Sonny Walker, a 30-year veteran of the fiber and textile business, took on the challenge of helping build Nylstar into the No. 1 textile nylon producer in the Americas.
A key strategy for many market leaders is going against the grain finding positive ways to change the game by seeing opportunities where others do not.
Nylstar, Europes leading textile nylon filament producer, is following that course in the Americas. The company said it is investing in plant, equipment, people and market growth at a time when other nylon producers are shrinking their presence or completely abandoning the market here.
More than two years ago, Nylstar quietly began building its leadership position in this region, the company said. It purchased Amfibe, a small nylon producer in Martinsville, VA, and immediately began expanding the plant and installing state-of-the-art equipment.
For the past 18 months, products have been developed and commercialized and markets seeded for growth. Now, Nylstar said it is poised to show the market what it can do.
The company named Sonny Walker, a 30-year veteran of the fiber and textile business, its president and chief operating officer in mid-2002. At a time when many of his more conventional peers are well along the path to retirement, where the biggest hassle might be scheduling daily tee times, he took on the challenge of helping build Nylstar into the No. 1 textile nylon producer in the Americas. Why?
Dina Dunn (L), Nylstars vice president of marketing, and staff
While Nylstar did not have a high profile in this market, Walkers years of experience convinced him that the company had a solid foundation on which to build. The result of a 1994 joint venture between Snia and Rhodia, Nylstar is the worlds second largest nylon producer and its Meryl® family of nylon yarns is among the most versatile in the textile marketplace.
I knew there was great potential for Nylstar in the Americas because one of its strengths is fiber innovation and they had a solid game plan in place, Walker said. That, coupled with its increasing commitment to the Americas, at a time when other nylon producers are diminishing their presence here, made this an extremely attractive opportunity.
Nylstars deep roots in European fashion, and the fact that its headquarters in Italy puts it squarely at the center of the rapidly changing fashion world, was a distinct advantage. This gives the company what Dina Dunn, Nylstars vice president of marketing, calls our Italian panache.
In Europe, Meryl® is synonymous with innovation and creativity. The fact that European designers turn to us for creativity, she said, is an advantage that our competitors cant duplicate.
Our goal is to bring that fashion leadership to the Americas with a continuous stream of innovative products. Thanks to Nylstars commitment to this market, we have complete access to all of the help and resources we need from our outstanding European product development team.
Nylstar said it believes it is currently leading the way in nylon product innovation and differentiation.
Next in the new product queue is Meryl Skinlife®, for which Dunn and Walker said they have a difficult time controlling their enthusiasm because of its unique qualities. They believe it will quickly become an important player in sportswear, intimate apparel, socks, hosiery and paramedical fabrics.
The only bacteriostatic nylon on the market, Skinlife® inhibits bacteria growth in fabric, whereas typical anti-bacterial fibers kill both good and bad bacteria on contact, they said. Another important Skinlife® feature is that its odor control agent is inherent in the yarn, so that it will never migrate to the skin or wash out, they added.
Skinlife® has all of the positives and none of the negatives associated with odor control products, Dunn said. It is a very unique product, driven by worldwide research of the benefits consumers require in their apparel.
Meryl Nexten® is another Nylstar innovation making impressive inroads in the Americas market. The worlds first hollow nylon fiber, it is up to 30 percent lighter than comparable nylon fibers and close to 40 percent lighter than polyester, Dunn said. Garments made with Nexten® are not only lighter, but they dry up to 30 percent faster than cotton and polyester, providing consumers an added degree of comfort, she added.
Nylstar has invested almost $100 million in the Americas nylon market over the past 2-1/2 years, according to Walker. Half of that went to construct the companys state-of-the-art production facilities in Martinsville, VA.
The company is unabashedly proud of the Martinsville plant, calling it the worlds highest state-of-the-art nylon manufacturing plant, with the most technologically advanced spinning equipment in commercial operation. The plant began production in 2001 and now has an annual capacity of about 40 million pounds.
Following ISO standards, and with a passion for continuous improvement, Nylstar is well positioned to serve the NAFTA and Caribbean Basin markets, Walker said.
The Martinsville facility has been designated the companys global center of excellence for specialty products, underscoring Nylstars commitment to the Americas market. A significant portion of its manufacturing capability will be devoted to products like Meryl Skinlife®, which will be produced there by mid-year, and it will be the hub for producing these products globally.
Walker said he looks back on 2002 as a building year in terms of growing market share, improving quality and efficiency at Martinsville, and turning the corner on profitability.
Much progress was made in each area sales were up 50 percent last year, for example but the job is far from finished.
As for this year and beyond, Walker said he is optimistic because all the pieces are in place for Nylstar to win here. Hes looking for 30 percent growth this year, reflecting strength in home furnishings and industrial nylon, as well as apparel.
Walker said his ultimate goal is for the company to be recognized as the nylon fiber producer of choice in the Americas.
When people think of nylon, he said, we want them to think of Nylstar and Meryl® first.
By Chip Smith
As you all know, no one is exempt from the perilous times in which we are living. The textile industry in the United States has suffered deeply these last few years. And Southern Textile News (STN) has been there by your side through most of it.
As so many other companies in this beleaguered industry, STN has strived to continue producing a quality product. Despite these tough times, we have always held a firm conviction the U.S. textile industry the most productive in the world will survive, albeit a smaller and more agile one.
We firmly believe the United States needs this industry. However, we have had to deal with declining business and, as so many of you, have had our share of problems. We, too, have had to adapt to this new global business environment.
Thus, after much deliberation, we have decided it was time to go to a bi-weekly schedule. In all of our 58 years, STN has published a paper on a weekly schedule, without exception. We have carried the news, both good and bad, and we have always attempted to promote this industry of which we are so proud to be a part.
But business is business, and in order to continue to get the news out in the years to come, we must make the tough decisions now. So, beginning this week, and until our advertising revenues pick up, we will go to press every other week. We sincerely regret the situation and we hope to renew our regular weekly schedule as soon as fiscally possible.
During this interim period, rest assured that we will continue gathering, sifting through and reporting the news you need. Please continue using STN to disseminate your news items and to advertise your products and services during this time.
Please visit our Web site, www.textilenews.com, for additional details. We will have a revised Editorial Calendar posted there within a week.
GREENSBORO, NC Not so fast, Mr. Buffett.
WL Ross & Co. said Tuesday that it vigorously opposes Warren Buffetts bid to buy bankrupt Burlington Industries Inc., saying the offer undervalues the claims of its creditors.
Berkshire Hathaway, Inc., the Nebraska investment firm owned by the famed investor, and Burlington jointly announced earlier Tuesday that Berkshire plans to buy the textile giant for $579 million. Wednesday, Burlington filed papers in its Chapter 11 case to further its deal with Berkshire Hathaway.
The deal is subject to higher offers at an auction Burlington wants to hold April 21.
But Wilber Ross, owner of private equity firm WL Ross and the lead member of Burlingtons creditors committee, said his company has also proposed a way to help the firm out of Chapter 11 court protection. He added that a majority of Burlingtons unsecured creditors oppose the sale to Berkshire Hathaway.
Rosss plan would provide that Burlingtons estimated $28 million of administrative claims and $439 million secured debt would be paid in full from cash on hand plus $250 million of new debt. The $300 million of bonds and other unsecured claims would be exchanged for 57 percent of the stock of the reorganized company and also would be issued transferable rights to subscribe for 43 percent of the stock for $85 million.
W.L. Ross entities would buy any unsubscribed shares, he said. In addition, unsecured creditors would receive the proceeds from the sale of non-operating assets valued at an estimated $20-25 million.
We believe that the subscription price is a 27 percent discount from the value of the equity and therefore we are happy to take up any unsubscribed shares, Ross, chairman of the Official Committee of Unsecured Creditors, said in a statement. We also believe that the unsecured creditors committee, the representatives of the real parties at interest, should be permitted to organize a free and open bidding process for the company as a whole and for the sum of its individual parts.
If a higher valued bid should emerge, we will exit without charging any breakup or stalking horse fee.
Burlington said its board considered a number of alternatives, including WL Ross & Co.s stock and cash purchase offer. Such a proposal may again be considered by the company, if required by the courts, Burlington said in a statement.
In announcing that it had agreed to the purchase by Berkshire Hathaway, Burlington said the details of the transaction are set forth in papers being filed with the bankruptcy court and the Securities and Exchange Commission.
Under the proposed plan, Burlingtons secured creditors would be paid in full and its pre-petition unsecured creditors would receive cash and certain other assets estimated to be 34 percent to 35 percent of their claims. All shares of Burlingtons common stock would be canceled with no payment.
Also, Burlington would emerge with no debt, other than ordinary course liabilities and certain pre-petition obligations, having repaid the majority of the $1.1 billion of liabilities it had prior to its bankruptcy filing in November 2001, and eliminating the balance through the bankruptcy process.
This is a very positive outcome for the company, our employees and our creditors, George W. Henderson III, chairman and CEO of Burlington, said in a statement, referring to the Berkshire Hathaway deal. Over the last year our efforts have increased the value of our company and allowed us to achieve a significant level of return for our creditors, despite extraordinarily challenging conditions in our industry and the capital markets.
The opportunity to be totally debt free and having made considerable progress in its globalization efforts puts the company in a position to take full advantage of our capabilities and compete successfully in a rapidly changing textile business, Henderson added.
The companies said they expect to close the deal, should it be approved, by the end of June.
Only the very strong will survive in the textile industry strong in management, strong in worker skills and strong in financial strength, Buffett said. Burlington brings the first two resources to a successful reorganization; Berkshire brings the latter. Burlington will go forth as a company with no debt, talented and dedicated management and a work force second to none. It will be a company designed for success.
If the buyout is approved, Burlington would become a wholly owned subsidiary of Berkshire Hathaway.
Berkshire is a company of great integrity and long-term focus, and we believe its solid foundation provides us the right environment in which to operate and grow as we implement a new and challenging business model, Henderson said.
With operations in the U.S., Mexico and India and a global manufacturing and product development network based in Hong Kong, Burlington is one of the worlds most diversified marketers and manufacturers of soft goods for apparel and interior furnishings. After eliminating nearly 6,000 jobs since filing Chapter 11, Burlington now employs about 7,000 people.
Berkshire Hathaway is a holding company owning subsidiaries engaged in a number of diverse business activities. Among its subsidiaries are
apparel makers Fruit of the Loom and Garan Inc., uniform maker Fechheimer Brothers and carpet maker Shaw Industries.
Earlier last week, Burlington reported a net loss of $15.6 million, or 29 cents a share, for the first quarter, according to forms filed with the SEC.
For the first quarter of a year earlier, the company lost $75.2 million, or $1.42 a share, according to the filing. Results for that quarter included a $59.2 million charge for restructuring, asset write-downs and other impairments.
Net sales for the quarter fell 22.9 percent to $189.7 million from the comparable period of 2002.
WASHINGTON The United States on Tuesday proposed eliminating tariffs on textiles and apparel within five years of a Free Trade Area of the Americas (FTAA) agreement taking effect provided trading partners do the same.
U.S. Trade Representative Robert B. Zoellick introduced the plan as part of the Bush Administrations larger negotiating stance for the FTAA deal. The U.S. is offering to eliminate its import duties on the majority of industrial and agricultural imports from the Western Hemisphere and is offering broad access to its services, investment and government procurement sectors.
It is our shared hemispheric vision that free trade and openness benefits everyone and provides opportunity, prosperity and hope to all our peoples, Zoellick said. President Bush has made the FTAA a top U.S. priority, and today we deliver with bold proposals to lower barriers throughout the region.
The United States has created a detailed road map for free trade in the Western Hemisphere weve put all our tariffs on the table because free trade benefits all and brings us closer together as neighbors.
News of the plan drew immediate public criticism from U.S. textile leader Roger Milliken, chairman and CEO of Milliken & Co., Spartanburg, SC.
If implemented, the USTR proposal would break the administrations pledge to Congress and the industry made last year during the battle over fast track (trade promotion authority) to not trade away any more of Americas textile and apparel jobs to gain market openings for other U.S. export sectors, Milliken said in a statement.
I, and all of the 900,000 people in the U.S. textile and apparel industry and the 2.2 million workers in the allied and support industries, should expect our representatives in Congress to demand that the administration honor last years no trade-off promise, Milliken continued. Our industry and its workers face enough difficulties without being used as bargain chips by U. S. trade negotiators.
The offer to the 34 FTAA countries is designed to mesh with broad U.S. initiatives in the World Trade Organization (WTO) negotiations, Zoellick added. For example, the U.S. offer envisions the elimination of consumer and industrial tariffs no later than 2015, which is in line with the United States Tariff-Free World 2015 proposal in the WTO, he said.
Zoellick said the textile and apparel provision is designed to help the Americas coalesce in order to combat the increasing dominance of China, which has surpassed Mexico as the United States largest supplier of clothing. But under a variety of preferential trade agreements, a majority of U.S. apparel imports made of U.S. components from Mexico, Canada, the Caribbean and Andean countries already enter the U.S. duty free.
The American Textile Manufacturers Institute (ATMI) said it would support the plan provided reciprocal tariff reductions are made by trading partners and exporters not be allowed to use fabric from other parts of the world for garments headed to the U.S., according to reports.
U.S. Rep. Robin Hayes (R-NC), one of the Textile Caucus members who initially voted for trade promotion authority after receiving promises from administration officials aimed at helping the domestic textile industry, criticizing the proposal.
I support expanding markets for our goods, and I believe our companies can compete in the world marketplace when they are on a level playing field, he said in a statement. Right now, there are numerous questions surrounding this proposal. One thing is clear: I will not support a bill that is hurtful to textile manufacturers and I believe that any such bill will face serious trouble in Congress.
CARY, NC Joseph Weinkam Jr., a former Johnson & Johnson executive with more than three decades of management experience within the nonwovens, textile and related fields, has been named president of INDA, Association of the Nonwoven Fabrics Industry.
Weinkam replaces Ted Wirtz, who announced his retirement late last year after seven years as president of the worlds leading nonwovens association. Weinkam assumed the position at the end of January.
Weinkam joins INDA from Wyndhurst Associates, a Baltimore, MD-based management consulting firm, where he specialized in crisis intervention, turnaround planning, financial restructuring and strategic planning.
Prior to joining Wyndhurst, Weinkam was president of JHG Associates, a New Jersey-based management consulting and strategic planning services company he founded in 1997. From 1995-1997 he was president and COO of Wyant Corporation, Somerville, NJ, a company formed through the merger of Hosposable Products and Wood-Wyant.
Weinkam is also familiar to the nonwovens industry from his 18-year career with Johnson & Johnson, where, among other positions, he served as director of sales and marketing for the Advanced Materials Division (formerly Chicopee).
Weinkam brings impressive management and leadership skills to INDA as it embarks on an aggressive expansion and membership recruitment program within the nonwovens and related industries, said Lee Sullivan, INDA chairman and general manager of Freudenberg Nonwovens. His knowledge of the nonwovens business, combined with his impressive management and planning talents, make him an ideal person to lead INDA into a very exciting and challenging future.
Thanks to the leadership of Ted Wirtz the past several years, INDA holds an extremely strong position within the global nonwovens, engineered fabrics and technical textile industries, said Weinkam, who will relocate from his home in New Jersey to North Carolina. My goal is to continue this leadership position while strengthening INDA for the opportunities ahead of it.
Among the short- and long-term opportunities for INDA, Weinkam pointed out, are the expansion of the triennial IDEA International Nonwovens and Industrial Fabrics Exposition and Conference into technical textiles; continued strong representation of the nonwovens industry among government officials in Washington, DC; increased communications with INDA members through specialty publications and research projects; and even closer relations with nonwovens associations around the world.
The INDA staff has done a tremendous job in identifying the potential for the association to continue to grow its leadership position in the business of nonwovens and engineered
fabrics, Weinkam said. I look forward to being a part of continuing this success in the future.
INDA is a trade association representing the nonwoven
fabrics industry since 1968. INDA provides a forum in which common problems facing the industry can be addressed.
Unifis Ron Smith speaks to STA members.
By Devin Steele
CHARLOTTE, NC Playing to your strengths, as a U.S. textile manufacturing industry, is the key to prosperity in this volatile global market, according to Unifis Ron Smith.
Smith, the synthetic yarn processors director of corporate strategy and business development, indicated as much during his presentation, Challenges Facing The North American Textile Industry as part of the Southern Textile Associations (STA) Winter Technical Conference here last month.
Finding a way to take advantage of the strengths we have is crucial, he said. And one of the strengths we have is that the markets we play in are global, growing markets. Consumption is growing. Its just a matter of getting the sourcing decisions driven in a way that allows the pool that you play in to actually be part of the global mix.
Consumption is the only sure thing that will grow, he reiterated, as regional production continues to contract in favor of Asia and other areas. As such, being a link in the supply chain is imperative. For instance, he cited, if JC Penney wants to get a knit pant from Hong Kong, then Unifi has no chance of getting its polyester yarn into that garment if all of its assets are in the Americas and Europe.
Sourcing decisions drive demand across the supply chain, he stressed.
The point is that you should get involved in that sourcing decision and get that product specked in from the supply chain that you participate in, Smith said. You can have the greatest, most effective, most innovative operation in the world, but if youre playing in a declining market, you may gain market share, but its ultimately a recipe for negative results, if the market youre playing in is smaller.
You can be the biggest fish in the pond, but if the pond keeps getting smaller and smaller, youve got tough days ahead.
Becoming a part of the supply chain means educating retailers on the value of U.S. production, he added.
We have a lot of competitive edges here, but we must get downstream as an industry and educate and creating demand and growth for our product, he said. In my mind, thats one of the most important things we can do.
Smith also spent a good portion of his discussion on instability in the market, which is challenging the textile industry. Among negatives forces, he said, are low utilization rates of technology around the world. As an explanation, he said that, as a frequent traveler to China and with about 100 visits to manufacturers there under his belt, he has heard from numerous Chinese producers who want to talk about expansion.
The first thing they say is something like, by the way, were putting in 150,000 tons of polymerization. Were vertically integrating back into POY, Smith said. But if you look at utilization for POY, for example, in China its 76 percent. And if you look at the pricing, you ask them, you guys are barely covering total cost, what gives you the incentive to do that? The answer is basically illogical. Its like, well, my competitors are putting in capacity, so I need to put in capacity. Or the towns growing, so I need to employ more people.
As such, some of the forces that are at work in China are not the same as those the U.S. would typically be in competition with because of government subsidies, banking practices, et al, he added.
Weve been a little arrogant from our perspective in thinking that our technology is so great, our technology is so unbelievable, he added. Yeah, their technology is not the same as our technology, but its getting the job done for a big, big chunk of that demand. So one of the big influences in my mind has been the low utilization rates of technology.
Among other factors having a negative impact on the industry, Smith said, are quota removal in 2005, the WTO, retail consolidation and bankruptcies. Other factors that could go either way in terms of the kind of effect it has on the industry include currency, the world economy, tariffs and politics, he added.
The good news forces at work, however, are the growth of global consumption, regional trade legislation and retail trends such as fashion cycles, replenishment and differentiation. With that in mind, he added: Successful strategies of the past must be re-defined in order to be successful in the future.
Smith also briefly discussed Unifis success formula. Among the foundations for prosperity the company is building is an entrepreneurial culture, he said.
A room full of smart, motivated and educated people will find ways to be competitive in the future, he said. So a lot of our last two years have been spent investing in our people. We believe they are our most competitive asset.
Unifi also is creating financial flexibility and investing in technology and infrastructure, he said. In addition, the company is maximizing return on core businesses, he said, meaning it is customer and supply chain focused and obsessed with product development and finding niche markets.
Unifi also is aggressively pursuing growth initiatives, Smith said, through brand development, regional trade legislation and comprehensive supply-chain solutions.
I cant stress enough the fact that we, as a supply chain or a value chain, have to go down and figure out how to compete at the value chain level, not how to squeeze another penny out of our customer or out of our supplier, because none of that happens if you cant deliver to the ultimate supply chain, he said.
Smith concluded his remarks with a thought-provoking takeaway: There are a lot of opportunities for companies that are willing to say Im not going to sit back and let it happen to me. Im going to do everything I can to focus and earn a return on the assets I have. But I have another asset: I have technology, I have know-how, I have distribution.
We, as a supply chain, can own the customers here, so lets take those assets and create growth opportunities in the global markets, whether its coming up with alliances and partnerships or something else.
THERE WAS plenty to kibitz about around the proverbial water cooler last week, not the least of which was Jackos wacky adventures, the Bachelorettes crashing the Scorned Hopefuls party, Hans Blixs Col. Klink (I see nothing) impersonation, Survivors first episode of Testosterone vs. Estrogen on the Amazon, Osama bin Ladens ominous Memorex message, sinister Simons snide snipes at sub-par singers or your personal duct tape supply. Around these textile industry parts, here were the two biggest topics of conversation:
The battle over Burlington. Forget Joe Millionaire this industry has two not-so-ordinary Joe Billionaires set to engage in judicial fisticuffs. Warren Buffett and Wilbur Ross are poised to fight for control of bankrupt Burlington Industries, which for the time being is sitting in Buffetts Berkshire Hathaway corner.
And it could get bloody. Already, a few verbal jabs have been lobbed by the underdog Ross, who heads buyout firm W.L. Ross & Co. Ross called the $579 million cash bid from Buffetts Berkshire Hathaway a covert plan of reorganization. He also termed specious Burlingtons claims that his proposal is contingent upon obtaining new debt while Buffetts is a cash bid with no financing necessary.
Burlington has made itself attractive and perhaps saved itself from extinction by focusing on its businesses that have proven to be successful. Among them: Its Nano-Tex research arm, which is discovering ways to use science fiction-like nanotechnology in fabrics.
Ultimately, the bankruptcy courts will serve as ringside judges, but the textile industry should be encouraged that a battle has erupted among such high-stakes players. Its good to know that a company representing this old economy industry is so attractive and worth fighting for. And this industry hasnt seen a good fight lately anyway.
So lets get ready to rum-m-m-m-m-m-mble!
The U.S. tariff proposition. Tuesday, U.S. Trade Representative Robert B. Zoellick proposed eliminating tariffs on textiles and apparel within five years of a Free Trade Area of the Americas (FTAA) agreement taking effect. Oh, that is, if trading partners do the same. That offer was introduced as part of the Bush Administrations larger negotiating stance for the FTAA deal. The U.S., of course, made a similar overture last fall to World Trade Organization (WTO) negotiators.
In theory, the proposal seems to hold promise for the domestic industry, whose products have always had a more difficult time reaching other markets than other countries goods have had reaching ours. But in reality, were not too sure.
Some in the industry have taken a wait-and-see approach. The American Textile Manufacturers Institute reportedly is willing to support the plan if certain conditions are met, including whether yarn-forward rules are included, reciprocity in tariff phaseout schedules is agreed upon and non-tariff barriers are eliminated. Hey, under those conditions, wed probably back it, too, but we dont believe our trading partners, even those in this hemisphere, are as bilateral-minded as we are.
Not surprisingly, Milliken & Co. was quick to oppose such a proposal. In a statement, Chairman and CEO Roger Milliken said the plan, if implemented, would break the administrations pledge to Congress and the industry ... to not trade away any more Americas textile and apparel jobs to gain market openings for other U.S. export sectors. Meanwhile, his companys Washington counsel, the always-colorful Jock Nash, told The Washington Post: Whats happening is the administration is giving this industry away like a drunken sailor.
Cant wait to visit the ol water cooler this week.