INTRODUCTION

Thank you for inviting me to meet and talk with you about cashmere and the Cashmere & Camel Hair Manufacturers Institute.

CCMI was established in 1984 to promote the use of genuine cashmere and camel hair products and to protect the interests of manufacturers, retailers and consumers of these products.

The 17-member organization is made up of most of the major cashmere processors throughout the western world and Japan.

CCMI is the leading authority on domestic and international issues concerning these luxury fibers and provides advise on labeling, international standards, supply and market trends.

The goal of CCMI is to promote and protect the image and integrity of cashmere and camel hair textile products through:

Government Relations

Product Testing

Industry Relations

Media Relations

Today, CCMI's primary objective is to maintain the integrity of cashmere and camel hair products through education, information and industry cooperation.

In recent years, the CCMI has become more of an international organization with the majority of its members based in Europe and Asia. In fact, in 1998, CCMI established its first international office in Milan, Italy.

CCMI was formed was to combat the growing influx of garments coming into the USA claiming to be genuine cashmere, but in reality weren't

Mislabeled cashmere is as much a problem today as it was in 1984.

The problem of mislabeled cashmere has and continues to tarnish the reputation of the product itself, as well as the companies who make and sell the garments.

As worldwide demand for cashmere continues to grow, the availability of mislabeled, adulterated cashmere garments has grown.

Adulterated cashmere garments are often blended with other fibers, particularly wool.

Cashmere is the fine fiber that comes from the soft undercoat or under layer of hair of a goat.

The primary producers of cashmere are China, Mongolia, Iran and Afghanistan.

Cashmere is an extremely rare fiber and is available in limited supply. One goat yields an average of four to six ounces of fiber. It takes 32 ounces of fiber to make one sports jacket and 10 to 12 ounces of fiber to make one two-ply sweater.

In 1999, 11 million kilos of raw cashmere was produced worldwide, compared to 1,376 million kilos of clean wool fiber.

There are five primary steps to cashmere production:

Collecting-Cashmere fibers are collected by either combing or shearing the animal during the molting season. Goats molt during a several week period in the spring.

Sorting/Scouring-Hand sorting for coarse hair takes place. After sorting, the fiber is washed to remove dirt, grease and any vegetable matter gathered in the collection process.

Dehairing-The scoured material is then dehaired. This step removes vegetable matter, dandruff and the coarse outer guard hair. At the end of this process, the cashmere is ready to be spun into yarns for weaving and knitting, the fourth and fifth steps.

Today, China produces more than half of the world's cashmere (53 percent) while Mongolia produces nearly a quarter (24 percent) and Iran/Afghanistan produces about one fifth (18 percent) of the fine fiber. The remaining 5 percent is produced in Turkey, Pakistan, and Commonwealth of Independent States, Australia, New Zealand and India.

Demand for cashmere continues to grow worldwide. As a result, the demand for the raw material is on the rise; as is the price.

China has developed its dehairing and garment making industry to the point of over saturation. The Chinese do not produce enough cashmere to run their own machines at full capacity. As a result, the Chinese are buying cashmere from other markets, creating increased competition with local and Western buyers.

The price of cashmere naturally has gone up. In December of 1998, when the most recent down side of the cashmere market cycle hit its lowest point, dehaired short white Chinese cashmere for weaving was at $20 to $22 per kg. and the longer knitting types were at $45 to $50 per kg. Over the last 18 months, the price reached $75 to $80 and $130 to $140 per kg. Respectively. Mongolian and Persian fibers followed suit in the price rise.

Unfortunately, we expect to see significant price increases in the year ahead due in part to a decrease in animal production in China and Mongolia. Last year brought drought conditions and a harsh and early winter to these regions resulting in the loss of many animals.

In 1999, Chinese mills absorbed some of last year's material price hikes in an effort to maintain their business relations with Western buyers rather than raise prices to cover increased costs.

They did this by blending new materials with older materials from the 1998 and 1999 clips thereby keeping the average fiber price down. However, as business is being considered for the 2001-2002 buying season, the supply of 1998 and 1999 cashmere is gone and the Chinese are relying on the 2000 clip to determine prices. As a result, we expect to see big price increases for cashmere in the year ahead.

The increased competition and demand for fiber has resulted in increased product contamination. Sheep wool is being blended with dehaired cashmere and the fibers are being sold as 100 percent cashmere. These fibers are being sold to Chinese sweater mills and to Western buyers. As a result, more mislabeled garments are expected to be found in retail stores in the months ahead.

Retailers need to be aware of these problems and be more cautious about what they order and from whom they order merchandise. Retailers also need to take more responsibility to assure that the merchandise they purchase is what the manufacturer claims it to be. Here are some ways retailers can protect themselves from mislabeled merchandise:

Work with reliable suppliers

Obtain reports of fiber content from suppliers

Regularly test goods before taking delivery to verify supplier information

Obtain information on where the fabric and garment were made

Review labels and hang tags carefully; fiber content should be stated precisely in order of predominance

Look out for special tags on the garment sleeve

Be wary of bargains; genuine cashmere will be expensive

Federal and state laws hold retailers responsible for the accuracy of the label information on the garments they sell.

The Wool Products Labeling Act protects consumers from deceptively labeled wool fabrics and mislabeled wool garments. The Federal Trade Commission's Bureau of Consumer Protection enforces this.

The following labeling information is required to appear on any garment containing wool. This also applies to cashmere and camel hair garments.

Wool products must be labeled in order of predominance with percentage of total fiber weight of wool, recycled wool and each fiber other than wool

If a garment contains a minority percentage of a fiber such as cashmere, it is unlawful to feature the word "cashmere" in such a way as to mislead the consumer by suggesting that all or a majority of the garment consists of the fiber.

When a generic name or a fiber trademark is used on any label, complete fiber content disclosure with percentages of all fibers present must be provided on the label.

The country of origin of the garment must be stated and if made in the USA of imported fabric, the label must state this.

All information must be in English.

The word "all" or "100 percent" can be used with the correct fiber name when the garment is composed of one kind of fiber.

Labels must be visible and securely affixed to each garment and must remain on the garment until sold to the consumer.

Retailers need to also be aware of how they promote cashmere products through advertising and in-store signage. Deceptive use of the word "cashmere" to promote a blended product is unlawful. When the word "cashmere" alone is used in promotions, it must be for a 100 percent cashmere garment and not a blend.

European regulations generally conform to these principles as well.

Garment testing is the best way for retailers to know what they are buying and protect themselves from mislabeled merchandise.

CCMI offers a fiber content testing service to retailers, manufacturers and its members. This service can be useful when you plan to:

Buy for a new season

Use a new supplier

Expand and upgrade product lines

Evaluate competitors' products

CCMI's testing service has been available since 1986 to US retailers. Today, the service is available worldwide. Have prepared our brochure and list of labs in Italian, Japanese and English and distributed to retailers in the USA, Canada and overseas.

We work with more than 14 labs around the world that are experiences and qualified in fiber content testing of luxury fibers. These labs have participated in international round trials to qualify.

Most common tests available for fiber content identification include:

Optical microscope

Scanning electron microscopic

DNA.

CCMI has found that the optical scan is usually sufficient to determine if a garment is accurately labeled

There are a number of parameters for identifying animal fibers.

Cuticle or scale: key in identifying cashmere from wool

Pigmentation

Medullation (a medulla looks like a honey-comb)

Diameter

There are many different types of wool fibers.

Merino-relatively short and fine; 20 microns or finer

Downs-a medium wool

Long Wools-used for carpets or Shetland wool sweaters

Regardless of the type of wool, the scales are usually quite pronounced. With the SEM you can measure the thickness, making it an objective test. Compared to cashmere, the scales usually are shorter and there is a kind of mosaic pattern.

Cashmere fibers (these are from Chinese goats) Double coated, dehairing.

Fine white cashmere. Scales are less pronounced than wool, longer, coronal pattern (crownlike, encircling the fiber). Many sweaters have fibers that look like this.

Brown cashmere.

Processed cashmere-The appearance of cashmere changes if it is heavily worked particularly in woven goods. Carbonizing fulling (acid treatment to remove vegetable materials) In this slide you see some damage to the scales, and perhaps some lifting up of the scales. More wool-like. But the scales are still less pronounced, longer, coronal.

It still differs from heavily processed wool.

Recycled cashmere-The results are fibers which have been hacked (partial cleavages or Simi-ruptures) or shortened

We expect the worldwide demand for cashmere to be strong again this year. Unfortunately, consumer's willingness to purchase cashmere products next season may be compromised due to anticipated major price increases.

The decrease in animal production in China and Mongolia this past year has resulted in a limited supply of quality cashmere. Therefore, we will continue to see aggressive competition for raw materials, which could push the price of cashmere even higher.

This situation will be an invitation for unscrupulous mills and suppliers of cashmere products to produce adulterated and mislabeled cashmere and cashmere blend garments.

In the months ahead, it will be more important than ever for retailers to monitor their suppliers closely to make sure the cashmere goods you purchase are indeed what you think they are.

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