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US COTTON

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About US COTTON

In an industry where margins are thread-thin, Parkdale Mills spins cotton into cash. The North Carolina-based company is the largest privately owned yarn spinner in the US. It manufactures cotton and cotton-polyester blend yarns and specializes in spun yarn that winds up in such goods as sheets, towels, underwear, and jeans. Parkdale Mills' global slate – more... of customers include Jockey International, Lands' End, L.L. Bean, and Springmaid. The company operates and owns 66% of Parkdale America, a joint venture with polyester and nylon yarn maker Unifi. The company has about two dozen plants in the US, Colombia, and Mexico, and a fiber research center. Its cotton consumption represents 30% of total US cotton demand.

Parkdale Mills is adding new operations, and it needs more space. With economic assistance from state and local officials, the company began investing about $45 million in a new plant in Cherokee Country, South Carolina. This is one of four plants in South Carolina and Georgia that Parkdale Mills acquired in spring 2010 from Wellstone Mills. It will also invest $3 million to expand its Edgefield County, South Carolina, manufacturing plant. In 2009 Parkdale mills picked up three out of four of Hanesbrands yarn-spinning operations, after Hanesbrands decided to stop making its own yarn, saying that outsourcing the product would drive value and improve the use of their assets. Parkdale will provide Hanesbrands with a large portion of its yarn needs. The expansions and acquisitions fell on the heels of several Parkdale Mills plant closures.

Parkdale Mills is part of the $60 billion textile industry, in which 50 of the largest companies make about 60% of the revenue. It is a survivor in the competitive global textile trade that has undergone credit crises, economic meltdowns, and fraudulent trade practices.

When you think of clean fresh cotton, it's hard to believe that there is a dark side to the textile, but there is, and US Customs and Border Protection is hopefully cracking down on customs textile fraud. The US textile industry blames illegal shipments of yarn and fabric entering the US for causing mill closures and job losses. Customs is on the lookout for companies that repackage Pakistani and Chinese yarns to pass them off as US product. The 2009 closure of RL Stowe Mills was blamed on Customs' failure to get a handle on the fake label scheme in time. In all, about nine plants closed throughout the Southeast in 2009 and 2010.

Textile fraud stems from the misuse of free trade agreements such as the Central American Free Trade Zone (CAFTA). These agreements were supposed to help US companies by giving them duty-free benefits for finished goods they import back into the US, but fraudulent trade practices have soiled the linen of the industry.

The problems didn't just begin in 2009. US textiles have suffered a long-term credit crisis for more than a decade; it only worsened with the global economic downturn, which caused US textile exports to fall almost 25% for the Western Hemisphere. Parkdale Mills, along with Mount Vernon Mills, Tuscarora Yarns, and the National Cotton Council of America pled their case to the US Congress in late 2009.

Parkdale Mills was founded in 1916. Textile magnate and chief executive Anderson Warlick and his family run the company along with chairman of the board Willard "Duke" Kimbrell, and Shepard K. Halsch. – less

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