Rhodia of France sells stake in Nylstar

Rhodia has reached an agreement to sell its 50% stake in Nylstar, textile nylon filament manufacturer, for 1 euro, to a third party agent acting on behalf of a consortium of Nylstar's credit banks. SNIA of Italy, Rhodia's partner in this joint venture, has signed an agreement to sell the remaining 50% stake, as well.

Nylstar produces textile nylon filament 6 and 66 in its plants located in France (Arras), Spain (Blanes), Italy (Cesano Mardeno), Czech Republic (Humenne), Poland (Gorzow) and the US (Ridgeway, VA), marketing under the brand "Meryl," but in bad financial health due to a surge of imports into Europe and material competition with polyester. It had once reached a basic joint-venture agreement with RadiciFibres, Italy's major synthetic manufacturer, in 2005, which ended up not being realized. Since then, a debt restructuring plan such as the decision to close down the plant in Italy has been carried out. The sale of the stake this time forms part of the financial restructuring of Nylstar through a debt / equity swap to give the company a restructured balance sheet and a significantly reduced level of debt. Rhodia will remain a raw material supplier to Nylstar. Rhodia generated sales of 4.8 billion euros in 2006 and employs around 16,000 people worldwide. Rhodia has already reached an agreement to sell its industrial fibers business to Butler Capital Partners to focus on its nylon businesses in raw materials such as engineering plastics and adipic acid. This sale of the stake in Nylstar has led the synthetic business of Rhodia which had continued from its predecessor, Rhone-Poulenc, to be almost extinguished except for acetate tow.

Damartex of France establishes production base in Tunisia.

The Damartex group, thermal underwear and apparel firm, will establish a production base in Tunisia. The construction will be carried out from 2008 to 2009 and its textile facilities transferred.

Currently about 70% of products of the group are produced in Tunisia, where the company has already been carrying out consignment production for the last few years.

According to the company, the advantages of re-establishing its production base in Tunisia are that it can improve the productivity by focusing on production in one place that makes it possible to enhance the control of its process and technology, as well as to transfer technology to local employees and offer know-how for product development and differentiation.

The social impact is expected to be limited since the transfer of production from consignment agents to the new facility are spread out over time, but the group still intends to take employment measures to support its employees.

Lenzing Group drastically increases sales and profits in 2006

The business performance of Lenzing Group (Lenzing AG) in 2006 marked drastic increases both in sales and profits, with sales increased by 16.8% to 1,100.5 million euros, EBIT at 107.1 million euros which was 30.9% higher than the year before, and net profits after tax coming to 88.4 million euros, an increase of 45.6%. Especially the fiber business with rayon and lyocell went well and sales increased by 16% to 902.8 million euros and EBIT at 89.8 million euros which was 35 % higher than the year before. Despite a 15% increase in pulp and raw fuel prices, the price for textiles and non-wovens turned around which led to a profit increase alone with the effect of reducing production costs.

Lenzing Group produces fiber in Austria, England, the US and Indonesia, and the total production in 2006 amounted to 478,068 tons, increased from that of 2005 which amounted to 453,806 tons. Of those, rayon production (including modal) at Austria Lenzing increased to 230,000 tons. Establishing a new distribution office in India by the Group contributed to an increase in sales, as well. It enhanced marketing activities to expand sales in sports and home textile areas.

For fiscal 2007, Lenzing Group believes that it is possible to be on a steady growth path because of its strong competitiveness in the textile and non-woven industries, even though it expressed concern over trends in the textile industry in Europe due to euro appreciation and in pulp and energy costs. The rayon staple plant (annual production capacity of 60,000 tons) established with Nanjing Chemical Fibre Co., Ltd. has started operation and the joint venture for carbon fiber precursor with SGL Carbon of Germany is expected to contribute to increases in sales for its plastics business.

Indonesia government's subsidy scheme for revival of textile industry

The Finance Ministry of Indonesia announced that it would support textile firms with interest rates when those firms got a loan from a bank for replacement of old machines for the revival of the textile industry. The budget for the subsidies for interest rates is planned to be included in the 2007 national budget, which is worth about Rp255 billion (about $28.02 million).

According to the Industry Ministry, the textile industry employed 1.18 million people in 2006, and of those roughly 600,000 workers in small and medium enterprises. With this interest subsidy scheme, the industry anticipates that employment will get a boost by 469,000 and production capacity will increase by 3.7% in three years. At the same time, it is aiming to expand exports to $10.5 billion in 2007 and to $14 billion in 2010.

Labor issues severely damage garment industry of Bangladesh

The garment industry is a staple industry for Bangladesh which accounts for more than 70% of overall exports. With the expiration of MFA at the end of 2004, there has been an expansion of exports of the garment industry of Bangladesh to Europe.

However, because the labor dispute with laborers demanding improved working conditions and higher wages occurred in the middle of 2006 in tightly-packed garment firms around Dhaka, overseas importers started to ask for better conditions for workers and a solution for the child labor issue. This labor dispute occurred mainly because certain factory owners were exploiting poor workers with bad working conditions and unacceptable low wages.

Although the Bangladesh Garment Manufacturers and Exporters Association managed to solve this issue with great difficulty, labor organizations and media of the US and UK have been campaigning against the garment industry of Bangladesh for the last few months. In the US, there is a move to submit "The Decent Working Conditions and Fair Competition Act" to Congress. Because it will allow any US citizen or organization to file cases against importers who deal with non-compliant apparel firms if this proposed law passes, this could have an enormous impact on the future development of the industry of Bangladesh.

Pakistan textile exports increase by 7% from July 2006 to February 2007

According to the Pakistan Federal Statistical Office, textile exports during the eight months from July 2006 to February 2007 were $7.006 billion which had increased by 6% compared to same period last year. Figures suggest that the export of cotton declined by 17.9%, that of cotton cloth decreased by 9.1% and that of bedding decreased by 5.3% against the same period of the previous year, but knitwear exports posted a growth of 16.1%, the export of readymade garments increased by 7.6%, that of towels grew by 2.0% and made-up articles except for towels and bedding increased by 2.5% on the same period last year. Cotton yarn posted a growth of 3.1%, silk and synthetic textile exports were up by 164% and other textile materials were up by 24.3% on the same period last year.

Major jeans brand Lee opens outlet store in Israel

Major jeans brand Lee is investing approximately $200,000 to open an outlet in Israel to respond to demand and sales increases in the Israeli market. Lee is currently distributing its products though 150 sales points such as stores, chains and boutiques in the Israeli market, but this will be the first time to open an outlet.

Israel and Egypt collaborate in textile production

According to the Manufacturers Association of Israel, the Israeli textile industry is expected to grow 7% in 2007 compared to last year, reaching NIS 10.7 billion (about $2.5 billion). In 2006, the local textile industry grew 1% from the previous year despite the fact that 10 factories closed down. In the same year, textile exports to Egypt were double the number of the previous year, reaching $54 million, and are expected to hit $70million this year with a further 30% increase. This is due to the QIZ Agreement (Qualified Industrial Zones) signed with the US, Israel and Egypt in February 2005. This agreement allows Egyptian companies to export products to the US tax-free on condition that the products are 35% local value-added and at least 11.7 % of their input comes from Israel.

Supreme Yarns of India aims at promoting own brand in retail market

Supreme Yarns of India is planning to venture into the retail market to promote its own brand. The company is planning to establish a knitting plant with an investment of Rp 2.4 billion (approximately $55 million) in addition to existing facilities. The annual production capacity of this new knitting plant will be 30,000 knitwear garments and T-shirts and tracksuits (training wear with long sleeves and long trousers) are to be produced. With existing facilities, it intends to increase the production of woven garments such as shirts and trousers. According to the company, it is aiming to join the high-end market of India in the future after entering the retail market for readymade garments with its own brand over the next year. For this purpose, it will initially launch five or six stores in the northern part of India, later venturing into other parts of the country depending on the market situation and its production system (weaving, spinning, dyeing and knitting).

The company is planning to install more facilities for spinning and knitting by adding 30,000 spindles and 720 rotors, and aiming to provide knitwear and yarns to the major US companies like Gap and Reebok(UK) after installation.

The company was established in 1996, and exports its cotton, acrylic, polyester, cotton acrylic, hand knitting and mink blankets to the US, Canada, the UK, Hungary, Egypt, Saudi Arabia, Korea and Hong Kong.

Taiwan's exports of polyester staple fibers decreases in 2006 due to competition with Chinese products

Taiwan's exports of polyester staple fibers have been declining, confronted with surging competition from China's products on Asian markets. Exports in 2006 amounted to 487,650 tons, a decrease of 9.2% in amount and 12.4% in value over the previous year. The decrease was especially drastic for major destinations of shipments, by 27% to Vietnam and 36% to China in amount. On the other hand, the export of polyester staple fiber from China in 2006 increased by about 40% to 279,700 tons from the previous year.

The exports of Taiwan exceeded by around 200,000 tons those of China, but the Vietnam market, which is a major destination for Taiwanese shipments, has been eaten away by Chinese products. The exports of China to Vietnam in 2006 expanded by about ten times those of the previous year, but behind these figures it can be pointed out that Taiwanese polyester staple fiber manufacturers have transferred their production bases overseas, including to China.

The exports of Taiwan to China and Vietnam decreased, but those to the EU increased. Export to Italy increased by 35% to 31,000 tons, to Germany by 40% to 23,000 tons, and to France by 70% to 12,000 tons. However, exports to the EU are expected to drop in 2007 due to the possible reimposition of import duties by the EU on rapidly increasing Taiwanese polyester staple fibers.

Exports to the US in 2006 amounted to 4,4000 tons, showing only 3.5% increase.