Indian Polyester – 2016 Celebrating 75 years of Polyester
10th August 2016
Prashant Agarwal
Jt. MD and Co Founder - Wazir Advisors
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Presentation Flow
1 Global Trade
2 Changing Pattern of Fibre Consumption at Global Level
3 Disconnect in Fibre Consumption in India vis-à-vis Global Level
4 Opportunities for Indian Textiles Industry in Domestic & Export Market
5 Action Plan for Indian Textile Players
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The global trade in textiles and apparel has grown at a CAGR of more than 6% from 2005 to 2014
Global textile & apparel trade is worth US$ 827 bn.
Date Source: UN Comtrade, Wazir Analysis
228 254 301 303 212
284 373 324 377 358
276 302
315 340
346 358
378 404 412 469 504
556 616 643
558 642
751 728 789
827
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Apparel Exports
Textile Exports
T&A Exports
45%
55%
Share
+6%
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India is the second biggest exporter of textile & apparel
Country 2014
Exports Share in Global
Exports
China & HK 317 38%
India 41 5%
Germany 38 5%
Italy 37 5%
Bangladesh 31 4%
Turkey 29 4%
Vietnam 27 3%
USA 26 3%
Viet Nam 25 3%
Spain 17 2%
France 17 2%
Belgium 16 2%
Rep. of Korea 16 2%
Netherlands 15 2% Total T&A Exports
827
Largest Exporters of T&A
Date Source: UN Comtrade, Wazir Analysis
2nd in Textile
Export with 6% Share
8th in Apparel
Export with 4% Share
2nd in Global
Export with 5% share
India’s Ranking in Global T&A Trade in 2014
India has potential to double its export share from present 5% to 10% in next 10 years
Values in US$ Billion
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1941, England – British scientists John Winfield & James Dickson invented polyester fibre
1946, USA - After the World War II was over, DuPont bought the right to make polyester fibre
1950, USA – Production of polyester fiber, named Dacron, started in DuPont factory in Delaware, USA
1951, USA – Polyester fabric was introduced to American public as “magic fabric” that needed no ironing
1982, India - Reliance Industries started production of polyester yarn
Polyester fibre production first started in 1950
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Globally polyester consumption is growing & will continue to grow further
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2000 2005 2010 2015
Kte
s
World Mill Consumption by Fibre
Polyester Nylon Acrylic
Viscose PP&Other Cotton
0
2,000
4,000
6,000
8,000
2000 2005 2010 2015 2020
Kte
s
World Mill Consumption by Fibre (excl Polyester and Cotton)
Nylon Acrylic Viscose PP&Other
20%
25%
30%
35%
40%
2000 2005 2010 2015 2020
Cotton Share of World Mill Consumption
Cotton Share
Polyester continues to grow market share. Other MMFs have relatively flat volumes
Date Source: PCI
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Till 2000, fibre consumption at global level was majorly cotton focussed.
By 2030, it is expected that consumption of polyester will be more than double to that of the cotton fibre.
Globally consumption of polyester will increase further
37% 36% 36% 35% 33% 31% 31% 30% 27%
36%
43% 44% 46% 48% 50% 50% 52%
59%
27%
21% 20% 19% 19%
19% 18% 18% 14%
2000 2007 2008 2009 2010 2011 2012 2020 (P) 2030 (P)
Cotton Polyester Others
Date Source: PCI Fibres
Widening gap between
Polyester and Cotton fibre
consumption
Global Fibre Consumption Trend
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Top 10 exporters of MMF based fabrics constituted 81% of world’s total trade in 2014
India ranked 7th among the top exporting countries of MMF Based Fabrics in 2014
China, South Korea & Taiwan are the Global leaders in MMF based fabric
Top Exporting Countries of MMF Based Fabrics
Date Source: UN Comtrade, Wazir Analysis
33% 35%
38% 40%
42% 45%
5% 5% 5% 5%
9% 8% 6% 5% 5% 5% 6% 5% 5% 5% 5% 4% 4% 4% 4% 4% 4% 4% 4% 4%
2009 2010 2011 2012 2013 2014
China South Korea Taiwan Italy Turkey
5% 5% 5% 5%
9%
8%
6%
5% 5% 5%
6%
5% 5% 5% 5%
4% 4% 4% 4% 4% 4% 4% 4% 4%
2009 2010 2011 2012 2013 2014
South Korea Taiwan Italy Turkey
Top Exporting Countries of MMF Based Fabrics (excluding China)
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Cotton accounted for nearly 51% of total fibre consumption in 2014
Polyester fibre consumption is gaining momentum due to factors like increased presence & sourcing by global brands where polyester fibre dominates, growth of women’s wear segment, growth of value retail etc.
But Indian textile industry is still Cotton focussed
Date Source: Fibre Policy, Wazir Analysis
Fibre Consumption Trend in India
60% 59% 59% 59% 58% 56% 55% 53% 51%
34% 35% 35% 35% 36% 37% 38% 39% 40%
6% 6% 6% 6% 6% 7% 7% 8% 9%
2000 2007 2008 2009 2010 2011 2012 2013 2014
Cotton Polyester Others
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Out of total 866 textile and apparel commodities* traded in 2014, India’s trade share is less than 1% in 402 commodities.
The untapped opportunity remains in MMF based product categories, which can give an exponential growth to India’s export of textile and apparel.
India’s presence is insignificant in some of the major MMF based product categories
* At 6 digit HS code level; Data Source: UN Comtrade, Wazir Analysis
India’s Trade Share in Top Traded MMF based Apparel Categories in 2014
Category End user Total Trade
(US$ Billion) Indian Trade (US$ Billion)
Share
Dresses W/G 15.1 0.71 4.7%
Trousers, bib and brace overalls, breeches and shorts W/G 14.9 0.28 1.9%
Jackets W/G 11.98 0.08 0.6%
Trousers, bib and brace overalls, breeches and shorts M/B 11.68 0.31 2.6%
Brassieres W/G 10.49 0.10 1.0%
Blouses, shirts and shirt-blouses W/G 9.25 0.81 8.7%
Jackets M/B 5.82 0.11 1.9%
Note: M/B – Men’s/Boys’; W/G – Women’s/Girls’
China is the leading exporter of the apparel categories mentioned above
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Consumption of Polyester fibre in domestic market will increase in the following segments:
Active-wear and sportswear
Women’s western office wear, party dresses and lingerie
School and corporate uniform
Women hygiene product
Technical textile products like protective wears, seat belts, airbags, seat covers and headliners
Consumption of Polyester based products will increase in domestic market as well
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Share of manmade fibre in total mill consumption is expected to reach ~65% by 2030.
Share of polyester fibre is expected to show a drastic increase and grow to 53% by 2030
Indian textile industry will consume more Polyester than Cotton within next five years
Values in ‘000 MT
Source: Wazir & PCI Analysis
40% 41% 42% 43% 44% 45% 46% 53%
6% 6% 6% 7% 7% 8% 8% 11%
51% 48% 47% 46% 45% 44% 43% 32%
3% 4% 4% 5% 4% 3% 3% 5%
2014 2015 2016 2017 2018 2019 2020 2030
Polyester Other MMF Cotton Other Natural Fibres
10,189 9,163 9,741 10,670 11,093 11,392 17,951 11,678
Total Fibre Consumption At Mill Level
To reap maximum benefit of the future scenario, India needs to focus on manufacturing of Polyester based textile products
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Taiwanese competitor Chinese competitor South Korean competitor
Far Eastern New Century
Jiangsu Hengli Group
Hyosung
Polyester fibre & filament, spun yarn, knitted & woven fabric, apparel
Polyester filament yarn, garment fabric and home textile fabric
Polyester, Nylon, Spandex fibre & filament, Aramide & carbon fibre, performance fabrics and carpets
Fibre & filament manufacturing , spinning, weaving/ knitting, processing and apparel manufacturing
Filament manufacturing and weaving
Fibre & filament manufacturing, weaving and processing
PSF: 489,600 MT PFY: 180,847 MT Spun Yarn: 395 MT Fabric: 23,460 MT Apparel: ~60 million pcs.
PFY: 600,000 MT Loom: 12,000 (hydraulic & air-jet)
Spandex: 170,000 tons Processing: 2.3 million meter
Company Revenue of US$ 6.8 billion in 2015
Consolidated revenue of US$ 4.8 billion in FY 2010
Consolidated revenue of US$ 11.1 billion in 2015
Leading companies in MMF based textile manufacturing are mostly vertically integrated with big capacities
Company
Products
Revenue
In-house Facilities
Capacities
Date Source: Company Websites
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India has to work across its value chain
Staple fiber
Filament
Yarn spinning
Knitting Weaving
Processing
Garments Home
Textiles Technical textiles
• Existing Indian manufacturers can scale up the capacities
• International players will invest in specialty fibers
• Existing Indian yarn spinners are competitive globally
• Significant investments will be required in knitting including warp knitting.
• Weaving infrastructure will need to be upgraded to handle specialty yarns and complex fabric types
• Processing will be the main challenge for Indian sector
• Players will have to opt for tie-ups with international partners for technical and market exposure
• Focus on design and product development aspect to sensitize demand growth
• Technical textiles investments will be required from Indian as well as international players
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Investment in MMF based fabric manufacturing, processing as well as garmenting is an attractive investment opportunity
• India is leading man-made fibre manufacturer of the world and has over capacity of manufacturing polyester fibre
• India is globally very competitive in spinning and enjoys leading position. • The intra-industry competition level is very high and it is majorly a commodity
business.
• Investment in fabric manufacturing will open immense opportunities in garment sector
• Bigger players can leverage this opportunity by setting large scale factories with defined process systems
• Indian players can bring high end garment manuf. technology in JV with Korean, Chinese, Japanese companies
• Weak-link in manmade fibre based textile value chain of India • Smaller units are unable to take the advantage of economy of scale • Too many players are involved in this part of the value chain, which increases
the cost & degrades the quality of service • Most units have old technology, which are not suitable for high quality products • Focus is on commodity products • Lot of MMF based processed fabric are imported to India
Fiber Manufacturing
Spinning
Fabric Manufacturing
Processing
Garmenting
Attractive Investment Opportunities
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For further information or queries:
Contact:
Prashant Agarwal Joint Managing Director [email protected] +91-9871195008 Wazir Advisors Pvt. Ltd. Tel : +91 124 4590300 www.wazir.in
Thank You!