...our operations are inevitably shifting eastwards to be in closer proximity to our customer base
Paul Forman discusses the vast industry of threads, zippers, and specialty fibres with Fibre2Fashion correspondent, Ilin Mathew.
Synopsis:
Coats plc is one of leading names in the world of US textiles industry. It has reached a staggering sales figure of over US$ 1 billion.
Paul was appointed Chief Executive Officer of Coats plc in December 2009, and has played a crucial part in its success ever since.
Excerpts:
Global recession, unfavorable trade policies, internal security concerns, high cost of production due to increase in the energy cost and different safety issues, specially fire - Which of these do you think is affecting the global textile industry? Kindly elaborate.
Every year people across the world are buying more and more clothes which creates a stable base for what could be argued is a recession proof industry. In addition, the Eurozone recession has stabilised and Asia offers huge opportunity so, overall, the outlook is relatively positive, although clearly it is not without pressures. The increase in fashion cycles across the year from the traditional two, means competition on the basis of time is now the biggest challenge. Then there is cost inflation and energy prices. Manufacturers need to work closely with contractors to help address those challenges and minimise their impact on the bottom line but, as an industry, I think we can be quietly bullish.
With a long heritage of more than 250 years, how does Coats plc still remain relevant and successful today?
Coats can trace its origins back to the eighteenth century textile industry in Scotland. That may seem a long way from where our company is today: the world’s leading industrial thread and consumer textile crafts business, at home in more than 70 countries and employing more than 20,000 people across six continents. But the core of the business is still about manufacturing 'clever thin lines’; building on our pioneering history of customer-led innovation, our range and reach has expanded to include hi-tech threads and engineered yarns. Then there are the areas of the business which did not even exist 250 years ago such as digital.
Coats is one of the largest and fastest growing manufacturers as well as suppliers of industrial sewing threads. What technologies do you think would help the sector advance further in the coming years?
The pace of technological advance in materials science is such that innovation is the only constant. Investment in R&D has to be a priority; new product launches help retain profile, drive sales and provide revenue for further R&D.
Already high on the development agenda is sustainability: addressing the sources of our materials (renewable versus fossil), manufacturing footprint (energy and water usage) and end of life options (recycling and biodegradation). The sector needs to look at technologies that will enhance the sustainability of current products and produce new, more sustainable products and processes for the future with the biggest potential breakthrough being broadly in biotechnology. Harnessing natural processes to produce high performance fibres or eliminate the waste legacy of synthetic fibres is likely to transform our industry in the next few years.
According to you, how important is it to understand current trends and future needs of a clothing firm to sustain in the increasingly competitive world?
Manufacturers and suppliers need to work extremely hard to understand the challenges their customers face and their perspective - or what it is like 'walking in their shoes’ - as that understanding is vital to collaboration, problem-solving and mutually growing business together. The most successful business relationships we have is where we work alongside our customers (from their design studios to the factory floor), identify challenges they face and work on solutions together. It is not just about coming to the table with a new product or innovation that may respond to a current trend or future need.
Do you think that applying innovative techniques to develop technical products in new areas and extending into new markets and online is necessary for the growth of any textile company? Can you explain it?
Innovation and market extension has to be at the heart of any manufacturing business but for those in the fast moving fashion sector it is essential. A company that is not developing new products or expanding into new markets will be at best standing still and at worst losing its business and market share.
You have previously mentioned that the big opportunity for the company is five billion people in Asia. In terms of consumption, how do you perceive the differences between Asian and Western consumers?
Yes, Asia presents a huge growth opportunity. The growing middle classes mean demand for apparel and footwear products is growing significantly, although it is not just about differences between Asian and Western consumers but differentiating within the markets in Asia. For instance Japan is the third largest retail market in the world but it reached the status of a mature consumer market many years ago. Its sophisticated consumers create intense competition and low growth potential for brands which contrasts greatly with the opportunities presented by the market of emerging middle class consumers in China.
Coats operates in more than 70 countries across six continents. Is it tougher to work with different labor laws and different wage structures than working in a single country? Can you expand on that a bit?
Coats complies with local legislation in every country in which we operate. In many cases we go beyond those local legislation requirements as we insist upon the highest standards of business ethics and employment standards globally. It is challenging for any business which operates in so many different countries but we have an advantage in terms of the experience and diversity of our senior management team which includes over 100 members from 25 different nationalities. They have a deep understanding of local markets and help us to ensure that we provide all our employees with appropriate terms, conditions and benefits.
Let me ask you this, counterfeit/inferior products often affect the sales. Does this problem persist in the case of threads and zippers and what is being done to overcome this problem?
Counterfeit/inferior threads and zippers would not have a direct impact on the sales of our products as such but we are very aware of the impact counterfeit/inferior products have on the sales of our customers.
It is often inferior thread, threadwork quality and zippers that are the most obvious signs of a fake product so we are looking at how they become part of the solution, for instance by developing a security system that allocates a unique code to individual brands that can be secretly and permanently inserted within sewing threads used in selected seams in apparel, footwear and accessories.
Sourcing is important for big companies. How do you identify from where and what to source?
In the last decade there has been an unprecedented shift in the geographic focus of our industry: slowing growth in Western Europe, North and Latin America contrasts with the exponential growth in Asia. Given our customers need to receive supplies within a short lead time, our operations are inevitably shifting eastwards to be in closer proximity to our customer base.
However, the bigger issue is around responsible sourcing across our end-to-end supply chain. The reputation of any company is at risk if its suppliers are not behaving responsibly and the larger the brand, the bigger the cost to its reputation.
Published on: 23/12/2013
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
