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Improving Profitability Through Research

News About The Cotton Research & Promotion Program From The Cotton Board In August, Cotton Incorporated presented the most recent edition of its Five-Year Strategic Plan to its Board of Directors, the Cotton Board and USDA. A theme throughout the plan was Cotton Incorporated's dedication to target its research towards the area(s) holding the greatest potential return for Upland cotton growers and importers.

The following corporate strategies, with brief summaries, reflect Cotton Incorporated's Five-Year Strategic Plan outline.

The demand for and profitability of cotton can be affected at several different points in the pipeline. The company's assets will be deployed at different stages of the pipeline to seize opportunities to build demand and improve profitability.

Contrary to what some might believe, Cotton Incorporated is not focused on just one area of the cotton industry. "To achieve our mission, we must target different points of the industry pipeline," says J. Berrye Worsham, president and chief executive officer of Cotton Incorporated.

Cotton Incorporated will utilize a "push-pull" approach to building demand for cotton products and influencing product decisions.

"A `push-pull' approach involves working from both directions in the pipeline, driving consumer demand for cotton products by appealing directly to consumers and working through manufacturers and retailers to increase cotton usage and cotton product offerings at retail," explains

Worsham. For example, Cotton Incorporated's research and marketing divisions are currently working together on several initiatives, including stretch apparel, absorbent products and cotton rugs. Staffs in the marketing divisions identify high priority opportunities and researchers work toward capitalizing on them.

Cotton Incorporated will place emphasis on maintaining or growing cotton's share at retail in the U.S. market.

With competition from man-made fibers rising, Cotton Incorporated will continue to focus primarily on building consumer demand for cotton among U.S. consumers, the largest market for U.S. Upland cotton. Additional priority markets include Mexico and Canada. The company is also expanding its Seal of Cotton licensing program to Central America through a partnership with Cotton Council International.

Cotton Incorporated will give priority to activities that foster the use of U.S. Upland cotton by textile mills in the United States.

Because U.S. mills are the producers' Number One customer for U.S. Upland cotton, Cotton Incorporated places priority on programs and activities that keep these mills using cotton. "Our Research Division will provide technical services and new product and processing information," explains Worsham, "to insure that high quality cotton products are produced with the greatest efficiency."

Cotton Incorporated will service importers of cotton products more aggressively and effectively by targeting important suppliers and importers in an effort to maintain or improve the quality of imported cotton products sold at retail.

Each year, imported cotton products account for a larger share of total apparel and home fabrics sold at retail in the United States. Many of the leading countries supplying cotton products are also key destinations for U.S. Upland exports. Cotton Incorporated believes that its emphasis should be on working with importers of cotton products to insure that they bring the highest quality cotton products to the marketplace and take full advantage of the ways to increase their cotton usage.

Cotton Incorporated will undertake initiatives to increase the usage of U.S. Upland cotton by foreign mills.

"We are committed to preserving and growing U.S. cotton's import share of raw cotton in the core foreign markets of Mexico, Japan, South Korea, Indonesia, Taiwan and Canada," says Worsham. "Our efforts also will focus on several other countries such as Turkey and Brazil that have great potential to be consistent, large buyers of U.S. cotton." Cotton Incorporated will partner with other organizations, such as Cotton Council International, to leverage the impact of their initiatives.

Approximately 40-50 percent of the yearly Upland crop is shipped overseas.

Cotton Incorporated will place a priority on conducting research that holds the greatest promise for uncovering technologies with the potential to increase or preserve cotton usage.

With a target toward receiving the greatest potential on every return, Cotton Incorporated is committed to long-term research and pursuing research that targets identified consumer needs.

Cotton Incorporated will conduct agricultural research for the benefit of the U.S. cotton producer.

As the company moves forward, it will strive to insure that the agricultural research program produces usable results and that U.S. producers have the benefits of being the early, first adopters of new technology.

Cotton Incorporated is committed to maintaining a presence in China throughout the period of this plan.

Says Worsham, "China's strategic importance to the world textile industry - it is the largest cotton-consuming and garment-manufacturing country in the world - necessitates our presence to promote U.S. Upland cotton and to stay abreast of key trends that will impact the world cotton and textile markets."

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