Where Quality Counts

he 10th anniversary of Buhler Quality Yarns Corp. in Jefferson, Ga., is a celebration of
quality — quality product, processes and people. Although 10 years is not an incredibly long time
in an environment of textile companies often more than 100 years old, the anniversary of Buhler’s
opening in 1996, and growing during the textile business turbulence of the last 10 years, is worth

Buhler crafted its business plan from the global perspective that cotton, and the market for
cotton yarn, was in the United States. Buhler would enter manufacturing in the United States
bringing fine-count spinning expertise from its Switzerland-based Hermann Bühler AG parent.

In the early days, Buhler was off to a strong start. With its spinning operations set up to
supply large weavers and because of a recent expansion, the company’s prospects were good. However,
by 1999, all bets were off. “We had just expanded and we were really positioned for big weaving,
but in 1999 things went sour and the business went East, not South,” said Werner Bieri, Buhler’s
president and CEO. “We needed to quickly change our plan.”

Shifting Quickly

Change Buhler did, swiftly refocusing on supplying fine-count yarn to knitters and developing
an export business serving Central and South American companies. The building block was American
Supima™ cotton — the company’s complete supply of which continues to come from one source: the
Pasadena, Calif.-based J. G. Boswell Co.

“J.G. Boswell is the largest Pima grower in California’s San Joaquin Valley, with about 25
percent to 33 percent of all Pima cotton grown in the Valley,” Bieri said. “What makes this cotton
very valuable is the fact that Boswell controls the process from seed to selling the ginned and
specially packed bales. Through controlling the whole process, they can supply a consistency in
quality over 12 months, which is hard to match by others.”

Premium extra-long-staple Supima was, and continues to be, a successful platform for the
company, but Bieri sees challenges ahead. “We need to diversify. Boswell supplies highly consistent
and high-quality cotton. With the Engineered Fiber Selection (EFS®) system, supplied by Cotton
Incorporated, we have not had a major complaint regarding quality or consistency in the two years
the system has been in full swing,” he said. According to Cary, N.C.-based Cotton Incorporated: “
The EFS system is a high-tech computer-based cotton-management system that, through the use of high
volume instrument (HVI) data, provides optimized cotton purchasing, warehouse management and
laydown selection solution. The EFS solution assists management analyzing mill and end-product
cotton requirements to improve inventory management, spinning quality, and end product quality. It
also provides electronic communication between and among mills and merchants.”

“Supima cotton, however, is being exported to Asia and coming back as finished goods,” Bieri
said. “This will drive us to further diversify in order to compete. We just invested $1 million in
a new opening line, and this allows us to develop and produce MicroModal® blends with Supima as
well as 100-percent MicroModal yarns and other blends.”

The Buhler Group worldwide is reportedly the largest consumer of Austria-based Lenzing AG’s
MicroModal fiber for apparel. Although the fiber has presented challenges in production, it
presents an opportunity for the retailer to offer another differentiated premium product to the

Lenzing — maker of Lenzing Modal®, MicroModal and Tencel® — has positioned MicroModal as a
premium soft-touch fiber based on beechwood, a renewable resource. The fiber’s properties,
including its performance in dyeing and fastness, make it an excellent blending partner for premium
long-staple cotton.

Retailers Key

The diversification brings opportunities, as well as pressure on sales and marketing to
explain the Buhler advantage. “We can really help the retailer with critical programs where being
more consistent and reliable pays off,” said David Sasso, vice president, sales. “We are known for
the fine counts, but we show the impact of yarn on the quality of the garment. We have a
relationship focus, and we really need to explain the opportunity with premium products.”
MicroModal broadens Buhler’s offering while maintaining its premium focus.

“Right now, about 50 percent of the MicroModal goes into garment dyeing, so that shows you it
is quick-turnaround — fashion,” Bieri added. “It isn’t in the big-box retailer yet. It looks good
and it feels good, that is probably why a primary market is ladies’ tops.

“We need to convince the retailer that it is to his benefit. Why should he pay more? He needs
to increase sales volume, he needs growth — we need to convince him that he can make a better
margin, have fewer write-offs. We are going the extra mile, making product, doing trials. What
happens when the product is washed and worn five times? Ours looks like the original and often even
feels better. The other one is twisted, it’s torqued, it’s wide, it’s short,” Bieri added.

Victor Almeida recently joined Buhler as a textile engineer in customer support. His role
allows Buhler to follow the yarn through the supply chain, solving problems and helping refine the
manufacturing process. “Victor has helped us become not just someone who sells the yarn, but
someone who provides the know-how in subsequent processing,” Bieri said.

Regarding the addition of the MicroModal line, Almeida said: “It is luxurious but maintains
the comfort factor. The absorbency makes it very, very comfortable on the skin.”

“I broadcast to my customers that we could now supply MicroModal efficiently in this
hemisphere and had a great response,” Sasso said. “Some asked, ‘How can Central America compete?’
At Buhler, we know that MicroModal is a very limited fiber.” Sasso went on to explain that this
scarcity helps Buhler-supplied retailers differentiate themselves from their competition.

“Over time we have proven ourselves and we often get the more critical programs where the
retailer can’t risk a yarn choice just because it may be cheaper,” Sasso continued. “We are working
with an intimate apparel company on a program in Mexico. Hopefully, if that fabric turns out right,
they will pull that program out of China and put it in Mexico.”

David Sasso (left), vice president, sales, and Victor Almeida, textile engineer, customer
support, with bales of J. G. Boswell cotton

Lean And Efficient

Touring the Buhler facility, one gets a quick sense of a limited inventory of raw materials
on hand. Virtually every machine is running at full speed. There is also very limited staged
product on the floor with limited finished inventory. “We have very low carrying costs and turn our
inventory 70 times a year,” Bieri said. While other spinners may spin for inventory in counts that
are big sellers, Buhler is a spin-to-order business.

Buhler President and CEO Werner Bieri

The Future

“In 1991, I went to a show in Hong Kong for the first time,” Bieri said. “I had yarn with me.
In 1992, I didn’t have yarn, I had fabric with me. And now, I was in California recently, and we
have people who say ‘Can you show us garments?’ They don’t even want to see the fabric. ‘Show me a
finished garment.’ And that is part of what we need to do.

“Everyone is pushing everything back. The retailer doesn’t want inventory, but wants quick
supply. The garment people don’t want to keep fabric inventory, and the fabric supplier doesn’t
want to keep inventory of yarn,” Bieri said. And he sees other challenges. “The process needs to be
controlled — the chemicals can’t be changed to cut a corner — but changed to upgrade and to invest.
That is a big challenge and a change in the mindset.”

Have 10 short years changed Buhler? “I think we have learned to forget the business plan and
to not just focus on one issue,” Bieri said. “Keep your eyes open. Have a plan, but be willing to
specialize — to invest. David [Sasso] is creative and working with the brands and retailers; Victor
[Almeida] is technical and bringing in ideas and know-how,” Bieri continued. “We cannot be
everything to everybody. The products and processes need to fit. They need to be market-driven and
fit within the economics of scale, which is different for every mill.”

January/February 2007