Preserving Fiber Characteristics Is The Path To Profitability
August 23, 2013 Among all of the sectors in the cotton industry, none has adopted sustainable practices into everyday business as effectively as ginners. Sustainability gets a lot of attention across all types of media, whether geared toward the business community or general population, but it often feels as though it hasn’t really become a core part of business activities.
When discussing the state of the ginning industry among Cotton International readers, however, it quickly becomes evident that concerns like power and water usage, waste production and environmental stewardship are everyday concerns in today’s successful gins.
Given the enormous pressure cotton is under from competitors – both on the farm in the form of food crops, and in the retail world in the form of synthetic fibers – that also includes financial sustainability.
The Successor to Volatility
As little as two to three years ago, every sector in the cotton supply chain was focused intently on market volatility, for understandable reasons. But as prices have moderated over time and are now relatively stable, ginners around the world are working to lay the groundwork for success in an ever-increasingly difficult business environment. Sustainability in the form of business operations, the environment, and the labor pool get a lot of attention from ginners, but that doesn’t mean that progress is coming quickly or easily.
The biggest challenge is that each of those initiatives directly impacts the other areas. Reducing waste and increasing energy efficiency are easily enough achieved in a vacuum, but they involve huge financial investments, changes in daily processes and regular monitoring to gauge progress. No matter how high a priority sustainability is for a business, big changes require careful planning, investment, and 100% buy-in from upper management, or they will never truly be adopted into everyday business processes.
Other top challenges include controlling the cost of production and establishing best practices. Competing crops at the grower level, the declining percentage of cotton in blends, and relatively low international prices are all lessening cotton’s attractiveness.
Problems Start with the Supply
Ginners have no income if there’s no cotton, so they need farmers to plant it. But there are two primary factors that are making cotton a less appealing crop for growers:
Input costs are up, with seed prices having increased substantially in many parts of the world.
Labor costs have gone up as well, and many growers simply can’t find enough workers at any price.
Even when growers do choose cotton, if they don’t adopt industry-recognized best practices, they pay the price, along with everyone else in the value chain.
“Insufficiently protecting fiber from water damage is a problem that can’t be corrected by anyone in the downstream industry,” said one ginner, adding that the failure to remove trash is also causing major problems, particularly in India and some in East Africa.
Both of those practices increase ginning costs and decrease fiber quality, damaging cotton’s profitability among the downstream sectors, and eventually, everyone who earns a living from cotton will suffer the consequences.
People in other sectors – spinners, weavers, garment manufacturers and brands – rarely have a solid understanding of the important role ginning plays in the value chain.
Ginners are not only the primary contact for farmers, but can have as great an influence on fiber quality as the growers themselves. When ginners are paid a good price for properly processing and maintaining the value of the fiber, they are able to pay better prices to growers, which strengthens cotton’s ability to resist the loss of planting space to competing crops.
Although they have a place in the world of apparel, retailer-driven programs like the Better Cotton Initiative and the promotion of organic fiber rarely have a positive impact on growers and ginners. The creation and adoption of best practices in ginning, on the other hand, would go a long way toward maximizing fiber quality and profitability.
Cleaning Up Cotton Fiber
One recent trend that would seem to be a boon for ginners has actually had the opposite effect: the increasing tolerance of trash among spinning mills, the ginner’s primary customer.
Spinning mills are accepting trash contents at very high levels. Facilities in Turkey routinely accept trash contents as high as 11%, while in Pakistan, spinners consider 8.5% as the standard trash percentage.
Those numbers are very high and encourage ginners not to clean cotton as much as they could, which in turn creates environmental issues when the trash spreads to all working areas in the factory.
Mills need to be aware that gins have modern equipment that can bring the trash content down to much lower levels – 2% to 3% is perfectly reasonable to expect – and that they should only accept cotton at these minimal trash levels.
“If spinners insisted on lower trash levels, it would actually improve the attitudes of ginners,” one Cotton International reader said. “The mills must also communicate with ginners about spinning parameters such as the blow room operation, count-strength-product (CSP) in yarn, and breakage rate, so the ginner is able to provide fiber that better meets those specific needs.”
Without that feedback, ginners are sometimes unaware that their own practices are lessening the value of the fiber, from the spinner’s perspective. For example, cotton fibers are adversely affected by higher temperature – a factor that ginners are easily able to control, once educated about the detrimental impact it can have on fiber properties.
That’s a lesson that applies to all ginners in all parts of the world. Even in the United States, where ginners are renowned for producing some of the cleanest fiber available anywhere, contamination is a challenge. Earlier this year, spinners began to report that bales coming out of U.S. gins contained multiple types of plastic.
A thin type usually consists of grocery bags that blow off of roads and into cotton fields. This type of plastic has been a problem for a long time, and gins typically are effective at removing it from the lint, although sometimes it slips through. Heavier and thicker plastic contaminants – such as the plastic used on cotton modules at harvest time to protect the fiber from water damage – are posing more of a challenge.
However, sometimes ginners can be their own worst enemies. Experts say that a significant percentage of the heavier plastic contamination gets into the cotton because ginners aren’t careful when they handle the cotton modules upon delivery. As with feedback from spinning mills about the fiber parameters they want, education would go a long way toward improving the situation, once ginners learn how to avoid contamination when handling the bales.
Issues on the Horizon
Some challenges simply can’t be eliminated no matter how much time and money are invested in education, process improvement and modern technology, most notably environmental changes and shifting weather patterns.
Consumers demand fine cotton, but fine cotton can only be produced if Mother Nature cooperates with growers.
When there are droughts, floods and other natural disasters, ginners get less cotton to process and thus have less income. That scenario is doubly damaging, because if there is shortage of cotton, world cotton prices could once again spike to the $2/lb level, and no sector is safe from the fallout from that type of volatility.
One challenge is completely under the ginner’s ability to control, but overcoming it isn’t cheap. Although large and often extremely expensive, maintaining the most modern equipment possible is a must for ginners looking to maximize their profitability.
The use of outdated ginning machinery virtually guarantees that fiber parameters will be sub-optimal, and that the ginner’s income will be, too.
On the bright side, modern ginning equipment can change not only bottom lines, but lives as well. Earlier this year, Olam International began construction on its state-of-the-art roller cotton gin in Mozambique – the first of its kind in the African country. Not only will the factory provide employment opportunities for up to 200 full time and seasonal workers, it will ensure that resource-poor growers obtain maximum value from their crop. Olam already had three saw gins in Mozambique and says the benefits to growers of this newest factory will be felt for decades. It’s expected to be up and running by the end of the year.
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