Alok Plans to Open Mill ... in the U.S.
1st new U.S. spinning plant in over 20 years
May 16, 2013,
Arun Agarwal Alok
And it's an Indian company - Alok Industries - that is planning to do so.
Alok, which has grown its business substantially in the United States over the past several years and now ranks as the industry's third largest supplier with 2012 sales of $460 million, said it is now finalizing plans to reopen a closed mill in the American southeast later this year. Alok will bring in new equipment for the plant, which will supplement rather than replace production in India.
The company declined to be more specific on exact location or timing, but added that it was working with an unidentified American retailer on the project.
As labor costs in Asia have increased and lead times have become more of an issue for quick-to-market strategies, companies are increasingly looking at North American manufacturing options. Earlier this year, Ellison First Asia said it was working on an entirely American made bedding program. Other suppliers have resumed cut & sew operations in the United States, among them Home Source and Veratex. And there are still several spinning plants making yarn in the United States.
But this Alok initiative would still involve foreign production, according to Arun Agarwal, president of Alok International, the U.S. subsidiary based here. He said the new facility would be a spinning plant only, making yarn which would then be sent to Latin America for weaving and finishing.
Agarwal said it was a financial decision for Alok, which has large yarn spinning facilities in India. "Energy is driving this," he said, citing U.S. energy costs that are a fourth of what they are in India.
He also said that the availability of American cotton made the business model workable. While India is the second largest cotton grower after China, the United States is third and is generally considered to produce a better grade of cotton.
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