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By Devin Steele
As part of our annual Review & Forecast edition, Southern Textile News sent questionnaires to targeted textile suppliers regarding the health of their companies and their expectations for the new year and beyond.
Following are reports based on the answers of those who responded.
American Dornier
Year-over-year conditions improved in 2004 at weaving machine supplier American Dornier, Charlotte, NC, the U.S. arm of Dornier GmbH of Germany, according to Peter Brust, executive vice president.
Among a number of factors that led to the increase, Brust said, was “luck.” Also, the fact that the company expanded into new markets. specifically South America, and entering the used machinery business played a large role in the company’s success, he added, leading the company to expand staff last year.
Given the uncertainty of the government’s handling of the China safeguard petition, Brust said he doesn’t expect an improvement this year. But “being able to offer a flexible and reliable product as well as a functioning service” gives American Dornier hope for a bright future, he said. Just don’t ask him to foresee the future five or 10 years down the road, as we did:
“Five to 10 years? I would be glad to foresee the next five to 10 months,” he said.
Louis P. Batson Co.
Louis P. Batson Co. and its affiliates, Greenville, SC-based suppliers and representatives for industrial operations in the Western hemisphere, saw improved conditions for doing business last year, according to Dreugh Batson, group manager.
The company added several new products and gained new business, he noted.
Some improvement is expected this year, he added with this caveat: “Goods from China will continue to be difficult to our progress.”
For the company, hope lies in expanding its customer base outside of textiles and in textile niche markets, Batson said.
PAF Sales
After breaking even in 2003, sales increased 18 percent in 2004 for North Carolina-based PAF Sales LLC, the exclusive distributor of textile monitoring equipment producer BTSR Products. Which makes for a promising 2005, according to Scott Yates, general manager:
“By lowering our fixed costs, praying for a more equal euro/dollar exchange and working smarter, I think our bottom line will be the best in five years,” he said. “As for sales, we will focus on anything but commodity textile products, other than those who have bought from us in the past. Technical, industrial and carpets are our future.”
The company increased sales through a number of initiatives last year, Yates said.
“We have consolidated our sales efforts in the form of sales agency networking,” he said. “We have asked for greater discounts and support from our suppliers. And, we have added new product lines to our sales portfolio.”
Asked if he thought the bottom had been reached for the domestic textile and apparel industry, Yates clarified the question before answering.
“First of all, be careful with mixing the above two markets,” he said. “Textiles is broad market involving technical, industrial, medical, automotive and home furnishings. This industry is not sinking. The apparel industry — including shirts, denim, socks, caps, etc. — has not finished sinking. This industry however, is very close to the bottom. The domestic market will end up with niche markets only.”
Anonymous
Business was flat in 2004 compared to 2003, according to an anonymous company that serves as an agent for machinery in weaving and knitting and finishing. He is holding out hope for some improvement this year, if the customer base doesn’t shrink more than it did last year, he said, adding that global textile quota removal will hurt some vulnerable manufacturers.
He waxed philosophic about predicting the future of the domestic textile manufacturing industry. Hope, he said, lies in “effort, service and innovation and God’s grace.”
Another anonymous supplier said that business conditions improved in 2004, but profitability still remained out of reach. As such, management is planning layoffs, consolidations and/or other cost-cutting measures his year.
The respondent added, however, that he/she is confident that the bottom has been reached for the company, but probably not the industry.
“There are growth possibilities for our company due to special alliances and products,” the person said, “but I’m afraid we will continue to see a loss of peers.”
A company that represents a number of foreign suppliers in this hemisphere, who asked not to be named, said that due to belt-tightening, his firm was able to turn a profit in 2004, despite negative factors and lower business volume last year.
“We continued to lose customers to closure and bankruptcy in 2004,” he said. “Customers who remained were reluctant to invest. Many deferred projects that were needed and had been anticipated. This continues into 2005.”
Cost-cutting initiatives included a reduction in staff, he said, meaning that remaining employees were given added responsibilities. “The work to support the equipment in place in the market remained, although with the plant closings at a reduced level. The view become more near term than it had been in the past. Decisions regarding personnel and investment were made under this premise.”
He took a big-picture approach when asked to assess factors contributing to business conditions last year.
“There was and continues to be so much uncertainty for the future of the industry,” he said. “In addition, if the customer is inclined to invest in a capital project, obtaining outside financing is a problem. Banks are not inclined to favor a textile investment.
“Used machinery also had an impact,” he added. “With mills being closed, machinery was available for resale, which was low cost yet fairly modern. We repeatedly receive offers for textile machinery from plants located in Europe and the U.S. When there was an opportunity the low value of the dollar in 2004 did not help the machinery import situation.”
As market shrinks, it is imperative for manufacturers to find cost-effective ways to continue to sell their goods and services, including the combining of sales and service staffs, he pointed out.
He isn’t among those predicting death for the U.S. textile industry, but it won’t resemble its former self, he said.
“This smaller and somewhat different market will require machines, parts and services,” he said. “Our company is positioned to serve these needs and will adapt as required to remain a viable organization. We will continue to be one of the wagons in the circle defending our industry.
“There are many other companies, in and serving this textile industry, which also will not give up. This is the way with America. Some of our best work comes with our back against the wall.”
