TNAG-0938-FCO40-1157-Visit-of-John-Nott--Secretary-of-State-for-Trade--to-Hong-Ko-1980 — Page 33

BRIEF 3 PART III

TOOTAL (MR AUDSLEY)

1

Tootal are the third largest textile group in the UK after Courtaulds and Coats Paton, generating a turnover of £390m in 1979/80. They are seventh largest worldwide and this geographical spread, together with the underlying strength of their thread operations, possibly enables them to weather the textile recession better than others. As in the other large textile groups, recent results have been disappointing and are attributed to growing import competition, high interest rates, weak consumer demand, and the strength of sterling, which affects both imports and exports.

2

Two-thirds of Tootal's operating profit arises overseas. The contrast between profitability at home and abroad leads Tootal to support more vigorously than most the approach to import controls adopted by eg South Africa, Australia and USA; and the renegotiation of the MFA on tough terms. But the company also has a strong interest in not encouraging an escalation of protectionism that would put their £57m pa of exports at risk, and in maintaining access to certain imported products eg fabric for its major printing operations.

3

Tootal are also stepping up their adjustment to current trading conditions by closing down or rearranging loss-making operations, and have recently reduced their UK workforce by about 3,000 to 14,500. Only two spinning mills now remain, and there has been a withdrawal from grey cloth weaving.

4

Printed textiles form a major part of the company's fabric

division. The division has been affected by the downturn in world demand which had reduced exports. Margirs are further squeezed by the strength of sterling. However, the company is anxious to build on its worldwide reputation for fabrics for workwear and uniforms. The Group's fashion fabrics are used by many of the world's most famous

dress houses.