of global apparel and textile imports to the U.S., while China and Asia represent the vast majority of the remaining 93 percent.

By merely doubling the productive capacity and exports from CAFTA-DR, an estimated 2.4 million jobs could be created and billions of dollars in new investment could be unlocked, according to an independent analysis on the economic impact of CAFTA-DR.

NCTO continues to urge retailers and apparel brands to make long-term investments in onshoring and nearshoring production to not only avoid the next breakdown in global supply chains but to invest in strong labor and environmental standards and employment in this hemisphere.

Parkdale’s investment and anticipated investments by other NCTO members underscore how critical and valuable the co-production chain is to the economies of the U.S. and Central America.

This is an exciting time for nearshoring and onshoring these critical production chains. There is a long history in this industry with Central America and the Western Hemisphere and we have never seen an opportunity that is so ripe for these investments and further strengthening our textile and apparel co-production chain.

China’s Predatory Trade Practices Hurting U.S. Textile Industry, Western Hemisphere Co-Production Chain

China’s Predatory Trade Practices Hurting U.S. Textile Industry, Western Hemisphere Co-Production Chain

By Kristi Ellis

China’s unfair trade practices, ranging from rampant intellectual property theft to state sanctioned export subsidies, to the egregious abuse of forced labor in the production of cotton and cotton apparel for well-known global apparel brands and retailers has had a chilling effect on the U.S. textile industry and U.S. trading partners, particularly those in the Western Hemisphere.

The far-reaching impact of China’s illegal practices and its race to dominance as a global supplier of consumer products came under scrutiny at a recent House Ways and Means Trade Subcommittee hearing on Dec. 2, titled “Supporting U.S. Workers, Businesses, and the Environment in the Face of Unfair Chinese Trade Practices.”

NCTO President and CEO Kim Glas, in testimony before the committee, outlined China’s rise to dominance of global textile and apparel production and its adverse impact on the U.S. textile industry, as well as ways to strengthen onshoring and nearshoring of supply chains, and recommendations on the critical policies needed to address these illegal trade practices and rectify inequities in the country’s trade policies.

“China continues to dominate the global textile and apparel market, including our U.S. market through illegal subsidies, rampant IPR theft and other predatory trade practices,” Glas told lawmakers in her opening remarks. “This has cost hundreds of thousands of domestic jobs here in the United States and undermined critical production chains like personal protective equipment (PPE).”

“If I were to offer one overarching recommendation today, we need to hold China accountable and ensure our trade policies are keeping pace to address the rapidly emerging predatory challenges we are facing from China and others,” she added.

Rep. Earl Blumenauer (D-Ore.), chairman of the powerful trade subcommittee, said in his opening remarks, “Instead of joining other market-based world economies, China has doubled down on its state-driven economic model.  Economists now describe this phenomenon as the ‘China shock,’ which has had devastating and sustained impacts on U.S. workers and businesses across our country,” Blumenauer said.

“More broadly, China continues to demonstrate that it refuses to play by the rules.  China will exploit loopholes wherever they exist.  We’ve given too much of a free pass to China over the years – it’s now time to take these issues seriously and take a more aggressive approach,” he stressed.

Glas said China’s “abusive environmental and labor record is on full display in our sector and has been well documented.”

Egregious & Illegal Use of Forced Labor in China

China makes up 44 percent of U.S. imports of textile and apparel products, she noted. One in five garments coming into the U.S. from China are made with forced labor from Xinjiang “with the worst human rights abuses imaginable,” she noted.

Between 2017-2019, the Chinese government has forcefully transferred an estimated 800,000 to 1.8 million Uyghur Muslims from their homes in Xinjiang to detention centers and factories throughout China forced to manufacture products for international sale under forced labor conditions, according to numerous reports and international and domestic news outlets, Glas said in written testimony submitted to the committee.

Given that 20 percent of global cotton production is sourced from Xinjiang, tainted apparel and textiles made with forced Uyghur labor is a serious problem for the U.S. and the world.

U.S. Customs and Border Protection (CBP) issued a Withhold Release Order (WRO), effectively a ban on cotton and cotton products coming from the Xinjiang region in China, but the agency lacks the resources to inspect and stop a majority of goods from Xinjiang from entering the U.S. market, Glas told the committee.

“These items are bleeding into our supply chains and making it to our store shelves and into our closets,” Glas noted in her opening remarks.

Section 321 De Minimis Loophole

“Some of these products are making their way with the press of a button to our doorstep using the Section 321 de minimis loophole that allows these goods to come in duty free—not just evading China 301 duties, but all duties—from China and elsewhere with little scrutiny by U.S. Customs on these products,” she continued.

The United States provides a duty exemption for goods valued at less than $800 in retail value if imported by one person on one day.

Of note, the de minimis exemption was raised from $200 in 2016 under the U.S. Customs reauthorization legislation.  The current application of de minimis provides exemptions on base MFN tariffs, as well as Section 301 tariffs, such as those currently in place against imports from mainland China. Use of this exemption has skyrocketed alongside the growth of direct‑to‑consumer e‑commerce, which has further accelerated due to the COVID‑19 pandemic.

De Minimis exemptions are a loophole that allows tainted goods to be imported into the U.S. market duty free virtually unchecked and undermines carefully constructed textile and apparel rules of origin in CAFTA-DR and other free trade agreement and trade preference partners.

Blumenauer took note of Glas’ remarks and called out her reference to the de minimis problem.

“Ms. Glas has noted the example of Shein [a Chinese e-commerce conglomerate that imports billions of dollars of apparel to the U.S.]. This Chinese company has developed a business model to exploit the de minimis provision in U.S. law to avoid paying any costs or go through oversight at the U.S. border, all of which undercuts U.S. companies playing by the rules,” Blumenauer said.

“Shein is also part of the Chinese textile industry that benefits from the deplorable treatment and forced labor of Uyghurs and other minorities in the Xinjiang region of China.  Lack of oversight at U.S. borders makes it even more difficult for CBP to intercept these shipments,” he noted.

Blumenauer pointed to a roundtable he attended on the issue, nothing that he was made aware of the fact that some 2 million packages are shipped into the U.S. each day under de minimis waivers. He also noted that one witness suggested as many as 6 million packages per day are coming into the U.S. market under the Section 321 waivers.

“These issues with de minimis and forced labor are key areas of importance for me and ones that I intend to legislate on in the coming months,” Blumenauer said.

Rep. Danny Davis (D-Ill.) asked the hearing witnesses what they considered would be the most practical end expeditious solution to addressing China’s illegal practices.

“In terms of things in our trajectory that we can get done very quickly, closing the de minimis loophole is one and effectively banning the cotton and cotton products coming from Xinjiang,” Glas said. I do not believe we have given CBP the resources to effectively administer the WRO. We should be holding daily press conferences on stopping shipments coming in because that will help recalibrate supply chains both here to the U.S. and to our Western Hemisphere partners.”

China’s Predatory Practices Hit CAFTA-DR Countries

“These predatory practices have not only harmed U.S. manufacturers and workers, but also drastically impacted our valued political and economic allies in the Western Hemisphere,” Glas said.

“For example, the CAFTA-DR-U.S. co-production chain for textile and apparel supports over 1 million jobs and has been a critically important and a deeply economically impactful agreement, despite the headwinds from China’s increased access to our markets during the agreement’s existence,” she said.

The main driver behind the stability in the face of the China juggernaut is the yarn forward rule of origin, Glas said.

“This unique investment-based rule ties lucrative duty-free access to the U.S. market and our consumers to ensure investment in yarn, fabric and cut and sew production. Simply put, it means the agreement requires the signatories of the agreement gain the job benefits of the agreement.”

“Onshoring and nearshoring are happening. Key CAFTA-DR countries have seen exports up anywhere from 33 to 56 percent, outpacing major Asian exporters, and more investment in yarn, fabrics and apparel production will be announced soon,” she added.

Glas told the committee that apparel brands and retailers importing product to the U.S. from China are seeking “so-called relief [such as weaking the rules of origin in CAFTA-DR] to give Chinese yarns and fabrics and other countries that are not signatories of the agreement, backdoor access to the CAFTA-DR market.”

“These Trojan Horse ideas must be rejected out of hand because they hurt U.S. jobs and those in the region and reward other countries,” she noted.

In one of the liveliest exchanges during the question-and-answer session with the committee, Rep. Tom Suozzi (D-NY) called on retailers and apparel brands, some of whom have complained that the ban on cotton and cotton products from China is raising prices on imported goods to the U.S. and said they should shift more production to the U.S. and Western Hemisphere.

“The [U.S.] textile industry is very concerned about what China is doing. We’ve gone to China for cheaper goods,” Suozzi said.

He said the U.S. should close the U.S. market to imported goods from the Xinjiang region, something that could be helped by passage of the Uyghur Forced Labor Prevent Act (which the House passed last week).

“We should say that any goods coming from the Xinjiang region are presumed to be made with forced labor,” Suozzi said.

“Concerns from industry and others that this will make the cost of T-shirts and pants go up and be passed on to the consumer, my initial reaction to that is: “It’s too damn bad.”

“We have to hold them accountable for the way they are treating human beings in their country,” Suozzi added.

Glas agreed with Suozzi’s recommendations, noting that she is a commissioner on the U.S. -China Economic and Security Review Commission, and pointing to a recommendation from the commission this year to ban all products coming from Xinjiang for importation to the U.S. market.

“Seventy percent of U.S. textile, fiber, yarn and fabrics go to our Western Hemisphere trading partners,” Glas said. “We have one of the best cotton growing industries in world. There is transparency in our supply chains here and in the hemisphere because we have a strong rule of origin under our free trade agreements.”

“We are already starting to see opportunities coming to our hemisphere. Trade is up from some of the Northern Triangle countries by 56 percent over the last two years because Asian supply chains are breaking down,” Glas added. I do think there are retailers who are trying to de-risk out of Asia given the pervasiveness of the Xinjiang cotton issues. Our market is open here in the United States and we’re open for business in the Western Hemisphere. This is a huge opportunity to onshore and nearshore these critical production chains.”

Glas outlined key policy recommendations to the committee, including:

  • Enact tax incentives and other targeted critical investments to strengthen Western Hemisphere trade relationships and re-shore manufacturing
  • Close the Section 321 De Minimis Tariff Loophole
  • Step up enforcement of forced labor of Uyghurs and others in the Xinjiang Uyghur Autonomous Region (XUAR)
  • Firmly maintain Section 301 penalty duties on China for finished textiles and apparel products
  • Immediately pass the MTB to help manufacturers with a limited list of critical inputs not made in the U.S. and review/close the mechanism in the MTB renewal which allows for finished products
  • Strengthen buy-American practices for PPE and other essential products
  • Block expansion of the Generalized System of Preferences (GSP) to include textile and apparel products
  • Use trade enforcement in free trade agreements to mitigate transshipment schemes by unscrupulous importers seeking to illegally circumvent duties

Contempora Fabrics: A North Carolina Circular Knitter Well Positioned for Rising Demand in Sustainable, American-Made Products

As brands and retailers, caught in a global supply chain squeeze, scrutinize their supply chains and explore new strategies based on onshoring and nearshoring, North Carolina textile companies like Contempora Fabrics are beginning to see rising demand for sustainable, American-made textiles.

Based in Lumberton, N.C., Contempora is a manufacturer of circular knits specializing in both coarse and fine gauge knits predominantly for the fashion apparel, performance sportswear and workwear markets.

Contempora was founded in 1972 by Lacy C. Nance to produce fine gauge interlock and single knit fabrics. In 1984, 40 percent of the company was purchased through an Employee Stock Ownership Plan (ESOP) and the company became 100 percent ESOP in 1988.

Today, Contempora Fabrics operates 175 machines in a 150,000 square foot facility on 29 acres and is known for a versatile product mix and capacity to manufacture approximately 2 million pounds of fabric each month.

On a weekly basis, Contempora produces 450,000 pounds of fabric, 80 percent of which is polyester and 20 percent of which is cotton blend.

Its knit fabric production is heavily concentrated in the team sports and performance markets and is used in a wide variety of products, ranging from jersey knit T-shirts to mesh fabrics in uniforms used in the MLB and NBA, to heavy weight fleeces.

Contempora works with several well-known performance gear, workwear and apparel companies.

Contempora President Ron Roach says apparel accounts for 90 percent of the company’s polyester knit fabric business, but he says the company is expanding its business into new markets, including industrial and automotive and potentially furniture.

As the company continues to deepen its product offerings, the demand for American-made, environmentally friendly fibers, yarns, fabrics and apparel continues to rise.

Sustainability is in Contempora’s DNA

Contempora has reached an impressive sustainable milestone. To date, the company has prevented 63 million plastic bottles from going to landfills by purchasing and using recycled fibers from Unifi Inc.’s REPREVE® brand, says Hannah Rich, product development engineer at Contempora.

She says that customers are seeking to switch more from virgin polyester yarns to recycled yarns though the cost differential is still a barrier.

Of the 450,000 pounds produced each week, 50,000 pounds contains recycled poly yarns and 200,000 pounds uses 100 percent virgin poly.

Recycled poly is 15-20 percent more expensive than virgin polyester, she notes.

In addition to rising customer demand for recycled products, Contempora has invested in reducing its own environmental footprint, says Contempora President Ron Roach.

“We’ve spent the last 10 years updating all of our lighting systems so that they use less wattage and we have spent a tremendous amount of money in the last five to six years on new equipment that uses less electricity,” stresses.

For the year to date, Contempora has recycled over 123,000 pounds of cardboard, more than 257,000 pounds of cardboard yarn cones and over 13,000 pounds of plastic, for a total of over 394,000 pounds, or 197,000 tons.

“The incredible advantage of using a sustainable product line is that it is all very traceable. We can verify everything. We can trace our product all the way back to the beginning to ensure that it was produced in the sustainable way we are claiming,” he says.

Roach says he hopes brands and retailers appreciate the investment in sustainable practices as well as the resiliency of the supply chain in the face of a major shock like that of the COVID-19 pandemic and shift more sourcing to the United States and the Western Hemisphere, the textile industry’s largest export market.

“We are definitely hoping that retailer and brands are coming to the conclusion that most of us have known for a long time—the cheapest price is not necessarily the best cost in the long run,” Roach notes.

“With the severe shortages of personal protective equipment (PPE) that we saw during the onset of the COVID pandemic, we learned how our dependence on Asia really hurt this country. The U.S. textile industry’s response was heart felt and really demonstrated our industry’s ability to come together and help solve the PPE shortages.”

Onshoring

Business for U.S. knit suppliers has been strong, Roach notes, despite the fact that most of the apparel manufacturing base moved offshore decades ago.

But there has been an upheaval in the global supply chain that companies are watching closely.

A confluence of events, including the supply chain crisis associated with the pandemic, Section 301 tariffs imposed on finished apparel and textile imports from China and a U.S. ban on cotton and cotton products from the Xinjiang region of China linked to the use of forced labor of Uyghur minorities, has led to a shift in global sourcing.

While Roach notes that he has not seen a rush to onshore on the part of retailers and brands, he says there have been numerous conversations “about putting up facilities in the U.S. and we are anxious to see where that goes.”

He pointed to a new program that Contempora is staring with a major apparel brand that will be made strictly in the U.S.

Additionally, Walmart, the nation’s largest retailer, continues to explore U.S. suppliers and recently participated in the Americas Apparel Producers’ Network (AAPN) Carolina Mill Tour in October. Contempora was one of the four stops, a reported by eTextileCommunications.

This year, Walmart announced a $350 billion Made in USA Lighthouse initiative aimed at strengthening its commitment to U.S. jobs and communities. The 10-year project aims to help identify and overcome top-down barriers to U.S. production.

“I am very encouraged by the Walmart Carolina tour It went well and we are anxious to see where it goes,” Roach notes. “I think it is a very good sign when you have the largest retailer in the country look at making a commitment and I hope that others will also take that same look.”

Nearshoring-Western Hemisphere

Roach says that he expects the Western hemisphere to be a “big, big play” in the coming months.

Central America is Contempora’s largest export market, accounting for 80 percent of the company’s exports.

According to recent trade data, the Western Hemisphere marked a dramatic rebound in the first half of 2021, driving a 50 percent surge in U.S. apparel imports, as global sourcing shifts and pressure on China forced retailers and brands to continue diversifying and consider nearshoring more production to take advantage of the benefits of our free trade agreements (FTAs) in the region.

For the year to date through September, apparel imports from the Western Hemisphere (largely comprised of U.S. textile components) jumped 43 percent to $10.3 billion compared with the year-ago period, according to new data from the Commerce Department’s Office of Textiles and Apparel (OTEXA).

Roach notes that he expects to see the Western Hemisphere gain the most from sourcing shifts by retailers and brands, a key reason why he says maintaining strong textile rules in the U.S. free trade agreement with Central America is critical.

“I know there is a lot of talk about reopening CAFTA-DR (the Dominican Republic-Central America Free Trade Agreement) but that would be a complete disaster,” he adds. “The yarn forward rule has helped maintain business and a strong coproduction chain with Central America, and the administration supports the status quo and is not looking to reopening it, based on reports from a recent roundtable.”

Labor Shortage Challenge

As is the case with all industry sectors across the U.S., the textile industry has been struggling with severe labor shortages that have idled some capacity and led to lost business opportunities.

But the business is there, Roach stresses.

“In today’s world, everyone is busy, whether on the yarn side, the fabric mill side or the apparel side,” Roach says. “The biggest problem we are all having up and down the supply chain are these labor shortages.”

He notes it affects the entire domestic supply chain from getting raw materials for production to shipping fabrics to dye houses.

“The key is trying to tap into what today’s workers are looking for,” Roach notes. “I don’t think we will ever go back to the days before pre-COVID. We have to work together to figure out what happened and then find ways to address this. The person who figures that out will be the winner.”

Roach is trying one new strategy. In addition to taking the usual steps to hire and retain workers, he says he has applied to the HB-2 Visa program and is trying to hire 20-30 workers from El Salvador on 10-month work visas, though the process has taken longer than he anticipated.

“There is enough business in the U.S. We just have to figure out how to get enough employees to run it,” Roach notes.

 

Two One Two New York Hosts State Senator Phil Boyle on plant tour and discussion

Two One Two New York, Inc. (212NY), a well-known and respected PPE, sweater, sweater-knit and apparel manufacturer based in Long Island, N.Y., hosted New York state Senator Phil Boyle at its state-of-the art manufacturing facility on September 9.

Senator Boyle visits 212 NY headquarters in Long Island, NY.

Principle Marisa Fumei-South and Controller Carole Schultz hosted the Senator on a tour of the company, one of the largest fully vertical, women-owned, family- operated textile manufacturers on the East Coast, which expanded its operations to produce PPE during the COVID-19 pandemic, despite shutdowns and an economic downturn that saw many in the industry pull back and idle production.

Fumei-South said she took the opportunity to demonstrate Two One Two New York’s capabilities and capacity housed in an 85,000-square-foot facility in Edgewood, Long Island that produces up to 48,000 dozen sweaters per month.

“They were able to see the production sweaters as well as masks in process for other government contracts. They were impressed with the organization as a whole, the substantial infrastructure and the fact that are positioned to turn quickly at any given time,” she said. “They were appreciative of our dedication to domestic manufacturing, to keeping our employees working and that we’ve remained in New York for over 30 years despite the challenges we face having to compete with imports.”

“We spoke about opportunities that could be generated for Long Island as well as New York and U.S. manufacturers and their respective supply chains as well as concerns we have in regards to policy,” Fumei-South said. “We also discussed the critical and urgent support we need to sustain the robust supply chain that we created during the pandemic before it disappears and how important it is that we keep Americans working.”

Fumei-South said she is looking forward to having follow-up conversations about mandated state procurement for PPE for New York state manufactures.

U.S. Trade Representative Katherine Tai Makes First Visit to Heart of U.S. Textile Industry

U.S. Trade Representative Katherine Tai made her first trip as the nation’s top trade chief to the Southeast in a one-day visit to two U.S. textile companies where she had a first-hand look at state-of-the-art facilities and met with industry executives.

Ambassador Tai visited Milliken & Company’s Magnolia plant in Blacksburg, S.C. and American & Efird’s plant in Mount Holly, N.C. and gained insight into the opportunities and challenges that exist for the industry.

The Ambassador participated in a Women in Textiles roundtable at Milliken and in a separate Industry Executive roundtable at A&E on September 23.

Industry leaders discussed a wide range of critical topics, ranging from the competitiveness and sustainability of the domestic industry to priority issues in Washington, the critical Western Hemisphere co-production chain, PPE, and Berry Amendment and Buy American policies.

At Milliken & Company, Ambassador Tai said in a short interview with a broadcast station, “I am so impressed by what they are making here, how they are making it under an environmental sustainability program here. I think what I’ve been most impressed by is the pride that folks here have in what they are making.

“I got to model one of the U.S. Olympic jackets just now and putting that on reminds me of the kind of pride that we feel once every four years watching the Olympics. We should feel [that kind of pride] in a company like Milliken every single day.”

Later, at an industry executive roundtable hosted by A&E, Ambassador Tai took note of North Carolina’s $2 billion in textile exports—making it the number one textile-exporting state.

“I understand the A&E Mount Holly plant exports products to 57 different countries,” she said. “As U.S. Trade Representative I am committed to helping A&E and all of your companies build on this success by finding more market opportunities…”

The Ambassador also noted that both the Milliken and A&E plants export a significant portion of their production to such U.S. trading partners as Mexico, Canada and Central America.

“The production linkage with Central America is especially important as the Biden-Harris administration works with our partners in the region to increase economic opportunity in the Northern Triangle counties of El Salvador, Guatemala and Honduras,” she said in opening remarks at the roundtable, noting she was eager to hear from the group of industry leaders at the roundtable about suggestions to further strengthen the co-production chain.

She also gave special recognition to the industry for making “great strides and commitments” in implementing sustainable practices and commended the entire industry for its “heroic” role in answering the call of the nation at the height of the pandemic to ramp up production of personal protective equipment (PPE).

“…Many of you in this room stepped up courageously and reconfigured your production lines to make protective equipment that was in high demand and in short supply. This quick turnaround was nothing short of heroic. And I want to personally thank you for the lives you saved and the people you protected. We do not want to be caught in the same situation twice,” she noted, adding that the Biden administration is committed to learning lessons and determining how it can be more prepared in the future.

In a separate interview with a broadcast station, Ambassador Tai also weighed in on where she sees the future of the industry moving, after hearing from women textile leaders about the significant enrollment of women at North Carolina State University’s Wilson College of Textiles.

“The women that I talked to today talked about the opportunities that they got and wanting to create more opportunities for women and a more diverse workforce. Folks here really believe that the future of this industry is female.”

Western Hemisphere and U.S. Co-Production Chain Post Significant Uptick in Two-Way Trade

The Western Hemisphere marked a significant uptick in trade in the first half of 2021, driving a 50 percent surge in U.S. apparel imports, as business rebounded following sizable decreases in textile output and trade due to the COVID-19 pandemic last year.

The trends in the latest U.S. government data show that two-way trade between the U.S. and the region is rebounding strongly, as consumer demand for textile products continues to grow. Additionally, global sourcing shifts and pressure on China forced retailers and brands to continue diversifying and consider nearshoring more production to take advantage of the benefits of our free trade agreements (FTAs) in the region.

Please note that the government trade data for the first half of 2021 provides a comparison to the first half of 2020, a year that is considered an anomaly due to the impact of the pandemic. However, the latest data indicates that trade is on track to match and/or exceed 2019 trade figures.

For the year to date through June, apparel imports from the Western Hemisphere (largely comprised of U.S. textile components) jumped 50 percent to $6.4 billion compared with the same period in 2020, according to new data from the Commerce Department’s Office of Textiles and Apparel (OTEXA).

On a year-ending basis through June, the Western Hemisphere controlled a 17.4 percent share of the U.S. apparel import market, an increase of 7.4 percent.

While the rebound is in large part a function of the market bouncing back from the adverse impacts of the COVID-19 pandemic, it is also a reflection of larger sourcing shifts occurring as brands and retailers continue to diversify out of China, which is facing pressures on several fronts.

Most notably, the trade data indicates that China is likely feeling the impact of the imposition of 301 tariffs on the majority of finished Chinese apparel imports, as well as the recent U.S. ban on cotton products from the Xinjiang region of China, following widespread reports of the egregious abuse of Uyghur Muslims and other ethnic minorities and the use of forced labor to produce consumer goods for Western brands.

While apparel and textile imports from China also rose in the first half of the year, the country lost import market share in the U.S.

For the year ending June 30, China had a 23.3 percent share of the U.S. apparel import market, a decline of 13.8% compared to the year-ago period. Its U.S. import share of total textiles and apparel stood at 28%, a decline of 2.8 percent.

A diversification in global sourcing trends has contributed to nearshoring and an increase in orders for Western Hemisphere trading partners.

These positive trends are extremely important for the U.S. textile industry, which has invested heavily in the region and has seen its exports to the region increase significantly, especially under two critical free trade agreements–the U.S. Mexico-Canada-Agreement (USCMA) and the Central America Free Trade Agreement-Dominican Republic (CAFTA-DR).

“The U.S. trade data indicates a strong rebound in the Western Hemisphere, which is gaining U.S. import market share,” said NCTO President and CEO Kim Glas. “I expect this trend to continue through the remainder of this year as retailers and brands seek to nearshore more of their production.

Built on the strength of reciprocal, negotiated FTAs, the Western Hemisphere’s textile supply chain is a vital economic driver for the whole region. Fiber, yarn, and fabric products, and their various associated textile and apparel related end-products, support almost $35 billion in annual two-way trade and more than 2 million direct jobs throughout the hemisphere,” she noted.

Textile mill product exports to the Western Hemisphere rose 27 percent to $5.8 billion for the year to date, compared to a year ago, while exports to the CAFTA-DR countries rose 42 percent and exports to the USCMA countries increased 24%.

On a more granular level, U.S. yarn exports alone to CAFTA-DR jumped 70 percent year over year, while U.S. fabric exports to USMCA increased 29 percent.

Five of the six CAFTA-DR countries posted double-digit increases in apparel imports in the first half of the year, compared with the first half of 2020,

including: Honduras, with a 78 percent increase to $1.2 billion; El Salvador,  an 85 percent increase to $850 million; Guatemala, a 40 percent increase to $753 million, the Dominican Republic, a 52 percent increase to $251 million; and Nicaragua, a 43 percent increase to $864 million.

Total textile and apparel imports from Mexico rose 31.36 percent to $2 billion, while imports from Canada rose 15 percent to $522 million.

Based on the upward trend in imports from the Western Hemisphere, Glas said she is optimistic about the future of the co-production chain in the Western Hemisphere.

She attributed the strength of the partnership to the reciprocal FTAs in the region. “A yarn forward rule in both CAFTA-DR and USMCA ensures that the benefits of the FTA are reserved for manufacturers who actually produce textiles and apparel in the FTA region, as well as strong labor and environmental obligations and commitments embedded in the agreement,” she said.

“We are on track to hit and potentially surpass the two-way trade flows with the Western Hemisphere that we saw in 2019—before the pandemic hit,” Glas said. “We will continue to press this administration and our allies in Congress to maintain policies that allow this co-production chain to flourish.”

 

 

Glen Raven Invests $82 Million in Norlina, N.C. Operations; Creates 205 new Jobs

As part of a multi-phase $250 million capacity expansion plan, Glen Raven, Inc., a leading provider of innovative performance textiles, which includes such well-known brands as Sunbrella® and Dickson® in its portfolio, will create 205 new jobs as it expands its Custom Fabrics operations in Norlina, North Carolina.

N.C. Governor Roy Cooper announced the significant expansion, in a press release, which stated the company will invest up to $82 million in Norlina.

“Companies that already do business in rural North Carolina know the advantages of communities like Warren County,” said Governor Cooper. “Glen Raven’s experience here provides the confidence they need that our workforce, transportation systems and business climate will best support this next phase of growth for their company.”

“Ever since Glen Raven was founded in the great state of North Carolina in 1880, we’ve invested in our communities and have celebrated many accomplishments together,” said Leib Oehmig, chief executive officer at Glen Raven, Inc. “We look forward to building on this legacy as we further grow and strengthen both Warren County and Glen Raven for the future.”

The company said it will invest in a new spun-yarn plant co-located with an existing facility in Norlina to “increase production output by more than double” the current capacity in an additional 315,000 square feet, in a press release.

A performance-based grant of $1 million from the One North Carolina Fund will help facilitate Glen Raven Custom Fabrics’ expansion in Warren County, the governor’s office said. The OneNC Fund provides financial assistance to local governments to help attract economic investment and to create jobs. Companies receive no money upfront and must meet job creation and capital investment targets to qualify for payment. All OneNC grants require a matching grant from local governments and any award is contingent upon that condition being met.

Glen Raven said it is expanding capacity to “meet record demand for its Sunbrella performance fabrics, in the next round of its investments in facilities and infrastructure.

“These investments represent phase two of a multi-phase expansion plan and are specifically focused on growing Glen Raven’s U.S. capacity,” the company said.

The investments include additional production facilities and a new distribution center in the U.S., as well as additional equipment to increase output levels for Glen Raven’s Custom Fabrics division, which includes Sunbrella fabrics.

Glen Raven’s phase two investments are part of an overall goal of expanding production at “all levels, from yarn to finished fabric,” the company said. Phrase three planning is underway.

The total of all three phases amounts to $250 million in investments and will increase the company’s production capabilities by more than 30 percent, in addition to creating over 400 additional jobs across the country.

“As with many other industries, we’ve continued to battle unforeseen supply chain disruptions and raw material shortages,” said Dave Swers, president of Glen Raven Custom Fabrics. “We’re producing more Sunbrella fabric than ever before and are committed to investing a quarter of a billion dollars in our operations to support our customers in the long term. We’re doing everything possible to better meet their expectations today and return to the service levels that have defined our reputation in the industry for decades.”

Swers noted that Glen Raven remains “resilient and determined to implement strategic initiatives that will make a positive and lasting impact for our customers, employees and the textile industry as a whole.”

Founded in 1880, Glen Raven, Inc. is a family-owned company with a portfolio of global businesses built around category-leading brands. The company has three divisions: Glen Raven Custom Fabrics with flagship brands Sunbrella® and Dickson®; Glen Raven Technical Fabrics with GlenGuard®, Strata™ and Glen Raven Logistics®; and Trivantage®, one of the nation’s largest business-to-business distributors for the awning, marine, upholstery and shade sail industries. Glen Raven, Inc. is a leader in the upholstery, marine, technical shading, automotive, military, geotextile, and protective work wear markets and operates national distribution and logistics subsidiaries.

Two One Two New York, Inc.: An American Women-owned Apparel Manufacturer with Staying Power

Two One Two New York, Inc. (212NY), a well-known and respected sweater-and sweater-knit apparel manufacturer based in Long Island, N.Y., has maintained and grown its presence manufacturing exclusively in the United States, even as a large swath of the industry moved offshore over the past two decades.

The company, one of the largest fully vertical, women-owned, family operated textile manufacturers on the East Coast, expanded its operations during the COVID-19 pandemic, despite shutdowns and an economic downturn that saw many in the industry pull back and idle production.

Principles, Marisa Fumei-South and Josephine Marini, bring over 35 years of industry expertise servicing many major U.S. retailers and brands as a U.S. design and manufacturing partner.

Originally based in Queens, N.Y. for over 25 years, 212NY built its apparel business by remaining an invaluable and competitive resource, providing ingenuity, designs, production efficiencies and speed as well as a capacity to produce 48,000 dozen sweaters per month.

Two One Two New York Headquarters in Long Island, NY

Six years ago, the company implemented a long-awaited plan to expand and modernize its facility to better service long-term retail partners.  This path took them, along with their devoted employees, from Glendale, Queens to Edgewood, Long Island where they relocated to an 85,000-square-foot facility.

“Treating this as a blank slate, we built a fully modern and open environment, expanded our capabilities and capacity, layering on additional equipment and bringing other processes typically outsourced, in house,” said Fumei-South.

212NY made the final transition to Long Island two and a half years ago, moving their 4,000-square-foot Manhattan showroom into the Edgewood facility, allowing for seamless communication and greater efficiency, while providing full-service one-stop shopping from design to delivery.

Then the pandemic hit.

At the onset of the pandemic in March 2020, Fumei-South saidevery retailer cancelled every order, regardless of the production status and held up every payment– essentially bringing cash flow to an abrupt halt.” The same week then-Governor Andrew Cuomo shuttered all non-essential business.

Having a deep allegiance to their dedicated employees and a sense of responsibility to help the cause here at home, Fumei-South and Marini, along with key technicians, programmers and management, stayed in their facility and never left.

Two One Two New York’s Production Facility

“Without hesitation, we put our heads together, made the necessary investments, and within a week and a half, we successfully pivoted to produce personal protective equipment (PPE), beginning with technically knit-2-shape sustainable face masks. We were immediately selected as the New York manufacturer to participate in the FEMA mask contract award and also landed multiple contracts with local municipalities, national utility companies, schools, local businesses, banks and grocery chains, Fumei-South said.

Along with loyal supply chain partners and a network of exclusive sub-contractors, 212NY took the next step and expanded fully into the PPE world, producing reusable/sustainable face masks and isolation gowns, disposable isolation gowns, bouffants, booties and other items for frontline workers, nursing homes, healthcare workers, and doctor and dental offices.

Today, 212NY has the overall capacity to produce 4 million face masks per week and between 750,000 to 1 million gowns per week, depending on the model and level.

Most recently 212NY was selected as a key subcontractor by Parkdale Mills on the “Biden Warp Speed Mask” contract and is currently working on several military mask and apparel contracts, in addition to its commercial PPE business.

“Through hard work, perseverance, resourcefulness, ingenuity and sheer determination, the development and production of PPE has evolved to be a permanent arm of 212NY,” she said.

The company now employs over 400 people within the New York area, both directly and indirectly.   

As for the state of Retail, Fumei-South is not as bullish at the moment.

Two One Two New York’s Showroom

Although retailers are back for the most part, unfortunately most feel no allegiance to support their domestic manufacturing partners,” she said. “After all that has happened they continue to place orders offshore, regardless of the shipping delays and increased container costs. Many look to their U.S. resources for opportunistic buys rather than making long-term commitments to do their part to sustain a robust U.S. supply chain. We would love nothing better than to bring visibility to those that take the stand to support U.S. manufacturers.”

 

 

TWO ONE TWO NEW YORK, INC.

Click to view a video of the 212NY textile facility.

                                            

Precision Fabrics Group Staying the Course in a Turbulent Economy

Precision Fabrics Group is staying the course and registering positive growth in key business segments, as it navigates the myriad challenges in the industrial textiles sector, beset by domestic and global supply chain disruptions, rising commodity prices and labor shortages in today’s pandemic-impacted economy.

Headquartered in Greensboro, N.C., Precision Fabrics Group—a new NCTO member–is an engineered materials business focused on highly technical, high-quality woven and nonwoven materials.

The company’s diverse portfolio represents a prime example of the U.S. textile industry’s innovative contribution and importance to the economic backbone of the U.S. economy.

Its core business is in industrial fabrics, centered around sophisticated weaving technologies and finishing chemistries for performance fabrics aimed at high-tech markets. The company specializes in designing fabric constructions for coating and laminating substrates, process and cure liners and other industrial applications.

In a testament to the company’s innovative might, Precision’s fabrics are also used in protective apparel, surgical garments, therapeutic bedding and aerospace safety equipment.

It has produced thousands of yards of fabric used to filter contaminated water in Guinea to help eradicate worm disease and also provided the woven release fabric used in the construction of emergency escape chutes, which were used in the 2009 emergency landing on the Hudson River in New York City.

Precision Fabrics Group was created in 1988 in a leveraged buyout from Burlington Industries, and continues today as a privately held company, employing approximately 600 associates and operates plants in North Carolina, Virginia and Tennessee.

In an interview, Byron Bassett, corporate vice president of Precision Fabrics, outlined the impact of the pandemic, and the ongoing challenges the company is facing and overcoming in a turbulent economy that is on the rebound but is still uneven due to new rising coronavirus cases associated with the Delta variant.

“The last two years have been the most uncertain that I have experienced in my 34- year career. There have been other times where the economy took a little dive and short term dip, but this one seems to be so protracted and the recovery so uncertain,” Bassett said. “It seems as if the economy has had more elasticity in years past.”

“We’re involved in the industrial sector and there is large portion of that industrial sector that essentially became a fraction of what it was pre-Covid– almost overnight at the onset of the pandemic last year. The sector is coming back now but the process of recovery is going to be a slow one in some areas,” he added.

The industrial textile sector, like all other segments of the U.S. textile industry, was impacted by shutdowns and economic downturn during the COVID-19 pandemic last year, but according to research highlighted in this summary of IFAI’s 2021 State of the Industry report, the outlook for the industry is positive.

“Collectively, companies in the industry…have positive expectations for their future. Some 62% expect their revenues to increase while only 5% expect a decrease (one-third are not sure),” IFAI said. “Overall, respondents expect an average increase of 8.5% in annual revenues over the next two years. Organizations serving the hospitality markets anticipate the highest increase in revenues (10%). Those serving manufacturing and agriculture anticipate slightly lower-than-average revenues.”

The research is based on findings from more than 300 members of the industrial fabrics community, gathered through an online survey fielded January–March 2021 that asked organizations about their businesses pre-pandemic (2019) and during the pandemic (2020), as well as their outlook for the future, according to IFAI.

Bassett said Precision Fabrics shares that optimism, having registered growth in the first half of this year, but warned there are headwinds slowing down the recovery.

 

SUPPLY CHAIN ISSUES DOMESTICALLY AND GLOBALLY

“We’re still waiting for yarns to run our looms. We’ve got 10 percent or 15 percent of our production capacity that has been hampered by [shortages] of raw materials. So on top of all of the other things, we are struggling to meet delivery schedules, which is a pretty common thing—as a result of these supply chain issues,” Bassett said.

He noted that supply chain problems downstream and upstream are impacting business and said domestic yarn manufacturers, non-woven produces and chemical companies across the board are having difficulty procuring polymers, necessary to run supply raw materials, as well as shortages in manpower to run them.

“There is a myriad of reasons that are hard to put together. We had a terrible winter down in the Gulf, which impacted the petrochemical based stocks. We had plant shutdowns because of COVID that reduced production outputs. There has been a lot of competition for commodities,” Bassett said.

“As our order books have strengthened over the last 6 months, priming the pump has been difficult, as a result.”

Another challenge causing supply chain disruptions has to do with the sheer magnitude of the effort necessary to ramp back up industries, many of which were temporarily shuttered for several months, particularly in the U.S. petrochemical industry, which supplies the majority of polymers to the textile industry.

Upstream manufacturers are also facing severe supply chain delays and issues.

For example, the automotive industry is a strong business segment for Precision, which makes nonwoven acoustic fabrics for the interior of vehicles to address sound absorption.

While consumer demand is high for new cars, an ongoing computer chip shortage, has severely impacted the production of new automobiles.

“The automotive business is a really good example where secondary or tertiary level supply chains are impacting every other tier of suppliers,” Bassett said. “They are saying this chip shortage will last into next year. Then we expect a surge because of pent- up demand. This turbulence is going to continue. How do you take a manufacturing process and ramp up from 30 percent of historical production volume to 130 percent of historical production volume? How do you forecast that?”

Rising raw material prices and freight surcharges on imported inputs are also putting pressure on margins.

“Raw materials are increasing in price; the cost of freight particularly sea freight is at all-time highs and some suppliers are implementing surcharges on components made from feed stocks that are on allocation.  The combination of these factors require PFG and other companies to rethink their strategies as the demand in the market improves, Bassett said.

 

WOKFORCE ISSUES—LABOR SHORTAGES

As business continues to come back online, NCTO member companies are facing one of the more dire labor shortage environments in history, in line with every other major industrial, retail and transportation sector across the country.

The textile industry was recently listed as one of seven industries “most desperate for workers,” by the Washington Post.

Shortages are so acute that manufacturers have had to turn down contracts from businesses, including those that want to make their goods here in America.

“From my perspective, there has been a change in our culture, a change in how people view themselves relative to companies themselves and what they see as their part in it,” Bassett said. “We are going to have to find some creative ways to keep people engaged, particularly in manufacturing. I don’t think young people graduating from college today are thinking: ‘If I could only get into manufacturing and work for 45 years, I’d have a great career.’”

Bassett said the labor shortages are also driven by a generational gap and retiring Baby Boomers.

“We’ve got Baby Boomers that have worked in manufacturing for 40 years and are looking forward to retirement. A lot of those folks have worked with us for a very long time and we’ve relied on them. Filling those jobs over the next 5-10 years is a key focus. That is the essence of where we are going as a manufacturing company—we are going to have to figure out how to replace that know-how.”

 

IMPORTS AND RESHORING 

Bassett said there continues to be price pressure from imports, particularly on lower-cost fabrics.

“There are situations where import prices are below our material costs. Some countries see it as a huge opportunity to take a long-term approach and dominate our markets. They have easy access to our market and are willing to invest in the those markets in the short run at lower margins to try choke out the domestic supply base,” he said.

The domestic industry is fully aware of the cost of producing polymers and can easily identify when imported textile components are imported into the U.S. market at below-market prices.

“We’ve seen countries support their industries and I just think there are a lot of reasons for our federal government to make it a strategy to rebuild the U.S. textile industry,” he said. “I don’t think we will make T-shirts here but we need a thriving textile industry in this country as part of an overall, nationwide manufacturing strategy. We are part of what needs to be here for the long run.”

He added that he is seeing a willingness on the part of Precision Fabric’s customers to reshore.

But he cautioned that in some segments such as personal protective equipment (PPE), “memories are quite short and people have reverted back to imports.”

He said foreign suppliers often try to combat reshoring by offering even lower prices as an incentive lure companies back offshore.

 

OUTLOOK

Despite the challenges and other headwinds, Bassett said on balance Precision Fabrics is seeing an increase in orders and business is coming back. 

“We’ve absorbed extra costs when things were leaner last year, and as we are digging out, we have tried to maintain as much continuity as we possibly can. We think that’s good for everybody in the long run,” he said. “It has been our philosophy to stay the course. We’ve got a lot of loyalty in our workforce and recognize that we’ve got skills in our manufacturing operations that would be difficult to replace once lost. It is important that we keep those associates working so that we are prepared to handle the volume when the market rebounds.”

The sectors related to “heavy industry” such as construction, aerospace and even automotive, despite ongoing supply chain issues, are areas where the business is coming back, he said.

Finally, Bassett said the industrial textile segment is “probably the one category in which we can survive as a domestic manufacturer.”

“Low-cost commodity fabrics or consumer items cannot be our focus. We have to continue innovating and take on the most technically challenging applications in our industry. Once something becomes commoditized, we need to replace that business with an innovative product, one that is more financially sustainable.  It is that kind of strategy that will provide a real future for the American textile industry.”