Scotland's cashmere factories shrug off trade war fears for record year

SCOTLAND'S KNITWEAR producers are celebrating an extraordinary turnaround in their fortunes after revealing record sales during a year when many expected to go bankrupt in the so-called "banana wars".

Cashmere factories in the Borders town of Hawick are working around the clock to meet US demand for what was once considered a luxury material but which has recently been adopted by mainstream fashion outlets.

Six months ago they faced catastrophe as the US government threatened to impose massive tariffs on Scottish cashmere to force Britain to back greater access to Europe for bananas from Latin America. Only an 11th hour appeal by the Prime Minister Tony Blair to US President Bill Clinton stopped the move and saved the industry.

"Ironically, the banana war was the best thing that could have happened to us," Columba Reid, managing director of Clan Douglas of Hawick, said yesterday. "It probably created a greater awareness of Scottish cashmere in America. Suddenly the hand that was going to jump up and choke us has begun to feed us again.

"This has been a record year for us. We're bursting at the seams, working seven days a week. We have purchased another factory and hope to expand next year."

Mr Reid said fashion designers had begun working in cashmere because the woollen raw material had fallen in price over the past five years as Mongolia's goat population has doubled. Cashmere wool is combed in the spring from the winter fleece of goats, mainly in Mongolia where the severity of the winter produces the finest threads.

Both The Gap and Banana Republic, which has 300 stores in the US aimed at younger consumers, had begun selling cashmere goods manufactured in Asia, which has had the knock-on effect of creating a taste for the finest material produced in Scotland.

"What happens," said Mr Reid, "is that young people find they are in the Ford Mondeo of cashmere and they can see that if they want a Jaguar they have to buy material made in Scotland."

Rony Rathie, production manager of Johnston's, another Hawick factory, was also upbeat. Last March, he was expecting 1,000 of Hawick's 16,000 population to be on the dole by now. "We will lose customers for ever," he warned at the time.

Yesterday, he said: "This has been a very good year for us. There was other business out there for us but we have been working at capacity and we could not take it on."

However, both he and Mr Reid warned that the boom means raw material costs are due to rise by 30 per cent next year. "We hope that the new- found taste for cashmere will survive a rise in price," said Mr Rathie.