Developing A Strategy
With more than 40 years of management and consulting experience in the textile and textile machinery industry on four continents, it has become very clear to me that working in a mature industrial environment requires establishing strategic goals along the value-added chain. These goals should focus on:
• Understanding the requirement of the end-user throughout the supply chain.
• Optimization of value added along the supply chain.
• The importance of brands.
FiberMax by Bayer CropScience has successfully used breeding and biotechnology to sustain competitiveness along the supply chain from producers to textile manufacturers and retailers.
For cotton producers, higher yields and measurable improvement in fiber quality translate to better profitability and market access. For textile manufacturers, higher quality fiber can reduce processing costs and improve the quality of yarn and fabric. Retailers desire these characteristics for marketing the end-product to the consumer.
The success of FiberMax is impressive compared to traditional cotton seeds. With these benefits to partners along the cotton supply chain, FiberMax now has a 27 percent market share in the United States, based on planted acres. Furthermore, these improvements will also have a positive impact on U.S. raw
cotton exports, which are estimated to increase by around 50 percent by the year 2020. (Source: Global Insight).
Impact Of Oil Prices
In addition to these strategic goals, U.S. cotton must continue to compete with synthetic fibers globally. Oil prices have been increasing and are likely to stay high, and this is more positive news for the American cotton growing industry.
Oil prices remain high because major oil producing countries need the high oil price per barrel to balance their “break-even” costs. Examples include: Russia ($110), Iraq ($100) and Saudi Arabia ($80). Only a decade ago Saudi Arabia balanced its costs with an oil price of $25 per barrel. (Source: Fareed Zakaria,