Interview with Nick Hahn

Nick Hahn
Founder and CEO
Hahn International

Cotton world needs India, and India needs the world markets

Hahn International Limited (HIL) is a full-service broker, serving clients nationwide for over 20 years. It assists customers through the entire process of importing goods, ensuring orders are delivered on time and budget. HIL is a small, specialist firm focusing on natural fibre textiles with emphasis on value added branding, marketing and sales. It has a strong portfolio of carefully vetted service providers doing brand identity, social media, websites, graphic design and trade show exhibits. The company has experience with 501 and 501c3 trade organisations managing, fund raising and motivating, and a wide network of relationships within the global textile, fashion and retail community.

A whole lot of synthetic fibres are coming up. Do they pose a threat to natural fibre textiles? Or, do you think synthetics are critical to ensure that the demand for natural fibres does not go out of hand?

I do not think synthetics threaten natural fibres. On the contrary, they enhance each other with unique characteristics. Synthetics help naturals achieve wrinkle-resistance and make them stronger and more durable. Naturals enhance the aesthetics of synthetics making them softer, more luxurious and enhancing appearance. Natural fibres "breathe", helping synthetics become more comfortable to wear.

In terms of environmental sustainability and usage across industries, how do synthetic fabrics fare vis-a-vis the natural?

Degradable natural fibres have an advantage over synthetics when it comes to the environment. That said, there are developments in the pipeline to aid the environmental sustainability of synthetics.

You have been in this industry for more than two decades. How do you expect the natural fibre niche to grow in the years ahead? What are the main problems plaguing it? And what is the path that needs to be followed globally to solve the issues?

You can't bunch all natural fibres together in this statement. Cotton, for example, is hardly a "niche" fibre as it owns approximately 40 per cent of the world's fibre market. Cotton, like other farm-bred fibres like wool, cashmere, alpaca, silk, vicuna, and coir, has performance characteristics that have never been duplicated by synthetics. At best, they have only been imitated. I expect all textile fibres to expand with increases in world population and growth of the middle class with disposable income. For natural fibres, the issue is production impacted by weather and price. Naturals are traded on commodity markets and prices fluctuate according to the laws of supply and demand. These fluctuations cause problems for the spinning mills when they forecast their costs.

With so many years and a number of designations across various companies and associations in textile, what next do you aspire to accomplish in your career?

My strength is in developing ingredient product brands for commodity textile fibres. Think Intel inside a computer, NutraSweet in a Diet Coke, Apple in a smartphone, Gore-Tex in a ski jacket etc. I built US cotton into a global brand -- Cotton: The Fabric Of Our Lives -- by recruiting the best staff and marketing help I could find. I also believe in nation branding, such as New Zealand Dairy, Swiss Chocolate, French Wine, Italian Silk, Mongolian Cashmere etc. This strategy can build a quality image for a given product within a country skilled at producing that product.

As an expert, what is your opinion on the textile industry in the USA?

Our industry suffered a major meltdown with most of our mills closing their doors in the 80's and 90's due to the needle trades (apparel) moving off-shore to low wage countries in Asia, Latin America and more recently, sub-Saharan Africa. We are seeing some recovery at the high end of the market but I don't see mass produced commodity products being made in the USA in the foreseeable future.

Countries resort to the practice of stockpiling cotton, which affects cotton prices the world over. What steps are needed to deal with it?

Stockpiling is a tried and tested strategy for holding a product off the market until the law of supply and demand kicks in and prices recover. This practice is an individual business decision and changing this strategy will be difficult. As you examine the supply chain, you realise that more than one link (farm, gin, spinner, knitter, manufacturer) could be stockpiling and/or reducing or expanding production to manipulate the market and through that, prices. The present situation in the oil business is a classic example. The Saudis are holding production down to make oil less profitable for the Iranians and Russians. I don't know how you can change this.

Do you expect textile logistics prices to come down in the near future because of low oil and gas prices globally?

Probably. But that said, it assumes that mills will pass on energy savings to their customers. By no means is this assured. Look at the airline industry: Fuel costs have dropped dramatically but ticket prices have held steady. The airlines are driving those reduced fuel costs to their own bottom line. Mills and manufacturers may do the same.

Thanksgiving and Black Friday sales were disappointing as compared to Cyber Monday sales. Does this indicate the onset of the virtual era in retail and the role of physical stores going down globally?

You're right. Brick and mortar sales were off and on-line sales continued growing, especially for branded products that consumers are familiar with. Fashion apparel is less susceptible to internet shopping. Consumers still like to see, try-on and feel the goods. We've recently seen Amazon decide to build their first brick and mortar store in New York City. Their strategy is to have a physical location where consumers can pick up orders, try on apparel and return things. It seems Amazon, the largest on-line shopping portal in the world, believes integration between physical and digital is the way to go. I recently saw a TV interview with the CEO of Wal-Mart. He said the same thing. They are aggressively kick-starting their on-line sales capability while finding ways and means to integrate with their thousands of physical locations around the globe.

Any plans to visit India in the near future? What is it that the world seeks from India, when it comes to cotton? What are the issues they face and what can India do to tackle these problems?

I have no current plans to visit India but would love to be invited to do so! India represents over 1.2 billion people, and is second only to China's 1.3 billion. The world's economy will continue to be guided by both countries as producers and consumers. The educated middle class in India dominates the global on-line service industry due to a propensity for software development and application combined with English language skills. My guess is, we'll see India take a leadership role in cotton production once the small, independent farmers organise into trade associations and/or marketing cooperatives. This consolidation is inevitable and will result in more efficient cotton production using high tech techniques like drone surveillance, BT cotton planting seeds, computer guided ploughing, planting, harvesting and spraying. The cotton world needs India and India needs world markets. The issue is scale and sophistication. Right now, your producers are small and uneducated. This can change with enlightened leadership and consolidation. I predict we'll see both in the not too distant future.

Published on: 23/12/2014

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.