SIC 2211
BROADWOVEN FABRIC MILLS, COTTON



This category covers establishments primarily engaged in the production of woven fabrics more than 12 inches (30.48 centimeters) in width, wholly or chiefly by weight of cotton. Broadwoven fabrics primarily of cotton are utilized in three general end-product categories: apparel, home furnishings, and industrial products. Most of the broadwoven cotton apparel fabrics serve the outerwear market—men's, ladies', and children's shirts, blouses, pants, and dresses. Some lightweight jackets and boxer shorts are also produced from broadwoven cotton fabric. The home-furnishings market includes terry towels; sheets, pillowcases, blankets, bedspreads, and other bedding accessories; table linens, dish towels, and dish rags; draperies; and upholstery fabrics and wall coverings. Carpet and rug manufacturers are classified in SIC 2273: Carpets and Rugs. Establishments involved in tire cord and fabric production are classified in SIC 2296: Tire Cords and Fabrics. Those establishments engaged in finishing cotton broadwoven fabrics are classified in SIC 2261: Finishers of Broadwoven Fabrics of Cotton.

NAICS Code(s)

313210 (Broadwoven Fabric Mills)

Industry Snapshot

Manufacturing of cotton broadwovens—like most segments of textiles—is a mature industry. Since the mid-1980s major U.S. firms in the industry have pursued growth largely through mergers, acquisitions, and foreign markets; they have maximized profits typically through cost cutting and sourcing low-cost labor from foreign countries. The industry faces formidable competition on price from imported textiles, particularly those from Asian markets. The devaluation of foreign currency, coupled with a strong U.S. dollar, has put significant stress on the industry, which has been steadily declining in sales and employment since 1996.

Since 1980 the number of spinning positions has fallen by more than 50 percent, but productivity rates per position increased 700 percent, from 200 pounds of cotton in 1980 to 1,400 pounds in 2000. Domestic demand in the retail cotton market was more than 20 million 480-pound bales in 2000, up from 14 million in 1990. In the same year, the United States held a 22.5 percent share of the world cotton textile and apparel market, up from 14.3 percent in 1990. Despite these gains, by the turn of the millennium, the value of U.S. broadwoven fabric mill shipments totaled $15.3 billion, down from $18.3 in 1997.

Organization and Structure

Fabric weavers generally are vertically integrated companies that produce their own yarn. The primary reason for integrated weaving plants is that despite fashion changes that occur in the woven segment, yarn counts—the size of the yarn—as well as fabric constructions remain fairly stable. Fabric knitters, on the other hand, are faced with constant changes in yarn size and construction. Therefore, most knitters find it more economical to purchase yarn from sales yarn companies.

Background and Development

Cotton remains a viable material for the textile market despite predictions in the 1960s and 1970s that manmade products would completely replace natural fiber. Cotton's inherent qualities, such as absorbency and breathe-ability, and new fabric finishes have kept the fiber's market share strong. Cotton's competitiveness can be partially attributed to improvements, such as the all-cotton, wrinkle-resistant fabrics—particularly popular for making men's pants—as well as softer finishes and flame-retardant treatments. Researchers are also developing antibacterial finishes and temperature-responsive treatments for cottons.

The general state of the economy, coupled with the level of consumer confidence, has a great impact on operations engaged in the manufacture of broadwoven cotton fabrics for apparel products. High consumer confidence coupled with a strong economy helped companies producing fabrics for apparel enjoy success until the mid-1990s.

New housing starts, which remained strong at the end of the 1990s, were the chief factor outside of trade matters affecting manufacturers of broadwoven cotton fabrics for home furnishings. Although a large market exists for replacement sheets, pillowcases, and towels, nothing spurs this segment of the industry as much as new housing starts.

Several factors affect the demand for broadwoven cotton fabrics for industrial use. These include the success of the automotive industry, the activity in new highways and bridges, and the nature of the agriculture industry. A significant section of the agriculture industry—cotton farming—also has a tremendous influence. Costs of raw materials have a direct effect on the annual success of producers of broadwoven cotton fabrics, no matter what the application. The price of raw materials is affected by weather and other natural factors. In the spring of 1995 the price of cotton escalated to more than $1 per pound due to shortages of foreign crops caused by the bollworm in China and by the leaf curl virus in Pakistan. As crop production increased through the late 1990s, stocks of cotton grew to be larger than historical averages. The surplus helped ease some of the squeeze on profit margins of this segment of the textile industry, as the manufacturers of cotton broadwoven fabric mills saw the price of cotton decline to approximately 50 cents per pound in July 1999.

Current Conditions

According to textile industry advocates, such as the American Textile Manufacturers Institute (AMTI), the U.S. textile industry is in the midst of a serious crisis. By 2000 the U.S. cotton industry was feeling the full effects of a staggering surge in imports of foreign-produced textile and apparel products caused by the Asian economic crisis of the late 1990s, which spurred aggressive export behavior among affected Asian countries. This surge, combined with the appreciation of the U.S. dollar against foreign currencies, resulted in the increase of cotton textile and product imports into the United States at the equivalent of 10.6 million bales, nearly doubling the approximately 5.6 million bale-equivalents in the mid-1990s. As a result, total fiber consumption from the cotton spinning system fell for five consecutive years, including a 20-percent decline in 2001 and a 7 percent decline in 2002.

Since 1996, Asian apparel prices have dropped by 25 percent, with broadwoven fabrics specifically falling 27 percent. Additionally, imports of yarn, fabrics, and made-ups from countries with devalued currency increased by 20 percent in 2002 alone. Although U.S. exports decreased for the second consecutive year in 2002 to mainstay customers such as Mexico, Canada, and the European Union, increased exports to Caribbean countries nearly offset the loss. The ATMI also bemoans the rampant influx of textiles and apparel from Asia that are smuggled into the country or laundered through Mexico and illegally given the status of U.S. or Mexican origin.

During 2002, 116 U.S. textile mills closed. After the terrorist attacks of September 11, 2001, the U.S. economy's outlook worsened, as did that of the textile industry. Four major U.S. textile mills (Burlington Industries, CMI Industries, Galey & Lord, and Malden Mills) filed for Chapter 11 under the bankruptcy laws.

Workforce

In 2001 the Bureau of Labor Statistics, a division of the U.S. Department of Labor, estimated that the broadwoven fabric industry, specifically cotton, employed 47,980 people. The mean hourly wage was $12.25 (median of $11.04). Production-related occupations accounted for nearly 67 percent of total employment, with a mean hourly wage of $11.23 (median of $11.85).

America and the World

A number of factors influence the success of companies engaged in the manufacturing of broadwoven cotton fabrics, but none has an impact equal to that of international trade. For a number of years, imports—particularly in the apparel fabrics sector—rose steadily, severely affecting operation of U.S. manufacturers of broadwoven cotton fabrics. Manufacturers of broadwoven cotton fabrics were affected by imported fabrics and garments, which are usually cut and sewn from fabrics manufactured in the same country as the garments.

The North American Free Trade Agreement (NAFTA), which became official January 1, 1994, proved to be a boon to manufacturers of broadwoven cotton fabrics throughout the late 1990s. In 1997 NAFTA countries accounted for more than 45 percent of the market for exports of U.S. textiles with a value of almost $4.4 billion. Growth in this market continued in 1998 and 1999, reaching almost 60 percent.

While the signing of NAFTA proved beneficial to manufacturers of broadwoven cotton fabrics, the signing in 1993 of what is known as the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), had just the opposite effect. The Uruguay Round agreement was signed by 117 nations following seven years of negotiations. This agreement phased out tariffs on textiles set by the Multifiber Arrangement (MFA) by 2005. In January 1995 the administration and enforcement of GATT were assumed by the World Trade Organization.

The foreign market openings promised in the Uruguay Round did not materialize. Countries such as India, Pakistan, Brazil, Argentina, and Egypt kept their markets closed to U.S. exports while increasing their exports to the United States by billions of dollars. The U.S Department of Agriculture's Economic Research Service projected that in the long-term (25 years) world cotton production would increase approximately 2 percent, but the distribution of production would be such that the United States would show a decrease with the biggest increases in China and the Middle East.

In 2000 President Clinton signed into law the U.S.-Caribbean Basin Trade Partnership Act of 2000, known as the Caribbean Basin Initiative, which allows apparel imports from the Caribbean to qualify for both duty-free and quota-free treatment, if U.S. fabric made from U.S. yarn and U.S. thread was used.

Research and Technology

Manufacturers of broadwoven cotton fabrics replaced shuttle looms with shuttleless weaving machines as rapidly as economically feasible. These machines offered geometrically higher weaving speeds than those of shuttle systems. Use of electronics in the broadwoven manufacturing process permitted even higher increases in speeds. Speeds on any filling insertion system vary depending on type and width of fabric being woven.

When first developed, each shuttleless filling insertion system was designed specifically for a somewhat narrow fabric application range. As systems were improved, modified, and computerized, the application ranges broadened considerably. Projectile, flexible rapier, and rigid rapier systems were more versatile and could handle heavier, more complicated styles, such as plaid upholstery. Modifications to air-jet systems, however, broadened the application range to include more than just simple, lightweight styles, such as printcloth and sheeting. Burlington Industries and Swift Textiles both produced heavyweight denim on air-jet machines, and a few companies began experimenting with heavyweight upholstery fabrics on air jets as well.

Electronic technology contributed greatly to the operation of shuttleless weaving machines in the broadwoven cotton sector. Systems provided more control in the airbursts from the series of nozzles on air-jet machines, permitting greater manufacturing speeds and production of a broader range of fabric weights. Jacquard machines—which control multicolored, extremely complicated patterns—incorporated electronics that permitted higher speeds in the production of fancy upholstery fabrics on flexible and rigid rapiers. Electronic advances also paved the way for the installation of automation features on shuttleless weaving machines, such as automatic filling break repair, automatic cloth removal at specified lengths, and automatic filling supply cone replenishment.

The biggest contribution made by electronic technology to broadwoven cotton manufacturing was in monitoring and controlling the operation. Microprocessor-driven systems monitored and provided real-time data on efficiency, production, and quality. The data could be provided for any time period that the manufacturer wished to designate. This data could also be supplied for an individual machine or several machines grouped by style and job assignment. Such information permitted the evaluation of styles and fabrics and gave the broadwoven fabrics manufacturer the ability to select those materials most suited for the production machinery available.

As electronic systems became more advanced, they permitted monitoring of the operation and controlled many of the functions as well. Modern systems can detect many mechanical and electrical problems. Depending on the sophistication of the system and the severity of the problem, the system can correct the problem, signal technicians as to the nature of the problem, or stop the machine until the problem is corrected. Totally automated systems (known as "lights out" operations) have been created for spinning machines, while complete automation of the weaving process is still far from being cost effective.

Computerization of the textile industry has been a critical part of the quick response (QR) programs that are being adopted by companies in an attempt to shorten the time between the placement of retail orders and the delivery of textile goods to stores. The companies coordinating such programs communicate using bar codes and electronic data interchange. With the ability to pinpoint production times and quantities, mills can direct production according to individual orders. The mills, as well as apparel manufacturers and retailers, benefit from the resulting reduction in inventory costs. QR programs also reduce forced markdowns and stockouts on the retail level, while providing a smoother flow of production that significantly improves textile mills' operating margins.

At the end of 1999, the Internet was introduced into the textile world as an additional means of product distribution. The e-commerce for fabrics allowed buyers to search a large database of fabrics and place orders for them online. The database contained digital images of sample yardage sent by the manufacturers with detailed product specifications included at the Web site.

The market for business-to-business e-commerce was expected to be larger than that of business-to-consumer. The use of the Internet allowed the manufacturers of broadwoven cotton fabrics to reach a worldwide market of prospective buyers.

Further Reading

"Although Sliding in New York Last Week, Cotton Prices Would Continue Rising." Textile and Clothing Trade Information, 10 February 2003. Available from http://www.emergingtextiles.com .

American Textile Manufacturers Institute. "Crisis in U.S. Textiles," 2003. Available from http://www.atmi.org .

——. "The Scope and Importance of the U.S. Textile Industry," Spring 2002. Available at http://www.atmi.org .

MacDonald, Stephen, Agapi Somwaru, Leslie Meyer, and Xinshen Diao. "The Agreement on Textiles and Clothing: Impact on U.S. Cotton." Economic Research Service, U.S. Department of Agriculture, November 2001. Available from http://www.ers.usda.gov .

McCurry, John W. "Layoffs, Mill Closings Adding Up Fast." Textile World, September 2001.

National Cotton Council of America. "Cotton Supply and Demand." EconCentral, 1999. Available from http://www.econcentral.org .

——. "U.S. and World Cotton Economic Outlook," November 1999. Available from http://www.onlinetextilenews.com .

Nelson, Cotton. "Crop Estimate Increases by 300,000 Bales." National Cotton Council of America, 10 December 1999. Available from http://www.cotton.org .

Standard & Poor's Industry Surveys. New York: Standard & Poor's Corp., 1999.

U.S. Department of Agriculture. Agricultural Market Service. "Weekly Cotton Market Review," 6 February 2003. Available from http://www.ams.usda.gov .

U.S. Department of Labor. Bureau of Labor Statistics. "Occupational Employment Statistics," 2001. Available from http://www.bls.gov .



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