Pricing Remains a Top Sourcing Concern
Gary Evans -- Furniture Today, January 26, 2011
NEW YORK - When it comes to sourcing issues at the dawn of 2011, the price of raw materials, particularly cotton, ranks as the top issue - just as it did a year ago.
Global manufacturers and importers interviewed during the recent Heimtextil trade show in Frankfurt, Germany, reported that customers have largely accepted the fact and are looking for work-a-rounds, including de-specing.
Limited cotton resources and higher prices have also put manufacturers in the driver's seat for the first time in years, many said.
"What we see this time is that the whole industry is changing," said Mohit Jain, director of IndoCount Industries. "This is a new era in the textile industry. All customers have stated an understanding that what cotton is, it is - and they've accepted the cotton situation and now we all have to find ways to work around it and see what new ways we can do."
Many suppliers said what's lacking now is faster decision-making by customers, although some were burned often enough last year by rapidly fluctuating prices that they are at least moving on partial orders.
"Obviously, the volatility of the market is always a topic of conversation, but we're really seeing the turn on the positive note - let's kind of move on from this volatility and let's look at new innovation - and design and trend and color - and really see what we can offer to our customer because at the end of the day, that's till what's important. And that's not specific to the US or to any country," said Lexi Schlandenhauff, vp of marketing and design, 1888 Mills.
"That's a global issue. It's giving the consumer what they want at the end of the day."
Anurag Sharma, president and ceo of Deesan Industries, said higher cotton prices globally as well as higher freight prices have the potential to make some European mills more competitive in their home markets.
"Whatever was the [price] difference for manufacturers in Europe or India is very minimal with the high prices," he said. "There might be an advantage for Europe with the logistics and the duty factored in."
For U.S. companies that distribute globally, there are bright spots beyond the U.S.
"I do see turnarounds in certain economies," said Stan Fradin, president, Rockland Industries. "You know, it's always a bounding ball syndrome, but when one ball is going up another ball is coming down. Certain parts of the world economies are very good right now and producing and performing in a way that everybody seems to be happy with - certain parts of South America, parts of the Middle East, parts of the Pacific Rim. I do believe there's a turnaround."
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