Energy Crisis Claims Anaheim Mills Corp.
The energy crisis continues to take its toll on the apparel industry as Orange County textile dyer Anaheim Mills Corp. this week joined a growing list of dye houses that have been forced to shut down as a result of crippling natural gas prices.
Anaheim Mills, a 12-year-old, $6-million-a-year firm that specializes in wovens and multibased fabrics, announced last Friday that it would temporarily lay off 125 workers at its 80,000-square-foot facility in Anaheim as it weighs its options for survival. The company has seen its gas prices skyrocket from an average of $30,000 to $40,000 per month to $150,000 to $200,000 per month over the past year. Its December bill alone topped $250,000, according tovice president Steve Lieberman.
The company joins Pico Rivera-based L.A. Dye & Print Works and U.S. Dyeing and Finishing, which in recent months have either shut down or pared down operations in the light of the energy crisis.
Anaheim Mills tried to stave off closure for several weeks by downsizing its energy needs and shutting down certain machines, but it wasn’t enough, said Lieberman. “We’ll try to reopen if we can secure a better gas contract, but we’ve been trying to do this for a long time,” he said.
The company, like most in the industry, had been securing its supply from Texas-based El Paso Gas Co., which is the target of a class-action lawsuit brought on by several industries. The Association of Textile Dyers, Printers and Finishers of Southern California (ATDPF) is among those involved in the suit, which is seeking damages from El Paso and its affiliates and Sempra, Southern California Gas Co. and San Diego Gas and Electric. The suit charges these firms with anti-trust violations, including price fixing and collusion. The defendants have blamed the energy crisis on California’s lack of infrastructure and limited amount of pipelines to transport enough gas to the market.
Industry observers see no immediate relief in sight, although organizations like the ATDPF are looking to Congress for help. ATDPF president Scott Edwards has been lobbying state congressmen to call on suppliers to cap rates at least temporarily.
“We’ve seen the wholesale price of gas rise 800 percent over the past year. Anybody who uses gas on a big level is not going to be able to absorb these costs,” said Edwards.
So far, several California congressional representatives have appealed to Department of Energy secretary Spencer Abraham to call on the regulating agency, the Federal Energy Regulatory Commission (FERC), to take a more pro-active stance in bringing prices down.
In the meantime, some apparel companies have been turning to other local companies and even East Coast sources for dyeing, printing and finishing as these sources have options besides natural gas, such as diesel fuel.
“Part of our appeal has been to be based close to our customers and we’ve had offers from out-of-state people to move, but that may not be worth it. In the long run, we might have to call it a day,” concluded Lieberman.
