Korea’s Samil Spinning has acquired US compamy Buhler Quality Yarns. As the US takes aggressive moves under its protectionist policies there has been a growing need to secure a production facility in the country. This led Samil to acquire an American company.
The American withdrawal from the Trans-Pacific Partnership was a major contributor to the acquisition. Samil was originally considering Vietnam or the US as possible options to set up its overseas production base. The deal allows the Korean midsize company to directly enter American markets without being held back by tariff barriers.
The US has been enforcing a protective rule of origin in the textile industry, dubbed the yarn forward rule, which means only apparel using US-produced yarn textiles can be sold in the market free of a 32 per cent duty. The acquisition grants Samil Spinning a US-based facility, thus freeing the company from high tariffs. Buhler Quality Yarns is an American subsidiary of Switzerland’s 205-year-old yarn maker Hermann Buhler.
Samil Spinning can also make use of the free trade agreement between the Dominican Republic and Central America to expand its customer base as apparel produced in member countries using US-made yarn is treated equally as US-produced apparel products.