The Rupp Report: The Recovery Of Textile Production

The Rupp Report has informed its readers in recent weeks of hope and upswings in the textile
industry, at the moment mainly in Asia. Recent discussions with some industry leaders have
confirmed this trend: Mainly China and India, but also Brazil are recovering strongly. This trend
is now confirmed by information from the Switzerland-based International Textile Manufacturers
Federation (ITMF):

Third Quarter With Strong Rebound

ITMF reports that “the third quarter of 2009 confirmed the strong rebound of global textile
production observed in the previous quarter. Both global yarn and fabric production rose modestly
in almost all regions, especially in South America, while North America recorded stagnant output.
Global yarn stocks fell slightly as a consequence of significant lower stocks in South America and
Europe and despite slightly higher inventories in Asia. Global stocks of fabrics soared driven by
Asia and South America, while Europe and North America saw inventories fall. Orders of yarn and
fabrics in Europe and Brazil jumped significantly, especially in Brazil.”

Yarn Production

In world yarn production, South America takes the lead again. According to ITMF, “the global
yarn production rose in the third quarter 2009 by +1.3 percent as compared to the previous quarter,
confirming the impressive rebound of the second quarter (+22 percent). With the exception of North
America (-2.3 percent) all regions recorded increases, especially South America (+5.0 percent),
Europe (+4.5 percent) and Asia (+1.2 percent). Nevertheless, in comparison to last year’s quarter
only Asia experienced growth (+4.9 percent), while yarn production in North America, South America
and Europe were still considerably below last year’s levels (-24.6 percent, -5.3 percent and -4.5
percent, respectively).

Fabric Production

“Fabric production also grew worldwide by +1.2 percent in the 3rd quarter of 2009. Global
fabric production increased or remained stable in all regions. In Asia and North America fabric
production was unchanged compared to the previous quarter. Europe on the other hand recorded a
slight increase of +0.9 percent, while fabric production in South America surged by +18.1 percent.
Year-on-year global fabric production was up by +4.2 percent due to higher outputs in South America
(+11.8 percent) and Asia (+6.1 percent), while North America and Europe still recorded
significantly lower production levels (-17.1 percent and -17.9 percent, respectively).

Yarn Inventories

ITMF further reports: “Global yarn inventories were almost unchanged (- 0.6 percent) in the
third quarter of 2009 as compared to the previous one. Yarn stocks plummeted in South America by
-15.3 percent and decreased in Europe by -3.2 percent but remained stable in North America and rose
by +1.3 percent in Asia. On an annual basis yarn stocks were down by -2.3 percent globally with
South America, Europe and Asia seeing reductions of -10.3 percent, -3.4 percent and -2.0 percent.

Fabric Stocks

“The level of global fabric stocks jumped in the third quarter of 2009 worldwide from its
lowest level in years by +5.3 percent. While inventories in North America and Europe continued
falling by -7.7 percent and -1.5 percent, respectively, reaching new lows, those in South America
and Asia grew by +3.3 percent and +10.5 percent, respectively. In comparison to last year’s third
quarter, inventories rose by +2.2 percent on a global scale. This increase was a result of higher
stocks in Asia only (+9.8 percent), while those in North America, South America and Europe fell by
-18.3 percent, -3.8 percent and -3.3 percent, respectively.

Increased Ordering Activities

“In the third quarter of 2009 both yarn and fabric orders experienced a strong increase. Yarn
and fabric orders in Europe grew by +5.5 percent and +5.1 percent, respectively and those in Brazil
even jumped by +19.1 percent and +10.0 percent, respectively. On an annual basis yarn and fabric
orders in Europe were still down by -2.4 percent and -12.1 percent, respectively, whereas in Brazil
they rose by +6.6 percent and +4.0 percent, respectively.”

March 17, 2010