Dyers, Finishers Seek Answers at Energy Summit
Southern California’s textile dyers and finishers, most of which are locked into long-term energy contracts at prices of at least five times the current rates, will be looking for solutions to their predicament during an “energy summit” on Nov. 8, when industry representatives meet with gas company officials at the Southern California Gas Co.’s Energy Resource Center in Downey, Calif.
The seminar, to run from 8:30 a.m. until 1 p.m., will be aimed at teaching energy efficiency, but the many textile industry representatives expected to show will also be looking to learn how they can break free from three-to-five-year contracts at prices averaging about $25 per therm. Many Los Angeles-area dyers and finishers negotiated these contracts early in the year when the price of natural gas was artificially inflated to about $75 per therm. Since then, prices have gone way down to about $3, and dyers and finishers want a piece of it.
“We’re paying much more than the current rates,” said Scott Edwards, president of the Association of Textile Dyers, Printers and Finishers (ATDPF). “We’re also having to buy credits from the Air Quality Management District for NOCs (nitrous oxide emissions), so many are having to pass off fuel surcharges to their clients.”
Local dyers and finishers are finding it more difficult to absorb these charges as the competition closes in. Offshore and out-of-state competitors are offering better prices and no fuel surcharges. Now, half the dyed clothing produced in California is sent out of state or offshore, according to the Los Angeles County Economic Development Corp.
“Some of those companies are doing samples for free, so it’s really hurting our [local] industry,” said Henry Licon, manager of L.A. Dye in Los Angeles.
The energy crisis has already claimed a number of top Southern California dye houses, including L.A. Dye & Printworks in Pico Rivera and Anaheim Mills in Anaheim Hills, which recently auctioned off their last pieces of equipment and machinery.
The remaining industry has had to adjust by limiting runs to only those that make it worthwhile, said Edwards. At the volume dye houses, smaller lots are too costly to keep machines going, so dyers are limiting those and some are also doing more basic colors like black and gray. According to some companies, runs of 300–400 yards were common before the energy crunch; now, the minimums start at 2,500–2,800 yards for some of the larger companies.
The smaller dyers are taking on small lots to pick up the slack and are surviving as a result.
“We’ve had our best month in a long time,” said Danny Kho, a representative of Elite Dyers in Los Angeles, which specializes in cotton-based apparel. “The good thing is we haven’t lost any customers. We didn’t carry any of the added energy costs over to the customers. We would have lost business.”
Cira Lim, principal at LA Corona dyers in Los Angeles, said the fabric dyers and washers are bearing the brunt of the hits because of their limited capabilities, so she and partner John Lim have added more services, including specialty washing, foiling and other processes, to the company’s mix. The company’s client list includes Calvin Klein, DKNY, Earl Jean and Frankie B.
According to Edwards, some companies are so desperate that they are breaching their contracts and going with different providers. They may face lawsuits as a result, he said.
“A lot of these companies locked in to three- and five-year contracts back in February and March when prices were around $75 per therm,” he said.
Breaking out of these contracts and getting new ones for these companies is something that the industry and the ATDPF have been working on for months. The upcoming energy seminar is just another step to getting the industry back on track.
