held alongside with the newly launched International Apparel Sourcing Show (IASS) and the Home Textile Fabric Sourcing Show (HTFSS), showed rising number of exhibitors and attendees, after the severe downturn of the past two years, the mood of buyers was characterized by caution.

Apparel sourcing at Texworld USA.

Messe Frankfurt USA teamed up with China’s CCPIT TEX, the Sub-Council of Textile Industry, China Council for Promotion of International Trade, in organizing the IASS.

David Audrain, the president of Messe Frankfurt USA, said that the partnership throughout China and greater Asia would grant American attendees “access to a great opportunity of new resources over a three-day period, significantly more access than they would have over several weeks or months on the road”.

The IASS, the east coast’s only event focused on sourcing finished apparel and contract manufacturing, was also aimed at providing American companies with opportunity to develop private label programs – currently, a major part of the world’s retail assortment strategy – and access to original design, manufacturing programs, enabling American companies to establish contact with international apparel manufacturers.

Product groups at the IASS included children’s wear, women’s wear, men’s wear, active wear, knits, wovens, denim/jeans, collections, suiting, contemporary, intimates/lingerie, loungewear/sleepwear as well as private label, ODM and contract manufacturing.

Messe Frankfurt USA claimed that there was continued interest at the Texworld USA for trim and embellished fabrics which were important during last couple of seasons. According to its post-show survey of Texworld USA, Messe Frankfurt USA maintained that 33% of respondents indicated findings and trims as their primary area of interest on the show floor.

One of the demands made by North American customers at the Texworld USA was for softness.  Exhibitors showcasing blends containing Lenzing Fibres such as Modal® and Tencel® could meet these needs.  Knitters offering goods in organic cotton or with recycled polyester continued to appeal to eco-conscious buyers.

Andreas Dorner, head of global marketing for Lenzing Fibres, highlighted the importance of building and maintaining a presence in the U.S. market.  Describing Texworld USA as a “great success” for Lenzing and especially for the Lenzing Innovation partner mills, he said that the mills exhibiting under the Lenzing umbrella had received “very positive customer feedback”.

While there was a huge contingent of exhibitors and contracting companies from mainland China, many Chinese suppliers were concerned at the caution exercised by the buyers at the show. American and other buyers were reticent. Rising costs of production and labor in China which is fast becoming a high-cost site, is weaning away buyers in the developed markets who find their profits dramatically diminish. Indeed, there is a quiet migration of a number of foreign and even local Chinese companies to other low-cost sites in the neighboring states such as Vietnam, Cambodia and Laos.

James Hoch, the chief executive of Acenovo LLC of Del Rey, California, an associate company of Hongchang Fabric & Clothing Design Holding Co. Ltd. of Shunde, Foshan in Guangdong, which produces jeans at a number of its facilities, agreed that rising costs in China were indeed squeezing profits and driving away many potential investors. The company, which supplies high-end jeans in the price range of $ 9 to 15 per piece fob value, said that the “days of low-end production are over”.

“You have to produce upper-end jeans because China itself is moving up the value-added chain ladder,” Hoch said.  Hoch added that many companies were relocating from China to Vietnam. However, he maintained that many Western investors refused to go to Pakistan because of the security problems in that country. “You have to closely oversee manufacturing operations and you can do that if you cannot go to the facility … that’s the problem with Pakistan,” asserted Hoch. “It is not possible to make a premium or super-premium product through a broker. Your presence is needed.”

Chinese suppliers were also wondering what impact the recent appreciation of their currency will have on their exports which would become more expensive. But Hoch said that besides currency revaluation, there were also factors such as rising yarn prices, labor costs, workers’ benefits, etc. that impacted business. However, Hoch said that his company, which paid good wages to its workers, was not affected as much as the smaller manufacturers, many of whom had gone out of business because of rising wages and benefits.

The real issue, according to Hoch, has driven structural changes in the U.S. market. The turnover time had become less and people wanted more deliveries, though smaller in volume. “People are still buying jeans … even high-end jeans.  High-end jeans can be worn frequently, after all,” he said.

Lin Yun Feng, the secretary general of The Sub-Council of Textile Industry (CCPIT) of the Textile Industry Chamber of Commerce (CCOIC).

Lin Yun Feng, the secretary general of The Sub-Council of Textile Industry (CCPIT) of the Textile Industry Chamber of Commerce (CCOIC), highlighting that Chinese textile industry is “very much market-oriented” with the state having less than 4% stake in the textile industry, said that foreign investors held between 20% and 30% of the stake in the textile industry through joint ventures with Chinese enterprises.

Lin said that domestic demand in China was outstripping foreign demand. China’s domestic consumption of fibers had increased by 30% to 40%. “Domestic demand has become more important than ever since the financial crisis hit the global markets,” he said in an interview. On the other hand, China’s exports had declined by 5% to 10%.  China’s share of exports to the United States had declined but the share of exports of other countries to the United States had declined even further, he claimed.

Commenting on the rising prices, Lin said that China’s prices had increased because of the improved quality of its products. Labor costs had increased in China because the government wanted the living conditions of the workers to be improved by offering them better wages and working conditions.

“The migration of companies from China to Vietnam will continue because of China’s free trade agreement (FTA) with the ASEAN region of which Vietnam is a member state,” Lin explained the relocation of manufacturing outlets from China to low-cost Southeast Asian sites.

The revaluation of the Chinese currency Yuan in relation to the US dollar has been the talk of the industry for sometime. “It (revaluation of the Yuan) will be decided by the Chinese government. Definitely, our textile exports will be affected if the Yuan is revalued,” he acknowledged.

There has also been growing competition from countries such as India, Pakistan, Bangladesh, Mauritius and Vietnam. “These countries have their advantages. I know many Chinese companies that are looking for cooperation with companies in these countries,” he said, declining to name such Chinese companies. “However, I can tell you that these companies are, mostly, in the Shandong province,” he added.

Pakistan, which was represented by a large exhibitor contingent, was urgently seeking business at the show, given that less and less buyers visit that country because of security concerns.

Muhammad Babar Khan, the CEO of Karachi based Multinational Export Bureau, and a former chairman of the Pakistan Hosiery Manufacturers’ and Exporters’ Association (PHMEA), acknowledged that costs of production in Pakistan were “going up all the time” because of non-availability of energy and water.

However, Khan said that “buyers have started to come to Pakistan”. “Energy prices are going up in Pakistan … we have raw materials and manpower. But our government is resorting to a short-term solution. We can try to develop alternative energy such as solar, wind, etc. Pakistan’s exports have been affected, both in terms of volume and earnings, because of the recession and downturn in demand. Growth declined and there was pressure on pricing with surplus production and suppliers having no option but to reduce prices,” he said in an interview.

But Khan expressed “cautious optimism” by saying that the economic recovery seemed to be strengthening.  Pakistan, he said, faced fierce competition from China, India, Bangladesh and Vietnam.