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As mills move from Southeast: Texas could be ideal for textile industry

Textile mills moving out of the Southeast to take advantage of cheap labor in Central and South America may be missing a golden opportunity by not looking west.

“Why not Texas?” asks Dean Ethridge, director of the International Textile Center in Lubbock.

Ethridge says the Texas High Plains and South Central regions offer advantages for certain textile manufacturing processes. Climate, transportation, proximity to the U.S. Cotton Belt, and a dependable work force make Texas an ideal location for textile mills, he says.

“Textile manufacturing is making less sense in the Southeast because of development of other, more technical industries.”

He says the Southeast is part of the advanced East Coast economy, with a high quality labor force and more opportunities than when cotton mills provided the only off-farm employment.

“In the 1950s and 1960s there was nothing else in the Southeast. Now, they have automobile manufacturing and other high tech industries. Consequently, we should not be surprised at the general change in textile manufacturing in the Southeast.

“But textile manufacturing does make sense in Texas. In the South Plains, we have an abundant source of raw material and are centrally located for the entire Cotton Belt. Energy is abundant and inexpensive. The overall climate is milder than the Southeast with much less inclement weather in the winter.

“And we have an abundant and highly dependable Hispanic work force.”

Ethridge says the stage of economic development in rural Texas makes it an ideal locale for textiles.

“I don't think the same opportunities would exist in Dallas, Houston or San Antonio,” he says. “Urbanized areas have a much more developed economy and need more technical expertise.

“The Southern Plains, however, is rich in raw material and energy but poor in manufacturing opportunities. Textile manufacturing makes organic sense for the area.

“Even with higher labor costs, Texas offers a better economic opportunity than Mexico for certain textile processes. The cost of producing and assembling raw material will be much more cost effective here.

“Texas grows the full range of cotton fiber qualities and transportation advantages permit movement from California and most of the Mid-South in a day or less.”

Labor costs in Mexico and Latin American countries would be considerably cheaper, Ethridge admits. “But labor makes up only about 10 percent of the total cost of textile manufacturing. The risk and cost of doing business in Mexico overwhelms the cheap labor.”

He says government instability, potential for graft and corruption, transportation problems and other factors manufacturers cannot control in developing nations add to risk factors.

“We have all the fundamentals in place.”

Ethridge surmises that locating the more high tech aspects of textile manufacturing in Texas, while moving the more labor-intensive and less skilled operations, such as cutting and sewing, offshore makes economic sense.

“Cost effective textiles in the United States probably mean high tech operations,” he says. “Yarn spinning, for instance, is the most technical aspect of textile manufacturing. It's also more capital-intensive than weaving, knitting, etc. It seems logical to do the high tech, capital intensive processes here and take the high labor, less capital intense processes to Mexico.”

He says Texas mills can set up manufacturing loops across the border where factories take yarn or cloth and manufacture finished products.

Ethridge says the main obstacles facing a Texas textile industry include limited human resources to build and manage the plants and a general lack of the technical infrastructure required to produce spare parts and other technical expertise.

“Those systems exist only in the Southeast,” he says. “But we have sheet metal expertise because of the cotton ginning industry and that could be a foundation for building the necessary infrastructure.

“Compared to Mexico, our textile infrastructure is glorious,” he says.

Ethridge says technical expertise would need to be imported from the Southeast or the Middle East, initially. “Spinning facilities, for example, need first rate technicians, people who understand the technology.”

In time, he says Texas Tech could ramp up and develop textile engineering programs to supply the expertise.

The capital investment also offers a sizeable obstacle. “A modest yarn manufacturing facility would require at least $10 million,” Ethridge says. “We would like to see more indigenous investment. We have folks generally supporting the idea of economic development, including textiles, in rural areas, but making the rubber hit the road is more difficult.

“It takes an entrepreneurial spirit. We need vision capitalists.”

He says mills would have to operate around the clock to cover capital investments. “We would have to run 24/7 to spread the cost of equipment over more units of production. The bottom line is that textiles require hard work.”

The keys to success, Ethridge says, include producing a quality product without wasting raw material. Procuring the needed fiber qualities also is important.

“Textile manufacturing starts with fiber quality control. That means manufacturers get the quality they know they need for the material they want to produce.”

Ethridge foresees a time when farmers will produce cotton for specific uses “and get paid for it.”

He sees “great potential for someone to succeed in textile manufacturing in rural Texas. I think it can happen and we're working on it.”

It's also an answer, he says, for the cotton industry's disappearing customer base.

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