Technical Textiles
March 23, 2011 Technical textiles are value-added textiles that span the entire spectrum of the textile industry. These products are predominantly used for improving lifestyle, protecting the environment and enhancing human life. Simply put, technical textiles are fibrous materials produced and available in different forms and shapes, such as mats, yarns, fabrics, composites, made-up goods and converted products that can be used in everyday life and are non-commodity items.
Technical textiles can be made using different processes such as weaving, knitting, nonwovens, composite formation, etc. They can even be raw fiber, depending on the intended use.
This sector is a growth segment within the textile industry. The technical textiles sector is one among very few industrial sectors that is expected to grow on par with the GDP, based on historical data. The current value of the global technical textiles sector is roughly $150 billion, which does not include the value of converted products at the consumer level, focusing instead on roll goods or unconverted fabrics.
According to the latest economic forecasts by PricewaterhouseCoopers, in 2011, the global economy is expected to grow at 3.1% (the United States at 2.4%; Western Europe 1.3%, China 9.4%, India 8.5%, Brazil 4.3% and Russia 4.5%).
This positive economic forecast will be of immense benefit to India as it endeavors to spearhead the growth of its technical textiles industry. Based on historical trends, India’s technical textiles sector should grow around 8.5% (the current government estimate is 11% and our recent research at Texas Tech University concurs, predicting double-digit growth). Growth was based on GDP estimates from the World Bank and have been vindicated by a market survey conducted by ICRA Management Consultancy with funding the Ministry of Textiles.
Status of the Indian Textiles Industry
India’s textile industry is a conventional industry dominated by cotton. According to a recent report by the Ministry of Textiles, India has 1,834 textile mills with an installed capacity of 37 million ring spindles, 489,718 rotors and 56,526 looms (nonwoven roll good production is between 80,000 and 100,000 tonnes). The textile industry, including the nascent technical textiles sector, contribute 4% to the GDP, 14% to industrial production, employs 35 million people, and provides 17% of export earnings.
India’s competitive advantage – low labor costs – has been eroding slowly as smaller nations such as Bangladesh and Vietnam, due to their cheaper labor and trade agreements with the United States and Europe, are gaining advantageous positions with regard to foreign trade.
The government and the industry are looking for diversification opportunities to enlarge the Indian textiles industry, hoping to reach $115 billion by 2012. The technical textiles sector should contribute at least 10% of that amount.
The current value of the Indian technical textiles sector is about $8 billion, so it needs to almost double in size in coming years. The government is playing a significant role by creating awareness and developing a knowledge base for the nonwoven technical textile (NWTT) sector. Since the mid-2000s, Indian officials have supported many technical awareness programs, and several industry associations have offered training programs as well.
In India, value-added textiles are grouped into to a single sector commonly referred to as “technical textiles,” which encompasses fiber to converted products. The government sponsored a nationwide market survey to estimate the size, need and the growth potential of this industry. ICRA undertook the study and estimated its current market size at $8.9 billion. It is expected to grow to $14.8 billion by 2012/13. Consumption should be slightly less than the market size.
The largest segments identified in the report are Packtech, Clothtech, Indutech and Meditech. The report categorizes technical textiles into 12 segments but could cause confusion because there are several products that fit in multiple segments. From a marketing perspective, it might be easier to classify the technical textiles sector in to three groups: consumer products, institutional products, and government procurement products.
Consumer products include personal care, baby care and hygiene products. In this category, global brands such as Huggies and Pampers have already penetrated the market, and the major players include Procter & Gamble, Kimberly-Clark, SCA-Godrej and Johnson and Johnson. Products from these major international companies are predominantly sold in pharmacies and retails stores. The consumers who use these products are predominantly from the upper strata of society, but the cost and the lack of awareness hinder the penetration of these products into rural and low-income areas.
There will be growth in the consumption of institutional products such as geotextiles, automotive textiles and hospital products. India has a plan to build 20 kilometers of national highway per day, which will lead to more consumption of technical textiles.
The government procurement category also offers scope, as the Ministry of Defense has recently streamlined its procurement policies. Those countries that have quality defense textile products, and liaison bodies in India will have advantages over the others.
What the Indian NWTT Sector Needs
There is an immediate need for a converting sector in India. Because of the growing domestic consumption and increase in wages, demand for affordable consumer products will rise. The international NWTT industry, machinery makers and trade bodies should look for win-win opportunities in the creation of converting clusters.
India has adequate roll good manufacturers, though not many of high quality. The needs of the domestic market as of today can be met with the existing capacity. There are approximately 50 spunbond manufacturers with predominantly Chinese, Korean and Taiwanese machinery. The industry is reluctant to invest in high-end machinery as the market is not fully established.
Other needs include:
• Technical schools to train skilled NWTT workers.
• Knowledge on converting roll goods to end-user products (including chemical finishing and formulation).
• Marketing know-how and a coordinated marketing strategy.
Because all stakeholders recognize the need for a coordinated body to represent the interests of the growing industry, the Indian Technical Textiles Association (ITAA) has just been founded, with headquarters in Mumbai.
In 2008, some of us were predicting that India’s NWTT sector would grow at a rate of 13% annually. ICRA has estimated it to be 11% per annum, so it’s fair to predict that growth will be in double digits.
As mentioned, there is an emergent need to grow the converting sector, which will drive the growth of other segments in NWTT. Machinery makers, fabric producers, fiber manufacturers and industry trade bodies should strongly consider engaging in relevant trade talks and promotional activities.
The Next Steps for the Indian Textile Industry
The growing trade deficit in developed nations such as the United States and United Kingdom has set off alarm bells for many countries in the developed world. For example, according to the United Kingdom’s Office for National Statistics, imports from China have grown quintupled to about $40.2 billion from 2001 through 2009.
Exports, on the other hand, have not grown much, totaling a mere $8 billion in 2009. Some developed nations, including the United States, have advised China and other growing nations (Brazil, India, Russia) to balance their trade by growing their domestic markets.
This topic was on the center stage in the recent G-20 summit in Seoul, South Korea. Population growth in emerging markets, particularly in East and South Asian countries, will boost domestic consumption. There will be an increase in the consumption of food and commodity items such as textiles.
However, the market size in developed nations will shrink due to increased savings, a slowing of the economy and declining population growth. The textile industry in India has to adapt to these changing landscapes and needs to diversify to meet the challenges of 21st century markets.
Are Technical Textiles a Panacea?
Given the changing economic and social landscapes, the Indian textile industry needs to grow and diversify so it can cater to both the domestic and export markets. To be sure, the sector has created enormous buzz in the past five years.
Although there has been a lot of excitement, a significant number of projects never evolved, for two main reasons:
1. lack of technical expertise, and
2. lack of practical/market knowledge.
The government of India has taken note of these weaknesses and recently unveiled a Technological Mission on Technical Textiles, complete with an investment of $44 million. It is a step in the right direction and all stakeholders should join forces to make this mission productive and successful.
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