Authorised Learning Centre

ACIIT INSTITUTE, Ludhiana.

Learning Centre Code No. 1788

FUTURE PROSPECTS OF POLYESTER YARN

BY

ANURAG VARSHNEY
Roll No.: 510928963

A project report submitted in partial fulfillment of the requirement for

MASTER OF BUSINESS MANAGEMENT

Of 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 YARN

Submitted 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 ANURAG VARSHNEY

Date: 26/12/2010 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 YARN

Submitted in partial fulfillment of the requirement for the degree of

MASTER OF BUSINESS MANAGEMENT

 Of Sikkim Manipal University, INDIA

Distance Education Wing

SIKKIM MANIPAL UNIVERSITY
Of Health, Medical & Technology Sciences

ANURAG VARSHNEY

Has 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) Objective
iii) 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 II
Project overview
i) Introduction.
ii) Objective
iii) 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, India’s 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
country’s 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 medium-
capacity 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 industry’s 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, China’s 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 meet the key marketing personnel’s for better information. •
To meet experts in the field.
• To browse the web for data collection and study about environment. •
To collect information about firm, products, industry, market,
competitors and general environment.
• To analyze the data collected.
• To forecast projections for the coming years. •
To derive conclusion based on analysis.
• 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 RIL’s 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. I’ve 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. it’s 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 puts tremendous pressure in the field to develop substitute
fibre which will cater to the need of the civilization. Whereas the growing
concern for envirionment is pressurizing the envirionment for
biodegradable fibres in one hand on the otherhand fashion trends and
changes in technology and political changes are making the market place
full of adventures and challenges.
 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

Management
Dillema
(Prospects of the
PSF
bussiness)

Management Question
What is the Current/future
PSF
business scenario?

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

Project Design

Primary research Secondary research

Meeting experts Studying journals

Studying Browsing Browsi
and news letters
books and company ng
trade reports sites intranet
and
publications

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

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 PROFILE

7.0 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 has been no looking back. Besides having two manufacturing
sites at Patalganga and Hazira, there are capacities of Apollo Fibres
Ltd. (Hosiarpur), India Polyfibres (Barabanki) and Orissa Synthetics
(Dhenkanal).
7.1.1 RELIANCE GROUP
The Reliance Group founded by Dhirubhai H. Ambani (1932-2002) is
India’s 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 Group’s 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 India’s
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 India’s GDP.

The Group contributes nearly 10% of the country’s indirect tax
revenues and over 6% of India’s exports. Reliance is trusted by an
investor family of over 3.1 million - India’s largest.

7.1.2 RELIANCE INDUSTRIES LIMITED

Reliance Industries Limited (RIL) is India’s 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 ‘World’s Largest Corporations’
and ranks amongst the world’s top 200 in terms of profits. RIL also
emerged as the only Indian company in the list of global companies
that create most value for their shareholders, published by Financial
Times based on a global survey and research conducted by
PricewaterhouseCoopers in 2004. RIL featured in the Forbes Global list of
world’s 400 best big companies and in FT Global 500 list of world’s
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
‘India’s 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 RANKS

Table-44

Product No Capacity Global

of sites ( ‘000 MT ) Ranking

Polyester 10 880 1st largest

PX 2 1700 3rd largest

Refinery 1 32000 5th largest

PTA 2 1300 5th largest

PP 2 1120 7th largest

Polymer 5 2565 Among top 10
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,
thus providing warmth and comfort when worn. These were being used for
making personal fashions and decoration of home etc., It was in the year
1950 that production of man-made fiber began for commercial use. The
finest silk - 'micro fiber' was developed in the year 1993. At present
artificial fiber (man made ) such as polyester is being used as the fashion of
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
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 PTA/DMT and MEG on either batch or
continuous polymerisation (cp_ - forming final polymer
• 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 of manmade fibres with cotton). Materials &
ProcessPolyester: Purified terephthalic acid (PTA) or Di-methyl
terephthalate (DMT) - both manufactured from paraxylene) - and
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 Scenario
4.1 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 YEARS

WORLD FIBRE CONSUMPTION Vs. POPULATION

Year Total population(Bn) Total fibre Prod(Mn Tonnes)
1950 2.56 9.4
1960 3.04 14.9
1970 3.71 21.8
1980 4.46 29.5
1990 5.28 40.8
2000 6.08 52.6
2003 6.34 57.7
Table-1
Fiber business had 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.
 fibre business growth
7 70
6 60
5 50
4 40
3 30
2 20
1 10
0 0
1950 1960 1970 1980 1990 2000 2003
year
Total population(Bn) 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 7.72 1.68 9.40 2.56 3.70
1960 11.61 3.37 14.97 3.04 4.90
1965 13.35 10.68 24.03 4.09 5.90
1970 13.40 5.49 18.89 3.35 5.60
1975 13.48 8.39 21.88 3.71 5.90
1980 15.19 14.63 29.82 4.53 6.60
1981 15.23 14.30 29.53 4.46 6.60
1982 15.47 13.60 29.07 4.61 6.30
1983 15.71 14.85 30.56 4.69 6.50
1984 16.24 15.76 32.00 4.77 6.70
1985 17.73 16.26 33.99 4.85 7.00
1986 19.46 22.61 42.07 5.61 7.50
1987 19.60 23.59 43.19 5.69 7.60
1988 19.63 20.77 40.40 5.53 7.30
1989 19.67 20.48 40.15 5.54 7.40
1990 19.74 19.74 39.48 5.37 7.40
1991 19.99 28.30 48.29 5.92 8.20
1992 20.19 27.52 47.71 5.85 8.20
1993 20.24 24.68 44.92 5.77 7.80
1994 20.64 17.86 38.50 5.02 7.70
1995 20.74 16.89 37.63 4.97 7.60
1996 21.07 18.54 39.62 5.11 7.80
1997 21.27 29.40 50.67 6.00 8.40
1998 21.41 18.94 40.35 5.20 7.80
1999 21.46 19.38 40.84 5.28 7.70
2000 21.51 31.15 52.65 6.08 8.70
2001 22.01 31.60 53.60 6.15 8.70
2002 22.61 35.10 57.70 6.34 9.10
2003 22.75 33.46 56.21 6.23 9.00
Table-2
 Population 2.5 times
Total fibre 6.1 times
Natural fibre 2.9 times
Manmade fibre 20.5 times
Kg / Capita 2.4 times
Table-3

NATURAL Vs MANMADE FIBRES Natural *

Manmade

45.00

40.00

35.00

30.00

25.00

20.00

15.00

10.00

5.00

0.00

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 growth
Double Exponential Smoothing: Manmade

year Forecast Lower Upper

2004 34.4290 26.4019 42.4560

2005 35.1542 23.8209 46.4876
2006 35.8795 21.0260 50.7331
2007 36.6048 18.1391 55.0705
2008 37.3301 15.2052 59.4550
2009 38.0553 12.2443 63.8664
2010 38.7806 9.2665 68.2947

The growth of synthetic fibre is

expected to reacha 40 MnTonnes
by 2010.

PROJECTION FOR NATURAL FIBRE GROWTH

Double Exponential Smoothing: Natural Fibres

Year Forecast Lower Upper

2004 22.9313 22.2845 23.5781

2005 23.2825 21.8053 24.7596
2006 23.6336 21.3206 25.9467
2007 23.9848 20.8347 27.1349
2008 24.3360 20.3485 28.3236
2009 24.6872 19.8620 29.5124
2010 25.0384 19.3754 30.7013

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

by 2010.
 Mn
Tonnes manmade cotton/wool/silk
1950 1.7 26.7
1960 3.4 42.6
1970 5.5 54.4
1980 14.6 68.2
1990 19.7 87.4
2000 31.1 107.4
2003 33.5 113.5
2010 38.8 129.9
Table-4 Consumption of fibres from 1950,fig from 2004 are estimated

cotton/wool/silk WORLD CONSUMPTION OF FIBRES

manmade

180.0

160.0

140.0

120.0

100.0

80.0

60.0

40.0

20.0

0.0
1950 1960 1970 1980 1990 2000 2003 2010

YEAR

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 times
Table-5
 World Production of Synthetic Fibers in Mn Tonnes
Polyester Polyamide Acrylics Others TOTAL Polyester Polyamide Acrylics Others
1970 34% 40% 21% 5% 4.809 1.64 1.92 1.01 0.24
1975 45% 33% 19% 3% 7.461 3.36 2.46 1.42 0.22
1980 47% 30% 19% 4% 10.779 5.07 3.23 2.05 0.43
1985 50% 26% 18% 6% 13.025 6.51 3.39 2.34 0.78
1986 50% 26% 18% 6% 13.645 6.82 3.55 2.46 0.82
1987 52% 25% 17% 6% 14.578 7.58 3.64 2.48 0.87
1988 53% 25% 16% 6% 15.172 8.04 3.79 2.43 0.91
1989 54% 24% 15% 7% 15.602 8.43 3.74 2.34 1.09
1990 53% 24% 14% 9% 16.191 8.58 3.89 2.27 1.46
1991 54% 22% 14% 10% 16.814 9.08 3.70 2.35 1.68
1992 56% 21% 13% 10% 17.693 9.91 3.72 2.30 1.77
1993 57% 20% 13% 10% 18.022 10.27 3.60 2.34 1.80
1994 58% 18% 13% 11% 19.779 11.47 3.56 2.57 2.18
1995 60% 19% 12% 9% 20.621 12.37 3.92 2.47 1.86
1996 61% 18% 12% 9% 21.81 13.30 3.93 2.62 1.96
1997 63% 16% 11% 10% 24.644 15.53 3.94 2.71 2.46
1998 65% 15% 10% 10% 25.521 16.59 3.83 2.55 2.55
1999 66% 15% 9% 10% 26.821 17.70 4.02 2.41 2.68
2000 66% 14% 9% 11% 28.389 18.74 3.97 2.56 3.12
2001 67% 13% 9% 11% 28.934 19.39 3.76 2.60 3.18
2002 68% 13% 9% 10% 30.694 20.87 3.99 2.76 3.07
2003 69% 12% 8% 10% 32.175 22.20 3.86 2.57 3.22
2004 70% 12% 8% 10% 33.29 23.39 3.91 2.58 3.41
2005 71% 11% 7% 10% 34.71 24.64 3.92 2.60 3.55
2006 72% 11% 7% 10% 36.13 25.88 3.94 2.62 3.69
2007 72% 11% 7% 10% 37.55 27.13 3.95 2.64 3.83
2008 73% 10% 7% 10% 38.97 28.38 3.96 2.66 3.97
2009 73% 10% 7% 10% 40.39 29.62 3.98 2.68 4.11
2010 74% 10% 6% 10% 41.81 30.87 3.99 2.70 4.25
Source:fibre year 2003-2004 -saurer
Table-6
Figures from 2004 onwards are estimated
 Growth of different fibre

35000
30000
25000
20000
15000
10000
5000
0
Polyester 1970 1975 1980 1985 1990 1995 2000 2003
Polyamide
Acrylic
others
Total year

% Vol of different fibre of total synthetic fibre prodn

80
70
60
50
40
30
20
10
0
1970 1975 1980 1985 1990 1995 2000 2003
Polyester
Polyamide
Acrylic year
others

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, Polyester’s share is
up from 27% in 1995 to 40% in 2001.In India, Polyester’s share up
from 18% in FY96 to 31% in FY02.
PRODN OF FIBRE IN INDIA
FY96 FY97 FY98 FY99 FY00 FY01 FY02

Polyester 633 826 1088 1228 1374 1417 1457

Cotton 2,521 2,764 2,662 2,839 3,066 2,890 2,907

an-made
DoOthe srtMc Fiber Shares
fibers 396 386 393 357 378 395 395
Table - 7

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 1980 1985 1990 1995 2000 2004

Developing countries

USA 20.9 22.2 25.9 30.9 33 33.9

EU(15 COUNTRIES) 15.4 15 18 19.5 23 23.5

Japan 16.8 17.7 21.8 23.4 26.2 27

RUSSIA 14.7 14.6 14 7.5 10 10.5

Total 14.1 13.9 14.1 7.6 10.5 11

Developing countries

India 2.26 2.44 2.91 3.63 4.3 5

China 4 5 5.5 6 6.5 8

East asia-s-e asia 3.5 3.6 4.7 5.5 6.3 6.7

World 6.8 6.8 7.7 7.7 8.5 8.6

Table -8

Very High Growth of manmade fibers is forecasted is forecasted in the

160

140

120

100 Other Synthetic

Polyester
80 Cellulosic

60 Natural

40

20

0
1970 1980 1990 2000 2010 2020 2030 2040 2050

SOURCE -PCI-2004

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 , outstanding yarn
properties helped Filament to capture the staple market.
FILAMENT VS STAPLE
4.3.3 POLYESTER

Double Exponential Smoothing for Polyester

POLYESTER

35 Actual
Year Forecast Lower Upper Predicted
Forecast
Actual
2004 23.3879 22.4197 24.3561 25 Predicted
Forecast
2005 24.6352 23.3281 25.9422
2006 25.8824 24.2116 27.5532
2007 27.1297 25.0834 29.1759 15
Smoothing Constants

Alpha (level): 0.810

2008 28.3769 25.9490 30.8048 Gamma (trend): 0.546

2009 29.6241 26.8109 32.4374 MAPE: 3.88964

5
2010 30.8714 27.6704 34.0724 MAD:
MSD:
0.39520
0.25480

1980 1990 2000 2010

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 Staple

33% 29%
Present breakup of
polyester
consumption
Tex Yarn Staple

38% Tex Yarn

Ind Yarn
 Top 3 Producing Countries

PFY 2003 % of world 2000 % of world 1995 % of world

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

World Production of Manmade Fibers

mill. tonnes 1995 1996 1997 1998 1999 2000 2001 2002 2003 CARG%
PR China 3.2 3.5 4.3 5.2 5.8 6.7 8.2 9.9 11.7 15%
GROWTH% 9% 23% 21% 12% 16% 22% 21% 18%
U.S. 4.2 4.2 4.4 4.3 4.1 4.2 3.6 3.8 3.8 -1%
GROWTH% 0% 5% -2% -5% 2% -14% 6% 0%
Taiwan 2.6 2.7 3.1 3.3 3.1 3.2 3.1 3.2 3.2 2%
GROWTH% 4% 15% 6% -6% 3% -3% 3% 0%
South Korea 1.9 2.1 2.5 2.5 2.7 2.8 2.4 2.3 2.2 2%
GROWTH% 11% 19% 0% 8% 4% -14% -4% -4%
India 1 1.2 1.5 1.6 1.8 1.9 1.9 2 2 8%
GROWTH% 20% 25% 7% 13% 6% 0% 5% 0%
Indonesia 0.9 1 1.1 1.1 1.2 1.4 1.5 1.4 1.4 5%
GROWTH% 11% 10% 0% 9% 17% 7% -7% 0%
Japan 1.7 1.7 1.8 1.7 1.5 1.5 1.5 1.3 1.2 -4%
GROWTH% 0% 6% -6% -12% 0% 0% -13% -8%
SUBTOTAL 15.5 16.4 18.7 19.7 20.3 21.7 22.1 23.9 25.6 6%
ROW 8.1 8.3 8.8 8.6 9.1 9.4 9.5 9.6 9.6 2%
TOTAL 23.6 24.7 27.5 28.3 29.4 31.1 31.6 33.5 35.1 5%
4.3.3.1 BIGGEST PLAYERS OF POLYESTER
TABLE-16
FILAMENT AND STAPLE
Taking 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 NAN YA 975 (in Taiwan, USA)

2 TUNTEX/XIANG LU 925 (in Taiwan, Thailand, China)
3 RELIANCE 890 (in India)
4 FAR EASTERN TEXTILE 708 (in Taiwan, China)
5 HUVIS 653 (in Korea, Indonesia)
6 TEIJIN 652 (in Japan, USA, Mexico, Germany,
Indonesia, Thailand)
7 YIZHENG 630 (in China - part of Sinopec)
8 HUALON 567 (in Taiwan, Malaysia)
9 SINOPEC 512 (in China - excl. Yizheng)
10 KOSA 508 (in USA, Mexico, Germany)
Source: PCI Fibres & Raw Materials

Table-17
POLYESTER FILAMENT YARN

Taking just polyester filament yarn, the list for 2003 (in '000 tons) is as
follows

1. NAN YA 575 (all textile filament)

2. HUALON 513 (all textile filament)
3. TUNTEX 450 (all textile filament)
4. RELIANCE 434 (all textile filament)
5. FAR EASTERN 388 (83% textile filament*)
TEXTILE 340 (all textile filament; in
6. ZHEJIANG HENGYI China)
7. SHAOXING 320 (all textile filament; in
YUANDONG 7. China)
ZHEJIANG TONGKUN 320 (all textile filament; in
9. TEIJIN China)
10. HYOSUNG 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 FIBER
And for polyester staple, the list for 2003 (in '000 tons) is as follows.

1. TUNTEX/XIANG LU 475
2. SANFANGXIANG GROUP 460 (in China)
3. RELIANCE 456
4. YIZHENG 440 (part of Sinopec)
5. WELLMAN 418 (in the USA and Ireland)
6. NAN YA 400
7. HUVIS 385
8. TEIJIN 346
9. SINOPEC 335 (excl. Yizheng)
10. FAR EASTERN TEXTILE 320
10. AKRA (DAK) 320 (in the USA and Mexico)
Source: PCI Fibres & Raw Materials

Table-19
GLOBAL RANKINGS - 2010

Taking 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. SHAOXING YUANDONG 1620 (in China)

2. YIZHENG 1540 (in China - part of Sinopec)
3. RELIANCE 1350 (in India)
4. NAN YA 1250 (in Taiwan, USA, Vietnam,
5. FAR EASTERN TEXTILE 1110 (in Taiwan, China)
China)
6. TUNTEX/XIANG LU 1025 (in Taiwan, Thailand, China)
7. ZHEJIANG 930 (in China)
RONGSHENG 8. INDO- 896 (in Indonesia, Thailand, India)
RAMA + ASSOC. 9. 873 (in Korea, Indonesia,
HUVIS China)
10. SANFANGXIANG GROUP 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 - 2010

Taking 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. RELIANCE 744 (all textile
3. NAN YA filament)
4. ZHEJIANG HENGYI 720 (all textile
5. YIZHENG filament)
6. FAR EASTERN TEXTILE 660 (all textile filament; in China)
7. ZHEJIANG 640 (86% textile filament; part of
RONGSHEN Sinopec) 550 (82% textile filament)
8. ZHEJIANG TIANFENG 530 (all textile filament)
9. ZHEJIANG 530 (all textile filament; in
ZONGHENG China)
10. ZHEJIANG 525 (all textile filament; in
TONGKUN 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 900 (part of Sinopec)

2. SANFANGXIANG 860
GROUP 3. SHAOXING 700
YUANDONG 4. RELIANCE 606
5. HUVIS 605
6. TUNTEX/XIANG LU 575
7. FAR EASTERN 560
TEXTILE 8. INDO-RAMA 532
+ ASSOC. 9. NAN YA 530
10. SINOPEC 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
Staple

10 Filament

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 per-
capita 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-MEG-
Polyester and most of the companies rely on imports.
• There are Several small capacity players-Government subsidized ,
without any viable cost or Quality model , these will call in for fierce
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.
4.4 FUTURE FIBER

Today’s challenge - eco friendly fiber !!!

Today’s 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 80’s 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 90’s, 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 world’s 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 13 per cent of the workforce

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?
China’s 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
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, China’s 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 China’s
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 world’s
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 China’s higher productivity are its low cost-
high 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 China’s weaknesses are
India’s strength. China’s drawback is essentially a people’s 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
government’s 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 INDIA’S TEXTILES : SCENARIO

5.1 INTRODUCTION

Textile is one of India’s 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 foot-
loose 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 2002-
03. 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 man-
made 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 of textile products for both home consumption and
exports. Thus, the per-capita availability of cloth has increased from17 sq.
meters in 1982 to about 31.24 sq. meters in 2003-04. 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 Manufacturer’s 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 Government’s 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
achieves cost reduction, attains quantum jump in quality production
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
facing challenges and
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
is
• 10% of total excise revenue
Table-27

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.

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 cellulosic fibre /
yarn, third largest producer of cotton and fifth largest producer of
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
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% , Rural
India share of Man made /Blended and Mixed fab60%

-Purchases of Cotton Fabric

•Overall share in purchases of Cotton Fabric- 40%

•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-Table28

Urban Rural All India

Cotton 11 6 7
% Share 44 38 40
Man-made 3 2 2
% Share 12 11 11
Blended / mixed 10 8 9
% Share 41 50 47
Pure silk 1 0 0
% Share 3 1 1
Woollen 0 0 0
% Share 1 0 0
All Textiles 24 17 19

Source : Textile Compendium 2009

Region Wise Fabric Purchase -2008Billion Meters -Table29

North South East West Central Total

Cotton 1.4 1.8 3.0 1.1 0.3 7.7
% Share 18 24 40 14 4
Man Made 0.5 0.5 0.3 0.7 0.1 2.1
% Share 22 26 16 32 4
Blended / Mixed 3.0 2.1 1.3 1.8 0.9 9.0
% Share 33 23 14 20 10
Pure Silk 0.0 0.2 0.1 0.0 0.0 0.3
% Share 13 57 18 8 4
Woollen 0.0 0.0 0.0 0.0 0.0 0.1
% Share 37 4 37 10 12

Grand Total 4.9 4.6 4.7 3.6 1.3 19.2

% Share 26 24 25 19 7
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 share around 10%

Opportunity

• Experience of exports
• Locational advantage to cater to

fabric producing markets

• Wide product range

• Short production cycles

• End of quota system

Threats

• Large Chinese Capacity expansion

both for domestic and export markets

• High growth in filaments ?

• Rationalization of excise duty ??

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. So, whatever may be the
requirements of the foreign buyer, India is a dependable source of
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. India has thus made a
mark in the global market as a supplier of a wide range and variety of
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. The leading markets for Indian synthetic textiles today
are the U.A.E., U.K., Italy, Spain, Turkey, U.S.A., Belgium, Germany and
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-de-
chine, 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
India. The polyester blended items include sheeting, shirting, twill and
drill. Suitings and shirtings dominate the polyester-viscose blended
fabrics category.

There is an equally exotic range of high quality decor fabrics offered by

India. Overseas buyers looking for the trendiest designs, non-fading
shades and durability can source their requirements of blankets,
bedspreads, curtains, cushion covers, upholstery, tablecloth,
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. Indian acrylic knitwear is also popular in
West Asia.
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. This projection is based on certain factors like the large
expansion taking place in the production of synthetic fibre and yarn,
and the subsequent economies of scale being attained,
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. The industry
is of course equally geared to execute high volume orders. 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). The
production of synthetic yarn and fabric shows the growth rate at 75% and
60% respectively. In fact, production of all Synthetic and Rayon textile
items (fibre, yarn, raw material) has been going up steadily over many
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. Raw materials like DMT,
Caprolactum, PTA, MEG, Acrylonitrile and rayon grade wood pulp are also
produced indigenously. In the cellulosic segement, India is producing
viscose filament yarn, viscose staple fibre/viscose type yarn and modal
fibre. 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. These fabrics
consist of all varieties, including synthetic filament fabrics and
blended/mixed fabrics. 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 hand-
painted.

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. The country has core
competence in textiles and will remain competitive in the world markets
for the next 20-30 years. India enjoys substantial cost advantages,
especially in the area of labour. The global scene too is favourable to
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. India has
also invested heavily in the spinning sector and is, therefore, in a position to
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-2003-2004 Table -36

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

YEAR PSF PRODUCERS CAPACITY(TPA))

Ahemedabad Mfg. And Calico Ptg.co. Ltd(Estd -1974) 7968
Terene Fibres India Ltd(Estd -1965) 36000
1975 Indian Organic Chemicals Ltd.(Estd -1973) 20000
Swadeshi Polytex Ltd.(Estd -1973) 14000
JK Synthetics ltd.(Estd -1972) 16000

Ahemedabad Mfg. And Calico Ptg.co. Ltd(Estd -1974) 7968

Terene Fibres India Ltd(Estd -1965) 36000
1985 Indian Organic Chemicals Ltd.(Estd -1973) 20000
Swadeshi Polytex Ltd.(Estd -1973) 14000
JK Synthetics ltd.(Estd -1972) 16000

Ahemedabad Mfg. And Calico Ptg.co. Ltd(Estd -1974) 7968

Terene Fibres India Ltd(Estd -1965) 36000
Indian Organic Chemicals Ltd.(Estd -1973) 20000
Swadeshi Polytex Ltd.(Estd -1973) 14000
JK Synthetics ltd.(Estd -1972) 16000

1995 Reliance Industries Ltd(Estd -1986) 65000

Orissa Synthetics Limited.(Estd-1987) 17172
India Polyfibers Ltd.(Estd-1987) 21000
Bongaigaon Refinery & Petrochemicals Ltd.(Estd -1988) 30000
JCT Fibers Ltd.(Estd -1989) 37000
Indorama Synthetics (I) Ltd (1995) 30000
Arora Fibers Ltd.Estd 1995)(by recycling waste) 7200

Ahemedabad Mfg. And Calico Ptg.co. Ltd(Estd -1974) 7968

Indian Organic Chemicals Ltd.(Estd -1973) 20000
Swadeshi Polytex Ltd.(Estd -1973) 14000
JK Synthetics ltd.(Estd -1972) 16000
Reliance Industries Ltd(Estd -1986) 453000

2008 Orissa Synthetics Limited. 31000 31000

RIL
JCT Fibers Ltd. 81000 Acquired 81000
India Polyfibers Ltd. 38000 Sites 38000
Bongaigaon Refinery & Petrochemicals Ltd. 30000
Indorama Synthetics (I) Ltd (1995) 140000
Arora Fibers Ltd.Estd 1995)(by recycling waste) 7200
Viral Filaments(Estd 1996)(By-Recycling waste) 5000
Table-37
Producers of PSF in India from the beginning of the industry till
date.Industries shown in subtle colour are closed down.
 6.3 Domestic Consumption of PSF

PSF SUPPLY DEMAND

1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
PSF
consumptio 120.812 131.342 153.316 212.094 254.378 258.978 326.033 457.203 523.527 514.25 558.491 560.465 578.622 671.4213 739.4411 810.785 895.23
n in KTA
PSF Imports
in KTA 10.476 8.369 9.106 19.137 44.306 40.433 38.564 29.766 17.444 13.83 21.309 26.947 25.812 20.7011 22.3801 24.059 25.738

PSF Exports
in KTA 23.871 13.185 17.313 7.105 11.002 8.889 8.229 7.966 16.587 51.065 29.238 17.902 29.32 28.0713 28.8741 29.6769 30.48

PSF PRODN
IN KTA 134.207 136.158 161.523 200.062 221.074 227.434 295.698 438.616 522.67 551.485 566.415 551.42 582.13 608 608 608 608

DEFICIT (70.79) (137.94) (208.40) (291.97)

Table-38

PSF consumption in KTA

PSF PRODN IN KTA PSF SUPPLY-DEMAND

DEFICIT

1200 0

(70.79)
1000 -100
(137.94)

800 (208.40) -200

600 (291.97) -300

(366.02)
400 -400

(445.93)

200 -500
(532.25)

0 -600
1990- 1991- 1992- 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000- 2001- 2002- 2003- 2004- 2005- 2006- 2007- 2008- 2009-
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
FINANCIAL YEAR

PSF deficit shows to be increasing by 2010 deficit will reach a staggering

532.25 KTA with a present rate of domestic production of 608 KTA. PSF
demand by the year 2010 is likely to touch 1138 KTA.
6.4 DEMAND AND SUPPLY
Textile spinning mills are the principal consumers of natural and
manmade fibre in India. Consumption of PSF in India has increased with
growth in the textile industry and attendant growth in the industry's
average spinning capacity.
The demand for PSF in the last three years has been increasing at a
compound annual rate of 27 per cent. The main reasons cited for the
growth are as follows:
• Shortage of cotton,
• Increased export of PC yarn and fabrics,
• Easy availability of PSF due to sufficient production and •
Competitive prices of PSF.

The prices of input materials for PSF can vary drastically, depending on
the exchange rates of the rupee and the prices of oil __ PTA and MEG
are basic raw materials of the PSF industry and they are both
petrochemical elements. In the current year, the prices of input
materials have risen significantly.
This is coupled with the serious problem of dumping. It is a major
threat as
countries such as Korea and Japan, have been dumping their produce in
the local
market. The local industry suffers, as the dumped produce is cheaper
than the
locally manufactured PSF. To counter this, an anti-dumping resolution
has been
passed.
PSF serves as a substitute for cotton. As a result, the demand for
cotton can be easily replaced by PSF. It is in the interest of the cotton
growers that less and less PSF and more cotton are consumed. At the
same time, the textile sector is in a position to exert immense
pressure on the government, as the textile sector prefers to have PSF
 at low prices to manufacture mixed fabrics.

With time, the demand has been saturated with supply. The product
has achieved maturity. Looking at the demand growth for PSF over the
last several years, it can safely be assumed that the demand will
continue to outstrip supply in the future. With the local mills running to
full capacity, imports are used to bridge the demand\ supply gap.

6.5 DEMAND DETERMINANTS

Except for the fibre consumption downstream and the fibres exported and
imported demand is going to be affected by a lot of economic ,non economic
factors.
Table -39
The economic factors: Condition
Income – Mainly per capita income GDP growth rate >8%
Price of the goods Polyester Price is low
Inflation <8%, after economic reforms

Economic Outlook Very bright-Going to be the

superpower
The Non –economic Factors:
Population Going to be the most populous
country

Properties of the fiber. Excellent

Technological advancement for fiber /textile m manufacturing and Economic scale

size is changing-lots of
application. research is going on.

Usability of fiber in different human need Apparel>Home>Industrial

Priority of textile spending to other spending People are highly fashion

conscious
rfibercoEMAND GROWTH DRIVERS
Climate Tropical

Inter fiber competition Polyester in less costlier than other

fiber
Culture/Fashion Fashion fabric
 1. Consumption pattern of people are likely to increase .Per capita
fibre consumption of India at present is around 2.3% which is
likely increase to 3.2% by 2010.
2. Fashion trends are changing which calls in for more polyester
consumption.
3. Industrial applications like geo textiles filtration media,tyre
cord,ropes ,tents and tarpolines.
4. Medical applications- suturing anti microbial,bandages .
5. Filling applications like bedding,pillows quilts etc.
6. Construction reinforcement material.
7. Used extensively in FRPs for defence applications etc.
8. Short -cut fibres have paved their way into the paper making.
Application as fashion fabrics in making carpets, nonwovens,
uphoslery etc

6.5.2 MACRO ECONOMIC FACTORS AFFECTING DEMAND

• Indian economy is poised for a very high growth(>8-10%).
• In India Textile consumption directly vary with per capita NNP (
Net National Product),in case of China it is half of NNP.
• Indian manufacturing is now become globally competitive .
• Growing population,by 2050 India will be the most
populouscountry of this planet.
• Change in demographic profile.(350 million people of -Productive
age group)-2025 in the peak.
• A booming textile sector-domestic market of more than US $25
Billion (Year 2002)-Export market US- ($50Billion by 2010)
• Textile outsourcing by developed nation : Now is an emerging
story.
• Textile industry has high potential to grow .
 • The BRIC Report(Brazil,Russia,India,China):Indian-economy in
the year 2030: Third biggest economy after Japan.

6.6 DEMAND PROJECTIONS

Whereas the spun yarn shows a growth of 4%,the filament yarn
shows a
compounded growth rate of 11% .The share of polyester consumption
have
grown from 87% in 1997-98 to 94% in 2002-03 which shows a
compounded
annual growth rate of 7%. In the weaving sector the non cotton and
blended
fabric growth rate is 8% and 1% respectively. This growth rate is a major
driver
for polyester consumption demand. Over the previous decade,
local
demand of yarns has increased on an average annual basis by 4.8% to
about 3 million tonnes in 2003/04. During this period the ratios of the
yarn types have drastically changed and polyester continued its
triumphal procession.
The share of polyester in filament yarns has gone up from 74% to
91% and in non-cotton spun yarn blends from 58% to 74%. The
growing filament demand in India resulted from a shift in consumer
preference towards synthetics particularly in rural areas, the
consumption rose from 49% to 66% over this period. Cotton demand
in the same areas dropped from 51% to 34%. Two of the fastest
growing end-uses for filament in India have been stimulating this
growth.
Firstly, sarees - traditional Indian dress for ladies - before the
widespread of synthetics were made for the high-end of the market
out of silk and for the low-end out of cotton. The introduction of high
taxes on polyester by the Indian government was to protect the own
cotton industry. As a result, polyester became an expensive fiber with
high in demand among rich people only. The growing demand for
polyester sarees substituted more and more silk in the high-end
market. After tax reductions on polyester, a booming demand for
polyester sarees materialized which still had the image of an exclusive
piece of garment but became affordable to a larger share of Indian
ladies.
Secondly, there has been a growing polyester demand for men’s wear
trousers and suitings.Changing purchasing patterns have been
influenced by its wearing comfort, easy care and advantages in price.
Previous year’s polyester output has increased by 7.2% to 22.26

million tonnes. Above average growth has been observed in filament

markets, rising by 7.6% to 12.87 million tonnes. Staple fibers went up by

6.6% to 9.39 million tonnes.

6.7 POLYESTER FILAMENT YARN

Polyester filament yarn is growing @ 6% carg over 97-98 prodn

.Looking at the downstream industries polyester filament yarn

consumption is growing @ 11% and polyester cloth consumption is

increasing @Share of Staple and Filament in India

•In India annual demand for Yarn has increased on an avg 4.8 % to

3.0 million ton.

•During this period the ratios of yarn shifted from cotton to polyester

•The share of polyester in filament has grown from 74% to 91 %

•The share of polyester in non cotton spun blend from 58% to74 %

•Polyester in rural India shifted from 49 % to 66 %

•The main Consumers - Sarees and men’s wear

6.8 DOMESTIC DEMAND OF VARIOUS FIBERS

VSFCONS in KTA -Table40

1990-91 154
1991-92 163
1992-93 161
1993-94 181
1994-95 195
1995-96 207
1996-97 186
1997-98 196
1998-99 182
1999-2000 205
2000-2001 221
2001-2002 191
2002-2003 226
2003-2004 239
2004-2005 240
2005-2006 242
2006-2007 242
2007-2008 244
2008-2009 245
2009-2010 246

VSFCONS IN KTA
VSFCONS in tonnes
Linear (VSFCONS in tonnes)
350

300
y = 6.4294x + 146.08
R2 = 0.8843
250

200

150

100

50

0
1990- 1991- 1992- 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000- 2001- 2002- 2003- 2004- 2005- 2006- 2007- 2008- 2009-
91 92 93 94 95 96 97 98 99 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

YEAR
 AFSCONS in KTA Table-41

1990-91 47
1991-92 50
1992-93 54
1993-94 72
1994-95 99
1995-96 92
1996-97 109
1997-98 111
1998-99 105
1999-2000 99
2000-2001 104
2001-2002 114
2002-2003 119
2003-2004 129
2004-2005 139
2005-2006 149
2006-2007 161
2007-2008 171
2008-2009 182
2009-2010 195

Figs from 2003-4 onwards are projected figures.

ASFCONS in tonnes
ASFCONS IN KTA
Poly. (ASFCONS in tonnes)

200

180 y = 0.0747x2 + 4.8054x + 51.068

R2 = 0.9156
160

140

120

100

80

60

40

20

YEAR
 COTTON CONS in K tones table-42

1990-91 1822
1991-92 1766
COTTON CONSUMPTION IN KTA
COTTON CONSUMPTION in tonnes
1992-93 1895
4500 Poly. (COTTON CONSUMPTION in 1993-94 2051
tonnes)
1994-95 2065
4000 1995-96 2295 y = 2.6694x2 + 49.702x + 1807.2
R2 = 0.9413
1996-97 2566
3500
1997-98 2719
3000 1998-99 2485
1999-2000 2652
2500 2000-2001 2721
2001-2002 2701
2000
2002-2003 2652
1500 2003-2004 2754
2004-2005 2968
1000 2005-2006 3179
2006-2007 3452
500
2007-2008 3627
0 2008-2009 3808
2009-2010 3995

COTTON yarn prodn in Mn kg Table-43

YEAR
1990-91 1510
1991-92 1450
1992-93 1523
COTTON yarn prodn in Mn kg COTTON YARN PRODN IN KTA
Poly. (COTTON yarn prodn in Mn kg) 1993-94 1622
4000 1994-95 1586
1995-96 1894
3500
1996-97 2148 y = 3.0132x2 + 32.645x + 1480.3
1997-98 2213 R2 = 0.938

3000 1998-99 2022

1999-2000 2204
2500
2000-2001 2267
2001-2002 2212
2000 2002-2003 2177
2003-2004 2254
1500
2004-2005 2446
2005-2006 2631
1000 2006-2007 2874
2007-2008 3015
500
2008-2009 3157
2009-2010 3300
0
1990- 1991- 1992- 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000- 2001- 2002- 2003- 2004- 2005- 2006- 2007- 2008- 2009-
91 92 93 94 95 96 97 98 99 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
YEAR
 COTTON yarn prodn BLENDED yarn NONCOTTON yarn
in Mn kg prodn in Mn kg prodn in Mn kg
1990-91 1510 210 104
1991-92 1450 237 118
1992-93 1523 253 119
1993-94 1622 311 134
1994-95 1586 351 153
1995-96 1894 395 196
1996-97 2148 484 162
1997-98 2213 583 177
1998-99 2022 595 191
1999-2000 2204 621 221
2000-2001 2267 646 247
2001-2002 2212 609 280
2002-2003 2177 585 319
2003-2004 2254 665 381
2004-2005 2446 750 377
2005-2006 2631 840 371
2006-2007 2874 953 357
2007-2008 3015 1049 351
2008-2009 3157 1153 342
2009-2010 3300 1268 329

Table -41
 BLENDED yarn prodn in Mn kg BLENDED YARN PRODN IN KTA
Poly. (BLENDED yarn prodn in Mn kg)

1200

y = 0.3277x2 + 33.131x + 189.83

R2 = 0.9392
1000

800

600

400

200

0
1990-1991-1992-1993-1994-1995- 1996-1997-1998-1999-2000-2001-2002-2003-2004-2005-2006-2007-2008-2009-
91 92 93 94 95 96 97 98 99 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
YEAR

NONCOTTON yarn prodn in Mn kg PRODUCTION OF NON COTTON YARN IN KTA

Poly. (NONCOTTON yarn prodn in Mn kg)
700

600

y = 1.2643x2 - 2.4853x + 121.64

R2 = 0.9868
500

400

300

200

100

0
1990- 1991- 1992- 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000- 2001- 2002- 2003- 2004- 2005- 2006- 2007- 2008- 2009-
91 92 93 94 95 96 97 98 99 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
YEAR
 CLOTH AVAILIBILITY SQCM CLOTH AVAILIBILITY PER CAP SQCM
Linear (CLOTH AVAILIBILITY SQCM)

380000
y = 6420x + 233904
360000 R2 = 0.9415

340000

320000

300000

280000

260000

240000

220000

200000
1990-1991-1992-1993-1994- 1995-1996-1997-1998-1999-2000-2001-2002- 2003-2004-2005-2006-2007-2008-2009-
91 92 93 94 95 96 97 98 99 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
YEAR

Cloth Availibility in sqcm Table-42

1990-91 241400
1991-92 228700
1992-93 245000
1993-94 262200
1994-95 259800
1995-96 279900
1996-97 293000
1997-98 309200
1998-99 281900
1999-2000 305500
2000-2001 306800
2001-2002 319700
2002-2003 313700
2003-2004 312400
2004-2005 323367
2005-2006 333699
2006-2007 348472
2007-2008 355206
2008-2009 361941
2009-2010 368676
 DOMESTIC DEMAND FOR COTTON/BLENDED/NONCOTTON YARNS
AND DEMAND FOR COTTON/VISCOSE/AFS -Table-43

TOTAL

COTTON COTTON BLENDED yarn

VSFCONS
CONSUMPTION yarn yarn NONCOTTON prodn CLOTH
in KTA
in KTA ASFCONS prodn in prodn in yarn prodn in Mn AVAILIBILITY
in KTA Mn kg Mn kg in Mn kg kg SQCM

1990- 91 1822 154 47 1510 210 104 1824 241400

1991- 92 1766 163 50 1450 237 118 1805 228700
1992- 93 1895 161 54 1523 253 119 1895 245000
1993- 94 2051 181 72 1622 311 134 2067 262200
1994- 95 2065 195 99 1586 351 153 2090 259800
1995- 96 2295 207 92 1894 395 196 2485 279900
1996- 97 2566 186 109 2148 484 162 2794 293000
1997- 98 2719 196 111 2213 583 177 2973 309200
1998- 99 2485 182 105 2022 595 191 2808 281900
1999- 2000 2652 205 99 2204 621 221 3046 305500
2000- 2001 2721 221 104 2267 646 247 3160 306800
2001- 2002 2701 191 114 2212 609 280 3101 319700
2002- 2003 2652 226 119 2177 585 319 3081 313700
2003- 2004
2754 239 129 2254 665 381 3300 312400
2004- 2005 2446 3573
2968 240 323367
139 750 377
2005- 2006 2631 3843
3179 242 333699
149 840 371
2006- 2007 2874 4184
3452 242 348472
161 953 357
2007- 2008
3627 244 171 3015 1049 351 4415 355206
2008- 2009 3157 4652
3808 245 361941
182 1153 342
2009- 2010 3300 4898
3995 246 368676
195 1268 329
7.2 SWOT ANALYSIS - RIL PSF BUSSINESS
STRENGTHS
• An affordable substitute for Cotton
- Already 60 mills in South has been converted
from cotton to polyester
• Production cost - reducing
- Core competency because of strong
backward integration
• Versatile - In product mix
- Because of number of separate establishment
with strong versatile technology
• Customized ability for Niche applications
- As having different capacities of production
line, special requirement of customer fulfilled

•Capacity expansion
- Latest capacity expansion by 20% in Hazira
only by the end of 2002.
- Acquisition/take over of other plants at
different locations across the country to cater
customers need accordingly, which helps also
to reduce the freight cost• Strong information networking -
All the modules of SAP R/3 installed for
executing all operations of RIL group
- Communication network through Lotus Notes
• Expansion with latest tech. & machinery
- New expansion with technology and
machinery from Zimmer-AG
 • Having taken over Trivera Ril enters the world with the 150000
TPA capacity of speciality fibre making & will get an competitive
edge in the ofter WTO world scenario.
WEAKNESSES
Cotton cloning still far away
- Though micro denier polyester for better feel
already introduced in the market, still market for
good quality cotton is existing for the
segments of higher-middle class and upper
class people
• Costlier polyester input in textile chain
-
• Cumbersome downstream requirement
- Downstream process for polyester required
huge investment and manpower with technical
skills and expertise
• Existing huge capacity old machinery's
- Though revamping process going on, still
some inherent constraints exist in old m/c’s
OPPORTUNITIES
• Strong linkage with textile growth
- Polyester fibre is one of the main raw material
for textile industries and high growth in textile
industries is expected as the regulations of
WTO will come in effect from 2004
• High growth in Polyester
- For coming 10 years growth projection:
World = 6.0% (CARG)India = 9.3% (CARG)
• Non apparel growth potential
 - Huge potential of growth in this segment
• Technological innovation - Quality and Cost.
• Cotton substitution
- With introduction of micro denier in product
line, it enhances the possibilities
• Business going to be more open globally
- By the year of 2004, export market for polyester
will be more open, specially for USA-market
THREATS
• Cheaper textile input - Filament
- Increase of use of filament in textile industries,
specially for sharies, etc.
• Per capita textile spending
- It is in decreasing trend
• Biotech innovation in Cotton
- It facilitates to impart more desirable quality in
cotton
• Expansion of production capacity by competitor
- M/S Indorama going to expand their capacity
by another 1.5 Lac TPA
• Expansion of business by China globally in Polyester
- After entry of China in global level it becomes a
threat for each country, because of their cost
leadership
7.3 PRODUCT
PRODUCT
Table45

Product Cut
With a majority share in Type Lustre
Details
the Indian market, Length
Appar Trilobal Denier Bright
Reliance today offer a el (TBL) (mm)
1.5, 2.0,
40, 44, 54
2.5
wide range of RecronTM 1.2, Bright,
Superblack 32, 38, 44,
51 Black
Staple Fibre. It has 1.5,
Optical Semi
developed a product 2.0
White (OW) dull
40, 44
1.2, 1.4
portfolio keeping in mind Semi
Micro 0.8 40, 44, 51
different requirements of dull

its customers. Semi

Differentiate 1.2,1.0 dull,
d Bright
32,38,40,44,51
Semi
Commodity 1.4,2.0,3.0
32,38,40,44,51 dull,
Bright

Non - 1.5, 2.0,

Trilobal 40, 44, 54 Bright
woven
(TBL) 2.5
Superblack 1.2,
32, 38, 44, Bright,
51 Black
1.5,
2.0
Semi
Differentiated 1.2,1.0
32,38,40,44,51 dull,
Bright
Semi
Commodity 1.4,2.0,3.0
32,38,40,44,51 dull,
Bright

Super High
Thread Tenacity 1.2 40, 44 Bright
(SHT)
Dope
Dyed Bright.
1.2 40, 44
(DD) Black
Black
SHT
Based on the process undertaken product types:

• Semi-dull
• Bright
• Optically white

The offer basket of products comprising a mix of speciality and regular

commodity products. Branded Products

 RecronTM Dyefast
 RecronTM Superblack
 RecronTM Superdye

COMMODITY PRODUCTS
Commodity products can be used by spinning/composite mills having
cotton/modified cotton spinning systems (ring, open end and air jet). The table below
shows the product range of commodity products.

Table -46

Denier Blend Count Range End Use (Fibre/Yarn/Piece dyed)

3.0 100% P/C 12s, 15s, 20/2, Suiting, Dress materials,

or P/V 30/2 Upholstery

2.0 100% P/C 15s, 18/2, Suiting, Dress materials,

or P/V 24/2, 30/2, Sheeting
40/2

1.4 100% P/C 20s, 30s, 30/2, Suiting, Dress materials,

or P/V 40/2, 45s Hosiery, Shirting, Sheeting
Denier - 1.4, 2.0 and 3.0
Cut length - 32, 38/40, 44 and 51 mm
Lustre - Semi dull or Bright
Tenacity - High

Product Advantages

• Consistent Quality: Dedicated lines denier wise, with in-house

raw material feed, resulting in high level of process/quality
consistency.

• Consistent merge nos. permitting long runs at customer end,

with no hassles in colour matching, while doing stock, yarn or
fabric dyeing.

• Consistent performance: Finishes application controlled within

narrow tolerances, ensuring top quality performance, product
quality and productivity.

DIFFERENTIATED PRODUCTS

Differentiated products can be used by spinning/composite mills

having cotton/modified cotton spinning systems (ring, open end and air
jet) with high emphasis on quality/productivity, catering to top end of
domestic/export market.

• Product Range
• Special features
• Benefits
 • Applications
• Advantages

Product Range

Denier - 1.0, 1.2

Cut length - 32, 38/40, 44 and 51 mm
Lustre - Semi dull or Bright
Tenacity - High

1.0 Denier RecronTM is a superior Polyester Staple Fibre that meets the
following requirements of the weaver:

• It is a stronger, more even and a much cleaner yarn with lower

hairiness to withstand high stress and strain in high speed
weaving.
• It enables delivery of longer lengths of defect free fabrics, for
exports.
• Can be spun at high productivity thereby reducing costs.

Special Features

• The fibre is finer by 15 to 20% compared to 1.2 Denier. •

Its tenacity is higher by 5%.

• It is dressed with a special finish to facilitate good performance
on high production cards with minimum cylinder loading and
minimum fly liberation/lapping on draw frames, speed frames
and ring frames at high speeds.

Benefits
 • Good substitute for costly cotton in fine and superfine count
spinning.
• Imparts higher CSP, lower u% and imperfections to blended
yarn.
• Lower yarn hairiness (by 20% to 50%) as compared to 1.2
Denier, at the same spindle speed.
• Higher ring frame productivity by 5 to 10%.
• Improved weaving efficiency by 6% in high-speed air jet looms
and 2% in ordinary looms.
• Better fabric quality and first grade realization.

Suggested End Uses Table-47

Denier Blend Count Range End Use (Fibre/Yarn/Piece

dyed)

1.2 100% P/C 30s, 40s, 45s, 50s, Sarees, Dhotis, Hosiery
or P/V 60s, 2/60s

1.0 100% P/C 30s, 45s, 50s, 60s, Sarees, Dhotis, Hosiery,
or P/V 2/60s, 2/76s, 2/90s, Dress materials.
2/100s

Denier - 1.0, 1.2

Cut length - 32, 38/40, 44 and 51 mm
Lustre - Semi dull or Bright
Tenacity - High

Advantages
• Consistent Quality: Dedicated lines denier wise, with in-house
raw material feed, resulting in high level of process/quality
consistency.

• Consistent merge nos. resulting in cost savings to customers on

account of uninterrupted long runs with no hassles in colour
matching.

• Consistent performance: Finish application controlled within

narrow tolerances, ensuring top quality performance, product
quality and productivity.

• Value for money: Incremental realization and productivity

particularly with 1.0 D, resulting in higher margins to spinners
with better market preference from their customers due to
better downstream productivity/quality of end product.

SPECIALITY PRODUCTS

• Micro Fibre
• RecronTM Super black fibre
• RecronTM Staple Fibre for Sewing Thread (SHT Fibre) •

Optical White (OW) PSF

• RecronTM Triloble (TBL) PSF
• Product Range
• Advantages
 MICRO FIBRE

RecronTM Micro Fibre is an economic substitute for expensive long

staple fine cotton used as raw material to make premium Men's and
Ladies' wear.

Special Features

• Extremely fine fibre of 0.8 denier, for imparting softer feel to

fabrics.
• Can be used for producing superior fabrics in all weight
categories, with all the advantages of PSF along with soft, silky
touch.
• Fabrics produced out of RecronTM 'Micro' have exceptional drape
and comfort properties.

Advantages

• Produces yarns of superior quality in terms of yarn, CSP, uster

u% and imperfections compared to 1.0 to 1.2 denier.
• Capable of spinning finer counts up to 2/100s or 2/120s in 100%
or in blend with better quality combed cotton.
• Ideally suited to make high quality branded shirting and dress
material.
• Offers higher productivity at spinning, high speed weaving and
knitting.
RECRONTM SUPER BLACK FIBRE
RIL is the largest producer of black fibre in the world with a share of
20% of the capacity. RecronTM Super black fibre is a superior raw
material for producing high quality black yarns and fabrics.
Special Features

• Consistent depth of shade with good tensile properties.

• Optimum finish level to give consistent performance and quality.

Advantages

• Superior spinning performance, productivity and quality

compared to fibre dyed spinning.
• Processing cost of fabrics made out of Recron TM Super black is
cheaper than fibre, yarn or piece dyed fabrics in terms of:
o lower production costs due to better performance
o higher consistency of shade and better depth
o higher all round fastness
o eco-friendly
o releases dyeing capacity for other shades/products

RECRONTM STAPLE FIBRE FOR SEWING THREAD (SHT FIBRE)

SHT Fibre is the ideal choice to make high quality sewing thread
needed by high quality garment manufacturers.
Special Features

• Ideal and economical raw material compared to cotton.

• Optimised tenacity, elongation and shrinkage values to give top
quality threads.
 • Fibre finish optimised to give good spinning performance and
thread quality.

Advantages

• Threads manufactured out of SHT fibre offer trouble free

performance on high speed stitching machines.
• RecronTM OW PSF offers an economical route to manufacture
white (bright) sewing threads of better quality.
• RecronTM 1.2 SHT DD black offers the advantages of higher
depth of shade, better fastness properties and quality.

RecronTM Optical White (OW) PSF

RecronTM Optical White is used in fabrics like dhotis, sarees, dress
materials, hosiery and sheeting. Where light, pastel shades or prints
can have better aesthetics with a white background.
Product Range

• 1.2 Denier in 32, 38, 40, 44, 51 mm cut lengths.

Special Features

• OW addition is consistent and gives natural white shade with

good fastness properties.
• Fibre is finished optimally to give good performance and quality.

Advantages

• Cost effective way for producing better quality dhotis, sarees,

sheeting, hosiery and dress materials.
• Customer benefits in terms of better price for the end product
compared to conventional manufacturing of similar products.
RECRONTM TRILOBLE (TBL) PSF

Targeted to manufacture high quality, meduim priced suitings, dress

materials and furnishing fabrics through the stock dyed route in 100%
P or P/V blends in a wide range of colours. These fabrics have superior
luster and feel similar to higher priced worsted suitings and dress
materials.
Product Range Table-48

Sr. Product Details Denier Cut Length Lustre

No. (mm)

1 Trilobal (TBL) 1.5, 2.0, 40, 44, 54 Bright

2.5

2 Super High Tenacity 1.2 40, 44 Bright

(SHT)

3 RecronTM Super Black 1.2, 1.5, 32, 38, 44, 51 Bright,

2.0 Black

4 RecronTM Super Black 1.2 40, 44 Bright.

SHT Black

5 Optical White (OW) 1.2, 1.4 40, 44 Semi dull

6 Micro 0.8 40, 44, 51 Semi dull

Advantages

• Consistent Quality: Dedicated lines denier wise, with in-house

raw material feed, resulting in high level of process/quality
consistency.
 • Consistent merge nos. resulting in cost savings to customers on
account of uninterrupted long runs.

• Superior performance: Finishes application controlled within

narrow tolerances, ensuring top quality performance, product
quality and productivity.

• Value for money: All these products go for value added end
products, translating to higher net realisation/margins to our
customers.

TOW PRODUCT RANGE

Polyester Tow
Polyester tow can be broadly defined as a bundle of filaments, that
are continuous in length. These filaments are essentially non-
annealed.

The worsted mills process the polyester tow on a machine called 'Tow to
Top Converter'. This cuts the tow into variable cut length fibres in the
form of sliver. Followed by a gilling process that yields a more
uniform sliver which is then packaged in the form of a ball called
Polyester Tops.

These polyester tops are then blended with wool tops and spun to
produce polyester woollen blended yarn, which are subsequently
woven into polywool-blended fabrics. The approx. characteristics of
100% polyester tops are as follows.

Table -49

Denier 2.5D or 3D
Average Length 78mm

C.V.% of Fibre Length 32%

Wool Tops

Mills in India normally import raw wool. The 'wool

Wool 22.5
Micron grease' is then removed by scouring. This clean wool
is then processed through carding, gilling, combing
Average 72mm
Length machines and converted into wool tops.

C.V.% 40%
The characteristics of
of fibre Product Lustre Cross-
length wool are determined section
Table-50 by its micron value. 2.5D Normal Circular
Normal
Wool tops with finer microns of 17 to 19 are
Tow
used to make expensive lightweight suits.
2.5D Bright Trilobal
Wool tops having 22.5 micron value is by and Trilobal
Tow
large the standard input for the worsted
3.0D Bright Trilobal
mills. Its properties are as follows.
Trilobal
Tow
Listed in the table below, are the TOW
2.0D Black Circular
products made by Reliance Industries Limited Recron T

for the worsted industry.

M
Super
Black
Tow
3.0D Black Circular
Recron T

semi-dull M
Super
Black
Tow
In semi-dull , the TiO2 content is 0.2 % to
3D Black Trilobal
0.3 %and the fibre cross-section is round. Dope
This type of fibre is generally used for dyed
Trilobal
apparels, industrial yarns and fabrics. Black
Tow
Semidull Circular
2.4dtex

Lowpill Table-51
Tow
Bright

Here, the TiO2 content is less than 0.05 percent. Lower amount of
TiO2 gives brightness to the . With this fibre, both triangular
crosssection and round cross-section are made. Plus, Trilobal fibre gives
a shine to both the fibre and the fabric made out of it.

Optically white

In optically whitened , a whitening agent, stable at high temperatures

of 3000 0C is added to the . The fibre made out of this is extremely
white. It exhibits fluorescence under Ultra Violet light. And saves
bleaching operation during chemical processing. Furthermore, this
fibre is increasingly being used for optically whitened sewing thread
yarn.
 • A major strength for Reliance's PSF business has been the strong
bonding with the customers, which has ensured that over 75%
of the customers have remained with it for more than 3 years.
• RIL’s market share in domestic market is 54% while the market
share of the nearest competitor is 20%.
• Reliance meets 70% of the top 100 customer's requirement. Of
the top 100 customers 95% are RIL's client.

Orders processed from customers are delivered within 24 hours, which

leads to on time delivery to the customer reducing their working
capital requirement.
7.4 KEY MILESTONES

• Largest producer of black fibre in the world.

• Largest producer of trilobal fibre in the world.
• Recently introduced short cut polyester staple fibre heralding a
new breakthrough in polyester application. This fibre finds
application in the hitherto unexplored segment of the paper
industry.
• Introduced micro fibres for fine count spinning.

7.5 VALUE-ADDED SERVICES

• Uninterrupted supply
• Widest Range
• Marketing and Technical Assistance •

Market Intelligence
 • Distribution and Transportation
• Market Intelligence - Down Stream Industry

Uninterrupted Supply

Vertical Integration system ensures that manufacturing units get

constant and unlimited supply of raw material. Which in turn makes
sure customer get uninterrupted supply of RECRON STAPLE FIBRE.
Thereby aiding customer to plan inventory, hassle-free.

Widest Range

With 5 manufacturing locations and 13 manufacturing lines, it has a

unique capability to produce different products of PSF simultaneously
and offer the widest product range off-the -shelf. Customers can have
uninterrupted supplies of all its products maintaining zero inventory at
their end, resulting in significant savings in their working capital.

Marketing and Technical Support

The strategically designed marketing network (4 regional offices and

Head office) ensures prompt and value added service to customer.
Customer can also make avail of technical assistance from this
network.

Market Intelligence

Head Office at Mumbai keeps track of the growth and status of the
down stream industry. Customers get regular feed back on various
opportunities available in the market. Plus, help customer in
identifying markets, both domestic and International. Technical
Services Team provide customer with valuable tips on polyester
spinning.

Distribution and Transportation

RIL’s wide network covers even the remotest Customer. The wide
distribution and transportation network enables servicing of part loads
also. This ensures just in time supplies for the customer thereby
reducing the average inventory from about 15 days to 7 days and the
inventory carrying costs.

Market Intelligence - Down Stream Industry

The Head Office at Mumbai keeps track of the margins of the down
stream industry. We also give regular feedback to the customer
regarding the yarn margins on various polyester blended yarns so that
the profitability of the customer improves. RIL also help the customers in
identifying markets both domestic as well as exports. Our Technical
Services Team also provides valuable tips to the customers on
polyester spinning.

7.7 MARKETING

Reliance polyester staple fibre market is devided into 4 zones.

• North zone - Zonal office at ‘Ludhiana’

• South zone - Zonal office at ‘ Coimbatore’

 • Eastern Zone - Zonal office at ‘ Calcutta’

• Western zone - Zonal office at ‘ Mumbai’

Fibre marketing office at Mumbai, co-ordinates the activities of all

regional sites.

In the similar way customers are also classified region wise.

The marketing arm of PSF Business is referred to as Fiber Marketing
Division (FMD).The Fiber Marketing Division at HO consisting of
marketing and technical service functions is assisted by regional offices
situated at the following placees.

Marketing and Technical service for tow products are handled by PSF.

1. North ( Dlhi / Ludhiana / Bhilara )

2. Calcutta ( Hyderabad )
3. Ahmedabad
4. South ( Coimbatore /Madurai /Bangalore /Erode /Dindigul
/Udumalpet
5. Rajapalayam / Salem )
6. Bombay
7. Bombay-North

The Regional and Area Offices cater to the requirements of customours in

the respective areas and the HO coordinates the activities of the
regional offices.
The Computer Systems in operation with PSF Marketing ( HO ) are
developed and maintained by MIS ( HO ) .
In case of failure of computer systems / electronic media,or any other
mode of communication can be used for transfer of information as
authorized by HOD.
7.8 LOGISTICS

Reliance brings customer e-enabled, end-to-end logistics solutions to

redefine India. Today customer will get the best in technology and
practices, better service, greater asset utilisation and value to all.

The Logistics (P) Ltd offers complete multiple freight options, including
full truck loads for long and short haul transportation and optimodal
distribution systems. What's more! The logistics would be flexible in
finding the best mode and service for our customers, at competitive
rates.

• Services
• Technology initiatives
• Risk coverage
• Transportation/Deliverables

Services
The unique service features include:

• Customisation of transportation solutions •

Dedicated customer solutions team

• Solutions design to address
• Compatible vehicle selection
• Mode of transport
• Routing
• Adapting our processes and capabilities to suit customerr needs •

Performance measures ( KPI) identified and documented

 • Cost optimisation
• Use of multiple axle vehicles
• High capacity utilisation
• Lowest cost per ton km
• Multi purpose vehicles
• Compatibility to cargo profile
• Optimum vehicle utilisation
• Captive fleet of vehicles
• Control on market fluctuations
• High deployment efficiency eliminating opportunity costs •

Advanced technology to optimise cost & service efficiency •

Cargo safety through technology

Technology Initiatives

Pioneering technology initiatives include:

• VTS (Vehicle Tracking Systems)

• Real time tracking of freight movements and accurate
forecasting of vehicle arrivals
• GPS + GSM technology would capture & send location data of
the vehicles
• GIS data location of the vehicles are superimposed on standard
maps and routes across the nation, to enable tracking of
consignments
• Round the clock vehicle position status from the time of loading
until unloading
• Real time control over shipment delivery cycle times
• TMS (Transport Management software) Optimisation tools &
decision support software system
 • Integration of VTS with TMS providing seamless information
flows
• Total software solution for the entire gamut of transport
functions from receipt of order till submission of bills and freight
realisation
• An Optimisation tool and decision support system with focus on
load planning, route optimisation and capacity / space utilisation
• Controlled logistics and Distribution management resulting in
better services
• Better placement efficiencies and order fulfillment
• Service level improvement through planning & monitoring •

Overall cost effectiveness

• Lotus notes connectivity across all operating arms of Reliance
Logistics (P) Ltd.

Full Risk Coverage

Special Contingency policy with New India Assurance Co for:

• Natural calamities viz storm, cyclone, flood, rainwater etc

• Other hazards viz fire, riots, strike, terrorism and criminal act •

Theft
• Burglary
• Pilferage
• Contamination

Transportation Deliverables

• Dedicated logistics team

• Improvement in the following key KPI's
o Vehicle placement lead time
 o Delivery cycle time
o Customer complaints & claims o

Cost reduction
o Better capacity utilisation
o Use of multi axle vehicles

7.9 PRICING

Demand and supply forces in the market determines the price of the
product in the market. The psf market is a defined market and the
demand for the fibre is generally affected by the following factors.

Seasonal factors: Consumption increases during the festive seasion

hence call for a high demand.

Dumping : Countries like Tiwan where won is depreciating offers fibres at

much cheaper rate which affect the price of the local markets.
Hence the anti-dumping measures taken by the government are
accountable.
Cotton price: Cotton is a monsson driven product and is a substitute of
polyester. Hence a good/bad monsoon affects the price of cotton in the
local market which inturn changes the down stream industries to swith
over to substitutes like polyester and viscose, so demand increases
and hence price.

Viscose price: Viscose too is a close substitute of both polyester and

cotton.Hence its price also affects the price of polyester.

Fashion trends: Fashion trends inculate fashion habits in people.

Fashion apparel are more made from polyester than any other fibre for its
variety of availability.Hence fashion affects price.

Monsoon: Monsson affects cotton corp hence demand of substitute

cotton.
PSF
PRICE PSF,VSF &ASF
ASF

VSF

110

100

90

80

70

60

50

40
98-99 99-00 00-01 01-02 02-03
FY

Competitors pricing

Customisesd product: Mills producing variety or speciality products

often vye for customized products.Customized products always come
with a premium.
Speciality product: Special products like micro denier are in high
demand because of their flexibility and properties and feel they impart.
They are sold at a premium.

Trade Discounts.

Trade discounts are given for Quantity and Payment.

 7.10 RELIANCE CAPACITY

Reliance sitewise production capacity 2004-05 (KTA)

Site HZ (Hazira) PG (Patalganga) IPL (Barabanki) OPL (Dhenkanal) RSL (Allahabad) CIPL (Mouda) AFL (Hoshiarpur) SIL (Silvassa) Total
PSF 196 107 38 31 - - 81 - 453
PFF 29 - - - - - 10 - 38
POY 183 131 - 59 47 14 - 435
FDY 13 9 2 24
Subtotal 408 250 38 31 68 49 105 950
Chips 41 14 2 - 57
PET 269 269
Total 677 250 38 31 109 63 107 - 1277
1085.1
PTY - - - - 5 97 102

Table-54

Latest take over of Trivera adds up 160000 TPA capacity

Trevira has a capacity of 130,000 tonnes per annum of polyester fibre

and yarn, spread over four locations in Europe namely Bobingen and
Guben (Germany), Silkeborg (Denmark) and Quevaucamps (Belgium).
In addition, it has a state-of-the-art research and development (R&D)
facility at Bobingen. With the acquisition of Trevira and its expansions
underway in India, the combined total polyester fibre and filament
yarn capacity of Reliance will exceed 1.8 million tonnes, making
Reliance, the largest polyester fibre and yarns producer in the world.

Commenting on the acquisition, PCI, leading UK based polyester

consultant says, ‘the market was surprised that Reliance suddenly
snapped up the Trevira polyester fibres operation in Germany. They
achieved this ahead of two other candidates from within Greater
Europe who had possibly expected to acquire the business for a
minimal financial outlay.’ It applauds that the acquisition provides
Reliance, the use of a proven successful development facility
supporting a differentiated product portfolio (including the Trevira CS
development for flame-retardant end uses).

The Trevira brand and products will now have access through the
established Reliance sales network to India, one of the fastest growing
textiles markets in the world. Trevira will provide Reliance a strong
foothold in Europe and place it in a position to cater to all market
segments of polyester fibres and filament yarns worldwide. Trevira’s
knowledge base developed over a period of time will be
complementary to Reliance's existing R&D facility, the Reliance
Technology Centre in India. The synergy will provide comprehensive and
innovative solutions for apparel and industrial applications of
polyester to customers worldwide.

Trevira is a highly specialized manufacturer of polyester products. The

company has several valuable patents and technologies together with a
strong R&D setup with substantial accumulated research knowledge.
Trevira is the market leader in Europe in high value applications of
polyester, especially in automotive and home textiles. Trevira is a
widely known and well-recognized brand both amongst customers and
producers of synthetic fabrics.
7.11 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
• Increase in population and change in demographic pattern with
increase in the % of consumer class
• GDP growth rate more than 8 %
 • Low per capita consumption .India - 1.4 kg; Pakistan - 3 kg;
China - 4 kg; Indonesia - 5 kg
• Growing non apparel applications .23% of global demand, but
negligible in India
• Cotton Viscose, Acrylic replacement.
• Export of manmade textile grew by 16% to Rs.4560 crore in the
April-October 2003 compared to Rs.3921 Crores export in the
year ago period.
7.12 PSF SUPPLY/DEMAND
Table-55

PSF PSF PSF PSF PSF

FYEAR consumptionconsumption Imports in Exports in PRODN IN DEFICIT
in tonnes in KTA KTA KTA KTA

1990-91 120812 121 10.5 23.9 134

1991-92 131342 131 8.4 13.2 136
1992-93 153316 153 9.1 17.3 162
1993-94 212094 212 19.1 7.1 200
1994-95 254378 254 44.3 11.0 221
1995-96 258978 259 40.4 8.9 227
1996-97 326033 326 38.6 8.2 296
1997-98 457203 457 29.8 8.0 439
1998-99 523527 524 17.4 16.6 523
1999-00 514250 514 13.8 51.1 551
2000-01 558491 558 21.3 29.2 566
2001-02 560465 560 26.9 17.9 551
2002-03 578622 579 25.8 29.3 582
2003-04 671421 671 20.7 28.1 608 (70.8)
2004-05 739441 739 22.4 28.9 608 (137.9)
2005-06 810785 811 24.1 29.7 608 (208.4)
2006-07 895231 895 25.7 30.5 608 (292.0)
2007-08 970159 970 27.4 31.3 608 (366.0)
2008-09 1050939 1051 29.1 32.1 608 (445.9)
2009-10 1138137 1138 30.8 32.9 608 (532.3)
 7.13 DEMAND/SUPPLY OF PSF AND RIL MARKET SHARE

SUPPLY/DEMAND-PSF(KTA)
PSF consumption in KTA
PSF PRODN IN KTA
1400 DEFICIT
Poly. (PSF consumption in KTA)
1200
y = 1.1154x2 + 28.998x + 81.744
R 2 = 0.9859
1000

800

600

400

200

(70.8)
-200 (137.9)
(208.4)
-400 (292.0)
(366.0)
(445.9)
-600
(532.3)

-800
YEAR

PSF DEMAND SUPPLY AND RIL MARKET SHARE Table-56

PSF PSF PSF PSF PSF RIL

RIL
FYEAR consumption in consumption in Imports in Exports in PRODN IN DEFICIT MARKET
PRODN
tonnes KTA KTA KTA KTA SHARE

1990-91 120812 121 10.5 23.9 134 65 54%

1991-92 131342 131 8.4 13.2 136 65 49%
1992-93 153316 153 9.1 17.3 162 65 42%
1993-94 212094 212 19.1 7.1 200 65 31%
1994-95 254378 254 44.3 11.0 221 65 25%
1995-96 258978 259 40.4 8.9 227 94 36%
1996-97 326033 326 38.6 8.2 296 277 85%
1997-98 457203 457 29.8 8.0 439 277 61%
1998-99 523527 524 17.4 16.6 523 277 53%
1999-00 514250 514 13.8 51.1 551 312 61%
2000-01 558491 558 21.3 29.2 566 341 61%
2001-02 560465 560 26.9 17.9 551 399 71%
2002-03 578622 579 25.8 29.3 582 429 74%
2003-04 671421 671 20.7 28.1 608 (70.8) 453 67%
2004-05 739441 739 22.4 28.9 608 (137.9) 453 61%
2005-06 810785 811 24.1 29.7 608 (208.4) 453 56%
2006-07 895231 895 25.7 30.5 608 (292.0) 453 51%
2007-08 970159 970 27.4 31.3 608 (366.0) 453 47%
2008-09 1050939 1051 29.1 32.1 608 (445.9) 453 43%
2009-10 1138137 1138 30.8 32.9 608 (532.3) 453 40%
Fig from 2003-04 onwards are estimated figures.
DEMAND/SUPPLY OF PSF AND RIL MARKET SHARE

PSF consumption in KTA

PSF DEMAND/SUPPLY & RIL SHARE PSF PRODN IN KTA
RIL MARKET SHARE
RIL PRODN
1200 90 %
85%
80 %
1000 74 %
71%
70 %
67%
800 61% 61% 61% 61% 60 %

54% 53% 56%

49% 51 % 50 %
600 47%
42% 43%
40%40 %
36%

400 31% 30 %
25%
20 %
200
10 %

0 0%

YEAR

RIL market share is going to decrease to 40% with present capacity by

2010.
7.14 IMMINENT THREAT TO OF RIL PSF BUSINESS
Imminent threat to of RIL PSF business

Home grown Indorma is doubling capacity by2005.Going for 800 TPD

CP.World biggest PSF producer Kosa has took over Dupont Polyester
Business(Koch Industries-Earlier INVISTA-$6.3 Billion textile company
of Dupont.).Sanfangxiang is coming up with 1200TPD PSF Project in
China .Total PSF capacity :1600 TPD.-World largest in single
location.Zimmer,Dupont are implementing some of the mega PSF/PFY
projects-800 TPD/CP.Petrochemical cycle has just started.Delaying of
mega project may take away our market leadership.The growing
domestic demand and the growth of china in the asean region is one of
the major concern.

7.15 THE NEED FOR PSF EXPANSION…..

Per capita polyester consumption is lowest in the world 1.25 kg, -

World average 6kg./Per capita China 4.0 kg/CapitaFiber used for
apparel purpose is very high.(93%),but this is changing very fast. SC-
PSF ,Fiber fill, Non woven etc. Present textile export is about US$12.54
Billion .McKinsey- projection , after phasing out of textile quota in
2005 - Export will rise to US$50 Billion by 2010. The new textile
policy has rationalized the disparity between organized sector and
disorganized sectors.25,000 Crore Textile Technology up gradation
fund (TUF)is providing a synergestic Pull effect wich will increase
demand for manmade fibres.Market share of RIL psf business is
dropping from 71% to 54% by the next year in the domestic market
only. Exports are likely to increase after the quota free regim. So to
hold on to the market the Indian companies should go on for market
expansion.
8.0 ANALYSIS AND INTERPRETATION
8.1 INTRODUCTION
This chapter deals with the analysis used for various projections in this
project.

8.2 DEMAND FORECASTING

Business is full of uncertainties, and so is the consumer’s

behaviour. Some data is available about the consumption pattern of
the established product, but forecasting demand of a new product is
really a difficult task. Buyers’ tastes and preferences may change over
time, new products may enter market, new technology may develop,
and so on. Under dynamic conditions, it is difficult to forecast demand
correctly.
A forecast is a prediction or estimation of a future situation,
under given constraints. Over the years, different techniques of
demand forecasting have been developed to make it more logical and
accurate.
8.2.1 PURPOSE OF DEMAND FORECASTING
Time-lag is involved in the production of commodities and their
consumption. Similarly, time-lag is also involved in taking a decision
by a firm to produce a commodity and its actual production. The
purpose of demand forecasting differs according to the type of
forecasting, i.e. (a) short -term forecasting, and (b) long-term
forecasting.
(a) Purpose of Short -term Forecasting. It is difficult to define
short run for a firm because its duration may differ according to the
nature of the commodity. For a highly sophisticated automatic plant 3
months’ time may be considered as short run, while for another plant,
the duration may extend to 6 months or one year. Time-duration may
be set for demand forecasting depending upon how frequent the
fluctuations in demand are. Short -term forecasting can be undertaken by
a firm for the following purposes :
(i) Appropriate scheduling of production to avoid problems of
over-production and under-production.
(ii) Proper management of inventories, i.e., purchasing raw
materials at appropriate time when their prices are low, and avoiding
over-stocking.
(iii) Evolving suitable price strategy to maintain consistent sales.
(iv) Formulating a suitable sales strategy in accordance with the
changing pattern of demand and extent of competition among the
firms.
(v) Forecasting financial requirements for the short period.
(b) Purpose of Long-term Forecasting. The concept of demand
forecasting is more relevant to the long-run than the short -run. It is
comparatively easy to forecast the immediate future than to forecast the
distant future. Fluctuations of a larger magnitude may take place in the
distant future. It is again difficult to give a precise definition of long run.
In a fast developing economy, the duration may go up to 5 or 10 years,
while in a stagnant economy it may go up to 20 years. Moreover, the
time duration also depends upon the nature of the production for
which demand forecasting is to be made. The purposes of long-term
demand forecasting are as follows :
(i) Planning for a new project, expansion and modernisation
of an existing unit, diversification and technological
upgradation. A firm which can easily forecast the demand for
a new product can better compete as compared to its rival
firms and consolidate its position.
(ii) Assessing long-term financial needs. It takes time to raise
financial resources, more particularly when the size of
 finance needed for expansion, modernisation and
diversification is very large.
(iii) Arranging suitable manpower. In the long-run, techniques
of production may change. Trained and skilled labour and
business executives may be needed for the new type of job
responsibilities. Demand forecasting can help a firm to
arrange for specialised labour force and personnel.
8.3 METHODS OF DEMAND FORECASTING

Demand forecasting is a very absorbing and difficult exercise.

Making estimates for future under the changing conditions is a difficult
task. Consumer’s behaviour is the most unpredictable thing in the
world because it is motivated and influenced by a multiplicity of forces.
Moreover, economists and statisticians over the years have developed
several methods of demand forecasting. Each of these methods has its
relative merits and demerits. Selection of the right method is essential to
make demand forecasting accurate and credible.
In demand forecasting, a judicious mixture of statistical skill and
rational judgement is needed. Through the use of statistical and
mathematical techniques, data can be collected, classified, tabulated,
analysed and interpreted. But, statistics do not speak for themselves,
they need the skill of a talented analyst to give it meaningful
manifestation. Sound judgement is a prime requisite for good
forecasting. The judgement should be based upon facts and the
personal bias of the investigator should not prevail upon the facts.
Thus, an efficient demand forecasting should strike a balance between
mathematical techniques and sound judgement.
The various methods of demand forecasting can be summarised in
the form of a chart as follows :
8.3.1 OPINION POLL METHOD
 In the opinion poll, the opinions of buyers, sales force and
experts could be sought to determine the emerging trend in market
demand.
8.3.1.1 CONSUMER SURVEY METHOD
In this method, the representative of the firm approaches buyers
personally to know their views about a particular product and also
their intentions for the likely purchases at a given price in the future -
usually a year. The firm may go in for complete enumeration or for
sample surveys.
In case of complete enumeration, firm has to go for a door-to-
door survey contacting all the households in the region. The major
limitation of this method in that it requires plenty of resources,
manpower and time. Moreover, the burden of opinion is left on the
consumers, who at times may not express their opinion properly or may
deliberately misguide the investigators.
Under the sample survey method, some representative
households are selected on a random basis as samples, and their
opinion is taken as the generalised opinion of the market they belong to.
This method is based on the assumption that the sample truly
represents the population. However, if there are large variations in the
nature and behaviour of the households constituting the population,
demand forecasting based on the opinion poll of the sample
households may prove to be wrong and misleading.
Opinion poll method proves very useful when bulk of sale is
made to industrial producers. In that case, it is known as ‘End-use
Method’ or ‘Input-Output Method’. The demand for the final product is
the end-use demand of the intermediate product used in the
production of this final product. For example, demand for steel is the
intermediate demand for the automobile industry. The end-use
demand estimation of an intermediate product is very difficult because
of the multiple uses of this product. Then, there can be domestic
demand and export demand of an intermediate product, and the
pattern of demand may be totally different in the two markets. End use
method may be useful for industries producing producers’ goods
like aluminium.
8.3.1.2 COLLECTIVE OPINION METHOD
This is also known as ‘sales force opinion method’. In this method,
instead of consumers, the opinion of the salesmen who are in close
contact with buyers is sought. It is presumed that salesmen, being the
closest to the customers, have the most accurate information about
their liking, disliking, consumption pattern, consumers’ reactions to the
firm’s product, etc. The firm collects information from the salesmen
and on the basis of their response it forecasts demand. Sometimes the
firm does not take the opinion of the individual salesman for granted.
It may revise the estimates taking into account over-optimism and
pessimism on the part of salesmen. The firm may also take into
account the likely changes in the prices, changes in designs and
packing, changes in income distribution, employment, etc. The chief
merit of this method lies in the collective wisdom of salesmen.
Besides, this method does not require the use of intricate
statistical techniques. Forecasts may be more authentic because these are
based on the direct contacts and first-hand knowledge of the
salesmen. This method is particularly more useful in forecasting sales of
new products.
The method has certain demerits. First, the results of the
forecasts depend exclusively on the opinion of the salesmen. At times
salesmen can use their personal bias. Consequently, the whole
investigation is vitiated. Second, this method is suitable only for the
short -term forecasting. However, most firms have to plan for future
which is most uncertain, and forecasting by this method may not serve
that purpose. Thirdly, salesmen lack vision and may not foresee the
influence of several unknown factors that may affect the demand
pattern in the market.
8.3.1.3 EXPERT’S OPINION METHOD
Instead of depending upon the opinion poll of buyers, firms can obtain
views of the specialists or experts. This is also known as ‘Delphi
Technique’ of investigation. This provides data relating to the
responses of a panel of experts to another group of experts,
maintaining secrecy of their identity. Another group of experts may
agree or disagree to the responses of the earlier group. In case of
disagreement, the information is passed on to the previous group,
which may either revise its forecast or explain reasons for the
disagreement. The process goes on until some sort of unanimity is
arrived at among all the experts forecasting.
This method is best suited in situations where intractable
changes are occurring. It also has the advantages of speed and
cheapness.
8.3.2 STASTITICAL METHODS
Statistical techniques have proved to be very useful in demand
forecasting. In order to maintain objectivity and precision in demand
forecasting, statistical techniques are used. The important statistical
methods used in demand forecasting are as follows :
8.3.2.1 TREND PROJECTION METHODS

Output and sales of a firm may increase or decrease over a

period of time. However, it has a distinct tendency either to increase or
decrease in the long run. Such long-run tendency of a time-series to
increase or decrease over a period of time is known as trend. Several
methods can be used to measure the trend, the important among
these are as follows :
 (i) Graphic Method. This is the most simple technique to
determine the trend. All values of output or sale for different years are
plotted on a graph and a smooth freehand curve is drawn passing
through as many points as possible. The direction of this free-hand
curve-upward or downward -shows the trend.
The disadvantage of this method is that it may show the trend but
cannot measure it. Similarly, smoothing of fluctuations by a
freehand curve may leave chances of bias on the part of the
investigator.
(ii) Least Squares Method. The least squares method is a
mathematical procedure for fitting a line to a set of observed data
points such that the sum of the squared deviations between the
calculated and observed values is minimised. In estimation, both
positive and negative errors may arise. We square all the these errors
and try to minimise the sum of squares of these errors. Hence the
name of the method is ‘least squares method’. This technique is used to
find a trend line which ‘best fits’ the available data.
8.3.2.2 BAROMETRIC TECHNIQUES

The barometric technique of demand forecasting is based on the

assumption that the future can be predicted from certain events
occurring in the present. We need not depend upon the past
observations for demand forecasting. Different economic indicators
such as income, population, expenditure, investment, etc., can be
used to predict the market trend.
For example, index of farm income can be a good indicator for
estimating demand for agricultural inputs like fertilizers, tractors, etc.
Similarly, personal income can be a good indicator for estimating
demand for consumer goods.
 Data relating to economic indicators is published by specialised
organisations.
In order to use barometric techniques for demand forecasting
certain steps have to be followed :
To determine whether a relationship exists between the demand for a
product and certain economic indicator.
Establishing relationship between demand and economic indicator
through the method of least squares and deriving the regression
equation. In case the relationship is linear, equation will assume the
form y = a + bx. For non-linear relationship, parabolic functions can
be used.
Once regression equation is derived, the value of y, i.e., demand, can be
forecasted for a given value of x.
Past data may not prove adequate for forecasting, therefore, the
investigator should use his judgement taking into consideration the
new factors as well.
Certain limitations arise in the use of this method of forecasting.
For example, it is not always possible to get an appropriate indicator. In
case of new product, no past data exist hence forecasting becomes
difficult. The success of this method depends upon the time-lag
between an economic indicator and demand. If no time-lag exists, use of
this method becomes difficult.
8.3.2.3 REGRESSION METHOD

Regression method is frequently used in demand forecasting.

Under this method, relationship is established between quantity
demanded and one or more independent variables such as income,
price of the related goods, price of the commodity under consideration,
advertisement cost, etc. In regression, a quantitative relationship is
established between demand which is a dependent variable and the
independent variables, i.e., determinants of demand.
Let us suppose that we have two variables y and x, where y is
dependent on x. It can be expressed in the form of the equation as
follows :

y = a+ bx
Since this is a linear relation, a study of regression in this case will
be that of linear regression. If the relation is curvilinear, the study of
regression in such a case in called curvilinear regression.

8.3.3 FORECASTING METHODS USED

Forecasting is done by two methods viz .trend analysis and

regression analysis. In trend analysis the past data are extraplorated
as per the trend seen in the history. In the regression analysis method
the variables are regressed with some key economic indicators and a
relationship is formed. Then that equation is used to project values for
the future.
Polyester staple fibre is used by the downstream industries to
produce spun yarns. Spun yarns are of three type viz. pure cotton,
blends and non cotton. The blends can be a combination of any of the
following components cotton, polyester, viscose and acrylic and
sometimes pp which is rare e.g. cotton/polyester, cotton/viscose ,
polyester/viscose, polyester/cotton etc. The production of spun yarns and
cloths in the down stream industry constitute the demand for PSF, ASF,
VSF.
Once the amount of cloth consumption is fixed the components
consumption vary among themselves according to the availability
,price ,fashion awareness ,use( apparel ,industrial,medical etc) etc.
8.4 DETERMINING WORLD FIBER CONSUMPTION

World Fiber Consumption- Table-59

'000 tonnes
Year Population Consumption
Natural * Manmade TOTAL billion kg / capita
1950 7.72 1.68 9.40 2.56 3.70
1960 11.61 3.37 14.97 3.04 4.90
1965 13.35 10.68 24.03 4.09 5.90
1970 13.40 5.49 18.89 3.35 5.60
1975 13.48 8.39 21.88 3.71 5.90
1980 15.19 14.63 29.82 4.53 6.60
1981 15.23 14.30 29.53 4.46 6.60
1982 15.47 13.60 29.07 4.61 6.30
1983 15.71 14.85 30.56 4.69 6.50
1984 16.24 15.76 32.00 4.77 6.70
1985 17.73 16.26 33.99 4.85 7.00
1986 19.46 22.61 42.07 5.61 7.50
1987 19.60 23.59 43.19 5.69 7.60
1988 19.63 20.77 40.40 5.53 7.30
1989 19.67 20.48 40.15 5.54 7.40
1990 19.74 19.74 39.48 5.37 7.40
1991 19.99 28.30 48.29 5.92 8.20
1992 20.19 27.52 47.71 5.85 8.20
1993 20.24 24.68 44.92 5.77 7.80
1994 20.64 17.86 38.50 5.02 7.70
1995 20.74 16.89 37.63 4.97 7.60
1996 21.07 18.54 39.62 5.11 7.80
1997 21.27 29.40 50.67 6.00 8.40
1998 21.41 18.94 40.35 5.20 7.80
1999 21.46 19.38 40.84 5.28 7.70
2000 21.51 31.15 52.65 6.08 8.70
2001 22.01 31.60 53.60 6.15 8.70
2002 22.61 35.10 57.70 6.34 9.10
2003 22.75 33.46 56.21 6.23 9.00
2004 22.93 34.43 57.36 6.35 9.10
2005 23.28 35.15 58.44 6.42 9.19
2006 23.63 35.88 59.51 6.50 9.27
2007 23.98 36.60 60.59 6.58 9.35
2008 24.34 37.33 61.67 6.64 9.44
2009 24.69 38.06 62.74 6.72 9.52
2010 25.04 38.78 63.82 6.79 9.60
Source; Fiber Year Saurer 2003- 2004

* Ramie, flax, hemp, jute, sisal and coir not included

8.4.1 PROJECTION FOR MANMADE FIBRE GROWTH

Double Exponential Smoothing: Manmade

year Forecast Lower Upper

2004 34.4290 26.4019 42.4560

2005 35.1542 23.8209 46.4876
2006 35.8795 21.0260 50.7331
2007 36.6048 18.1391 55.0705
2008 37.3301 15.2052 59.4550
2009 38.0553 12.2443 63.8664
2010 38.7806 9.2665 68.2947

The development over the

last decade has shown that
82% of the additional volume consumed has come from synthetics.
While cellulosics’ increase averaged at 0.6% annually, cotton showed an
average annual growth of 1.7% and synthetics jumped up by 5.9%. In
other words, 14 out of 17 million tonnes of additional demand was met by
synthetic fibers over the period 1993 to 2003. This trend is
commonly expected to continue. The growth of synthetic fibre is
expected to reacha 40 KTA by 2010. the growth of manmade fibre iis in
the rising trend due to better technology,cost effctive and novel
manmade fibres produced over the years.
8.4.2 PROJECTION FOR NATURAL FIBRE GROWTH
Double Exponential Smoothing: Natural Fibres

Year Forecast Lower Upper

2004 22.9313 22.2845 23.5781

2005 23.2825 21.8053 24.7596
2006 23.6336 21.3206 25.9467
2007 23.9848 20.8347 27.1349
2008 24.3360 20.3485 28.3236
2009 24.6872 19.8620 29.5124
2010 25.0384 19.3754 30.7013
Growth of natural fibre is sluggish it is expected to reach 25 Mn
Tonnes by 2010. Total manmade fibre consumption has grown by a
blooming 20.5 times leaving behind the natural fibre growth at a rate
of 2.9times. Nevertheless, in apparel end-uses, accounting for more
than half the world’s fiber demand, natural fiber is preferred for
reasons of comfort. Relative pricing disadvantages as well as natural
restrictions argue against a cotton-dominated textile industry.
Technical innovations to imitate nature and to make fibers more
natural will be the key to success. This would also address growing
public concerns about the environment by making fibers biodegradable
and manufacturing them from renewable resources.

8.4.3 WORLD FIBRE CONSUMPTION Vs POPULATION

KTA
billion WORLD FIBRE CONSUMPTION Vs POPULATION
Log. (KTA)
Log. (billion)
70.00 7.00

60.00 6.00

50.00 5.00

40.00 4.00

30.00 3.00

20.00 2.00

10.00 1.00

0.00 0.00

YEAR

Wo
World fibre consumtion and population increase seem to be highly
correlated. World population of 6.34 billion corresponds to an
average per capita consumption of 9.9 kg. 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.
On a world basis, demand for fibers from the first two groups has
increased by 2.7%. As in the recent years, the manmade fibers
performance exceeded that of cotton in terms of the growth rate..
Since the beginning of the 90’s manmade fibers have been the most
important fiber type in terms of volume. Manmade fibers managed to
perform with an average annual growth rate of 4.7% while natural
fibers accounted for a mere 0.4% annual increase in average. With
some exceptions in the early- and mid-eighties, filament yarns have
developed stronger than staple fibers. Over the past fifteen years,
filament yarns - most commonly further processed via texturing or
twisting - have enjoyed an average annual growth of 6.0%. Staple
fibers have increased by 1.4%, of which cotton and wool by 0.5% and
manmade staple fibers by 2.8%. Staple fibers are the raw material for
spinning of staple fiber yarns (synonym: spun yarn) and for
manufacturing of drylaid nonwovens.
8.4.4 NATURAL Vs MANMADE FIBRE CONSUMPTION
 NATURAL Vs MANMADE FIBRES Natural *
Manmade

45.00

40.00

35.00

30.00

25.00

20.00

15.00

10.00

5.00

0.00

YEAR

After the mid 80’s manmade fibre consumption zooms past the natural
fibre growth. The growth rate of natural fibres is @ 0.4% whereas the
growth rate of manmade fibre is @ 4.7%. World natural fibre
consumption shows a compounded growth rate of 2.1 % from 22.75
KTA to 26.89 KTA in 2010.The trend line shows that the growth rate is
decreasing.This may be due to the advent of synthetic fibres with
more and more competitive prices and with better feel. World
Consumption of mmf have increased from 1.68 kta to 33.5 kta per
annum a 13.56 times rise in the last 50 years.
Consumption pattern seems to be increasing from 9.0 kg per cap to
around 10 kg per cap by 2010. This is due to the changing buying
behaviour and fashion consciousness among the people. Still now the
consumption of India is as low as 2.1 kg against 5.5 kg in the US and
Europe.
 Table-59
Natural Fibers Mn Tonnes

Cotton Wool Silk TOTAL ± in %

1950 6.647 1.057 19 7.723 n/a
1960 10.113 1.463 31 11.607 4,2%
1965 11.884 1.484 33 13.401 2,9%
1970 11.784 1.659 41 13.484 0,1%
1975 11.723 1.578 48 13.349 -0,2%
1980 13.575 1.599 53 15.227 2,7%
1981 13.516 1.616 57 15.189 -0,2%
1982 13.782 1.632 55 15.469 1,8%
1983 13.993 1.657 55 15.705 1,5%
1984 14.44 1.744 56 16.24 3,4%
1985 15.929 1.744 59 17.732 9,2%
1986 18.891 1.789 63 20.743 17,0%
1987 18.743 1.832 63 20.638 -0,5%
1988 19.122 1.886 64 21.072 2,1%
1989 19.388 1.955 66 21.409 1,6%
1990 19.406 1.988 66 21.46 0,2%
1991 17.745 1.928 67 19.74 -8,0%
1992 17.87 1.736 67 19.673 -0,3%
1993 17.885 1.678 68 19.631 -0,2%
1994 17.774 1.618 69 19.461 -0,9%
1995 17.998 1.51 92 19.6 0,7%
1996 18.727 1.439 71 20.237 3,3%
1997 18.69 1.424 75 20.189 -0,2%
1998 18.527 1.386 77 19.99 -1,0%
1999 19.82 1.363 83 21.266 6,4%
2000 20.077 1.342 86 21.505 1,1%
2001 20.605 1.316 88 22.009 2,3%
2002 21.385 1.27 92 22.747 3,4%
2003 21.272 1.243 91 22.606 -0.6%
2004 21.57 1.22 91.83 22.78 0.8%
2005 21.99 1.18 93.99 23.17 1.7%
2006 22.41 1.15 96.14 23.56 1.7%
2007 22.83 1.12 98.29 23.95 1.6%
2008 23.25 1.09 100.44 24.34 1.6%
2009 23.67 1.05 102.60 24.72 1.6%
2010 24.09 1.02 104.75 25.11 1.6%
Source; Fiber Year Saurer 2003- 2004
* Ramie, flax, hemp, jute, sisal and coir not included
 World Production of Synthetic Fibers -Mn Tonnes-Table-64
Polyester Polyamide Acrylics Others TOTAL Polyester Polyamide Acrylics Others
1970 34% 40% 21% 5% 4.809 1.64 1.92 1.01 0.24
1975 45% 33% 19% 3% 7.461 3.36 2.46 1.42 0.22
1980 47% 30% 19% 4% 10.779 5.07 3.23 2.05 0.43
1985 50% 26% 18% 6% 13.025 6.51 3.39 2.34 0.78
1986 50% 26% 18% 6% 13.645 6.82 3.55 2.46 0.82
1987 52% 25% 17% 6% 14.578 7.58 3.64 2.48 0.87
1988 53% 25% 16% 6% 15.172 8.04 3.79 2.43 0.91
1989 54% 24% 15% 7% 15.602 8.43 3.74 2.34 1.09
1990 53% 24% 14% 9% 16.191 8.58 3.89 2.27 1.46
1991 54% 22% 14% 10% 16.814 9.08 3.70 2.35 1.68
1992 56% 21% 13% 10% 17.693 9.91 3.72 2.30 1.77
1993 57% 20% 13% 10% 18.022 10.27 3.60 2.34 1.80
1994 58% 18% 13% 11% 19.779 11.47 3.56 2.57 2.18
1995 60% 19% 12% 9% 20.621 12.37 3.92 2.47 1.86
1996 61% 18% 12% 9% 21.81 13.30 3.93 2.62 1.96
1997 63% 16% 11% 10% 24.644 15.53 3.94 2.71 2.46
1998 65% 15% 10% 10% 25.521 16.59 3.83 2.55 2.55
1999 66% 15% 9% 10% 26.821 17.70 4.02 2.41 2.68
2000 66% 14% 9% 11% 28.389 18.74 3.97 2.56 3.12
2001 67% 13% 9% 11% 28.934 19.39 3.76 2.60 3.18
2002 68% 13% 9% 10% 30.694 20.87 3.99 2.76 3.07
2003 69% 12% 8% 10% 32.175 22.20 3.86 2.57 3.22
2004 70% 12% 8% 10% 33.29 23.39 3.91 2.58 3.41
2005 71% 11% 7% 10% 34.71 24.64 3.92 2.60 3.55
2006 72% 11% 7% 10% 36.13 25.88 3.94 2.62 3.69
2007 72% 11% 7% 10% 37.55 27.13 3.95 2.64 3.83
2008 73% 10% 7% 10% 38.97 28.38 3.96 2.66 3.97
2009 73% 10% 7% 10% 40.39 29.62 3.98 2.68 4.11
2010 74% 10% 6% 10% 41.81 30.87 3.99 2.70 4.25
8.4.17 WORLD REGION WISE GROWTH OF DIFFERENT FIBRE

Table-69

mill. tonnes 1995 1996 1997 1998 1999 2000 2001 2002 2003
PES FY 6.7 7.1 8.5 9.4 10.1 10.7 11.2 12 12.4 7%
GROWTH% 6% 20% 11% 7% 6% 5% 7% 3%
PES SF 5.6 6 6.9 7 7.6 8.1 8.3 8.8 9.4 6%
GROWTH% 7% 15% 1% 9% 7% 2% 6% 7%
PA FY 3.2 3.3 3.5 3.4 3.4 3.6 3.3 3.5 3.4 1%
GROWTH% 3% 6% -3% 0% 6% -8% 6% -3%
PA SF 0.6 0.6 0.6 0.6 0.5 0.5 0.4 0.5 0.5 -2%
GROWTH% 0% 0% 0% -17% 0% -20% 25% 0%
PP 2 2.2 2.4 2.5 2.6 2.8 2.9 3 3 5%
GROWTH% 10% 9% 4% 4% 8% 4% 3% 0%
PAN 2.4 2.5 2.7 2.5 2.5 2.6 2.6 2.7 2.7 1%
GROWTH% 4% 8% -7% 0% 4% 0% 4% 0%
Cellulosics * 3 2.9 2.9 2.8 2.6 2.8 2.7 2.8 2.9 0%
GROWTH% -3% 0% -3% -7% 8% -4% 4% 4%
Others 0.1 0.1 0.1 0.2 0.2 0.2 0.3 0.3 0.3 13%
GROWTH% 0% 0% 100% 0% 0% 50% 0% 0%
TOTAL 23.6 24.7 27.5 28.3 29.4 31.1 31.6 33.5 35.1 5%
GROWTH% 5% 11% 3% 4% 6% 2% 6% 5%
Source; Fiber Year Saurer 2003 -2004
* since 2002 with Lyocell included

World natural fibre consumption shows a compounded growth rate of

2.1 % from 22.75 KTA to 26.89 KTA in 2010.The trend line shows that
the growth rate is decreasing.This may be due to the advent of
synthetic fibres with more and more competitive prices and with better
feel. World Consumption of mmf have increased from 1.68 kta to 33.5
kta per annum a 13.56 times rise in the last 50 years.
Consumption pattern seems to be increasing from 9.0 kg per cap to
around 10 kg per cap by 2010. This is due to the changing buying
behaviour and fashion consciousness among the people. Still now the
consumption of India is as low as 2.1 kg against 5.5 kg in the US and
Europe.Except for a appreciable growth rate in polyester production
which grew from 8.58 Mn Tonns in 1990 to 22.2 Mn tonnes in 2003 an
 World Production of Manmade Fibers-Table-70
mill. tonnes 1995 1996 1997 1998 1999 2000 2001 2002 2003 CARG%
PR China 3.2 3.5 4.3 5.2 5.8 6.7 8.2 9.9 11.7 15%
GROWTH% 9% 23% 21% 12% 16% 22% 21% 18%
U.S. 4.2 4.2 4.4 4.3 4.1 4.2 3.6 3.8 3.8 -1%
GROWTH% 0% 5% -2% -5% 2% -14% 6% 0%
Taiwan 2.6 2.7 3.1 3.3 3.1 3.2 3.1 3.2 3.2 2%
GROWTH% 4% 15% 6% -6% 3% -3% 3% 0%
South Korea 1.9 2.1 2.5 2.5 2.7 2.8 2.4 2.3 2.2 2%
GROWTH% 11% 19% 0% 8% 4% -14% -4% -4%
India 1 1.2 1.5 1.6 1.8 1.9 1.9 2 2 8%
GROWTH% 20% 25% 7% 13% 6% 0% 5% 0%
Indonesia 0.9 1 1.1 1.1 1.2 1.4 1.5 1.4 1.4 5%
GROWTH% 11% 10% 0% 9% 17% 7% -7% 0%
Japan 1.7 1.7 1.8 1.7 1.5 1.5 1.5 1.3 1.2 -4%
GROWTH% 0% 6% -6% -12% 0% 0% -13% -8%
SUBTOTAL 15.5 16.4 18.7 19.7 20.3 21.7 22.1 23.9 25.6 6%
ROW 8.1 8.3 8.8 8.6 9.1 9.4 9.5 9.6 9.6 2%
TOTAL 23.6 24.7 27.5 28.3 29.4 31.1 31.6 33.5 35.1 5%

CARG% of 8% Among theother fibres the growth of polyamide nylon and

nylon-66 is showing a negative gtowth rate.And acrylic fibre
shows a growth CAGR% of 1% .The growh rate of polyester is 14
times in the last 23 years against where as polyamides have grown by 2
times and acrylic by 3 times.

8.4.18 YARN CONSUMPTION

SHort staple spindles: Table-71

million PR China India Pakistan USA Brazil Turkey

2002 49.07 36 9.08 2.49 3.6 5.98
2003 57.5 33.88 9.26 1.96 3.67 6.4
± in % 17.20% -5.90% 2.00% -21.30% 1.90% 7.00%

Open end rotors:

‘000 PR China India Pakistan USA Brazil Turkey

2002 900 386 145 738 322 507
2003 1 379 148 642 330 530
± in % 11.10% -1.80% 2.10% -13.00% 2.40% 4.50%
Source; Fiber Year Saurer 2003- 2004
In the last two years a lot of investments is seen in China the short
staple spindle investment shows a 17.2 % rise over the previous year
and rotor increased by 11.1%.. Similar growth rate is sen in Pakistan
2%,Brazil 1.9%-SS-Spindle and rotor-2.% whereas in Turkey the %
increase in SS-Spindle is 7% and Rotor is 4.5%. In India and US the
no. of spindle and rotor increase is negative over the previous year.
Last year’s output of filament yarn was 18.9 million tonnes. The 5.3%
increase derived from stronger demand for textile and industrial yarns.
This rise in consumption has been supported by higher production
levels and increasing world capacity. The world filament yarn market
comprises cellulosic and synthetic fibers for textile, industrial and
carpet applications

a) Textile Yarn
The textile filament yarn segment serves a broad range of applications
from apparel to home textiles. In 2003, output increased by 6.4% to
14.6 million tonnes. Some 83% of the textile end-uses come from
polyester, that managed to further grow by 7.6% to 12.0 million
tonnes. China,India, South Korea,and Taiwan account for 77%of all
manufactured polyester textile filaments. .
Micro filaments are on their way to becoming commodities. Large new
capacity of some ten thousands of tonnes of sea island yarns in PR
China has led to a drastic drop in prices by about 50% in the Asian
market.
Polyamide textile filaments stagnated at 1.6 million tonnes with a
decreasing consumption for fine yarns . This decline was more than
offset by favorable conditions for coarser yarns and micro filaments for
underwear and sports clothing.
Cellulosic textile filament yarns discontinued their downward trend and
increased by 3.9% topping 0.4 million tonnes.
Polypropylene filaments, predominantly used in carpets, showed a
further tendency to enter new market niches for textile applications.
The demand for upholstery, sport and functional textiles show a
healthy growth.
According to the spinning process, textile yarns are split into in POY
and FDY. Partially oriented yarns, accounting for about 75% of the
world market, require further processing before manufacturing fabrics.
With respect to the volume, texturing is the most popular process to
finally draw the yarns, giving them a comfortable feeling called “textile
touch”.
Air-jet textured yarns take in a 8% market share in terms of number
of positions
b) Industrial Yarn
The market of high-tenacity yarns essentially comprises polyester,
polyamide, polypropylene and viscose yarns, predominantly used in
the automotive industry as reinforcing or composite materials.
Polyamide leads the world market with a 44% share, followed by
polyester comprising a 38%Share.Polypropylene with major usage in
ropes, nets, twines and belts also increased.
Spun Yarn
Staple fibers are the raw material for the spun yarn and nonwovens
production. The global amount of staple fibers being further processed
slightly increased by 1.4% to 38.83 million tonnes with natural fibers
taking in a 58% share. With the exception of cellulosics and polyester,
production of all the remaining types declined in a range from 0.2% to
1.9%. The global supply of staple fibers can be split into the following
three subsequent processing technologies:
a) Short Staple
The world short staple spun yarn production increased by 1.3% to
30.8 million tonnes. The three spinning technologies - ring, rotor and
air jet spining - cover with their different focus on applications the
entire range concerning fineness and input material.
PR China, the unquestioned leader in terms of production and installed
equipment in this sector, rose production by 16% to 9.3 million
tonnes. This is three times the output of second ranked India. The
number of installed spindles went up by 17.2% to 57.5 million. The
trend to further expand automated rotor spinning positions has
continued as the considerable portion of last year’s installations
proved. Based on the fact, that such machines have at least twice as
much productivity than manually operated machines, the domestic
capacity in rotor spinning has witnessed above average increases in
the previous year.
The output of spun yarn in India remained almost at the level of the
previous years at 3 million tonnes. The majority of 69% was cotton
yarn, followed by 20% blends and 11% non-cotton yarn. One bright
spot in last year’s performance was the 17% rise in the hosiery sector.
The Indian textile industry witnessed a 5% decline in spinning and
composite mills at 1,784, leading to a decline in installed spindles by
roughly 6% to 33.88 million. The number of rotors remained at nearly
379,000 despite below-average shipments of some 3,500 new
positions. The cyclic investments in rotor spinning capacity has
continued. Based on the fact that a rotor spinning machine has a
seven times higher efficiency than a ring spinning machine, about 5 to
10% from all Indian made yarns are coming from rotor spinning. Last
year’s emphasis was on semi-automatic equipment.
India is considered by many U.S. firms the primary alternative to PR
China. Over the long term, competitiveness may diminish as strong
economic growth leads to greater domestic demand for textiles and
apparel, and for the labor and capital to make these goods. Apparel will
continue to decline, like sheeting and bath products. Technical
products may remain strong, but in relative volume, they are nothing
compared to cotton and polyester/cotton short staple.The major
producing nations like China, India, Pakistan, United States, Brazil
and Turkey produced more than 19 million tonnes in 2003. This comes to
a 63% share of the global industry.
b) Long Staple
While the long-staple spinning industry has traditionally focused on the
processing of wool, today it is increasingly dominated by manmade
fibers.Long staple fiber production marginally decreased by 2.0% to
3.9 million tonnes, of which wool comprised approximately 1.27 million
tonnes (clean basis). The number of newly installed spindles remained
at the 2002 level of about 350,000. This number also takes into
consideration the flow of second hand machinery, of which for example
a large portion was directed to Turkey. The major end-uses are
apparel, accounting for about half the world market, blankets,carpets
and hand-knitting yarns.Big winners expected from the release of
global quotas in 2005 will be China, Pakistan,India, Turkey and
Bangladesh - the same countries as in the short staple spun yarn
business. China, is taking the lead in this sector as well, and following
a period of capacity reduction- particularly of obsolete long staple
processing equipment - has now begun to increase its investments in

184
new and modern capacity. Business confidence has picked up in the
wool
textile pipeline, particularly at combing and worsted weaving. Worsted
spinners, however, considered it difficult to sustain output growth on the
back of erratic ordering.
World yarn production
The global amount of filament and spun yarns accounted for 53.5
million tonnes representing a 2.4% increase over 2002. Although short
staple yarn still dominates the world market with a 57.5% share,
filament yarns have shown a more dynamic development over the
period with an average annual growth rate of 5.1% comprising a
33.4% share compared with 20.7% in 1980. Short staple yarns just
account for an average annual growth rate of 1.9% over this period.
8.5 DETERMINING DOMESTIC CONSUMPTION

8.5.2 PROJECTION FOR DOMESTIC CAPITAL FORMATION

Gross domestic capital formation

Table -73

1990-91 134381 Double Exponential Smoothing

1991-92 133133
1992-93 151781 Data Gross domest
1993-94 180491 Length 13.0000
1994-95 229265 NMissing 0
1995-96 288710
Smoothing Constants
1996-97 310887 Alpha (level): 1.02186
1997-98 346147 Gamma (trend): 0.03312
1998-99 362775
1999-2000 428127 Accuracy Measures
MAPE: 5
2000-2001 456720 MAD: 13387
2001-2002 504461 MSD: 2.95E+08
2002-2003 542351

Period Forecast Lower Upper

2003-04 573692 540894 606490

2004-05 604891 554054 655728
2005-06 636090 566348 705831
2006-07 667288 578327 756249
2007-08 698487 590158 806816
2008-09 729685 601908 857463
2009-10 760884 613609 908159

Double Exponential Smoothing for

Gross domestic Capital Formation
Act ual
900000
Predicted
Forecast

700000 Act ual

Predicted
Forecast

500000
Smoothing Const ants
Alpha (level): 1.022
300000 Gamma (trend) :0.033

MAPE: 5
MAD: 13387
100000 MSD: 2.95E+ 08

1990-91 2002-03 2009-10

Year
8.5.3 PROJECTION FOR DOMESTIC SAVINGS

Double Exponential Smoothing

Gross domestic savings

Table -74 Data Gross domest
Length 13.0000
NMissing 0
1990-91 118030 Smoothing Constants
1991-92 129599 Alpha (level): 1.19103(actual) 1.19103(adjusted)
1992-93 146501 Gamma (trend): -0.00443(actual) 0.01000(adjusted)
Accuracy Measures
1993-94 175803
MAPE: 7
1994-95 210923 MAD: 13990
1995-96 269391 MSD: 3.15E+08
1996-97 298451 Period Forecast Lower Upper
1997-98 321124
2003-04 568546 534271 602822
1998-99 346794
2004-05 604595 545030 664161
1999-2000 408746 2005-06 640644 555003 726286
2000-2001 445302 2006-07 676693 564737 788650
2001-2002 494394 2007-08 712742 574369 851116
2002-2003 532601 2008-09 748791 583947 913635
2009-10 784840 593495 976186

Double Exponential Smoothing: Gross Domestic Saving

gross domestic savings

1000000 Actual
Predicted
Forecast
800000
Actual
Predicted
Forecast
600000

Smoothing Constants
400000
Alpha (level): 1.191
Gamma (trend): 0.010

200000 MAPE: 7
MAD: 13990
MSD: 3.15E +08

1990-91 2002-03 2009-10

Year
8.5.4 PROJECTION FOR GDP

GDP at current price Rs Crrores -Table-75

1990-91 510954
1991-92 589086
1992-93 659916
1993-94 781345
1994-95 917058
1995-96 1073271
1996-97 1243547
1997-98 1390148
1998-99 1598127
1999-2000 1761838
2000-2001 1902998
2001-2002 2090957
2002-2003 2249493
2003-2004 2429452.44
2004-2005 2623808.635
2005-2006 2833713.326
2006-2007 3060410.392
2007-2008 3305243.223
2008-2009 3569662.681
2009-2010 3855235.696

GDP is assumed to grow at a rate of 8% per annum.

8.5.5 PROJECTION FOR GNP

Regression Analysis: GNP at current price versus GDP at current

price Table -76

GNP at current price GDP at current price

1990-91 503409 510954

1991-92 579009 589086
1992-93 661576 659916
1993-94 769265 781345
1994-95 903975 917058
1995-96 1059787 1073271
1996-97 1230465 1243547
1997-98 1376943 1390148
1998-99 1583159 1598127
1999-2000 1746407 1761838
2000-2001 1885713 1902998
2001-2002 2078871 2090957
2002-2003 2230272 2249493

The regression equation is

GNP at current price = - 4482 + 0.994 GDP at current price

S = 3827 R-Sq = 100.0% R-Sq(adj) = 100.0%

Analysis of Variance
Source DF SS MS F P
Regression 1 4.15683E+12 4.15683E+12 283831.13 0.000
Residual Error 11 161099611 14645419
Total 12 4.15699E+12

PROJECTIONS FOR GDP AND GNP AT CURRENT PRICE-Table-77

YEAR 2003-20042004-20052005-20062006-20072007-20082008-20092009-2010
GNP at
current price 2410394 2603584 2812229 3037566 3280930 3543763 3827622

GDP at
429452 2623809 2833713 3060410 3305243 3569663 3855236
current price 2
8.5.6 PROJECTION FOR CLOTH AVAILIBILITY

Double Exponential Smoothing:

CLOTH AVAILIBILITY SQCM -Table-78 Data CLOTH AVAILIBILITY

1990-91 241400
1991-92 228700 N 17
1992-93 245000 N Missing 0
1993-94 262200
1994-95 259800 Smoothing Constants
1995-96 279900 Alpha (level): 0.523369
1996-97 293000
1997-98 309200
Gamma (trend): 0.087055
1998-99 281900
1999-00 305500
2000-01 306800 Accuracy Measures
2001-02 319700 MAPE: 3
2002-03 313700
2003-04 312400 MAD: 8974
2004-05 323367 MSD: 1.44+08
2005-06 333699

PERCAPITA CLOTH AVAILIBILITY INSQCM

420000 Actual
Predicted
Forecast
Actual
Predicted
Forecast

320000

Smoothing Constants
Alpha (level) : 0.52
Gamma (trend): 0.08
YR Forecast Low

2007-08 348472 326

220000 2008-09 355206
2009-10 361941
329
333
2010-11 368676 336
2011-12 375411 338
1990-91 1999-2000 2009-2010
YEAR MAPE: 3
 FORECAST FOR CLOTH AVAILIBILITY IN SQCM YR
Forecast Lower Upper

2007-08 348472 326484 370459

2008-09 355206 329992 380421
2009-10 361941 333166 390716
2010-11 368676 336117 401235
2011-12 375411 338914 411908
regression analysis- cloth availability in sqcm vs gnp, gdp, population,
gds, gdcf & index of industrial production.
The regression equation is
CLOTH AVAILIBILITY SQCM = 75007 - 0.010 GNP at current price
+ 0.092 GDP at current price + 0.293 Population
- 1.12 Gross domestic savings
+ 1.20 Gross domestic capital formatio
- 1665 Index of Industrial production

S = 10278 R-Sq = 95.7% R-Sq(adj) = 93.7%

Analysis of Variance
Source DF SS MS F P
Regression 6 30389620851 5064936809 47.94 0.000
Residual Error 13 1373335380 105641183
Total 19 31762956231

The p value and the R-sq value shows that the the prediction is highly
significant.

Cloth availability is the basis on which the consumption of the amount of

yarn produced is computed. The rate at which the availability of
cloth is growing shows that the consumption pattern is changing.
People are becoming more fashion conscious and the buying behaviour
change is also taking its toll.
8.5.7 PROJECTION FOR COTTON YARN PRODUCTION

COTTON yarn prodn in Mn kg-Table79

Year
prodn
1990-91
1991-92 1510
1992-93 1450
1993-94 1523
1994-95 1622
1995-96 1586
1996-97 1894
1997-98 2148
1998-99 2213
1999-00 2022
2000-01 2204
2001-02 2267
2002-03 2212
2003-04 2177 Regression Analysis:
2004-05 2475 COTTON yarn versus
2005-06 2552 CLOTH AVAILI, GNP at
2630
curre, ...

The regression equation is

COTTON yarn prodn in Mn kg = - 147 + 0.0127 CLOTH AVAILIBILITY
SQCM
- 0.00123 GNP at current price + 0.00118 GDP at current price -
0.00443 Population + 0.00656 Gross domestic savings
- 0.0126 Gross domestic capital formatio
+ 36.2 Index of Industrial production

S = 98.24 R-Sq = 96.1% R-Sq(adj) = 90.7%

Analysis of Variance

Source DF SS MS F P
Regression 7 1198668 171238 17.74 0.003
Residual Error 5 48252 9650
Total 12 1246920
The p value and the R-sq value shows that the the prediction is highly
significant.
 PROJECTION FOR COTTON YARN PRODN IN Mn Kgs -Table-80
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
2253.663 2445.77 2630.908 2873.613 3015.139 3157.405 3300.095

Cotton yarn prodn is expected to rise to 3300 Mn Kgs by 2010.The

more the yarn is produced less will be the demand for PSF as psf is
one of its close substitute.
8.5.8 PROJECTION FOR BLENDED YARN PRODUCTION

Blended Yarn Prodn in Mn Kgs-Table-81

Year BLENDED yarn prodn in
Mn kg
1990-91 210
1991-92 237
1992-93 253
1993-94 311
1994-95 351
1995-96 395
1996-97 484
1997-98 583
1998-99 595
1999-00 621
2000-01 646
2001-02 609
2002-03 585

Regression Analysis: BLENDED yarn versus CLOTH AVAILI, GNP at curre, ...

The regression equation is

BLENDED yarn prodn in Mn kg = - 1937 + 0.00333 CLOTH
AVAILIBILITY SQCM
- 0.00124 GNP at current price + 0.00173 GDP at current price +
0.00061 Population - 0.00225 Gross domestic savings
- 0.00240 Gross domestic capital formatio
+ 12.7 Index of Industrial production

S = 35.69 R-Sq = 98.0% R-Sq(adj) = 95.3%

Analysis of Variance

Source DF SS MS F P
Regression 7 318520 45503 35.72 0.001
Residual Error 5 6369 1274
Total 12 324889
The p value and the R-sq value shows that the the prediction is highly
significant.

PROJECTION FOR BLENDED YARN PRODN IN Mn Kgs-Table82

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
665.2582 750.129 840.3599 953.4951 1048.628 1153.296 1268.317

Blended yarn constitute of any of the combination of cotton,polyester

viscose and acrylic components in a ratio as per requirement. The
more the demand for blended yarn the more will be the demand for the
components.
Regression Analysis: TOTAL yarn p versus CLOTH AVAILI, GNP at curre, ...
Table -83
NONCOTTON yarn prodn in Mn kg TOTAL yarn prodn in Mn kg

1990-91 104 1824

1991-92 118 1805
1992-93 119 1895
1993-94 134 2067
1994-95 153 2090
1995-96 196 2485
1996-97 162 2794
1997-98 177 2973
1998-99 191 2808
1999-2000 221 3046
2000-2001 247 3160
2001-2002 280 3101
2002-2003 319 3081

The regression equation is

TOTAL yarn prodn in Mn kg = - 2070 + 0.0147 CLOTH AVAILIBILITY
SQCM
- 0.0028 GNP at current price + 0.0031 GDP at current price -
0.00297 Population + 0.0044 Gross domestic savings
 - 0.0129 Gross domestic capital formatio
+ 43.3 Index of Industrial production

S = 123.2 R-Sq = 97.8% R-Sq(adj) = 94.8%

Analysis of Variance

Source DF SS MS F P
Regression 7 3393061 484723 31.95 0.001
Residual Error 5 75852 15170
Total 12 3468913
The p value and the R-sq value shows that the the prediction is highly
significant.

PROJECTION FOR TOTAL YARN PRODN IN Mn Kgs-Table-84

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
3299.881 3572.907 3842.683 4184.348 4414.693 4652.311 4897.533

8.5.9 PROJECTION FOR 100% NON COTTON YARN

PRODUCTION

PROJECTION FOR NON COTTON YARN PRODN IN Mn Kgs-Table-85

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
380.9599 377.0079 371.4158 357.2399 350.9272 341.6103 329.1204

Non cotton yarn is 100% non cotton which are pure synthetics . the
growth in demand for non cotton yarn will be a driver for PSF demand.
Out of the major three types of fibre used PSF,VSF and ASF the mostly
shought after fibre for 100 % yarn are VSF and PSF. The demand for
100% non cotton yarn is likely to grow to around 482 KTA by 2010. This
will be a major growth driver for PSF demand.
8.5.10 PROJECTION FOR PSF IMPORTS

Double Exponential Smoothing

PSF IMPORTS IN KTA-Table86
Year psf imports in KTA Data C15
1990-91 10.5 Length 14.0000
1991-92 8.4
1992-93 9.1 NMissing 0
1993-94 19.1 Smoothing Constants
1994-95 44.3
Alpha (level): 1.35754
1995-96 40.4
1996-97 38.6 Gamma (trend): 0.05931
1997-98 29.8 Accuracy Measures
1998-99 17.4
1999-00 13.8 MAPE: 38.6735
2000-01 21.3 MAD: 7.5071
2001-02 26.9
MSD: 88.8245
2002-03 25.8

PSF IMPORTS IN KTA

Actual
Predicted
Forecast
100 Actual
Predicted
Forecast

0 Smoothing Constants
Alpha (level) : 1.358
Gamma (trend): 0.059

MAPE: 38.6735
MAD: 7.5071
-100 MSD: 88.8245

1990-91 2000-01 2003-10

YEAR
Period Forecast Lower Upper

2003-04 20.7011 2.3087 39.093

2004-05 22.3801 -13.4247 58.185
2005-06 24.0590 -29.4783 77.596
2006-07 25.7380 -45.6138 97.090
2007-08 27.4169 -61.7820 116.616
2008-09 29.0959 -77.9667 136.158
2009-10 30.7749 -94.1607 155.710
PSF imports constitute of speciality fibres and some times normal
fibres which the local market is unable to supply. One other factor is the
dumping of fibre by tiwan and korea due to the depereciated won value-
which is protected by the anti dumping laws. The more the
demand for the import fibres less is the demand for domestic
production. Hence the domestic demand decreases.
8.5.11 PROJECTION FOR PSF EXPORTS

Double Exponential Smoothing

PSF EXPORTS IN KTA-Table-87

Year psf exports in KTA Data C16Length 14.0000

1990-91 23.9 NMissing 0
1991-92 13.2 Smoothing Constants
1992-93 17.3
1993-94 7.1 Alpha (level): 0.565582
1994-95 11.0 Gamma (trend): 0.160744
1995-96 8.9
Accuracy Measures
1996-97 8.2
1997-98 8.0 MAPE: 42.251
1998-99 16.6 MAD: 8.137
1999-00 51.1
2000-01 29.2 MSD: 161.320
2005-06 29.3
2008-09 32.1

PSF EXPORTS IN KTA

80 Actual
Predicted
Forecast
60
Actual
Predicted
Forecast
40

Smoothing Constants
20
Alpha (level): 0.566
Gamma (trend): 0.161

0 MAPE: 42.251
MAD: 8.137
MSD: 161.320

0 10 20
Time

Period Forecast Lower Upper

2003-04 28.0713 8.1362 48.0063

2004-05 28.8741 5.5189 52.2293
2005-06 29.6769 2.5588 56.7950
2006-07 30.4798 -0.6199 61.5794
2007-08 31.2826 -3.9432 66.5084
2008-09 32.0854 -7.3657 71.5365
2009-10 32.8882 -10.8588 76.6352
PSF exports is also a growth driver for PSF demand growth.Exports are
expected to rise to 33 KTA by 2010. With the removal of quota exports
are expected to rise more than the figures projected.
 PSF/PFY/TOTAL POLYESTER/COTTON/VSF/ASF CONSUMPTION IN TONNES -Table-88
1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-2001 2003-2004 2008-2009

PSF consumption
120812 131342 153316 212094 254378 258978 326033 457203 523527 514250 558491 560465 648622
in tonnes

Polyester Filament
consumption in 210766 207261 242280 301592 318997 395962 472038 612800 737339 827086 785286 865822 1115052
tonnes

TOTPSFPOY
consumption in 331578 338603 395596 513686 573375 654940 798071 1070003 1260866 1341336 1343777 1426287 1593674
tonnes

COTTON
CONSUMPTION 1822 1766 1895 2051 2065 2295 2566 2719 2485 2652 2721 2701 3152
in tonnes

VSFCONS in
154 163 161 181 195 207 186 196 182 205 221 191 225.79
tonnes

ASFCONS in
47 50 54 72 99 92 109 111 105 99 104 114 119.36
tonnes
8.5.13 PROJECTION FOR COTTON CONSUMPTION

Regression Analysis: COTTON CONSU versus COTTON yarn , BLENDED

yarn
The regression equation is
COTTON CONSUMPTION in tonnes = 420 + 0.878 COTTON yarn prodn in
Mn kg
+ 0.534 BLENDED yarn prodn in Mn kg

S = 39.37 R-Sq = 99.1% R-Sq(adj) = 98.9%

Analysis of Variance

Source DF SS MS F P
Regression 2 1627342 813671 525.07 0.000
Residual Error 10 15496 1550
Total 12 1642839
The p value and the R-sq value shows that the the prediction is highly
significant.

PROJECTION FOR COTTON CONSUMPTION-Table-90

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
2754 2968 3179 3452 3627 3808 3995
8.5.14 PROJECTION FOR PSF CONSUMPTION

Regression Analysis: PSF consumpt versus BLENDED yarn,

NONCOTTON yarn
The regression equation is
PSF consumption in tonnes = - 149695 + 834 BLENDED yarn prodn in
Mn kg
+ 699 NONCOTTON yarn prodn in Mn kg

S = 28370 R-Sq = 97.9% R-Sq(adj) = 97.5%

Analysis of Variance

Source DF SS MS F P
Regression 2 3.75848E+11 1.87924E+11 233.49 0.000
Residual Error 10 8048402646 804840265
Total 12 3.83897E+11
The p value and the R-sq value shows that the the prediction is highly
significant.

PROJECTION FOR PSF CONSUMPTION-Table-91

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
671421 739441 810785 895231 970159 1050939 1138137
8.5.15 PROJECTION FOR VSF CONSUMPTION

Regression Analysis: VSFCONS in t versus BLENDED yarn,

NONCOTTON ya

The regression equation is

VSFCONS in tonnes = 136 + 0.0307 BLENDED yarn prodn in Mn kg
+ 0.216 NONCOTTON yarn prodn in Mn kg

S = 13.06 R-Sq = 70.9% R-Sq(adj) = 65.1%

Analysis of Variance

Source DF SS MS F P
Regression 2 4153.8 2076.9 12.17 0.002
Residual Error 10 1705.9 170.6
Total 12 5859.7
The p value and the R-sq value shows that the the prediction is highly
significant.
PROJECTION FOR VSF CONSUMPTION -Table-92
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
239 240 242 242 244 245 246
8.5.16 PROJECTION FOR ASF CONSUMPTION

Regression Analysis: ASFCONS in t versus BLENDED yarn,

NONCOTTON ya
The regression equation is
ASFCONS in tonnes = 25.0 + 0.115 BLENDED yarn prodn in Mn kg
+ 0.0724 NONCOTTON yarn prodn in Mn kg

S = 12.40 R-Sq = 80.5% R-Sq(adj) = 76.5%

Analysis of Variance

Source DF SS MS F P
Regression 2 6334.3 3167.1 20.58 0.000
Residual Error 10 1538.8 153.9
Total 12 7873.1
The p value and the R-sq value shows that the the prediction is highly
significant.

PROJECTION FOR ASF CONSUMPTION -table93

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
129 139 149 161 171 182 195
8.5.17 PSF SUPPLY DEMAND ANALYSIS

PSF DEMAND SUPPLY ANALYSIS-Table-94

PSF
FYEAR consumption in PSF PSF PSF PSF RIL
tonnes RIL
consumption in Imports in Exports in PRODN IN DEFICIT MARKET
PRODN
KTA KTA KTA KTA SHARE

1990-91 120812 121 10.5 23.9 134 65 54%

1991-92 131342 131 8.4 13.2 136 65 49%
1992-93 153316 153 9.1 17.3 162 65 42%
1993-94 212094 212 19.1 7.1 200 65 31%
1994-95 254378 254 44.3 11.0 221 65 25%
1995-96 258978 259 40.4 8.9 227 94 36%
1996-97 326033 326 38.6 8.2 296 277 85%
1997-98 457203 457 29.8 8.0 439 277 61%
1998-99 523527 524 17.4 16.6 523 277 53%
1999-00 514250 514 13.8 51.1 551 312 61%
2000-01 558491 558 21.3 29.2 566 341 61%
2001-02 560465 560 26.9 17.9 551 399 71%
2002-03 578622 579 25.8 29.3 582 429 74%
2003-04 671421 671 20.7 28.1 608 (70.8) 453 67%
2004-05 739441 739 22.4 28.9 608 (137.9) 453 61%
2005-06 810785 811 24.1 29.7 608 (208.4) 453 56%
2006-07 895231 895 25.7 30.5 608 (292.0) 453 51%
2007-08 970159 970 27.4 31.3 608 (366.0) 453 47%
2008-09 1050939 1051 29.1 32.1 608 (445.9) 453 43%
2009-10 1138137 1138 30.8 32.9 608 (532.3) 453 40%
 SUPPLY/DEMAND-PSF(KTA) PSF consumption in KTA
PSF PRODN IN KTA
1400 DEFICIT
1200 Poly. (PSF consumption in KTA)
y = 1.1154x 2 + 28.998x + 81.744
R2 = 0.9859
1000

800

600

400

200

(70.8)
-200 (137.9)
(208.4)
-400 (292.0)
(366.0)
(445.9)
-600 (532.3)

-800
YEAR

8.5.18 PSF DEMAND SUPPLY ANALYSIS AND RIL MARKET

SHARE

PSF consumption in KTA

PSF DEMAND/SUPPLY & RIL SHARE PSF PRODN IN KTA
RIL MARKET SHARE
RIL PRODN
1200 90%
85%
80%
1000 74%
71% 70%
67%

800 61% 61% 61% 61% 60%

56%
54% 53%
49% 51% 50%
600 47%
42% 43%
4040%
36%

400 31% 30%

25%
20%
200
10%

0 0%

YEAR
9.1 CONCLUSION
The world textile industry will be facing the greatest challenge in its
history from the last release of quota trade on 1st Jan 2005 when the
remaining 49% of quotas will be eliminated. An initial foretaste has
been observed in the previous two years after China became a WTO
member. The country managed to drastically increase its clothing
exports by 40% to more than $50 billion, at the same time the nation
is a major importer of textiles, mainly fiber intermediates and fibers,
to fuel the local garment industry. This makes clear the country’s need
to further expand domestic upstream capacities in spinning and fiber
intermediates. This ongoing development in China and to a minor
extent in other Asian countries highlights the enormous challenge to
fiber companies located in the western hemisphere. Strategies for
survival in higher cost economies are becoming inevitable to position
its comparative edge. From the variety of measures, the focus of
present industry is on technical innovations to gain sustainability.
The development over the last decade has shown that 82% of the
additional volume consumed has come from synthetics. While
cellulosics’ increase averaged at 0.6% annually, cotton showed an
average annual growth of 1.7% and synthetics jumped up by 5.9%. In
other words, 14 out of 17 million tonnes of additional demand was met
by synthetic fibers over the period 1993 to 2003. This trend is
commonly expected to continue.
Nevertheless, in apparel end-uses, accounting for more than half the
world’s fiber demand, natural fiber is preferred for reasons of comfort.
Relative pricing disadvantages as well as natural restrictions argue
against a cotton-dominated textile industry.
Technical innovations to imitate nature and to make fibers more
natural will be the key to success. This would also address growing
 public concerns about the environment by making fibers biodegradable
and manufacturing them from renewable resources.
Representative for developments may be Lenzing’s Lyocell and Cargill
Dow’s PLA fiber.
Lyocell, the 100% cellulosic fiber, is based on a particularly eco-
friendly, closed-loop production process. In addition to the natural
fibers properties, Lyocell offers high strength, both in wet and dry
state. Due to its permanent crimp, fabrics contain excellent wearing
comfort and color brillianceThe current season’s global cotton
production is expected to be higher at about 20.05 million tonnes,
representing a 5% increase over 2002. Output in most major-
producing countries is estimated higher with the exception of China.
Two thirds of this volume is being consumed in five countries - China
(6.6 million tonnes), India (2.9), Pakistan (2.0),U.S. (1.3) and Turkey
(1.3).
Wool and lamb/mutton are the principle products in the sheep
industry. Consumption and prices of wool have decreased so low since
the beginning of the nineties that any valueadded sometimes exceeds
the value of manufacturing the wool. The dwindling demand for wool
can be ascribed to consumer acceptance of synthetic manmade fibers.
Changes in consumer behavior towards lighter weight, casual clothing
have additionally supported this substitution.World wool production
has continued its long-established downward trend, the volume
declinedby 2.1% to 1.24 million tonnes. Half the wool output comes
from Australia and New Zealand, directing nearly all the output for
shipments abroad, mainly China, the largest wool processing country.
World population of 6.34 billion corresponds to an average per capita
consumption of 9.9 kg.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.
On a world basis, demand for fibers from the first two groups has
increased by 2.7%. As in the recent years, the manmade fibers
performance exceeded that of cotton in terms of the growth rate..

2
Since the beginning of the 90’s manmade fibers have been the most
important fiber type in terms of volume.Manmade fibers managed to
perform with an average annual growth rate of 4.7% whilenatural
fibers accounted for a mere 0.4% annual increase in average.With
some exceptions in the early- and mid-eighties, filament yarns have
developed stronger than staple fibers. Over the past fifteen years,
filament yarns - most commonly further processed via texturing or
twisting - have enjoyed an average annual growth of 6.0%. Staple
fibers have increased by 1.4%, of which cotton and wool by 0.5% and
manmade staple fibers by 2.8%. Staple fibers are the raw material for
spinning of staple fiber yarns (synonym: spun yarn) and for
manufacturing of drylaid nonwovens.The reasons for this unbalanced
development are manifold. Filaments have favorable manufacturing
costs and do not depend on natural restrictions in terms of the raw
material availability.Technological progress in spinning equipment has
led to outstanding yarn properties enabling filaments to branch out
into new markets that have been traditionally occupied by spun yarn
applications. This trend has been supported and enforced by consumer
acceptance.
The following consumption pattern exemplified for the Indian market
proves this trend. In
addition to that, it will show the commanding position of polyester.
Over the previous decade, local demand of yarns has increased on an
average annual basis by 4.8% to about 3 million tonnes in 2003/04.
During this period the ratios of the yarn types have drastically changed
and polyester continued its triumphal procession.
The share of polyester in filament yarns has gone up from 74% to
91% and in non-cotton spun yarn blends from 58% to 74%. The
growing filament demand in India resulted from a shift in consumer
preference towards synthetics particularly in rural areas, the
consumption rose from 49% to 66% over this period. Cotton demand
in the same areas dropped from 51% to 34%. Two of the fastest
growing end-uses for filament in India have been stimulating this
growth.
Firstly, sarees - traditional Indian dress for ladies - before the
widespread of synthetics were made for the high-end of the market
out of silk and for the low-end out of cotton. The introduction of high
taxes on polyester by the Indian government was to protect the own
cotton industry. As a result, polyester became an expensive fiber with
high in demand among rich people only. The growing demand for
polyester sarees substituted more and more silk in the high-end
market. After tax reductions on polyester, a booming demand for
polyester sarees materialized which still had the image of an exclusive
piece of garment but became affordable to a larger share of Indian
ladies.
Secondly, there has been a growing polyester demand for men’s wear
trousers and suitings.Changing purchasing patterns have been
influenced by its wearing comfort, easy care and advantages in price.

Polyester
Previous year’s polyester output has increased by 7.2% to 22.26
million tonnes. Above average growth has been observed in filament
markets, rising by 7.6% to 12.87 million tonnes. Staple fibers went up
by 6.6% to 9.39 million tonnes. Double-digit growth rates occurred in
China, Pakistan and the Kingdom of Saudi Arabia on a small scale
level. The small group of countries that have also managed to increase
the output volume is mainly located in Asia. This resulted in a further
shifting of manufacturing to the Asian region, now accounting for a
83% share. Meanwhile, Europe and the Americas have further lost
ground, especially in textile filament and staple fibers.
Polyamide
Negative volume changes in Europe and the Americas together with
modest increases in Asia characterized the world polyamide fibers
industry, resulting in a stagnating volume at 3.93 million tonnes.
While staple fibers continued their long-term downward trend, filament
yarn applications have shown a mixed performance. Yarns for
industrial end-uses were the only segment with increasing demand
over 2002.
Polypropylene
The production of polypropylene fibers increased by 0.7% to 2.99
million tonnes. Textile yarns are mainly the basic raw material for
niche markets. Such yarn is much required in sport and functional
clothes. In the meantime, an increasing consumption for stocking and
socks wins recognition. Additionally to carpets, polypropylene filament
yarns became established in several home textile and industrial
applications helping to disengage from the poor image of former times.
The development in price proves this acceptance is on the rise.Locally
restricted, polypropylene yarns are ranked before commodity polyester
filament applications in termes of prices. Polyester, suffering from
huge overcapacity, has partly replaced polypropylene in weaving end-
uses. Formerly known as a 100% polypropylene fabric tends to be
containing a polypropylene and a polyester layer.
Textile Yarn
The textile filament yarn segment serves a broad range of applications
from apparel to home textiles. In 2003, output increased by 6.4% to
14.6 million tonnes. Some 83% of the textile end-uses come from
polyester, that managed to further grow by 7.6% to 12.0 million
tonnes. China,India, South Korea,and Taiwan account for 77%of all
manufactured polyester textile filaments. .
Micro filaments are on their way to becoming commodities. Large new
capacity of some ten thousands of tonnes of sea island yarns in PR
China has led to a drastic drop in prices by about 50% in the Asian
market.
Polyamide textile filaments stagnated at 1.6 million tonnes with a
decreasing consumption for fine yarns . This decline was more than
offset by favorable conditions for coarser yarns and micro filaments for
underwear and sports clothing.
Cellulosic textile filament yarns discontinued their downward trend and
increased by 3.9% topping 0.4 million tonnes.
Polypropylene filaments, predominantly used in carpets, showed a
further tendency to enter new market niches for textile applications.
The demand for upholstery, sport and functional textiles show a
healthy growth.
According to the spinning process, textile yarns are split into in POY
and FDY. Partially oriented yarns, accounting for about 75% of the
world market, require further processing before manufacturing fabrics.
With respect to the volume, texturing is the most popular process to
finally draw the yarns, giving them a comfortable feeling called “textile
touch”.
Air-jet textured yarns take in a 8% market share in terms of number of
positions
Industrial Yarn
The market of high-tenacity yarns essentially comprises polyester,
polyamide, polypropylene and viscose yarns, predominantly used in
the automotive industry as reinforcing or composite materials.
Polyamide leads the world market with a 44% share, followed by
polyester comprising a 38%Share.Polypropylene with major usage in
ropes, nets, twines and belts also increased.
Spun Yarn
Staple fibers are the raw material for the spun yarn and nonwovens
production. The global amount of staple fibers being further processed
slightly increased by 1.4% to 38.83 million tonnes with natural fibers
taking in a 58% share. With the exception of cellulosics and polyester,
production of all the remaining types declined in a range from 0.2% to
1.9%. The global supply of staple fibers can be split into the following
three subsequent processing technologies:
Short Staple
The world short staple spun yarn production increased by 1.3% to
30.8 million tonnes. The three spinning technologies - ring, rotor and
air jet spining - cover with their different focus on applications the
entire range concerning fineness and input material.
China, the unquestioned leader in terms of production and installed
equipment in this sector, rose production by 16% to 9.3 million
tonnes. This is three times the output of second ranked India.
The output of spun yarn in India remained almost at the level of the
previous years at 3 million tonnes. The majority of 69% was cotton
yarn, followed by 20% blends and 11% non-cotton yarn. One bright
spot in last year’s performance was the 17% rise in the hosiery sector.
The Indian textile industry witnessed a 5% decline in spinning and
composite mills at 1,784, leading to a decline in installed spindles by
roughly 6% to 33.88 million. The number of rotors remained at nearly
379,000 despite below-average shipments of some 3,500 new
positions. The cyclic investments in rotor spinning capacity has
continued. India is considered by many U.S. firms the primary
alternative to China. Over the long term, competitiveness may
diminish as strong economic growth leads to greater domestic demand
for textiles and apparel, and for the labor and capital to make these
goods. Apparel will continue to decline, like sheeting and bath
products. Technical products may remain strong, but in relative
volume, they are nothing compared to cotton and polyester/cotton
short staple.The major producing nations like China, India, Pakistan,
United States, Brazil and Turkey produced more than 19 million tonnes
in 2003. This comes to a 63% share of the global industry.
Long Staple
While the long-staple spinning industry has traditionally focused on the
processing of wool, today it is increasingly dominated by manmade
fibers.Long staple fiber production marginally decreased by 2.0% to
3.9 million tonnes, of which wool comprised approximately 1.27 million
tonnes (clean basis).
World yarn production
The global amount of filament and spun yarns accounted for 53.5
million tonnes representing a 2.4% increase over 2002. Although short
staple yarn still dominates the world market with a 57.5% share,
filament yarns have shown a more dynamic development over the
period with an average annual growth rate of 5.1% comprising a
33.4% share compared with 20.7% in 1980. Short staple yarns just
account for an average annual growth rate of 1.9% over this period.
Oveview
The development at consumer side has been steady-going due to
increasing world population and economic improvements as well as the
desire for fashionable and diversified clothing.Although this appears to
be a rather healthy growth, the increasing imbalance on the supplyside
may cause some concerns. The dominating factor driving this
imbalance has been regional advantages of low labor costs. Formerly
geographically advantaged industries adjacent to the big consuming
regions were in a favorable position. When quota-free textile trade will
come into operation in 2005, countries such as PR China, India,
Pakistan, Turkey, Indonesia, Vietnam and Bangladesh will gain higher-
than-average benefit from this opening of the industrialized markets.
What is it, that those countries have in common? They have all
embarked on the strategy to expand their textile and garment industry
which is regarded as crucial to economic development. Outstanding
success, over recent years, in the pursuit of this policy has led to a
widening gap between production and final consumption on a global
scale. Furthermore the dependency on just a few markets, which
account for a large proportion of global textile demand, has sharply
increased. Following the guiding theme “big is beautiful”, the entire
textile chain has been subject to fundamental changes. Quite a
considerable amount of garment production is being sourced by a few
multi-billion-dollar retail companies and huge foreign direct
investments from industrialized to emerging countries have further
strengthened this shifting of capacity. The retail sector is already in a
process of restructuring and more consolidation will mean even further
increases in the influence of the retailer in the re-allocation of the
textile value chain. Will this sourcing in low cost countries prove
sustainable? Yes, but it will also offer other countries a fair opportunity
to gain attractiveness. Growth in today’s booming markets will not be
endless, but constrained by shortages in energy and raw materials.
Economic growth will result in greater domestic demand for textiles
and apparel as well as higher labor costs in the long run. Secondly,
retailers already strongly interfering into the manufacturing and
distribution flow, will avoid a single-region dependency, and search for
alternatives. However, some concerns may arise due to efforts to
impose regulations in terms of trade protectionism by means of yarn
or fabric forward rules and tariffs. These measures cannot help the
industry in Western Europe or the United States to revive. Major parts
of the big volume apparel market have already left and they will not
come back. Instead, the industry’s only chance will be in concentrating
on superior quality and innovative products. Naturally, every single
innovation must enjoy an absolutely reliable and effective protection
against imitations. The particular focus in the western hemisphere is
linked to the labor market. The combination of automation and loss of
market share to foreign competitors caused the loss of several million
manufacturing jobs over the previous years. Stimulating domestic
demand through tax cuts and record low interest rates has just been
creating jobs in China or its neighboring countries. However, anything
else than commonly respected rules on how to practice world trade
and global manufacturing will even worsen this situation. An
unrestricted evolvement of the market forces will eventually increase
economic welfare the most. From that point of view, a liberated textile
trade may disclose unexpected opportunities to the world textile
industry. Although there is still a way to go until free trade is
established, as some import tariffs, non-tariff barriers and subsidies
will remain beyond 2005, it may be a promising step after phasing-out of
the quotas from January 2005 onwards. Today’s dynamics force
everybody to be part of the appropriate chain for tomorrow’s success in
the global gamble. It is becoming even more crucial to have the right
partners, full market knowledge and the technical capability to master
the challenges ahead.
The demand for PSF is increasing .Players in China,Taiwan,Indonesia
are coming up with major expansions.Inhouse domestic producer
Indorama is also expanding with around 160000 TPA. Demand for
short staple is increasing. The current market share of RIL at 67% is
going to reduce to 40% by 2010 with the existing capacities. With
increasing price of PTA and MEG the margins are getting squeezed. So
capacity and speciality are going to be the major strategy for existing
players in the field.Micro fibres have started becoming a
commodity.Demand by 2010 is likely to increase to about 1138 KTA.
With the lifting of quota from next year the world will become a
common playground for everybody. It is high time that RIL too should
expand its capacity to maintain market leadership.
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Websites

1. Www.Ril.Com
2. Www.Indorama.Com
3. Www.Hillsine.Net
4. Www.Fibrejournal.Com
5. Www.Textile.Saurer.Com
6. Www.Textileministry.Com
7. Www.Infoline.Com
8. Www.Wto.Com
9. Www.Itma.Com