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How Mills Can Strategize for Improved Post-Pandemic Profitability

For mills and manufacturers, the recovery from Covid-19 has not been uniform, as companies working in certain regions and product categories bounced back faster than others.

As a result of this disparity, some mills in sectors like home textiles are currently strategizing for capacity growth, while others are making operations leaner to grapple with tighter funds. But regardless of what stage of recovery producers are currently in, they are all equally focused on the future success and profitability of their businesses. A recent Sourcing Journal webinar delved into both the hurdles mills face in achieving cost-effective production and the solutions that can help them reach their goals.

“A lot of organizations are looking to ultimately build back better, the kind of catchphrase that’s caught on as a result of the pandemic,” said Kurt Kipka, vice president at Apparel Impact Institute. “This looks at how can we use this as an inflection point for the industry in general to ensure that not only are supply chains more nimble and able to adapt to disruptions in the future, but more profitable as well.”

Driving Long-Term Profitability Webinar

In response to this demand for long-term profitability plans, Cotton Council International launched a new consultancy service for mills and manufacturers during the pandemic. Dubbed Cotton USA Solutions, the offering is powered by an expert team with 200 years of combined experience in the field. Cotton USA Solutions is designed to help clients improve their productivity and profitability, allowing them to be in better financial shape coming out of the pandemic.

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“Mills and manufacturers will need to identify not only short-term but also long-term strategies to secure their operations as post-pandemic recovery begins,” said Joerg Bauersachs, head of Cotton Council International Technical Services and Cotton USA Solutions.

Cotton USA Solutions currently offers five different programs: research studies on cotton performance, an exchange program with mills, technical seminar events, courses on cotton spinning, and one-on-one consultations.

For the consultations, Cotton USA Solutions team members either visit mills in person or they take a virtual tour of the operations via a virtual reality headset. After auditing the mill and hearing about their issues and challenges, the consultant helps to solve these problems. The consultancy can also work with mills to calculate margins, discover what is earning and losing money, and pinpoint the products creating the best revenues.

Some of the issues preventing spinners from reaching their full financial potential relate to the quantity and quality of cotton yarn produced.

For instance, mills may not be using machinery or raw materials in the most efficient manner for optimal yield with the least waste. Shahid Anwar Tata, CEO of Tata Textile Mills Limited, a Cotton USA Solutions client, explained that since cotton is a natural material, each crop is slightly different with varied characteristics. To better understand each cotton batch, mills can use bale management to analyze and identify which types of fibers to blend together to get the best and most consistent product.

“My customers should get a yarn from me that they are able to use season after season, with the same dyeing recipes and machine performance,” said Tata. He added that he has been able to achieve more reliable results with U.S. grown cotton compared to fibers cultivated elsewhere.

As a result of work with Cotton USA Solutions, Tata Textile Mills Limited was able to shrink its combing waste by 1 percent. Meanwhile, another mill improved its yield by 4.5 percent. Even single-digit differences have an impact, since raw materials can represent 70 to 80 percent of the total cost of yarn.

“Every mill tries to reduce waste as much as possible and save the dollar,” said Bauersachs. In addition to a financial move, waste reduction contributes to more sustainable production.

Like any other business investment, advancing aspects such as machinery, capacity or sustainability takes funds. To spend on improvements, having confidence in future orders can make a difference.

Kipka noted he is beginning to witness brands willing to make a longer-term commitment to a given production facility. “This enables long-term profitability and increased capacity for facilities to be able to take that leap to invest in themselves, and feel confident in those investments,” he said.

Watch the webinar, sponsored by Cotton USA Solutions, to learn more about:

  • How mills and manufacturers can trim costs and waste
  • The machinery missteps that could be lowering productivity
  • Why Tata Textile Mills Limited sources U.S. cotton
  • How Cotton USA Solutions leverages data to help mills determine their actual margins
  • Why cotton spinning is eco-friendly, and what mills are doing to make it even more sustainable

Click here to watch the webinar now.