MEXICO CITY — U.S. textile companies exhibiting at Expotela here last week left the trade show with stacks of business cards and requests for samples — but few orders.
Orders that were placed were mainly from established customers. Nevertheless, the U.S. companies — testing the potential of the new North American Free Trade Agreement — were buoyed by the response from the Mexican apparel makers shopping the show. The three-day event, which ended Thursday, piqued interest in doing business on both sides of the border.
According to Bobbin Blenheim, producer of the show, 5,319 people turned out to see the 149 exhibitors, who were housed in a small, temporary, metal building next to the World Trade Center, which is being renovated.
The audience was made up primarily of Mexican apparel manufacturers, textile distributors and potential distributors.
“There’s a lot of interest,” said Carter Deaton, national sales manager for Armtex, Pilot Mountain, N.C. “We’re trying now to set up lines of communications.”
Deaton said he’s likely to make at least one immediate high-volume sale to a Mexican children’s wear maker who needs fleece fabric for production in May. Armtex has offered to ship the order to the border town of Brownsville, Tex., where the customer will pick it up.
Prices were what was holding Michel Levy back from buying worsted wools for his men’s suit factory, Industrias Cavalier, S.A. de C.V., the Mexican licensee for Christian Dior and Gold Club, the label for Parisian textile maker Dormeuil. Levy said U.S. textile companies need to realize they won’t get the same price they do from domestic apparel makers, particularly if Mexican buyers still must pay tariffs. He said other exporters to Mexico are willing to lower prices to sell to the market.
In comparison with other exporters, the minimum orders for U.S. textile companies are also too high, he said.
“We can buy minimums of 200 yards in Europe,” he said, noting how small orders are crucial when buying expensive fabric. Levy’s company produces 150,000 suits a year, sourcing 50 percent of its worsteds from Mexico, the balance from Italy, Spain, Korea, Uruguay, Chile and Canada.
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“The U.S. companies are very willing to export, which is good,” Levy said. “But they are not used to exporting. They are not prepared.”
Exhibitors said buyers were interested in most fabric categories, particularly heavy cottons, denim and activewear textiles.
Customers, cautious about paying higher prices for U.S. goods, seemed eager to at least lay the groundwork for future business. Among the obstacles to eventually filling orders seemed to be transportation costs and duties. Exhibitors said that in the short term, these factors could raise the overall cost of fabric beyond their customers’ limit.
Calculating transportation costs may prove easier than deciphering textile tariff phaseouts under NAFTA. Although under the nascent NAFTA, tariffs on textile trade between the U.S., Mexico and Canada will eventually be eliminated, many textiles still carry tariffs, although they have been lowered under the treaty.
“They don’t understand the duties and the transportation costs. And right now we don’t know the answer either,” said James Rice, vice president of utility wear, Graniteville, Co., New York.
Graniteville and other exhibitors have already learned first-hand the frequently painstaking process of sending goods to Mexico under the new NAFTA rules. Graniteville received their show samples the night before Expotela, a month after they were shipped through a freight-forwarder.
“What’s going to happen to our production if we can’t even get our samples through?” asked James Parkin, another Graniteville executive.
U.S. textile companies with agents or distributors in Mexico, or with their own factories or joint ventures, seemed less concerned about these difficulties.
Rudy A. Masry, market manager for foundations and shapewear at Guilford Mills, New York, said his company will transfer orders to its Mexican partner, American Textil SA de CV, to get around the cost and headache of direct shipping. Guilford owns a 20 percent stake in American Textil, which Masry described as “a miniature Guilford.”
Denim giant Cone Mills will benefit from a denim factory joint venture with Mexican jeans maker Industrial Parras.
Burlington Industries has owned a mill in Mexico, Textiles Morelos, for decades. The company also has a sales office in Mexico City, as does Dan River.
Hilos American & Efird de Mexico SA de CV, a division of the U.S.-based thread manufacturer American & Efird, opened a sales office and warehouse in Mexico six months ago. Jorge Luis Zamora, A&E’s director of sales in Mexico, says the company will build a factory in the country within the year. It already has nine factories worldwide, with Chile and the Dominican Republic as its only other Latin American locations.
“Mexican customers want to know you have a commitment to service,” Zamora said.
Also making the rounds of exhibitors were Mexican distributors, offering services to consolidate and ship orders. U.S. factors were also making calls.
Lawrence Fink, president of surplus fabric seller Magna Fabrics, was doing a brisk business.
“Our target market here is with wholesalers,” said Fink, whose booth was advertising “Venta Gigante: Telas Bonitas a Precios Bajos,” meaning “Big Sale: Beautiful Textiles at Low Prices.”
“I’m willing to undercut our prices in order to break into the market,” he said.