The Rupp Report: New Global Yarn And Fabric Production Highs

According to the latest information from the Switzerland-based International Textile Manufacturers
Federation (ITMF), global recovery in yarn and fabric production continued in the fourth quarter of
2009 to recover from their lows in the year-earlier quarter. Yarn and fabric production rose in
Asia and Europe, whereas South and North America recorded reduced output levels compared to the
previous quarter.

Low-level Production In North America

Production in North America reached its lowest levels on record for both yarn and fabric
production. Global yarn stocks dropped somewhat mainly due to lower inventories in Asia, while
those in the other regions remained almost unaffected. Global fabric stocks increased owing to a
considerable jump in South American inventories and a slight increase in Asia and despite decreased
North American and European inventories. Yarn and fabric orders increased in Europe and dropped
significantly in Brazil.

Increased World Yarn Production

World yarn output rose by 6.1 percent in the fourth quarter of 2009 in comparison to the
previous quarter. This is underlining the upward trend that could be observed since the first
quarter of 2009. While Europe and Asia recorded respective increases of 12.8 percent and 5.5
percent, yarn production in North and South America dropped by 2.6 percent and 10.2 percent,
respectively. In comparison the year-earlier quarter, Asia and Europe saw output levels
significantly higher, by 13.7 percent and 8.8 percent, respectively, whereas South America remained
unchanged and North America recorded a 9.5-percent drop.

World Fabric Production Rose

Fabric production grew worldwide by 4.0 percent in the fourth quarter of 2009. Again, Europe
and Asia recorded higher output levels, respectively, by 18.8 percent and 5.0 percent, while South
and North America reported significantly lower output levels, by 17.2 percent and 7.3 percent,
respectively. Year-on-year global fabric production increased by 9.3 percent as a result of
11.9-percent higher output in Asia. Europe and South America, on the other hand, recorded
production levels slightly below those of the previous year with respective decreases of 1.9
percent and  2.8 percent, while North America’s output dropped by 16.8 percent.

World Yarn Stocks Dropped

World yarn inventories fell slightly, by 0.9 percent. Asian stocks were reduced by 1.4
percent and Europe’s by only 0.1 percent. On the other hand, South American stocks rose by 0.4
percent. On an annual basis, world yarn stocks were down by 5.4 percent, with levels falling in
South America by 21.6 percent, in Asia by 5.5 percent and in Europe by 3.8 percent.

World Fabric Stocks At Their Lowest Levels On Record

Fabric stocks rose globally by 5.6 percent, with South America recording a big jump of 35.9
percent; and Asia, a small 1.5-percent increase. In Europe, inventories fell slightly by 0.2
percent; and in North America, by 2.6 percent — the lowest levels ever recorded in both regions.
Compared to the fourth quarter of 2008, global fabric inventories increased by 7.4 percent. South
American stocks soared by 30.8 percent and Asian inventories were up by 9.3 percent. On the other
hand, inventories dropped by 16.9 percent in North America and by 2.85 percent in Europe.

Recovery In European Yarn And Fabric Orders

In Europe, yarn and fabric orders continued to recover a bit, rising by 2.6 percent and 1.7
percent, respectively; whereas Brazil recorded significantly lower orders, with a drop of 12.4
percent for yarns and 27.0 percent for fabrics. On an annual basis, yarn orders in Europe and
Brazil were up by 4.3 percent and 16.8 percent, respectively, while fabric orders were down by 7.8
percent and -20.3 percent, respectively.

In the third quarter of 2009, both yarn and fabric orders experienced a strong increase.
Orders in Europe grew by 5.5 percent for yarns and 5.1 percent for fabrics, and those in Brazil by
19.1 percent and 10.0 percent, respectively. On an annual basis, European yarn and fabric orders
were down by 2.4 percent for yarns and 12.1 percent for fabrics, while orders in Brazil rose by 6.6
percent for yarns and 4.0 percent for fabrics.

April 21, 2010