NEW YORK — The battle for second place in the domestic spandex market is intensifying, and the fallout could eventually hit DuPont, long the dominant market player.
By the middle of next year, Globe Manufacturing and Miles Inc. will be making close to 11 million pounds of new spandex between them, aiming that production at spandex businesses perennially controlled by DuPont. Those businesses include hosiery, intimate apparel, swimwear and activewear.
The big question is whether the U.S. spandex industry — currently at about 45 million pounds and faced with overcapacity and stagnant product categories — can handle all of that new production.
Both Globe and Miles are banking that it will.
From its new $40 million, 165,000-square-foot
plant in Tuscaloosa, Ala., Globe will add 3.5 million pounds of dry-spun spandex. The plant is currently operating at one-third of capacity, with shipments to begin within the next two weeks, said company executives.
The plant will allow Globe to expand its overall spandex capacity to about 18 million pounds. Globe also produces the fiber at its Fall River, Mass., headquarters, and at Gastonia, N.C.
Miles’s U.S. spandex production will come from a $170 million plant at Bushy Park, S.C., a facility that will produce slightly more than 7 million pounds of Dorlastan spandex. The site is expected to begin production by December, with initial Dorlastan shipments slated for the beginning of next year. Miles is the U.S. subsidiary of Bayer AG, Dormagen, Germany, which produces about 9 million pounds of Dorlastan a year in Europe. Some of this is imported into the U.S., and this is expected to bolster Miles’s domestic production.
Putting the two firms’ added capacity into perspective, once Globe and Miles are at 100 percent production, their combined U.S. spandex output will be about 25 million pounds — only about 5 million pounds less than DuPont’s.
While DuPont does not divulge its capacity, industry observers said the company produces slightly more than 30 million pounds of Lycra spandex from its plant at Waynesboro, Va., and commands about 80 percent of the U.S. market. And, said observers, DuPont produces about half of the world’s 160 million pounds of spandex. The hosiery market, a key area for spandex, has flattened. Executives claimed, however, that despite the overall decline in units, hosiery containing spandex remains fairly strong.
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Circular knits, primarily used in activewear and swimwear, are another big spandex area. This had been a rapidly growing market, but the momentum slowed about two years ago, said executives. A lot of bad fabrics using sub-par spandex imported from the Far East flooded the market and had to be absorbed. Now, they said, circular knits using domestic spandex are starting to come back strong.
In addition, woven fabrics continue to be a difficult area to break into for spandex producers. Still, they are regarded as a growth opportunity.
Finally, the world market, which had been gripped by a recession, is starting to show signs of life. Europe, the world’s biggest user of spandex — and a part of the world that particularly has dogged DuPont’s business — is getting back on track.
On a worldwide basis, spandex represents about four-tenths of 1 percent of all fiber consumption. So, executives said, there is room for growth.
“The [spandex] figures look a little different today than they did about two years ago, when we were predicting spandex market increases of about 10 percent a year,” said Robert Bailey, Globe’s vice president of marketing and sales. “While in some areas it’s slowed, flattened or declined, we believe the market is going to trend back the other way.
“No doubt there is overcapacity today, but the good sign is that the world market is increasing,” Bailey added. “However, it’s going to be a survival-of-the-fittest game. Our aim is to be a high-tech, low-cost producer. Keeping overhead down is a key aim of ours.
“DuPont will always be the leader, but we feel we can fit in very nicely behind them,” Bailey said. “We’d also like to see the exports become about 20 percent of our spandex business.”
As for his firm’s decision to enter the U.S. market, James Heslep 3rd, Miles’s director of marketing for Dorlastan, said there is enough growth in the market to absorb the company’s spandex. “The world is continuing to grow. We’ve grabbed a significant share of the European business, and that will continue this year,” Heslep said. “The next step was to go to a country that had the best textile economy in the world, the U.S.
“Looking at the arithmetic, 11 to 15 percent of the U.S. market is all we could ever hope to catch. We realize DuPont will be the biggest in the game. However, we believe we are deep technologically, and we think that can and will make us a strong number two.”
Although the Bushy Park site will produce spandex for exporting, Heslep said most of it will be for the U.S. market.
He said Miles is going to market Dorlastan to the hosiery, intimate apparel, swimwear and activewear markets.
“The intimate apparel market has a low but steady growth rate, unlike swimwear, which bounces up and down,” Heslep said. “The activewear market has some bumps, but again, isn’t as cyclical as swimwear.”
Heslep also said the spandex market will remain strong, simply because in many areas the fiber performs better.
“A women’s swimsuit is a heck of a lot better in spandex than other fibers,” Heslep said. “Nor is spandex a fiber that is nickel-a-pound dependent.”
As Globe and Miles increase production, DuPont is not standing still.
“We don’t want to comment on our competitors,” said Wally McWalter, regional director, DuPont Lycra North America. “Rather, we want to focus on our own plans.”
This week, McWalter said, DuPont will begin shipping a new 40-denier product, produced exclusively for the circular knit market with what the company says has better dyeing qualities and stretch recovery. A similar 70-denier product will be available in the third quarter, he said.
Other commitments to the market, McWalter said, include an expanded retail effort backed by cooperative advertising, point-of-sale material and hangtags, and a new corporate print and TV campaign “addressing the benefits of Lycra brand spandex.”
“We are not going to stand pat in the Lycra business,” McWalter said.
Industry users said a major result of the new competition could be lower prices. This could be helpful, but several fabric firms still said their allegiance remains with DuPont, because of its size and marketing programs. Currently, spandex, among the three makers, ranges in price from $7 to $22 a pound, depending on the denier. Although an expensive fiber, its use in any given fabric is always small — generally only 5 to 10 percent of fiber content.
“Having three players in the market has to help bring prices down,” said one mill executive, requesting anonymity. “DuPont’s prices have been higher than most, and with a low-cost firm like Globe adding production, and with Miles getting some U.S. business started, hopefully, DuPont won’t be charging so much anymore. Also, the overcapacity existing in the marketplace will help price.”
Marvin Moster, president of Claridge Knits, which uses spandex from both Globe and DuPont, said, “There will be a settling-out process that occurs when all of this production comes on. We will continue to use both firms’ spandex. The circular knit business right now is thriving on spandex.”
Another key user of spandex, Guilford Mills, a 100 percent Lycra spandex house, forecasts another good year for fabrics containing Lycra.
“Business is tough all over, but the circular knit business is doing OK,” said Alfred Greenblatt, president of the apparel, home fashions and automotive business unit. “We predict the spandex business in that area is going to get even bigger. However, we have not sampled, nor do we have any intention of sampling, anyone’s yarn but DuPont’s.”