Cotton Incorporated (CI) endeavors to promote cotton as the first choice among consumers in apparel and home products. Yet the situation is becoming tougher and tougher for cotton due to soaring cotton prices, declining consumer purchasing power and intensified competition with synthetic fibers in the athletic apparel market. In an interview with ATA Journal and AdsaleATA.com, President J. Berrye Worsham and Vice President Katsuro Ishidam of Cotton Incorporated talked about their insights on opportunities in Asia market.

ATA: AdsaleATA.com
Mr Worsham: J.Berrye Worsham, President and CEO of Cotton Incorporated
Mr Ishida: Katsuro Ishida, Vice President, Supply China Marketing Asia of Cotton Incorporated

ATA: Many of the new technologies developed by Cotton Incorporated have expanded the applications of cotton in the textile industry. Could you tell us more about the R&D efforts behind these technologies?

Mr Worsham: A couple of years ago, we realized that cotton was gradually losing share in the sportswear market. What we did at that time was to challenge our research team in North Carolina to do research into this market and make it our priority. To develop these technologies, we also cooperated with our partners in this industry especially during the trial period but most activities happen in our own facilities in North Carolina.

Another thing that I want to stress is that Cotton Incorporated does research not only in textile-related technologies but also in fiber quality as well as agriculture industry. Some of the technologies like TransDRY and Wicking Windows that we developed are designed to help cotton compete more favorably against synthetic fibers. With these technologies, moisture can be transferred from the body to the garment quickly, thus keeping the wearer dry and comfortable. These are very important features for cotton to grab a share in the sports apparel market that was once dominated by chemical fibers.

ATA: We know that Cotton Incorporated is actively pushing cotton into the sports apparel sector. Which market segments in this sector are responding the most positively so far?

Mr Worsham: In the sportswear market, there is a broad range of possibilities for cotton to enter into, from golf shirts to running shirts to other tops. In China, Snow Wolf and Kang Wei, two leading outdoor sportswear brands, are using our technology now.

One of the things that we’ve noticed is that when you develop a product for a market, sometimes you can find that it has applications in other markets that you did not anticipate. Therefore, possibilities are not limited. At the moment, these technologies are still fairly new but as we refine them over time, I think they will help us compete not only in the athletic wear market but also in other major markets.

ATA: Cotton price has been rising rapidly recently. How does that affect your business and the US apparel market as a whole?

Mr Worsham: When there are lots of uncertainties in the market, it will create negative impact on demand. The world demand for cotton recovered faster than what people thought. The declining US dollar is also a factor. At the same time, prices of other commodities like corn, soybean and wheat are rising rapidly. All these things together cause the price of cotton to rise in a rather rapid way. Last time we saw this happen was about 1994. I don’t think the price will continually go higher because the market cannot bear that.

Speaking of the impact, I think this might affect us a little bit next year. For the US market in particular, the low-priced denim jeans market will most likely to be hit because they use pounds of cotton per garment. However, overall I don’t see this to be a permanent situation.

ATA: How do you see the future of cotton products in the Asian market? Are there any major challenges?

Mr Ishida: Historically, Asia is a cotton-oriented region partly because of the climate here. However, the reality is that synthetic fibers are coming back quickly with new technology developments like moisture management. This is a big threat as well as a challenge for us because we see this trend not just in Asia but also in the US and Europe. Unless we keep renovating our products, we will easily lose our share in the market.

For any products to be successful in the region, price is another major factor to take into account because countries like Japan and South Korea are not doing that well like what China have done in recent years where you see around 10% GDP growth. For this reason, in the next decade, China will continue to be a major market of strategic importance for us.

ATA: Cotton Incorporated has presence in China since 1997. What are your views on the Chinese textile market in general?

Mr Ishida: Having presence in China is very important to us. China is a long-established manufacturing center for many industries. For textiles, the country now has complete supply chain from cotton cultivation to apparel making, which makes it very competitive in the world. The situation now is that the rising labor costs might change the business landscape here because manufacturing activities might gradually move to other parts of Asia. But at this stage, nothing can be stated for sure. In terms of domestic consumption, Chinese consumers are now having a stronger purchasing power and that is why we are focusing intensively on promoting new technology in China. Technologies that can be used in pure cotton or cotton-rich product will bring more values to customers looking for better quality in life.