Quaker Opens New Facilities in Brazil

March 13, 2000

Boston, Mass – In order to elevate its earnings for 2000, the American mill, Quaker Fabrics, has made several important moves abroad. Notably, Quaker president Larry Liebenow said that the company has just opened a wholly-owned subsidiary in Brazil. The new facilities include a fabric warehouse and a distribution center.

Liebenow said that within the world market, the Mercosul region with Brazil at the hub, is potentially one of the ten best markets for Quaker's middle to higher end products. "It's an improving business," said Liebenow. "We believe it will become even larger for us than our business in Mexico – we expect to do in excess of eight figures in Brazil.''

Liebenow said that the company hopes to gain momentum from those activities in Brazil, in order to make an impact on other Latin American markets.

Quaker's claim on the potential of the Mercosul market is validated by the proliferation of furniture manufacturers in the area: There are about 2,000, according to Rodrigo Prieto, who will oversee Quaker's new operation in Brazil and who already heads up sales in Latin America. Prieto said manufacturers in the south of Brazil focus more on the better end of the market. Liebenow said that these furniture manufacturers are part of the market that Quaker is trying to profit from. Another, he said, is the fabric wholesaler/ retailer. Aleks Birman, hired by Quaker in January, will fill the position of sales manager there. Because Brazil alone is such as large territory, Liebenow said the company will gradually accumulate personnel in the area. We're going to hire another person to cover the south of Brazil, at least initially, and we intend to build a sales force there," he said.

"U.S. mills have been falling out of the international scene," Liebenow said. "Our activity in Brazil is an example of the extent to which Quaker is upping its commitment to the international market. It's a core part of our corporate strategy."

According to Liebenow, the company opened an office and a showroom in Dubai, U.A.E. Stephen Schroeder heads the office there. Quaker has also hired Mark Hacking as a sales representative in the U.K.

"Both parts of the business, domestic and international are growing," said Liebenow. "Our international business was off a little bit in '99, but we will make up for it in 2000 with the moves we're making," said Liebenow.

Liebenow attributed a combination of factors to Quaker's lower overseas numbers. "There was a very strong economic performance in the U.S., and there were a lot of problems in much of the world," he said. "That is changing. Most of Latin America, with some exception, is improving. The Middle East, with its higher petroleum prices is improving." He said that the far East, Brazil, Mexico and Europe in general were looking up.

Quaker is making noise in other parts of the world as economies improve. According to Liebenow, Quaker has been using two models for its export operations. In one, the company puts its own agents in the countries. The other is more extensive and involves putting facilities and operations in the country. "It's a model we've developed in Mexico over a number of years. In Mexico, we put our people on the ground in the country and we have an inventory team in country. We also have a fabric warehouse in Mexico City."

Liebenow said that exports account for about 15-20 percent of the company's turnover, a figure which Liebenow expects will increase in the near future. "There are just a few areas we haven't touched with exception of those in Indian sub-continent, like Pakistan," he said. "They will become more important, as Brazil will," Liebenow said. Meanwhile, Quaker's domestic business has remained steady. Liebenow said he believes that Quaker's turn-over this year will surpass its 1999 turnover of about $251 million. Liebenow said that chenilles continue to sell well for Quaker. "As well as the normal chenille, made of acrylic and rayon, we're also using linen, cotton, wool and camel hair," he said.

The company is also offering a range of washed goods at standard widths. "They won't shrink," Liebenow said. "I believe Quaker is the only company that is making this guaranty."

He said that the company has a large novelty spinning operation, which produces fabrics with "far superior performance to any chenille products." He said the company has also introduced expensive finished products.

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