Global Competition Heats Up

New York — Even as individual companies are competing in a global economy against one other, the competition is also pitting country against country, region against region.

India complains of China's export tax rebates. China — its rebates now trimmed and wages rising — frets about Pakistan's low labor costs and India's government development programs for the textiles industry. Pakistan, off limits to many potential buyers because of safety concerns, worries about remaining competitive when too few customers are willing to visit its plants. Brazil, its U.S. business severely crimped by its currency valuation, looks to Europe and its domestic markets for growth. So does Turkey, buffeted by price competition from China. Finally, visa restrictions remain a barrier for many off-shore companies interested in putting their people on the ground on the U.S. market.

In one sense, the global industry could be said to be in its infancy. The combined $376.3 million in sheet volume posted by the seven leading global sheet manufacturers is less than half the $690 million in volume Springs recorded last year. The figure is well below the $1.47 billion the top five U.S. sheet suppliers rang up — although it's likely the top global players are also key vendors to the U.S. suppliers.

The race is tightening in bath towels as the United States sheds domestic production. The Global Top 5 expect this year's volume to hit $285.4 million collectively. For comparison's sake, WestPoint Home last year did $400 million and Springs $270 million in bath towels. Again, in many cases the top global manufacturers are suppliers to the U.S. leaders — or competitors, or both.

Over the past year, leading suppliers have begun striving to expand buyers' perceptions of what their core competencies might be. Towel manufacturers have begun treading into the sheet business. Sheet manufacturers have tacked on cut-and-saw to put themselves into the bed ensemble business — as have fabric manufacturers. Bedding ensemble plants have jumped into the curtain and decorative pillow categories.

Some of the more aggressively off-shore manufacturers have set ambitious targets. Al-Abid Silk Mills wants to hit $150 million in total sales next year. Westgate — formerly ADF/HFI — passed the $100 million mark in 2005 and aims for about $1 billion over the coming years. Welspun recently boosted its worldwide sales by roughly $65 million with the acquisition of U.K. towel stalwart Christy, and is shopping for more companies to springboard it beyond towels.

Research for this report was compiled by HTT staff.

In cases where companies did not provide firm numbers, estimates were used.