Textile Insight

T he 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 aer a successful year. A New Kind of Volatility e 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. e pandemic le 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, "e perfect storm created a legacy of bad effects. We have never seen anything like this volatility." What Keeps Textile CEOs Up at Night e 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. e bottle/pack- aging industry will require 5.9 million tons of rPET in 2025, while the Textile Exchange has challenged the apparel industry to in- crease 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 com- mented, "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 e textile industry has had difficulty at- tracting young talent for years, exacerbated by the current low unemployment rate. "e labor shortage is making us uncompetitive," said Hamrick. Solutions include a combination of mentoring programs to sustain the work- force, and new technologies in automation and artificial intelligence. COLLABORATION IS KEY Challenges and Opportunities on the Horizon for U.S. Suppliers. By Debra Cobb STRATEGIES / OUTLOOK 2023 32 • Textile Insight ~ Winter 2023 textileinsight.com 1/2019 1/2020 Delta PET chip/China PET chip/US 1/2021 1/2022 1/2023 (est) 1.20 1.10 1.00 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 $/LB PHOTO: PARKDALE MILLS. CHART SOURCES: WOOD MACKENZIE CHEMICALS/WOODMAC.COM PRICES THE POLYESTER CHAIN

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