L.A. Dye & Print: Closure Could Be First of Several
News that one of Southern California’s largest dye houses, Pico Rivera, Calif.-based L.A. Dye & Print Works, will be closing its doors in the face of escalating natural gas prices has some speculating that more dyers and finishers will soon close if an end to the current energy crisis is not found.
“There are other large [printers and dyers] that are on the precipice that may be falling any day,” said Scott Edwards, president of the Los Angeles-based Association of Textile Dyers, Printers and Finishers (ATDPF). “I don’t want to give the names but you’re going to see more of the larger firms falling imminently because of the outrageous price of natural gas.”
Natural gas prices have been rising steadily over the past five months to their current rate. Natural gas earlier this month was priced at $17.50 per decatherm up from $14.12 per decatherm in December 2000 and up from December 1999’s rates of $2.41 per decatherm, according to Edwards.
Dyers and printers are particularly hard hit by the prices because they operate under very slim margins, according to Edwards.
Both large and small companies are at risk. “When you get a seven-fold increase in your gas bill, proportionate to your size, that’s a big chunk of change,” he said.
Edwards said other large firms on the scale of L.A. Dye & Print may also opt to close rather than continue operating during the crisis and smaller firms may wait-out the crisis and risk being forced into bankruptcy if the prices remain at their current levels.
“In a smaller entrepreneurial business, you become emotionally wrapped up in it and you don’t make a cold, calculated decision to fold because it’s your life and your livelihood on the line,” he said.
The natural gas crisis has been overshadowed by the electricity crisis in California, which has affected a great number of consumers in the state, but the two are interrelated. Gov. Gray Davis recently proposed opening new electricity-generating plants in an effort to ease the electricity crisis, however these plants would rely on natural gas to generate the electricity, causing further escalation in prices for consumers and businesses.
“That’s an important link and I think that message is finally getting through to the people in government,” Edwards said.
Large-scale closures such as L.A. Dye & Print should also underscore the scope of the crisis to state politicians, Edwards said, noting that his organization has been trying to persuade the state to put a cap on the rising price of natural gas.
“As more of these plants close, there will be more pressure put on the federal government to have the Federal Energy Regulatory Commission cap the wholesale prices,” he said. “And that’s what we need to survive here. We need some stability in the marketplace.”
