Collaboration is Key
Challenges and Opportunities on the Horizon for U.S. Suppliers.
The U.S. textile industry made a strong comeback in 2022, only to face a global economy that bounced from lockdown to pent-up demand; from supply chain congestion to inventory glut; from layoffs to labor shortages. Inflation and the cost of energy are keeping CEOs, as well as consumers, up at night.
At the fall conference of the Synthetic Yarn and Fabric Association (SYFA), held in Charlotte, NC, industry leaders shared their observations with some 170 members of the textile trade on steps companies are taking to be successful in 2023.
Laura Murphy, research director for fibers at the global research and consultancy group Wood MacKenzie, outlined the headwinds and tailwinds driving the industry. While headwinds are led by inflation, energy prices, and labor shortages; tailwinds include sustainability and the Infrastructure Bill, made-in-America legislation, and continuing consumer demand.
“Consumer spending is not off that much,” Murphy offered. “Inventory is the problem. Suppliers panicked and overbought.” But off the dais, attendees confirmed a recent drop in orders after a successful year.
A New Kind of Volatility
The main event at the conference was a panel discussion featuring six of the industry’s heavy hitters, who offered insights into the future of the trade.
The pandemic left lingering effects; some bad, some good. Jeff Price, executive VP operations at Milliken & Company, commented, “We’ve never faced anything like the past three years, and the smoke has not yet cleared.”
Cameron Hamrick, president of Hamrick Mills, added, “The perfect storm created a legacy of bad effects. We have never seen anything like this volatility.”
What Keeps Textile CEOs Up at Night
The panelists called out the rising costs of energy and raw materials as their biggest worry.
“Inflation is trying to knock us back down,” lamented Charles Heilig, president and CEO of Parkdale Mills, Textile Division. “We will lose our competitiveness through energy prices. We have to change the way we think and source, locally.”
For synthetic textile mills, the price of oil is also putting a squeeze on raw material supply. While the price of PET chip has fallen from its mid-2022 peak, Murphy noted that the price of U.S. PET chip is nearly twice that of China’s.
Murphy predicted “bottle wars” as the demand for post-consumer recycled PET (rPET), continues to grow. The bottle/packaging industry will require 5.9 million tons of rPET in 2025, while the Textile Exchange has challenged the apparel industry to increase its use of rPET from 14 percent to 45 percent, or 17.1 million metric tons by 2025. At current rates of recycling, there will not be enough rPET from bottles to meet both targets. “We need to develop a much more effective textile recycling process,” she concluded.
Glen Raven, Inc.’s CEO Leib Oehmig commented, “We all see a commitment to transition to renewables, but we need to make sure we have a thoughtful transition plan.”
Solving the Labor Shortage
The textile industry has had difficulty attracting young talent for years, exacerbated by the current low unemployment rate. “The labor shortage is making us uncompetitive,” said Hamrick. Solutions include a combination of mentoring programs to sustain the workforce, and new technologies in automation and artificial intelligence.
At Glen Raven, “We are leveraging technology and becoming much more data-informed,” according to Oehmig. Price noted that Milliken was supplementing its workforce with “digital and data. Anytime you can combine science with textiles, you will win,” he added.
Eddie Ingle, CEO of Unifi, Inc., spoke about the company’s new dashboards speeding up production. “We need to go to the next level of automation and connect all the dots. You have more satisfied people when you can move beyond an Excel spreadsheet.”
Heilig agreed, “We have to invest in new technologies, and in people. In order to be sustainable, we need to hire young people. Think about who we are mentoring.”
One such program is the SYFA’s creation of a new scholarship to support Gaston College’s Textile Technology program, launched in fall 2022. Students earning the Associate in Applied Science degree from Gaston can transfer to pursue a bachelor’s degree at Wilson College of Textiles at NC State University.
Sustainability and Fibers of the Future
The textile executives see sustainability as both a challenge and an opportunity to drive innovation. “Unifi built the Repreve brand in 2007 when there was no market,” remarked Ingle. “Now the retailers demand we must be sustainable in everything we do.”
Milliken is one of the first fifty companies globally to achieve approved science-based net-zero GHG emissions targets using the 2021 Science Based Targets initiative (SBTi) Corporate Net-Zero Standard. “The SBTi is creating questions and conversations,” Price noted.
“By 2050, cotton will be a luxury fiber,” predicted Heilig. “We think about how we can use our resources by becoming a solution provider,” referring to the company’s investment in CiCLO, a sustainable textile ingredient for reducing plastic microfiber pollution. “Where’s the next fiber? What will it be?” he questioned.
“Hemp is going to be huge,” predicted Amy Bircher, owner and president of MMI Textiles. She called out the company’s EcoThrive line of environmentally preferred, Berry-compliant performance fabrics. “Future-wise we are very passionate about being different,” she insisted. “We are setting up for some unique technologies coming down the pike.”
“We need to focus on sustainability holistically through the supply chain, to be open to sustainable practices and make it work economically,” commented Hamrick.
Oehmig concurred, “Let’s focus on what comes next: relationships and incredible opportunities for sustainable differentiation and innovation.”
There’s Dignity in our Work
The panelists agreed that the domestic industry’s efforts to supply the country with PPE during the pandemic not only earned respect but brought new life to textile makers in the U.S. and the Western hemisphere. “Covid changed the perspective of how we need to lean on each other,” declared Heilig.
“Collaboration is a pillar of our success,” agreed Bircher. “We have to stop siloing. We do compete, but we need to cross-utilize our library of talent.”
Kudos were given to Kim Glas, president and CEO at the National Council of Textile Organizations (NCTO), who liaised with various U.S. government organizations to promote the sourcing of millions of pieces of domestically made PPE.
In her dinner address, Glas called U.S. textiles “a strategic industry,” and spoke about the need to close the di minimus loophole, a legal provision U.S. trade law that currently allows foreign products valued at $800 or less, per person/per day, into the U.S. market duty free, benefitting exporters such as China.
Government contracts from the Department of Homeland Security, the Department of Defense, and other agencies, along with an expansion of the Berry Amendment, are driving new business. In addition, the passage of the Inflation Reduction Act offers R&D tax credits and supports the use of clean energy for small businesses.
Price noted, “For years this industry has been on the defensive. Now we have an opportunity to be on the offensive. There’s dignity in our work.”