Authorised Learning Centre

ACIIT INSTITUTE, Ludhiana. Learning Centre Code No. 1788

FUTURE PROSPECTS OF POLYESTER YARNBY

ANURAG VARSHNEYRoll No.: 510928963A project report submitted in partial fulfillment of the requirement for

MASTER OF BUSINESS MANAGEMENTOf Sikkim Manipal University, INDIA

Directorate of Distance Education

SIKKIM

MANIPAL

UNIVERSITY

Of Health, Medical & Technology Sciences Syndicate house, Manipal 576 119

I here by declare that the project report entitled

FUTURE PROSPECTS OF POLYESTER YARNSubmitted in partial fulfillment of the requirement for the degree of

MASTER OF BUSINESS MANAGEMENT

To Sikkim Manipal University, INDIA

Is my original work and not submitted for the award of any other degree, diploma fellowship, or any other similar title or prizes

Place: LUDHIANA Date: 26/12/2010

ANURAG VARSHNEY Reg. No.: 510928963

The Project Report of

ANURAG VARSHNEY

Is approved and is acceptable in quality and form

Internal Examiner

External Examiners

(Name, Qualification and Designation)

(Name, Qualification)

This is to certify that the project report entitled

FUTURE PROSPECTS OF POLYESTER YARNSubmitted in partial fulfillment of the requirement for the degree of

MASTER OF BUSINESS MANAGEMENT

Of Sikkim Manipal University, INDIADistance Education Wing

SIKKIM

MANIPAL

UNIVERSITY

Of Health, Medical & Technology Sciences

ANURAG VARSHNEYHas worked under my supervision and guidance and that no part of this report has been submitted for the award of any other degree, Diploma, Fellowship or other similar titles or prizes and that the work has not been published in any journal or Magazine.

Certified M. VENUGOPAL MBA MANAGER RELIANCE INDUSTRIES LIMITED

TABLE OF CONTENTS: Executive summary i) Introduction

ii) Objectiveiii) Methodology. iv) Analysis v) Conclusions vi) Recommendations. Part I. Company Profile

i) Brief Introduction of a company ii) History (very brief) of the organization.

PART IIProject overview i) Introduction.

ii) Objectiveiii) Methodology iv) Analysis v) conclusions vi) Recommendations. Part III i) Appendix ii) Bibliography iii) References iv) Glossary Note: this is only suggestive but not exhaustive

EXECUTIVE SUMMARY 1. INTRODUCTION

1.1 INDIAN MANMADE FIBRE INDUSTRY Initially, a company engaged in the production of manmade fibres has the option to set up the largest capacity that the market can absorb, decide the level of participation in the manmade fibres chain, and use the most cost-effective technology. To a large extent, these factors determine the profitability and cost structure of a manmade fibre company, while later efforts are focused on managing the facilities efficiently and effectively. Currently, the Indian textile industry accounts for 9.0% of the global textile fibres production. India is the fifth largest manmade fibre producer in the world, after China, South Korea, Taiwan and Japan. Of the global production of around 24.0 million tonnes of manmade fibres, India

produces around 1.5 million tonnes. Thus, Indias share of the world manmade fibres output is low at around 7.0%.The demand for polyester in the domestic market increased at the fast pace of over 15% during the 1990s. Currently, polyester accounts for a significant 38% share of the countrys total fibre consumption (for ultimate use in the domestic market, the share is even higher at more than 50%).Further, the weaving industry, being weak, finds it difficult to export synthetic fibre based textile goods (the cotton and cotton-blend textiles and clothing are exported from India mainly on the strength of low raw cotton prices). Thus, with textile trade coming under the World Trade Organisation (WTO) regime, the Indian manmade fabrics and apparel industry would have to measure up to the challenge of imports (fabrics and apparel are under a higher threat from imports than other forms of textile) as also a domestic manmade fibres market that is getting increasingly saturated. The Indian manmade fibres industry has a pyramidal structure, i.e. there are many companies with capacities while only a few have large capacities. The entry of very large integrated players have not only

turned the small players sick, but also hurt the medium capacity players who are showing poor financial performance. The stock prices of these middle-capacity players have taken a severe beating, making them good targets for acquisition by the financially strong players. Already, market leader Reliance Industries Limited (RIL) has acquired various mediumcapacity players in the Indian polyester filament & fibre industry (like Raymond Synthetics, ICI and DCL Polyester; JCT Fibers, OSL,IPL and BRPL). The acquisition of small capacity players is expected to lead to an overall decline in the number of players in the Indian manmade fibres industry, resulting in lower fragmentation. So long, the significant decline in polyester prices had severely affected its substitutes such as viscose staple fibre, acrylic and nylon. However, with polyester margins and prices showing a rising trend, the prospects for these businesses are also expected to improve.

1.2 WORLD TEXTILE INDUSTRY Global growth of the textile industry from the beginning of the decade is being phenomenal. It improved from the 2.2% in 2001 to more than 2.5%. In the face of major uncertainties in the global environment, any forecasts on the future prospects are extremely difficult. Though global GDP is expected to rise, the dangers of the world economy sliding toward recession are real. As for the textile industrys performance, no fundamental changes occurred. The U.S. and the EU are still the most important regions in terms of consumption. Asia, with China taking the unquestioned lead, has gained further market shares in terms of production. As a result, the gap between supply and demand has further widened. The U.S. and China, representatively of the developed and developing countries, each stand for an extreme position in this industry.

The textile and apparel industry will increasingly center on

China in the

years to come China has continued increasing production, being protected by high tariffs and an import license system. Investments have been fuelled by massive Chinese subsidies in various forms. Forced to lend in large amounts to unprofitable state-owned enterprises, Chinas banking sector has accumulated at least a 40 to 50% ratio of non-performing loans to assets. This means that the Chinese government has about $400-500 billion of bad loans that must be resolved. Furthermore, intellectual property rights infringements are increasingly causing concerns. A recent estimate by the U.S. Department of Commerce assumes lost sales of more than $100 million annually. The Chinese synthetic fiber industry is highly dependent on imported synthetic fiber raw materials. Reductions of import tariffs are advantageous for local synthetic fiber producers. However, particular concerns may arise for the polyester fiber intermediates sector. The phasing-out of the multi fiber agreement in 2005, too soon to examine its impacts yet, will present an enormous challenge to the developed world.

2. OBJECTIVE OF STUDY To complete the project as per time frame decided. To To meet the key marketing personnels for better information. To browse the web for data collection and study about environment. collect information about firm, products, industry, market, competitors and general environment. To analyze the data collected. To To forecast projections for the coming years. derive conclusion based on analysis. To meet experts in the field.

To prepare the project report.

3. RESEARCH METHODOLOGY 3.1 INTRODUCTION This chapter deals with stepwise procedure adopted to carry out this project. It is felt that the procedure adopted here is sufficiently effective and most accurate in the light of research with various limitation.

3.2 PROBLEM STATEMENT To study the current global fiber scenario and domestic fiber scenario and study the growth prospects for RIL, in PSF business, in the current decade . 3.3 RESEARCH DESIGN The primary purpose of this study is to provide comprehensive market intelligence on a domestic level for Polyester staple fiber. This study attempts to provide a comprehensive review of the global fiber market scenario and analyzes trends in INDIA with emphasis on RILs PSF Bussiness prospects up to the year 2010.A combination of primary and secondary research have been used for all findings. The usage of obtained information is based on the perceived reliability of the source by the researcher. It is based upon my belief that companies in the advanced world have started to look at newer niche opportunities very aggressively. Ive studied the impact of the growing competition in the Asian region and on how the polyester bases are shifting to Asia .The next step was to conduct exploratory primary research, involving phone calls to marketing and sales executives in the market, for additional strength to the issues and trends in the business, that were identified originally by secondary research. Primary research interviews included those with executives in the industry. Generally, executives contacted for

this information are experts in this field having a wide gamut of knowledge in this field.

Following steps were carried out for the study. Step-1 : Situation analysis Step-2 : Preliminary investigation Step-3 : Study Design Step-4 : Data Source and collection Step-5 : Analysis of data Step-6 : Conclusion Step-7 : Report writing 3.3.1 SITUATION ANALYSIS Following activities were carried out in situation analysis. Preliminary information about the firm. its products, the industry, the market, competitors and general environment around the firm. Familiarity of the situation surrounding the problem. 3.3.2 PRELIMINARY INVESTIGATION The global synthetic fibre industry caters to the gaps where the natural fibre fails to bridge in. With growing of population and the need for cultivation concern puts for tremendous pressure in the field to develop substitute is pressurizing the envirionment for fibre which will cater to the need of the civilization. Whereas the growing envirionment biodegradable fibres in one hand on the otherhand fashion trends and changes in technology and political changes are making full of adventures and challenges. the market place

Fibre market is studied from the global prespective in general with their impact on the polyester industries in India. In India the market is studied for emerging trends in the polyester staple fibre business .

3.3.3 STUDY DESIGN

(Prospects of the PSF bussiness)

Management Dillema

Management QuestionWhat is the Current/future PSF business scenario?

Project Question What is the trend of PSF and what should be RILs Stratergy to be a market leader in PSF bussiness?

Project Design

Primary research Meeting experts Studying journals and news letters

Secondary research

Studying books and trade reports and publications

Browsing company sites

Browsi ng intranet

DATA COLLECTION ANALYSIS CONCLUSION

REPORT WRITING

3.3.4 DATA COLLECTION The research data is of two types viz. primary data and secondary data.

3.3.4.1 PRIMARY DATA Primary field. data has been collected through relevant discussions with experts for their opinion in the

3.3.4.2 SECONDARY DATA Secondary data was collected from a varied source 1. Trade Publications and trade bulletins 2. Browsing internet 3. Browsing intranet 4. journals and magazines Various references are enlisted in the annexure &

bibliography.

4 ANALYSIS OF DATA. Projections were done on the basis of time series trend analysis. Seasonal factors impacting the trends is taken care off by considering yearly data alone. Trend analysis & Regression analysis of data was done with respect to demand determinants to extrapolate projections up to 2010. MINITAB was used extensively to do statistical calculations and projections.

5 CONCLUSIONS Conclusion is derived from secondary research are verified by consulting experts in the field.

REPORT WRITING First the world fiber scenario is seen from the current perspective. A tremendous growth is seen in the fibre production capacities in this decade. How synthetic fibre overtook the natural fibre production capacities and how polyester emerged as a prime fibre with a tremendous growth potential is analyzed. The report also throws light into how the polyester base is shifting to the east. Finally the RIL PSF business is studied in detail.

Part I COMPANY PROFILE7.0 RELIANCE POLYESTER STAPLE FIBER BUSSINESS 7.1 INTRODUCTION This section deals with the ril polyester staple fibre bussiness. Polyester staple fibre is a versatile fibre and is a close substitute of cotton and viscose. It blends easily with any other natural and regenerated fiber. This section deals with the product,production facilities, pricing, psf demand and supply and ril market share. Reliance is amongst the five largest producer of Polyester Staple Fibre in the world. It offers a complete range of products for a variety of applications, on time and at the right price has given it a market leading position in the country and a preferred vendor status with the world's leading spinners and composite mills. RecronTM Staple Fibre is available in both, Fibre and TOW forms and is procurable even in the remotest locations through our vast network of offices and agents.RecronTM Staple Fibre, the most wanted substitute for cotton. Reliance is the fifth largest producer of PSF in the world with 386,000 tonnes of capacity available per annum. Today, PSF is the lowest cost fibre for the Indian spinning industry, as compared to cotton, viscose and acrylic fibres. Market development initiatives have opened up an entirely new demand segment for PSF - cotton substitution on open end and ring frame machines. RIL started producing PSF in 1986 at Patalganga in Maharastra, and since then there are capacities of Apollo Fibres there has been no looking back. Besides having two manufacturing sites at Patalganga and Hazira, (Dhenkanal). Ltd. (Hosiarpur), India Polyfibres (Barabanki) and Orissa Synthetics

7.1.1 RELIANCE GROUP The Reliance Group founded by Dhirubhai H. Ambani (1932-2002) is Indias largest business house with total revenues of over Rs 99,000 crore (US$ 22.6 billion), cash profit of Rs 12,500 crore (US$ 2.8 billion), net profit of Rs 6,200 crore (US$ 1.4 billion) and exports of Rs 15,900 crore (US$ 3.6 billion). The Groups activities span exploration and production (E&P) of oil and gas, refining and marketing, petrochemicals (polyester, polymers, and intermediates), textiles, financial services and insurance, power, telecom and infocom initiatives. The Group exports its products to more than 100 countries the world over. Reliance emerged as Indias Most Admired Business House, for the third successive year in a TNS Mode survey for 2003. Reliance Group revenue is equivalent to about 3.5% of Indias GDP. The Group contributes nearly 10% of the countrys indirect tax revenues and over 6% of Indias exports. Reliance is trusted by an investor family of over 3.1 million - Indias largest. 7.1.2 RELIANCE INDUSTRIES LIMITED Reliance Industries Limited (RIL) is Indias largest private sector company on all major financial parameters with gross turnover of Rs 74,418 crore (US$ 17 billion), cash profit of Rs 9,197 crore (US$ 2.1 billion), net profit of Rs 5,160 crore (US$ 1.2 billion), net worth of Rs 34,452 crore (US$ 7.9 billion) and total assets of Rs 71,157 crore (US$ 16.3 billion). RIL is the first and only private sector company from India to feature in the 2004 Fortune Global 500 list of Worlds Largest Corporations and ranks amongst the worlds top 200 in terms of profits. RIL also emerged as the only Indian company in the list of global companies

that Times

create most value for their shareholders, published by based on a global survey and research

Financial by

conducted

PricewaterhouseCoopers in 2004. RIL featured in the Forbes Global list of worlds 400 best big companies and in FT Global 500 list of worlds largest companies. RIL emerged as the Best Managed Company in India in a study by

Business Today and A.T. Kearney in 2003. The company emerged Indias biggest wealth creator in the private sector over a 5-year period in a study by Business Today - Stern Stewart in 2004. 7.1.3 RELIANCE - GLOBAL RANKSTable-44

Product

No of sites

Capacity ( 000 MT ) 880 1700 32000 1300 1120 2565

Global Ranking 1st largest 3rd largest 5th largest 5th largest 7th largest Among top 10

Polyester PX Refinery PTA PP Polymer

10 2 1 2 2 5

PART II 2.5 SCOPE OF STUDY The growth of manmade fibres in the textile industry has been phenomenal. With more and more cotton being exported out of the country, not much is available for domestic use. Manmade fibres, particularly polyester, are not only abundant but are affordable too and is gaining rapid acceptance. So much so that the frenzy of setting up plants led the industry to a situation of over-capacity. This combined with poor global margins damage the profitability of domestic manufacturers. The small and non-integrated players are finding it increasingly difficult to survive -- in fact many have folded up. Although polyester fibre demand zipped along at a 10 per cent rate over the last decade, it may not grow so fast in the future. A lot depends on the future world trade scenario. With the MFA coming to an end in 2005, patterns of trade flows are likely to undergo major change. This will impact the growth of the industry in India too. With uncertainty regarding future exports, Indian players have been cautious about capacity expansion plans. Industry experts feel that demand growth would witness significant increases if the bias against manmade fibres in terms of duties were eliminated. There has been a recent up trend in polyester industry operating rates, which is likely to boost margins and enhance profitability. If demand does find strength, there is scope for additional capacities but these will be restricted to the larger, integrated and financially strong companies. Since its inception in the last century polyester fiber has shown a dramatic growth .By the seventies synthetic fibre production have superseded the natural fiber growth. The growth is mainly due to the properties of synthetic fibre, which make them more durable, and with the advent of technological invasions, like micro fibres and biodegradable

fibres the total production scenario of the fibre market have changed. Polyester has shown a spectacular growth with respect to other fibers and PSF, which is a close substitute of cotton, have also shown a spectacular growth. Low profit margin of PSF business and difficulties in maintaining the existing domestic market share of the business in coming years and growing international competition in the market Reliance Industries Ltd is the no.1 private sector company of India and is the largest producer of PSF (Polyester Staple Fibre) in the world, having a domestic market share of 71 %. With the increasing competition and low profit margin of the product, to grow at the same rate is the toughest job for today. To retain the same market share and grow on a continuous basis, it is imperative to scan the environment on a continuous basis to formulate & implemlement stratergy to gain competitive advantage to attain business growth.

2.6 STUDY RELIABILITY AND REPORTING LIMITATIONS Primary and secondary research was performed to determine market size, growth trends, major impacting factors, and relative strengths and weaknesses of companies. While extensive effort is made to provide reliable information. Often times more than a few sources are used to derive the final published data. It is beyond the scope to evaluate the credibility of these sources and validity of such obtained data. Only secondary research may be the source. Experts consulted are industry specialists with a lot of experience in this particular field.

2.7 TOOLS USED FOR ANALYSIS MINITAB 13@ is used extensively for all statistical analysis. For projections Double exponential smoothening method is applied for trend projections. - Regression analysis is carried out for trend projections.

PART II 3.0 FIBER OVERVIEW 3.1 INTRODUCTION This chapter deals with the types of fibre and about the fibre value chain . it also contains the PSF manufacturing process,properties of PSF,types of PSF as the ultimate aim of this project is to associated with RIL PSF Bussiness. 3.2 CLASSIFICATION OF FIBRES "A fiber is the basic entity, either natural or manufactured, which is twisted into yarns, and then used in the production of a fabric." Since ancient times, cotton and wool are the fibers which people are aware of. Different kinds of fabrics were woven using these two fibers, used for home etc., It was in the year At present thus providing warmth and comfort when worn. These were being making personal fashions and decoration of

1950 that production of man-made fiber began for commercial use. The finest silk - 'micro fiber' was developed in the year 1993. artificial fiber (man made ) the day all over the world. Thus, with the discovery of many more natural, man-made (chemical) and mineral fibers, we have indeed come a long way. Fibers can be broadly classified into two categories: Natural Fibers & Synthetic Fibers Natural fibers which dominate the market are: Cotton Wool Silk such as polyester is being used as the fashion of

Jute Man-made fibers (chemical/ Synthetic fibers) Synthetic fibers can be classified into two categories viz; organic and inorganic Organic fibers which dominate the market are: Polyester Polyamide(Nylon) Acrylic Polypropylene Elastane , Aramid , Carbon (prominent specialty fiber) Regenerated fiber ( cellulosic )

Inorganic fibers which dominate the market are: Asbestous Carbonfibers Glass fibers 3.3 POLYESTER STAPLE FIBRE 3.3.1 FIBRE MANUFACTURING PROCESS Today over 70 to 75% of polyester is produced by CP( continuous polymerization) process using PTA(purified Terephthalic Acid) and MEG. The old process is called Batch process using DMT( Dimethy Terephthalate) and MEG( Mono Ethylene Glycol). Catalysts like Sb3O3 (ANTIMONY TRIOXIDE) are used to start and control the reaction. TiO2 (Titanium di oxide) is added to make the polyester fibre / filament dull. Spin finishes are added at melt spinning and draw

machine to provide static protection and have cohesion and certain frictional properties to enable fibre get processed through textile spinning machinery without any problem. PTA , which is a white powder is fed into hot MEG to dissolve it. Then catalysts and TiO 2 are added. After that Esterification takes place at high temperature. Then monomer is formed . Polymerization is carried out at high temperature (290 to 300 degree centigrade) and in almost total vacuum. Monomer gets polymerized into the final product, PET (Poly ethylene Terephthalate). This is in the form of thick viscous liquid. This liquid is them pumped to melt spinning machines. These machines may be single sided or double sided and can have 36/48/64 spinning positions. At each position , the polymer is pumped by a metering pump-which discharges an accurate quantity of polymer per revolution ( to control the denier of the fibre) through a pack which has sand or stainless steel particles as filter media and a spinneret which could be circular or rectangular and will have a specific number of holes depending on the technology used and the final denier being produced. Polymer comes out of each hole of the spinneret and is instantly solidified by the flow of cool dry air. This process is called quenching. The filaments from each spinneret are collected together to form a small ribbon, passed over a wheel which rotates in a bath of spin finish: and this ribbon is then mixed with ribbon coming from other spinning positions, this combined ribbon is a tow and is coiled in cans. The material is called undrawn TOW and has no textile properties. At the next machine ( the draw machine), undrawn tows from several cans are collected in the form of a sheet and passed through a trough of hot water to raise the temperature of polymer to 70 degrees C which is the glass transition temperature of this polymer so that the polymer can be drawn. In the next two zones, the polymer is drawn approximately 4

times and the actual draw or the pull takes place either in a steam chamber or in a hot water trough. After the drawing is complete, each filament has the required denier, and has all its sub microscopic chains aligned parallel to the fibre axis, thereby improving the crystallinity of the fibre structure and imparting certain strength. Next step is to set the strength by annealing the filaments by passing them under tension on several steam heated cylinders at temperatures 180 to 220 degrees C. Also the filaments may be shrunk on the first zone of annealer by over feeding and imparting higher strength by stretching 2% or so on the final zone of the annealer. Next the fibre is quenched in a hot water bath, then passed through a steam chest to again heat up the tow to 100 degree C so that the crimping process which takes place in the stuffer box proceeds smoothly and the crimps have a good stability. Textile spin finish is applied either before crimping by kiss roll technique or after crimping by a bank of hollow cone sprays mounted on both sides of the tow. The next step is to set the crimps and dry the tow fully which is carried out by laying the tow on a lattice which passes through a hot air chamber at 85degree C or so. The tow is guided to a cutter and the cut fibres are baled for dispatch. The cutter is a reel having slots at intervals equal to the cut length desired 32 or 38 or 44 or 51mm. Each slot has a sharp stainless steel or tungsten carbide blade placed in it. The tow is wound on a cutter reel, at one side of the reel is a presser wheel which presses the tow on to the blades and the tow is cut. The cut fibre falls down by gravity and is usually partially opened by several air jets and finally the fibre is baled. Some, balers have a preweighting arrangement which enables the baler to produce all bales of a pre determined weight.

The bale is transported to a ware house where it is "matured" for a minimum of 8/10 days before it is permitted to be dispatched to the spinning mill.

3.3.1.2

PROBLEMS

WHICH

OCCUR

DURING

MANUFACTURE

OF

POLYESTER STAPLE FIBRE The manufacture of polyester fibre consists of 4 stps: Polymerisation:Using continuous PTA/DMT and MEG on either final batch polymer or polymerisation (cp_ forming

Melt spinning :Here molten polymer is forced thorough spinnerette holes to form undrawn filaments, to which spin finish is applied and coiled in can

Drawings: in which several million undrawn filaments are drawn or pulled approximately 4 times in 2 steps, annealed, quenched, crimped and crimp set and final textile spin finish applied and

Cutting: in which the drawn crimped tow is cut to a desired 32/38/44/51 mm length and then baled to be transported to a blend spinning mill.

3.3.2 SPECIALITY FIBRES IN POLYESTER HIGH/LOW SHRINK FIBRES: The high shrink fibre shrinks upto 50% at 100 degree C while that of low shrinkage is 1%. The high shrink fibre enable fabrics with high density to be produced and is particularly used in artificial leather and high density felt. Low shrinkage fibre is recommended for air filters used in hot air, furniture, shoes etc.

MICRO DENIER: Available in

0.5/0.7/0.8 deniers in cutlengths

32/38 mm. Ideal for high class shirts, suitings, ladies dress material because of its exceptional soft feel. It is also available in siliconised finish for pillows. To get the best results, it is suggested that the blend be polyester rich and the reed/pick of the fabric be heavy. FLAME RETARDANT: Has to be used by law in furnishings / curtains, etc where a large number of people gather - like in cinema theatres, buses, cars etc in Europe and USA. It is recommended for curtains, seat covers, car mats, automotive interior, aircraft interiors etc. CATIONIC DYEABLE: Gives very brilliant shades with acid colours in dyeing / printing. Ideal for ladies wear EASY DYEABLE: Can be dyed with disperse Dyes @98 degrees C without the need for HTHP equipment. Ideal for village handicrafts etc. LOW PILL: In 2 and 3 deniers, for suiting end use and knitwear fibre with low tenacity of 3 to 3.5 gm/denier, so that pills which forms during use fall away easily. ANTIBACTERIAL:It is antibacterial throughout the wear life of the garment inspite repeated washing. Suggested uses are underwears, socks, sports, blankets and air conditioning filters SUPER HIGH TENACITY: It is above 7 g/denier and it is mainly used for sewing threads. Low dry heat shrinkage is also recommended for this purpose. Standard denier recommended is 1.2 and today 0.8 is also available. MODIFIED CROSS SECTION: In this there are TRILOBAL, TRIANGULAR, FLAT, DOG BONE and HOLLOW FIBRES with single and multiple hollows. Trilobal fibre gives good feel. Triangular fibre gives excellent lustre. Flat and dog bone fibres are recommended

for furnishings, while hollow fibres are used as filling fibres in pillows, quilts, beddings and padding. For pillows silicoised fibres is required. Some fibre producers offer hollow fibre with built in perfumes. CONDUCTING FIBRE: This fibre has fine powder of stainless steel in it to make fibre conductive. Recommended as carpets for computer rooms. LOW MELT FIBRE: It is a bi-component fibre with a modified polyester on the surface which softens at low temperature like 110 degree C while the core is standard polyester polymer. This fibre is used for binding non woven webs. 3.4 VALUE CHAIN Fibres are transformed into yarn through spinning for natural and blended yarns or drawing and texturising for synthetic filament yarn production.Yarn is weaved into cloth. The process of fabric formation or weaving comprises preparatory activities followed by actual weaving on the loom. The preparatory process includes winding, warping, sizing, drawing-in and denting. The sheets of yarn thus prepared are then converted into fabric on the looms. This weaved cloth or fabric is stitched into garments or sold in other forms of finished textiles. These stages of manufacture have various levels of automation possible as an improvement from the basic process.Textile fibres are predominantly of two types - natural and manmade (see figure Basic Threads). Based on the source, natural fibres, in turn, can be those derived from animals, vegetables or minerals. On the other hand, manmade fibres are produced in the fibre form by application of mainly chemical processes on the naturally occurring substances (like hydrocarbons). Again, manmade fibres fall in two categories - synthetics and cellulosics. Synthetic fibres

are primarily made from petrochemicals whereas cellulosics are mainly regenerated wood pulp with chemical and physical treating. These fibres can be either long, highly strong yarn called filament yarn (which is oriented and fully drawn and is straight) or in staple form (much smaller in length and crimpy like natural fibres). Filament yarns are woven or knitted as they are. They are also woven into fabrics of textured yarn by combining with other types of filament yarns, twisting yarns and texturing in accordance with the aim of the product. The filament yarns are processed into circular, triangular, oval, hollow and other cross-sections that have even better properties. The staple fibres can be easily blended with other types of fibres. They are woven into fabrics by blending with cotton, wool and linen fibres to suit the aim of the product. The principal manmade fibres include polyester, nylon, acrylic and viscose. Chemically, polyester (or many esters) is primarily a family of polymers wherein the monomers belong to the category esters. The most commonly used polyester is the polymer of diglycol terephthalate and is called polyethylene terephthalate (PET).Nylon is a group of polymers, which can be classified as polyamides. Today several types of nylon are produced with properties tuned to meet customer specifications. The most commonly used ones are nylon-6 (which is manufactured from caprolactam) and nylon-66 (made from adipic acid and hexamethylene diamine). The special characteristics of manmade fibres combined with availability and cost factors have seen an enormous increase in their use in the global textile industry (see table Features of Fibres for a comparison terephthalate of manmade Purified both fibres with cotton). or from Materials Di-methyl and & ProcessPolyester: terephthalic acid (PTA)

(DMT)

manufactured

paraxylene)

monoethylene glycol (MEG) - made from ethylene - are combined and polymerised to form polyester chips. PTA has several advantages and is

more popular than DMT. The PET chips are melted and drawn to form yarn and then cut to fibre; extruded into films or blown to yield bottles (see chart Refinery to Finery). For generating fibres and yarns, the molecules in polyester have to be oriented in a single direction (which increases the strength and tenacity of the fibre). Drawing and texturising is done to orient the partially oriented yarn (POY) - produced after the PET melt passes through spinnerets - thereby yielding polyester filament yarn (PFY). For generating polyester staple fibre (PSF), the initial POY is cut in small parts and than provided a wavy shape so that it can be blended with naturally crimpy natural fibres. Acrylic Fibres: Acrylic chips are manufactured by polymerisation of acrylonitrile. Acrylonitrile is manufactured from ammonia and propylene. Nylon: Caprolactam - the raw material for nylon-6 chips - is manufactured using benzene and ammonia. The conventional source of both these products is hydrocarbons. Viscose fibres are cellulosic fibres made from purified regenerated cellulose. The cellulose known as rayon grade wood pulp or dissolving pulp is obtained from soft woods

4.0 World Fiber Scenario4.1 INTRODUCTION

There is tremendous growth of fiber business in the last 50 years with lot of Changes in the market, technology, the processes etc. With advancement in technology Manmade fiber Grew more rapidly than natural fiber from nineties. Among the manmade fiber Polyester superseded the others from eighties. The filament growth became stronger than staple from mid eighties. The Business shifted from late nineties from USA /Europe to Asia specially China. India is also emerging. Lot of developments are being done in specialty fiber for getting higher margin. The manmade fibre industry will grow to 10.5 million tonnes by 2005 and to nearly 13.0 million tonnes by 2010.

GROWTH OF FIBER BUSSINESS IN LAST 50 YEARSWORLD FIBRE CONSUMPTION Vs. POPULATION Total population(Bn) Total fibre Prod(Mn Tonnes) 2.56 9.4 3.04 14.9 3.71 21.8 4.46 29.5 5.28 40.8 6.08 52.6 6.34 57.7

Year 1950 1960 1970 1980 1990 2000 2003

Fiber business had

Table-1 increased by about 6 times in the last 50 years

.Among these the total manmade fibre consumption has grown by a blooming 20.5 times leaving behind the natural fibre growth at a rate of 2.9times.

7 6 5 4 3 2 1 01950 1960

fibre business growth

70 60 50 40 30 20 10 0

year Total population(Bn)

1970

1980

1990

2000

2003

Total fibre Prod(KTA)

World Fiber Consumption Mn tonnes(Figs from 2004 onwards are projected figures) Population Consumption Year Natural * Manmade TOTAL billion kg / capita 1950 1960 1965 1970 1975 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 7.72 11.61 13.35 13.40 13.48 15.19 15.23 15.47 15.71 16.24 17.73 19.46 19.60 19.63 19.67 19.74 19.99 20.19 20.24 20.64 20.74 21.07 21.27 21.41 21.46 21.51 22.01 22.61 22.75 1.68 3.37 10.68 5.49 8.39 14.63 14.30 13.60 14.85 15.76 16.26 22.61 23.59 20.77 20.48 19.74 28.30 27.52 24.68 17.86 16.89 18.54 29.40 18.94 19.38 31.15 31.60 35.10 33.46 9.40 14.97 24.03 18.89 21.88 29.82 29.53 29.07 30.56 32.00 33.99 42.07 43.19 40.40 40.15 39.48 48.29 47.71 44.92 38.50 37.63 39.62 50.67 40.35 40.84 52.65 53.60 57.70 56.21 2.56 3.04 4.09 3.35 3.71 4.53 4.46 4.61 4.69 4.77 4.85 5.61 5.69 5.53 5.54 5.37 5.92 5.85 5.77 5.02 4.97 5.11 6.00 5.20 5.28 6.08 6.15 6.34 6.23 3.70 4.90 5.90 5.60 5.90 6.60 6.60 6.30 6.50 6.70 7.00 7.50 7.60 7.30 7.40 7.40 8.20 8.20 7.80 7.70 7.60 7.80 8.40 7.80 7.70 8.70 8.70 9.10 9.00

Table-2

Population Total fibre Natural fibre Manmade fibre Kg / Capita Table-3

2.5 times 6.1 times 2.9 times 20.5 times 2.4 times

NATURAL Vs MANMADE FIBRES45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00

Natural * Manmade

YEAR

Remarkable Growth of Synthetic fiber is seen after after 1990 due to relative stagnation in the field of growth of natural fibres natural fiber production. The growth rate of natural fibres is @ 0.4% whereas the growth rate of manmade fibre is @ 4.7%.

G r o w t h a f te r 1 9 9 0 Growth Rate Natural Fibre 0 .40 % S y n th e t ic 4 .70 %

Projection for Man made fibre growthDouble Exponential Smoothing: Manmade

year 2004 2005 2006 2007 2008 2009 2010

Forecast 34.4290 35.1542 35.8795 36.6048 37.3301 38.0553 38.7806

Lower 26.4019 23.8209 21.0260 18.1391 15.2052 12.2443 9.2665

Upper 42.4560 46.4876 50.7331 55.0705 59.4550 63.8664 68.2947

The growth of synthetic fibre is expected to reacha by 2010. PROJECTION FOR NATURAL FIBRE GROWTHDouble Exponential Smoothing: Natural Fibres

40

MnTonnes

Year 2004 2005 2006 2007 2008 2009 2010

Forecast 22.9313 23.2825 23.6336 23.9848 24.3360 24.6872 25.0384

Lower 22.2845 21.8053 21.3206 20.8347 20.3485 19.8620 19.3754

Upper 23.5781 24.7596 25.9467 27.1349 28.3236 29.5124 30.7013

Growth of natural fibre is sluggish it is expected to reach 25 Mn Tonnes by 2010.

Mn Tonnes 1950 1960 1970 1980 1990 2000 2003 2010

manmade 1.7 3.4 5.5 14.6 19.7 31.1 33.5 38.8

cotton/wool/silk 26.7 42.6 54.4 68.2 87.4 107.4 113.5 129.9

Table-4 Consumption of fibres from 1950,fig from 2004 are estimated

cotton/wool/silk manmade 180.0 160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0 1950 1960 1970

WORLD CONSUMPTION OF FIBRES

1980 YEAR

1990

2000

2003

2010

Manmade fibers accounted for 35.10 million tonnes (+4.9%), comprising a 55.8% market share. Cotton, wool and silk declined by 0.6% to 22.61 million tonnes Among The Synthetic fibers Growth of polyester is Phenomenal .Polyester have grown by 14 times while acrylic and polyamide fibres have grown by 2 times and 7 times respectively.

Growth 1970 to 2003 Polyester 14 times Polyamide 2 times Acrylic 3 times Total 7 timesTable-5

1970 1975 1980 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Source:fibre Table-6

Polyester 34% 45% 47% 50% 50% 52% 53% 54% 53% 54% 56% 57% 58% 60% 61% 63% 65% 66% 66% 67% 68% 69% 70% 71% 72% 72% 73% 73% 74%

World Production of Synthetic Fibers in Mn Tonnes Polyamide Acrylics Others TOTAL Polyester Polyamide 40% 21% 5% 4.809 1.64 1.92 33% 19% 3% 7.461 3.36 2.46 30% 19% 4% 10.779 5.07 3.23 26% 18% 6% 13.025 6.51 3.39 26% 18% 6% 13.645 6.82 3.55 25% 17% 6% 14.578 7.58 3.64 25% 16% 6% 15.172 8.04 3.79 24% 15% 7% 15.602 8.43 3.74 24% 14% 9% 16.191 8.58 3.89 22% 14% 10% 16.814 9.08 3.70 21% 13% 10% 17.693 9.91 3.72 20% 13% 10% 18.022 10.27 3.60 18% 13% 11% 19.779 11.47 3.56 19% 12% 9% 20.621 12.37 3.92 18% 12% 9% 21.81 13.30 3.93 16% 11% 10% 24.644 15.53 3.94 15% 10% 10% 25.521 16.59 3.83 15% 9% 10% 26.821 17.70 4.02 14% 9% 11% 28.389 18.74 3.97 13% 9% 11% 28.934 19.39 3.76 13% 9% 10% 30.694 20.87 3.99 12% 8% 10% 32.175 22.20 3.86 12% 8% 10% 33.29 23.39 3.91 11% 7% 10% 34.71 24.64 3.92 11% 7% 10% 36.13 25.88 3.94 11% 7% 10% 37.55 27.13 3.95 10% 7% 10% 38.97 28.38 3.96 10% 7% 10% 40.39 29.62 3.98 10%year

Acrylics Others 1.01 0.24 1.42 0.22 2.05 0.43 2.34 0.78 2.46 0.82 2.48 0.87 2.43 0.91 2.34 1.09 2.27 1.46 2.35 1.68 2.30 1.77 2.34 1.80 2.57 2.18 2.47 1.86 2.62 1.96 2.71 2.46 2.55 2.55 2.41 2.68 2.56 3.12 2.60 3.18 2.76 3.07 2.57 3.22 2.58 3.41 2.60 3.55 2.62 3.69 2.64 3.83 2.66 3.97 2.68 4.11 2.70 4.25

6%2003-2004

10%

41.81-saurer

30.87

3.99

Figures from 2004 onwards are estimated

Growth of different fibre35000 30000 25000 20000 15000 10000 5000 0Polyester Polyamide Acrylic others Total

1970

1975

1980

1985

1990

1995

2000

2003

year

% Vol of different fibre of total synthetic fibre prodn80 70 60 50 40 30 20 10 0 1970Polyester Polyamide Acrylic others

1975

1980

1985

1990

1995

2000

2003

year

Polyester superseeds other fibersShare of Polyester increased from 34% to 70 % from 1970 to 2003 where as share of Polyamide decreased from 40 % to 12 % growth of wool and silk is almost negligible.

Similar Growth of Polyester is sounded in India.Globally, Polyesters share is up from 27% in 1995 to 40% in 2001.In India, Polyesters share up from 18% in FY96 to 31% in FY02. PRODN OF FIBRE IN INDIAFY96Polyester Cotton an-made

FY97 826

FY98 1088

FY99 1228

FY00 1374

FY01 1417 2,890 395

FY02 1457 2,907 395

633 2,521

2,764 2,662 2,839 3,066 386 393 357 Table - 7 378

DoOthesrtMc Fiber Shares fibers 396

100 % 80 % 60 % 40 % 20 % 0% FY96 FY97 FY98 FY99 FY00 FY01 FY02

Source : ASFI Handbook of Statistics, 200001 & October, 2001 report. CRIS INFAC Ernst & Young compilation

4.2 WORLD FIBER DYNAMICS WORLD FIBER CONSUMPTION PATTERN

Country Developing countries USA EU(15 COUNTRIES) Japan RUSSIA Total Developing countries India China East asia-s-e asia World

1980

1985

1990

1995

2000

2004

20.9 15.4 16.8 14.7 14.1

22.2 15 17.7 14.6 13.9

25.9 18 21.8 14 14.1

30.9 19.5 23.4 7.5 7.6

33 23 26.2 10 10.5

33.9 23.5 27 10.5 11

2.26 4 3.5 6.8

2.44 5 3.6 6.8

2.91 5.5 4.7 7.7

3.63 6 5.5 7.7

4.3 6.5 6.3 8.5

5 8 6.7 8.6

Table -8

Very High Growth of manmade fibers is forecasted160 140 120 100 80 60 40 20 0 1970 SOURCE -PCI-2004 1980 1990 2000 2010 2020 2030 2040 2050

is forecasted in the

Other Synthetic Polyester Cellulosic Natural

coming years

Growth of Staple and filament From mid eighties Filament developed stronger than Staple fibre. Annual growth of Filament showed a growth rate of- 6%, and annual growth of Staple fibres showed a growth rate of - 1.4% , Natural fibres on the other hand showed a meager growth rate of- 0.5 % , and over all synthetic growth stood at-2.8 % . Favorable manufacturing cost, technological progress properties helped Filament to capture the staple market. FILAMENT VS STAPLE , outstanding yarn

4.3.3 POLYESTERDouble Exponential Smoothing for Polyester

POLYESTER35

Year Forecast 2004 2005 2006 2007 2008 2009 2010 23.3879 24.6352 25.8824 27.1297 28.3769 29.6241 30.8714

Lower 22.4197 23.3281 24.2116 25.0834 25.9490 26.8109 27.6704

Upper 24.3561 25.9422 27.5532 29.1759 30.8048 32.4374 34.0724

Actual Predicted Forecast Actual

25

Predicted Forecast

15

Smoothing Constants Alpha (level): 0.810 Gamma (trend): 0.546 MAPE: 3.88964 0.39520 0.25480

5 1980 1990 2000 2010

MAD: MSD:

year

Polyester growth in 2003 is 7.2 % of total volume of 22.63 million MT. Filament growth in 2003 is 7.6 % of total volume of 12.87 million MT. Staple growth in 2003 is 6.6 % % of total volume of 9.39 million MT. Maximum growth seen in 2003 is in China, Pakistan, Saudi Arabia. Asia now account for a 83 % share of the world Polyester production. America, Europe farther lost the ground to Asian countries with only exception being Turkey. Continuous growth in polyester is predicted and consumption is predicted to reach 30.8 million MT by 2010. Staple Vs. Filament in Polyester

Polyester Consumption Ind Yarn 33% Staple 29%

Present polyester

breakup

of

consumption

Tex Yarn 38%

Staple Tex Yarn Ind Yarn

Top 3 Producing Countries PFY PR China Taiwan South Korea TOTAL PSF PR China Taiwan U.S. TOTAL 2003 5.741 1.555 1.28 8.576 2003 3.591 875 855 5.321 % of world 2000 % of world 44,6% 3.152 29,5% 12,1% 1.525 14,3% 9,9% 1.517 14,2% 66,7% 6.194 58,0% Unit: 000 tonnes % of world 2000 % of world 38,2% 1.815 22,5% 9,3% 932 11,6% 9,1% 1.041 12,9% 56,7% 3.788 47,0% 1995 1.022 1.225 947 3.194 1995 922 753 1.039 2.714 % of world 15,7% 18,8% 14,5% 49,0% % of world 16,5% 13,5% 18,6% 48,6%

Table-14 China, Taiwan and South Korea are the largest producers for both PSF and PFY. The Chinese produce 44.6% and 38.2% of the world PFY and PSF production respectively.Table -15

mill. tonnes PR ChinaGROWTH%

World Production of Manmade Fibers 1995 1996 1997 1998 1999 2000 2001 2002 2003 3.2 3.5 4.3 5.2 5.8 6.7 8.2 9.9 11.7 4.2 9% 23% 21% 12% 16% 22% 21% 18% 4.2 4.4 4.3 4.1 4.2 3.6 3.8 3.8

CARG% 15% -1% 2% 2% 8% 5% -4% 6% 2% 5%

U.S. TaiwanGROWTH% GROWTH%

0% 5% -2% -5% 2% -14% 6% 0% 2.6 2.7 3.1 3.3 3.1 3.2 3.1 3.2 3.2 1.9 1 4% 15% 6% -6% 3% -3% 3% 0% 2.1 2.5 2.5 2.7 2.8 2.4 2.3 2.2 11% 19% 0% 8% 4% -14% -4% -4% 1.2 1.5 1.6 1.8 1.9 1.9 2 2

South KoreaGROWTH%

IndiaGROWTH%

IndonesiaGROWTH%

20% 25% 7% 13% 6% 0% 5% 0% 0.9 1 1.1 1.1 1.2 1.4 1.5 1.4 1.4 1.7 11% 10% 0% 9% 17% 7% -7% 0% 1.7 1.8 1.7 1.5 1.5 1.5 1.3 1.2

JapanGROWTH%

SUBTOTAL ROW TOTAL

0% 6% -6% -12% 0% 0% -13% -8% 15.5 16.4 18.7 19.7 20.3 21.7 22.1 23.9 25.6 8.1 8.3 8.8 8.6 9.1 9.4 9.5 9.6 9.6 23.6 24.7 27.5 28.3 29.4 31.1 31.6 33.5 35.1

4.3.3.1 BIGGEST PLAYERS OF POLYESTER TABLE-16

FILAMENT AND STAPLETaking capacities for filament and staple together for all their various plants and JVs across the world, the largest polyester fibre producers in 2003 (in '000 tons) are as follows.

1 2 3 4 5

NAN YA TUNTEX/XIANG LU RELIANCE FAR EASTERN TEXTILE HUVIS

975 925 890 708 653652

(in Taiwan, USA) (in Taiwan, Thailand, China) (in India) (in Taiwan, China) (in Korea, Indonesia)(in Japan, USA, Mexico, Germany,

6 TEIJIN Indonesia, Thailand)

7 YIZHENG 8 HUALON 9 SINOPEC 10 KOSA

630 567 512 508

(in China - part of Sinopec) (in Taiwan, Malaysia) (in China - excl. Yizheng) (in USA, Mexico, Germany)Source: PCI Fibres & Raw Materials

Table-17 POLYESTER FILAMENT YARNTaking just polyester filament yarn, the list for 2003 (in '000 tons) is as follows

1. NAN YA 2. HUALON3. TUNTEX

575 (all textile filament) 513 (all textile filament)450 (all textile filament)

4. RELIANCE 5. FAR EASTERN TEXTILE 6. ZHEJIANG HENGYI 7. SHAOXING YUANDONG 7. ZHEJIANG TONGKUN 9. TEIJIN 10. HYOSUNG

434 (all textile filament) 388 (83% textile filament*) 340 (all textile filament; in China) 320 (all textile filament; in China) 320 (all textile filament; in China) 306 (74% textile filament*) 303 (65% textile filament*; in Korea)

*Among other filament products are included high tenacity industrial filament, textile monofil and filament spunbonded fabrics.Source: PCI Fibres & Raw Materials

Table-18 POLYESTER STAPLE FIBERAnd for polyester staple, the list for 2003 (in '000 tons) is as follows.

1. TUNTEX/XIANG LU2. SANFANGXIANG GROUP

475460 (in China)

3. RELIANCE 4. YIZHENG 5. WELLMAN 6. NAN YA 7. HUVIS 8. TEIJIN 9. SINOPEC 10. FAR EASTERN TEXTILE 10. AKRA (DAK)

456 440 418 400 385 346 335 320 320

(part of Sinopec) (in the USA and Ireland)

(excl. Yizheng) (in the USA and Mexico)Source: PCI Fibres & Raw Materials

Table-19 GLOBAL RANKINGS - 2010Taking capacity for filament and staple together for all their various plants and JVs across the world, the largest polyester fibre producers in 2010 (in '000 tons) are expected to be as follows.

1. 2. 3. 4.

SHAOXING YUANDONG YIZHENG RELIANCE NAN YA

1620 (in China) 1540 (in China - part of Sinopec) 1350 (in India) 1250 (in Taiwan, USA, Vietnam,1110 (in Taiwan, China) 1025 (in Taiwan, Thailand, China)China)

5. FAR EASTERN TEXTILE 6. TUNTEX/XIANG LU

7. ZHEJIANG RONGSHENG 8. INDORAMA + ASSOC. 9. HUVIS10. SANFANGXIANG GROUP

930 (in China) 896 (in Indonesia, Thailand, India) 873 (in Korea, Indonesia, China)860 (in China)

Thus, of the top ten in 2003, only six are expected to remain in the top ten for 2010. Source: PCI Fibres & Raw Materials

Table-20

POLYESTER FILAMENT YARN - 2010Taking just polyester filament yarn, the list for 2010 (in '000 tons) is expected to be as follows. 1. SHAOXING YUANDONG 920 (all textile filament)

2. 3. 4. 5.

RELIANCE NAN YA ZHEJIANG HENGYI YIZHENG

6. FAR EASTERN TEXTILE

7. ZHEJIANG RONGSHEN 8. ZHEJIANG TIANFENG 9. ZHEJIANG ZONGHENG 10. ZHEJIANG TONGKUN

744 (all textile filament) 720 (all textile filament) 660 (all textile filament; in China) 640 (86% textile filament; part ofSinopec) 550 (82% textile filament)

530 (all textile filament) 530 (all textile filament; in China) 525 (all textile filament; in China) 500 (all textile filament; in China)

By 2010, all the biggest polyester filament producers except Reliance of India will be found in China, even if they also have operations elsewhere (such as Nan Ya and Far Eastern Textile). Source: PCI Fibres & Raw Materials

Table-21 POLYESTER STAPLE FIBER - 2010

And for polyester staple, the list for 2010 (in '000 tons) is expected to be as follows.

1. YIZHENG 2. SANFANGXIANG GROUP 3. SHAOXING YUANDONG 4. RELIANCE 5. HUVIS 6. TUNTEX/XIANG LU 7. FAR EASTERN TEXTILE 8. INDO-RAMA + ASSOC. 9. NAN YA 10. SINOPEC

900 (part of Sinopec) 860 700 606 605 575 560 532 530 495 (excl. Yizheng)

By 2010, all the bigger polyester staple producers except possibly Reliance and Indo-Rama will be found in China, even if they also have operations elsewhere (such as Huvis, Tuntex, Far Eastern Textile and Nan Ya). Source: PCI Fibres & Raw Materials

4.3.3.2

POLYESTER

STAPLE

AND

FILAMENT

GLOBAL

CONSUMPTION PATTERN

25 20

15

Staple10

Filament

5 0 1960 1970 1980 1990 2000 2010

4.3.3.3 STRONG GROWTH DRIVERS FOR POLYESTER IN INDIA

Quota removal by developed quantries

(18% of the world current

production will be either from India or China) Big Boom in textil export. Textile Exports to increase from current $13bn to $50bn by 2010. Polyester based textile growth will increase with the increase in population and change in demographic pattern and with the increase in the percentage of consumer class. GDP growth rate rate is expected to be more than 8 %. Polyester consumption is still low in India with a percapita consumption of 1.4 Kg whereas in Pakistan it is 3 kg, China 4 kg and Indonesia 5 kg. There is a growing demand for non apparel application worldwide 23% of global demand, whereas in India it is negligible. Polyster is slowly replacing Cotton, Viscose and Acrylic fibres as more and more polyester is used for its versatility and low price.

4.3.3.4 CHINESE POLY ESTER INDUSTRY STRUCTURE CAN WE BEAT THEM ??? Chinese industry is dominated by more than 200 players which is highly fragmented . Few companies are integrated -PTA-MEGPolyester and most of the companies rely on imports. There are Several small capacity players-Government turbulence and may not survive in Post 2005 era. Imbalance growth across the chain.(PX-PTA-MEG-PET) MNC polyester manufacturer find it very difficult to come to India as Reliance is a formidable force in Indian market Several Chinese Manufacturers are going for Chinese M/C for High IRR. They will fail in the long run. Chinese Industry is Quantity driven where as Indian Industry are quality driven. subsidized , without any viable cost or Quality model , these will call in for fierce

4.4 FUTURE FIBER Todays challenge - eco friendly fiber !!! Todays main fibers in the world - Cotton and polyester - How eco-friendly they are ??? Cotton Massive land for growth Huge pesticide Massive water Very slow biodegradation Polyester Huge Fossil resource getting depleted Not bio degradable

Future fiber Raw material of finite resources Bio degradability of the product Eco-friendliness of the process Improved Quality

4.5.1 SHIFTING FOCUS OF POLYESTER TO ASIAN COUNTRIES The last decade has seen a fundamental shift in the world polyester production from the predominantly western part of the world to Asia. In the 80s the top ten polyester producers of the world had only two Asian companies ETeijin and Toray, while the rest were all from USA/Western countries. Today seven Asian companies are firmly entrenched amongst the top ten producers of the world - Nan Ya on the top followed By Tuntex, Teijin, Far Eastern, Hualon, Reliance and Indo Rama. Firms like Hoechst, which was a top ranking polyester company in the 90s, is not in the current list. The new entrants are Kosa (Koch-Sabanchi group), Tuntex, Hualon, Reliance and Indo Rama who are now emerging as serious new global polyester players. China, Taiwan, Korea, India and Indonesia are key countries that have surged ahead in the polyester market posting growth figures of 10%, in spite of a major financial breakdown in the Asian economy in the year 1999. In 2000 the figure stood at 8.5%. On a longer term this figure is expected to stabilize at 6.5~7%, against the world average of 5 ~ 5.5% in decade (2000 -2010). Based on this, the estimated capacity of polyester in Asia by the year 2010 is expected to touch 30 million tonnes. China is expected to emerge as the biggest player in Asia leaving behind Taiwan, Korea, and the other countries in the world. Its polyester capacity will more than double in 10 years time, and it is expected to occupy 33% of the Asian market share. Besides this, some new groups will also emerge in Asia and dominate world polyester by way of mergers, acquisitions and consolidation. Countries like Taiwan and Korea are likely to shift capacities outside their ountries, while India is likely to face a

shortage of polyester in the face of increasing domestic demand. Growth of polyester in other Asian countries like Indonesia, Malaysia, Thailand, Philippines, Pakistan, and Vietnam will be slow. 4.6 CHINESE TEXTILE INDUSTRY: ITS STRENGTHS AND WEAKNESSES When the Chinese textile industry is preparing to launch its conquest of the world markets from 2005 when quotas on the international textile trade are the lifted, it might be interesting to have a hurried look at the strengths and weaknesses of that industry. Just about a quarter century ago, the Chinese textile complex, according to Mr Herwing Strolz, director general, International Textile Manufacturers Federation, was in a shambles, unable to meet even the needs of its growing population. In 1978, it had about 23 million spindles and 490,000 looms, most of them obsolete and in doubtful working condition. Fibre consumption by its textile industry was about 2.66 million tonnes in 1975, just around 11 per cent of the total world consumption. But by 2000, fibre consumption by the Chinese textile industry had risen to about 13 million tonnes, about 25 per cent of the world total. Even after scrapping, one million old spindles, its spinning capacity amounted to 35 million spindles in 2001, of which 20 per cent was less than 10 years old. It had by then, nearly 700,000 rotors of which 60 per cent were less than 10 years old. Modernisation of its weaving sector has been even more impressive. In 2003, it had 660,000 looms of which 12 per cent were shuttleless (against none in 1978) and of them, more than 90 per cent were less than 10 years old.

Thus by 2009 China had emerged as: i) The worlds largest textile economy; ii) it became the biggest exporters of textiles and clothing; iii) it was the largest single producer of cotton and man-made fibres; iv) its textile industry accounted for nearly 10 per cent of its GDP and 20 per cent of its industrial output; and v) its textile industry accounted for employed by its manufacturing sector. Despite all this wonderful progress, the Chinese textile industry is still suffering from certain weaknesses such as: i) Outdated and small man-made fibre manufacturing units; ii) large obsolete production capacities still existing in the cotton weaving sector; iii) existence of certain loss-making units in the public sector; iv) neglected finishing and printing sectors; and v) low value addition of its textile production. A question that is bound to arise here is: what is the strategy adopted by the Chinese textile industry to achieve the present impressive growth? Chinas success in the global textile market, according to Mr Strolz, has its roots in the early recognition that the development of its textile complex had to start from where it was most competitive i.e. at the apparel end of the pipeline. It was here that its low labour costs would 13 per cent of the workforce

give it an unbeatable advantage for a long time to come, considering the virtually non depletable reservoir of labour from the rural areas in future. Once the take-off stage in apparel had been left behind, investments would automatically be attracted into the capital intensive upstream sectors, be it textiles or fibres. Although the process from backwardness to bigness took only 25 years

when considering the size of the industry today, China had no instant success when trade performance is taken as the yard stick. In fact, it was only in July 1988, 10 years after the announcement of the Deng reforms that in value terms, Chinas apparel export caught up with the textiles. After that, however, apparels performed the role that was intended for it. Apparel exports grew by over 420 per cent in the 13 year period to 2001, as against 140 per cent for textiles. So storming has been the advance of the apparel sector that textiles could not follow. In the big noise which is currently made about Chinas export performance, it is often forgotten that China is also one of the leading textile importers of the world. The main reason for this lies in the fact that many fabrics needed by its export -oriented apparel industry are not manufactured in the country either at all, or in sufficient quantity and quality Growing textile imports by China are partly the result of an obsolete weaving industry in which shuttle loom is the dominant technology and partly neglect of the finishing and printing sectors. According to the Chinese customs statistics, only 4.3 per cent of textile imports in 2001 was classified as general trade. The rest was processed materials. China is aware that its future competitive strength in the world market will depend essentially on the strengthing and diversifying of its textile base. It might be interesting to note that China continues to introduce new machinery in its textile industry at almost breakneck pace.

It is no surprise that textile machinery manufacturers all over the world are looking at China as market with great potential. That is what causes apprehensions in the minds of textile manufactures elsewhere in the world, whether they will be able to survive in the new quota free era. 4.6.1 THE CHINA FACTOR It has been widely observed by now that the country most critical to the course of future cotton and textile trade developments is China. Even though India and Turkey are acknowledged as serious players in this segment the industry's watchful gaze is chiefly focused on China. It is popularly being seen by industry specialists as a wild card which will dictate terms and trends to the global textile market in the years to come. China sits snugly with the majority share of 25% of the entire worlds textile market exports, while India lags far behind at a mere 5%. Given the fact that India has about the same potential and resources as China for the textile export market, it is important to look at the factors that impede its growth in an otherwise promising scenario. Amongst the key reasons for Chinas higher productivity are its low costhigh quality mass production, a favourable physical environment for foreign companies, an optimistic work culture and a technology imbibing attitude- factors that are wanting in India. However, a comparison between the two countries also shows that Chinas weaknesses are Indias strength. Chinas drawback is essentially a peoples problem: the local staff in the industry suffers from low educational background, limited functional specialities and a lack of international mindset. On the other hand, India has a talented local staff with an extremely high

education

level,

which

also

has

the

potential

of

moving

up

the

management hierarchy. However, India has glaring infrastructure problems that cannot be ignored. Its power supply remains poor and erratic at best. The cost of capital, which is comparatively low in China, is high in India. This does not allow the industry to implement rapid technological advances in machinery and processes, most of which are completely obsolete. Moreover, it also has a strong culture of trade unions, with strong political affiliations that complicate business issues and retard productivity. The discrepancy between the wages of labour and management are high in India leading to considerable dissatisfaction and unrest. In contrast, China enjoys a disciplined and dedicated workforce that has very little disparities in the remunerations between its labour force and the managerial class. Funds for modernisation are extensively granted to the Chinese industry while in India it is still lacking. The infrastructure of any country is the basic foundation upon which it stands. Or moves. India with a GDP growth suffers from a sluggish growth rate, even as its neighbour China rears its head with an 8% growth rate. For a considerable period now lack of modernisation has been staring at the face of the Indian industry, which banks primarily upon a labour intensive approach. The textile industry is no exception and is replete with obsolete machinery.

Industry heads voice the need for cheaper capital to be able to make these much-required changes, and are not satisfied with the governments half-hearted efforts. There is also a significant lack of effort in the areas of research and development pertaining to the textile industry, something that has been addressed very seriously in countries such as China. The power available to Indian industries is inconsistent in quality due to high levels of voltage fluctuation. Furthermore, frequent power cuts force industries to invest heavily in self-generating power plants. Indian industries also pay the same tariff rates for both peak and normal hours, while in a country like China the tariff at normal hours costs much less. Besides power, other infrastructure issues such as cost of capital is also appreciably cheaper in China as compared to India, which pays very steep interest on the much needed working capital. It has also to contend with higher rates of import duties.

5.0 INDIAS TEXTILES : SCENARIO 5.1 INTRODUCTION Textile is one of Indias oldest industries and has a formidable presence in the national economy in as much as it contributes to about 14 per cent of manufacturing value -addition, accounts for around one -third of our gross export earnings and provides gainful employment to millions of people. They include cotton and jute growers, artisans and weavers who are engaged in the organised as well as decentralised and household sectors spread across the entire country. The industry is largely footloose and has a wide sectoral dispersal particularly in handloom and powerloom sectors. It has a wide spectrum of fibres consisting of cotton, jute, silk, wool, man-made and synthetic fibres as well as blends of one or more fibres. It enjoys possibly the widest linkages, both forward and backward, and contributes directly not only to the livelihood but also to the empowerment of largely the weaker sections of the society living in rural and semi-urban areas. The growth of the industry over the years has been characterised by expansion in dimension, changes in fibre-mix, adoption of heterogeneous technology matrix and increase in availability of goods for home consumption and exports. In the spinning segment, the spindleage increased from about 21 million in 1981 to about 38million in 2003 which is the second largest in the world after China and has a world share of 38%. The production of spun yarn has also increased accordingly from about 1240 million kgs. in 1981-82 to about 3520 million kgs. in 200203. The production of fabrics has also increased from 12300 million sq. meters in 1981-82 to 36200 sq. million meters in 2002-03. The rapid growth in the decentralised garment segment in the past decade or so has added to the dimension of the textile industry. The garment segment

began initially as an export -oriented effort but it has grown in volume and diversity and the export of ready made garments now accounts for over 40 per cent of the value of total textile exports. The value of production of ready-made garments for domestic market is estimated to be three times as much as for export market. The fibre-mix pattern has also undergone changes due to improved availability of man-made fibres and a shift in consumer preference towards this fibre. The ratio of cotton to manmade fibre is now about 65:35. The fibre mix pattern of fabrics has also undergone change and cotton-based fabrics which accounted for over 70 per cent of the total fabrics production till 1988, now accounts for about 42 per cent production. The remaining 58 per cent is contributed by blended and 100 per cent non-cotton cloth. The significant growth in textile industry so far has led to an increase in the availibility in of textile to products 31.24 for sq. both meters home in consumption 2003-04. and exports. Thus, the per-capita availability of cloth has increased from17 sq. meters 1982 about Likewise, exports of textile products have grown significantly from $ 5797 million in 1991-92 to $ 12501 million in 2002-03. The growth in exports further seems to rise to up to $ 50000 by 2010.

5.3 PRODUCT DEVELOPMENT

The future growth, particularly in export markets, will come mainly from exports of value -added items including made-ups and apparels. It is, therefore, imperative that our industry must gear up to integrated consumer tastes and preferences in their production and develop marketing infrastructure so as to service both domestic and international requirements timely and effectively. The industry can contribute towards development of marketing infrastructure through their own association and export promotion councils. The Government has set up seven National Institute of Fashion Technology Centres providing skilled human

resources to the apparel and textile industry. Besides, the Government has equipped certain Powerloom Service Centres, Weavers Service Centres and Training Institutes. The industry can take help from these organisations in meeting their design requirements. It has also been decided to set up a National Design Centre for Handlooms. 5.4 INFORMATION TECHNOLOGY The efforts to increase the competitive strength of the industry as a whole will depend on how fast the industry can integrate various I.T. solutions including ERP solutions, CAD/CAM and other I.T.-based tools for improving the speed and quality of production, reducing time lag in deliveries, marketing and incutting down overall time overrun. In fact, countries like Japan and USA are adopting I.T. solutions like Quick Response (ARS) which are reportedly capable of cutting down apparel pipeline time substantially and thus effect significant savings in cost. Some variants of these solutions may also be tried in our apparel sector in particular so that we can compete with these advanced countries successfully. I.T. solutions can easily be adopted by small and medium units and these units have the added advantage of adaptability and flexibility in production, which large units often do not have 5.5 JOINT VENTURES It is important to note that the production environment in textiles all over the world is undergoing changes. Countries are trying to complement their own comparative advantage, whether in technology or in raw materials or in finance, by forging joint ventures or production or marketing tie-ups with other countries to increase their overall competitive strength. The Indian textile industry may also like to explore

this route for enhancing comparative advantage and convert it into competitive strength. 5.6 EXPORT. Till the phasing out of the Multi Fibre Agreement (MFA) by the end

2004, the Government has made all efforts to streamline the textile quota regime, so as to benefit the textile trade and industry. The new policy seeks to achieve continuity and stability with competition. The policy has also attempted to simplify procedures, ensure time-bound action in case of apparels and encourage fast utilisation of quotas. The Policy also attempts to give a boost to Technology Upgradation Fund Scheme (TUFS) by linking with investments under Manufacturers Entitlement and New Investment Entitlement. 5.7 TEXTILES IN THE NEW MILLENNIUM Needless to say that the textile industry has several challenges ahead and re-orientation of the industry, both organic and systemic, is required to enhance its competitive strength and improve its global positioning in the new millennium. In this effort, the Governments initiative, some of which have been outlined above, may not be sufficient. The industry including the textile machinery sector and related organisations must supplement these initiatives in a more proactive manner, so that the industry production achieves cost reduction, attains quantum jump in quality and improves delivery systems.

5.8 INDIAN TEXTILE INDUSTRY : A FUTURISTIC PROFILE

The Textile Sector in India ranks next only to Agriculture. It accounts for 20 per cent of the country's industrial output and 30% of the foreign exchange earnings. About 21 per cent of the country's work force is employed in this sector. But presently, the Indian textile industry stands at the cross-roads. It is facing challenges and exciting opportunities at the same time, following a focus thrust on this sector in the planning process, economic liberalisation and globalisation of trade. It can either flourish or perish.INDIAN TEXTILE INDUSTRY CONTRIBUTES TO -

3% of GDP 14% of total industrial production 21% of total work force Employing around 35 million people 27% of gross export earnings 10% of total excise revenueTable-27

5.9 MAN-MADE FIBRE Till the early seventies, the Indian man-made fibre textile industry was miniscular. Fibre flexibility introduced by the Government's Textile Policy of 1985 has, however, helped man-made fibres to grow rapidly in the last two decades. Falling input prices and ease of maintenance have popularised man-made and blended fabrics among the common masses. They are also increasingly being used in industrial applications. India's man-made textile industry is capable of expansion in terms of raw material base and yarn and fabric conversion facilities. Today, it accounts for almost 32 per cent of the fibre/yarn base. Given the Indian advantages of lower production costs, dominance of medium-sized units

capable of catering to a small lot and volume orders, large domestic consumption which could neutralise adverse effects of overseas demand fluctuations and decline in production in the developed countries, the Indian synthetic textile producers have an edge. This will release more cotton for value-added exports.

5.10 SPINNING AND WEAVING With 39.02 million spindles and 4.69 lakh rotors, India has almost 19 per cent of the world spindlage. The spinning sector has kept itself healthy through timely investments and technology upgradation. Consequently, it is doing excellently in exports Since 1947, the mill the

powerlooms has grown from 24,000 to almost 16.92 lakh. A Technology Upgradation Fund Scheme is being mounted during the Ninth Plan. Upgrading technology level in the weaving sector by installing shuttleless or automatic looms and related accessories would ensure productivity enhancement and production of defect-free fabrics with value addition.

5.11 PROCESSING Processing and finishing are the weakest links in the Indian textile industry today. A conscious drive has been initiated to upgrade it by incentives in investment to the high-tech processing machinery, strengthening testing infrastructure by upgrading or setting up new laboratories, developing natural and vegetable dyes for commercial scale application, providing support for eco-friendly processing and other such measures. This would help improve the garment quality, contributing to

value addition and higher unit value realisation in exports and hence a larger market share.

5.12 INDIA'S POSITION IN WORLD TEXTILE ECONOMY The Indian textile industry has a significant presence in the world textile economy by virtue of its contribution to world textile capacity and world production of textile fibre/yarn :India's position in World textile economy. It contributes about 23% to the world spindleage and about 6% to the world rotorage and has second highest spindleage in the world after China. It has the highest loomage (including handlooms) in the world and contributes 61% to the world loomage. (Though this position cannot be considered as a 'strength' because in quantum terms we may have the highest loomage in the world, in terms of high-tech shuttleless looms, our contribution is only about 2.8% to the world loomage.) It contributes about 12% to the world production of textile fibres and yarns (including jute). It is the largest producer of Jute, second largest producer of silk and yarn, third largest producer of cotton synthetic fibres/yarns. 5.13 COST COMPETITIVENESS OF TEXTILE INDUSTRY India's position in comparison with other countries India has inherent strengths in terms of strong multi-fibre raw material base, low cost of labour, intellectual capital, dynamic and vibrant entrepreneurship. It is diluted to a great extent due to severe disadvantages suffered by the Indian textile industry in certain other areas affecting its cellulosic fibre / and fifth largest producer of

productivity, quality and cost competitiveness.The main disadvantaged factors are high interest cost, high power tariff, structural anomalies and technological obsolescence which is pervading all segments of the industry. As per ITMF study for the year 2003 of seven countries , i.e., Brazil, China, India, Italy, Korea, Turkey and USA. Power cost works out to be the highest in India in comparison to other countries. The power cost in total cost of spinning, weaving and knitting is in the range of 3% to 13%, while in India it is in the range of 6% to 17% except woven textured yarn Fabric in which case Italy is highest with 28%. -source "compendium of International Textile Statistics - 2004"I.

5.14 CONSUMER BUYING BEHAVIOUR The success of any product now lies in customizing it for the Indian market and working closely with manufacturing facilities and research centers in India. Now, Reliance CDMA phones come with the Indian flavour- unique polyphonic rings and colour displays ; the Samsung stables have the Metallica and Woofer series of TVs revolving around the song and dance routines of Hindi film industry; and Electrolux Kelvinator with their Hindi-speaking washing machine catering to the Indian housewife. The Indian market does lap up a foreign tag but it does so only with some level of customization. The realization that Indians are different from the Americans and the Europeans made the multinationals rework their marketing strategy. From introducing their products in a hurry without bothering to gauge whether the Indian consumers liked them or not, they had to graduate to develop products specially made for the Indians. These localized products are targeting the Indian consumers not as a single entity but also focusing on the distinctly different preferences of the urban, small town and rural Indians. During 2001 -Per capita purchase of textiles was 19 meters -In purchases of Man made /Blended and Mixed fabric Overall share of Man made /Blended and Mixed fabric stands at 58%

Urban India share of Man made /Blended and Mixed fab50% India share of Man made /Blended and Mixed fab60% -Purchases of Cotton Fabric Overall share in purchases of Cotton Fabric- 40%

, Rural

Urban India purchases of Cotton Fabric- 44% Rural India purchases of Cotton Fabric-38% Regional Buying Trend Man made / Blended and Mixed -Over 50% of the Man made / Blended and Mixed fabric purchased by North and West -West leads in purchases of Man made fabric -North leads in purchases of Blended/Mixed fabric Cotton Fabric -Maximum cotton purchases by Eastern region: 40% Silk -Maximum silk purchases by Southern region: 57%

Per Capita Purchase Meters-Table28Urban Cotton % Share Man-made % Share Blended / mixed % Share Pure silk % Share Woollen % Share All TextilesSource : Textile Compendium 2009

Rural 6 38 2 11 8 50 0 1 0 0 17

All India 7 40 2 11 9 47 0 1 0 0 19

11 44 3 12 10 41 1 3 0 1 24

Region Wise Fabric Purchase -2008Billion Meters -Table29North 1.4 18 0.5 22 3.0 33 0.0 13 0.0 37 4.9 26 South 1.8 24 0.5 26 2.1 23 0.2 57 0.0 4 4.6 24 East 3.0 40 0.3 16 1.3 14 0.1 18 0.0 37 4.7 25 West 1.1 14 0.7 32 1.8 20 0.0 8 0.0 10 3.6 19 Central 0.3 4 0.1 4 0.9 10 0.0 4 0.0 12 1.3 7 Total 7.7 2.1 9.0 0.3 0.1

Cotton % Share Man Made % Share Blended / Mixed % Share Pure Silk % Share Woollen % Share Grand Total % Share

19.2

Source : Textile Compendium 2009

5.15 SWOT ANALYSIS 5.15.1 SPINNING SECTOR - SWOT ANALYSIS Strength Large production base Skilled Man Power Domestic Orientation Raw material available at economical or international prices Finer count capability Major investments in Spindles

Weakness High cost base 29% either closed or obsolete which

need replacement With 21% spindle share production Opportunity Experience of exports share around 10%

Locational

advantage

to

cater

to

fabric producing markets Wide product range Short production cycles Threats Large Chinese Capacity expansion both for domestic and export markets High growth in filaments ? Rationalization of excise duty ?? End of quota system

5.15.2 WEAVING SECTOR - SWOT ANALYSIS Strength Large domestic market Production domestic oriented Cheap conversion cost in case of

the Decentralized sector

Weakness Demise of organised sector Poor quality and lack of export culture Production of large length of defect free fabric

Fragmented production base Lack of knowledge on fashion trends Opportunity Growing domestic demand Reduction in machinery ID to 5% Soft loans under TUFS Investments in Garment Sector Outsourcing of production by brand leaders Threats Lowering of tariffs End of quota system

Large Chinese Capacity expansion both for domestic and export markets

5.15.3 PROCESSING SECTOR- SWOT ANALYSIS Strength Apart from weaving , this is another major weak link Acts as a deterrent to producing quality processed fabrics to produce quality garments Opportunity -Customs duty on machinery imports at 5% -Soft loans under TUFS

Table-30

Table-31

Table-32

6.0 INDIAN FIBRE INDUSTRY 6.1 INDIA'S SYNTHETIC AND RAYON TEXTILE INDUSTRY India offers the global buyer the entire range of polyester, rayon, nylon, acrylic and blended textile items of high quality at competitive prices. And, its uniqueness is that it is able to supply both high and low-end textile items either in small or large volumes. supply. The Synthetic industry in the country has a largely self-sufficient raw material production base, innovative professionals, state-of-the -art plants and machinery, and an abundance of creative personnel coming up constantly with new effects, finishes and designs. synthetic and rayon textiles. At present, India exports synthetic and blended textile yarns worth nearly US $ 12501.52 US$ million annually. In these markets, Indian items compete with products of textile giants like Japan, Korea and Taiwan and outpace them. France. The annual fabric production in the country is around 41973 million Sq metres, of which 5876 million Sq metres are blended fabrics. The range of polyester, rayon, nylon and blended fabrics offered by India is truly fabulous. The main varieties in polyester filament fabrics categories are Georgette, Chiffon, Crepe, Tafetta, Cambric, Crepe-dechine, Voile, Habutae, Palacs, Palace crinkle, Gingham, Dobby, Velvet, Twill and Jersey. Polyester cotton and polyester viscose blended fabrics account for the bulk of the production and export of blended fabrics in The leading markets for Indian synthetic textiles today are the U.A.E., U.K., Italy, Spain, Turkey, U.S.A., Belgium, Germany and India has thus made a mark in the global market as a supplier of a wide range and variety of So, whatever may be the requirements of the foreign buyer, India is a dependable source of

India. drill.

The polyester blended items include sheeting, shirting, twill and Suitings and shirtings dominate the polyester-viscose blended

fabrics category. There is an equally exotic range of high quality decor fabrics offered by India. shades Overseas buyers looking for the trendiest designs, non-fading and durability curtains, can source their covers, requirements upholstery, of blankets, tablecloth, cushion

bedspreads,

counterpanes, bath mats, tie-backs, etc., from the huge collection of Indian home textiles with each item standing out for its finish, texture, print and shade. These items are woven from the finest yarns of 100% polyester, acrylic, polyester-cotton, silk-polyester, polyester-viscose, viscose spun and viscose-cotton in plain, dyed, printed and embroidered. Besides wholly synthetic and also blended fabrics, the industry offers a large range of made-up items like scarves/stoles/dupattas and odhanies in exotic shades, intricate patterns and magical finishes, exotic dyed, printed and embroidered dupattas and odhanies in metallic stripes, sequins and pearl and bead works which are in great demand in the Arab world as a specialty of India. West Asia. Indian acrylic knitwear is also popular in

6.1.2

GROWING

SHARE

OF

SYNTHETIC

TEXTILES

It is expected that the already substantial consumption of synthetic fibre in the Indian textile industry will reach global levels in the next few years. and the This projection is based on certain factors like the large subsequent economies of scale being attained, expansion taking place in the production of synthetic fibre and yarn, acorresponding expansion in production in the user-sectors, rising per capita consumption of cloth, limitations in growth in production of natural fibres, and greater dependence on synthetic textiles to meet the rising demand. These inherent advantages of the Indian synthetic textiles industry will further accelerate its growth rate in the coming years. 6.1.3 UNIQUE DVANTAGES The Indian synthetic and rayon industry has certain unique advantages which will go a long way in helping it to make a mark in the global market. The industry is self-sufficient and vertically integrated. Moreover, due to its centuries-old textile tradition, India is adept in the art and science of producing exquisite textiles. Besides, the diversified, small lot production situation prevalent in India makes it capable of coping better with changes in global fashion demand, and is well-oriented to execute small volume orders within a short span of time. is of course equally geared to execute high volume orders. The industry With its range

of products popular among the middle and the low-end consumers, India is capable of catering to all segments of the international market.

6.1.4 PRODUCTION SCENARIO The growth rate of man-made fibres in India has been impressive (from 498 million kgs in 1995-96 to 2072 million kgs in 2002-2003). 60% respectively. years. The spindleage is expected to reach 40 million in the next one year, a development which will enable the industry to produce over 3400 million kgs of yarn if the capacity utilization can reach 85% - which is the international norm. Since cotton production is more or less stagnant, and production of man-made fibres is rising, production of cotton yarn and non-cotton spun/blended yarns is expected to be equal in a year's time. As the importance of man-made fibre textiles is increasing, the production capacity of raw materials for the man-made fibre industry is going up with the current estimated production of around 4.4 lakh tonnes per annum. The Indian Synthetic and Rayon Textile industry produces the complete range of fibre and yarn for different end-uses. produced indigenously. fibre. Raw materials like DMT, Caprolactum, PTA, MEG, Acrylonitrile and rayon grade wood pulp are also In the cellulosic segement, India is producing viscose filament yarn, viscose staple fibre/viscose type yarn and modal the synthetic fibre/yarn produced in India include nylon filament yarn, polyester filament yarn, polypropylene filament yarn, nylon tyre yarn, acrylic staple fibre, polypropylene staple fibre and spandex fibre. 6.1.5 PRODUCTION OF FABRICS India manufactures around 41973 million sq. mtrs. of fabrics annually for clothing and furnishing, upholstery and household use. consist of all varieties, including synthetic filament blended/mixed fabrics. These fabrics fabrics and The production of synthetic yarn and fabric shows the growth rate at 75% and In fact, production of all Synthetic and Rayon textile items (fibre, yarn, raw material) has been going up steadily over many

The main fabric varieties manufactured in India

at present are polyester filament, viscose filament, polyester-cotton, polyester-viscose, viscose spun, polyester spun and acrylic spun. 6.1.6 EXOTIC MADE-UP ITEMS India also produces an exotic range of made-up items like scarves, stoles, dupattas, odhanies, shawls, cushion covers etc., in a wide variety of finishes like dyed, printed, embroidered, sequined, beaded and handpainted. 6.1.7 TREMENDOUS SCOPE FOR EXPANSION India has tremendous scope for further expansion of its exports of synthetic and rayon textiles in the coming years. for the next 20-30 years. The country has core competence in textiles and will remain competitive in the world markets India enjoys substantial cost advantages, The global scene too is favourable to especially in the area of labour.

India at the moment as countries in Europe, Japan, Korea, etc., are moving up the market, or vacating some areas in production of synthetics which leaves a much larger field open to expand our exports.

6.1.8 WORLD CLASS PLANTS India can boast of world-class plants to produce synthetic fibres and yarns and has acquired self-sufficiency in all raw materials. produce and supply quality yarns to the world. 6.1.9 EXPORTS OF SYNTHETIC AND RAYON TEXTILES Exports is expected to increase to US$50 Bn from present US$12.4 Bn by 2010. Highlights of Exports of Synthetic and Rayon Textiles in April/January-2003-2004Table -36

India has

also invested heavily in the spinning sector and is, therefore, in a position to

QUANTITY FIBRE/YARN Viscose Staple PSF ASF Pp Viscose Filament Yarn Nylon Filament yarn Polyester Filament Yarn PP Yarn Source: DIGCS,Calcutta 4.42 35.67 9.12 0.25 2.85 15.25 68.19 0.0

6.2 INDIAN PSF CAPACITIESYEAR PSF PRODUCERS Ahemedabad Mfg. And Calico Ptg.co. Ltd(Estd -1974) 1975 Terene Fibres India Ltd(Estd -1965) Indian Organic Chemicals Ltd.(Estd -1973) Swadeshi Polytex Ltd.(Estd -1973) JK Synthetics ltd.(Estd -1972) Ahemedabad Mfg. And Calico Ptg.co. Ltd(Estd -1974) 1985 Terene Fibres India Ltd(Estd -1965) Indian Organic Chemicals Ltd.(Estd -1973) Swadeshi Polytex Ltd.(Estd -1973) JK Synthetics ltd.(Estd -1972) Ahemedabad Mfg. And Calico Ptg.co. Ltd(Estd -1974) Terene Fibres India Ltd(Estd -1965) Indian Organic Chemicals Ltd.(Estd -1973) Swadeshi Polytex Ltd.(Estd -1973) JK Synthetics ltd.(Estd -1972) 1995 Reliance Industries Ltd(Estd -1986) Orissa Synthetics Limited.(Estd-1987) India Polyfibers Ltd.(Estd-1987) B