RadiciGroup at Fibres and Raw Materials Conference - 3-4 November 2011


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Nylon Textile Filament Sustainability, Performance and Changing Business Patterns.

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RadiciGroup at Fibres and Raw Materials Conference - 3-4 November 2011

  1. 1. Nylon Textile Filament Sustainability, Performance and Changing Business Patterns Paola Corbani Senior Marketing Analyst – RadiciGroupThe Fibres and Raw Materials Conference.Hong Hong, 3-4 November 2011 1
  2. 2. Topics RadiciGroup Today Macrotrends Fibre Consumption Trends Nylon Textile Filament  Global Overview  Sustainability and Performance Summary and Conclusions 2
  3. 3. RadiciGroup in the WorldRange of products: chemicals, engineering plastics, textiles & fibers, textilemachinery, energy, hotel and real estate… 3 Production Sites & Branch Offices: more than 50 worldwide
  4. 4. RadiciGroup Turnover in 2010 Consolidated Sales Millions of € 1.165 Personnel 3500 4
  5. 5. Synergy and integration 5
  6. 6. Synergy and integration 6
  8. 8. Topics RadiciGroup Today Macrotrends Fibre Consumption Trends Nylon Textile Filament  Global Overview  Sustainability and Performance Summary and Conclusions 8
  9. 9. Population Trends World Population growth: from 6.9 billion in 2010 to 7.6 billion in 2020. Aging population in Western developed countries: off consumption peak  less volume consumption, but higher added- value products, more service content, health, fitness and functional products  Less export opportunities for (Asian) export driven economies, especially in commodity goods Fast growing young middle class in emerging countries with increasing income and request for sophisticated products. China to have the biggest population in working age...But also a fast growing aging population 9
  10. 10. Income shifting towardemerging countriesShift of GDP share and economic power to Asiaand emerging countries 10 Source: Frost & Sullivan 2010
  11. 11. Sustainability IssuesAs world population grows, global sustainability issues gain importanceCompetition on arable land of food/non food/biofuel crops, use of chemicals, water availabilityEnergy consumption, Greenhouse Gas Emissions and climate changeChemical feedstock versus bio-feedstocksRecycling of industrial and post consumer wasteIncreasing consumer demand for environmentally responsible goods and servicesImpact on Cotton vs manmade fibres, interfibre 11 competition
  12. 12. Topics RadiciGroup Today Macrotrends Fibre Consumption Trends Nylon Textile Filament  Global Overview  Sustainability and Performance Summary and Conclusions 12
  13. 13. Cotton Role in the Fibre Industry Cotton: in 2015 forecast between 26 and 28 mio M tonnes: in 2020 between 27 and 30 mio M tonnes Impact on on future manmade fibres demand Cotton Production capped below 28 mio M Tonnes in ICAC scenario: Limited arable land availability not compensated by strong growth in yields Cotton Production 13 Source: Terry Townsend, Icac Org. May 2011
  14. 14. World Fibre Mill Consumption 2010-20 110 99(Millions of Metric Tonnes 100 90 90 77 80 66 tot fibres 70 61 60 51 cotton 50 man made fibres 40 30 25 28 30 20 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 PES IF FIL (incl SB) 2.7% Source: Pci Fibres RB 2010 PES TF PP Fil+ST 6.0% 2010 27.8% Cellulosic 4.4% Nylon Nylon IF Carpet fil Acrylic Staple 1.5% 2.5% 1.0% Nylon Other Staple PES staple 0.2% 4.7% 17.5% Nylon Textile filament cotton 2.0% 32.9% wool 1.5% 14
  15. 15. Topics RadiciGroup Today Macrotrends Fibre Consumption Trends Nylon Textile Filament  Global Overview  Sustainability and Performance Summary and Conclusions 15
  16. 16. Nylon TF Global trends  Volumes forecast to keep above 1.5 mio Metric tonnes over the next 4 years and long term  Actual volumes have been higher than forecast over the last few years. Average yearly growth var var 2010/00 2020/10  Mainly due to China America -5.9% -0.1% Europe, M East & Africa -6.4% -0.2% China (with Hong Kong) 10.7% 2.9% perfomance Other Asia World -6.5% -0.5% -4.1% 1.0% RB 2010 RB 2005 RB 2007 RB 2009 1800 1700 1600(000 Metric tonnes) 1500 1400 Past Pci forecast 1300 1200 1100 1000 1990 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015 2020 16 Source: PCI Fibres
  17. 17. Regional Trends Nylon TFNylon Textile filament mainstream volumesto stay in Asia Following textile migration pattern of made up articles Fabrics and yarns integration China getting the biggest share But increasing Chinese costs opening opportunities to emerging Asian Countries: Vietnam, Pakistan, Bangladesh 100% 1471 1517 1673 90% 80% 70% 60% Other Asia 50% China (with Hong Kong) 40% Europe, Middle East & Africa 30% 20% America 10% TOTAL 0% 2005 2010 2015 17 Thousands of Metric Tonnes Source: PCI Fibres
  18. 18. Nylon TF Forecast PatternsNylon TF main historical forecast based on: Competition with polyester ...due to higher raw material cost of nylon in mainstream applications Static Apparel consumption in core nylon market Europe and in advanced countries Slow development of nylon core apparel demand in emerging countries 18
  19. 19. Nylon TF at a turning pointIn 2010, volumes at 1.5 mio metric tonnes at a peak since 2001 Taking advantage of cotton shortage and high pricing reflecting also on polyester availability and pricing Fast developments in advanced nylon garment demand (lingerie, hosiery, sportswear, industrial uses) from middle class population in emerging countries... A continuing trend Some recovery in European demand on limited volumes: stable prospects for functional textilesMedium term: Growing overall fiber consumption, Cotton loss of market share and partial shift to higher ends of the marketA positive contribution to Nylon TF in the future 19
  20. 20. More Regional Demand to come Asian suppliers increasingly focused on fast growing domestic demand Rising textile costs (esp. labour) and freight rates in China and other Asian Countries. Partial return to regional sourcing by European retailers: security of supply, financial and currency risk management, new products targeted to specific needs in reduced time lags, sustainability. 20
  21. 21. Overall Industry Balance Europe: Supply more balanced with demand after extensive restructuring China: PA6 nylon TF capacity surge China Nylon TF Capacity vs production  Domestic demand 2000 trends vs capacity  Utilization rates to(thousands of Metric tonnes) 1500 remain below 60% 1000 over the next 5 to 500 10 years  Shrinking export 0 2010 2015 2020 opportunities to capacity production Western countries Global Raw material availability and high price an open issue 21
  22. 22. Key Issues for the FutureNylon role as a specialist fibre:Work on best performance to deliver value: comfort, softness, thermal regulation, moisture management, strength, lightweight, stretch, durability Innovation and product development - from polymer chemistry to yarn and fabric construction- to cater for diversified needsTackle the sustainability issue: Focus on environmental performance, clarify and communicate industry efforts Functionalize approach to Sustainability 22
  23. 23. Sustainability in Nylon Textile Filament Nylon Environmental performance perceived as worse than other fibres (esp. PES) in terms of energy use, GHG Emissions, water consumption Nylon recognized as a specialized fibre but focus on sustainability set to tighten Functional approach to Sustainability: work on environmental performance relative to delivered technical features Nylon Industrial waste recycling a reality ... increasing focus on post consumer. Recycling of limited percentages started from post consumer carpet waste, some textile filament, but no ready source like post consumer PET bottle. 23
  24. 24. The Recycling Options in Nylon SustainabilityNylon recycling: back into spinning: mainly in carpet, textile filament still technically difficult down the value chain into the plastics businessBoth solutions are technically feasible but:The spinning process requires more energy andthe CO2eq. emissions are higher.  Recycled-yarns have some limitations on Recycled content, dyebility, Mechanical performancesThe plastics solution requires less energy andemits less CO2 equivalent.  Recycled plastics retains: Good mechanical performances, Good mouldability; the recycled content could be up to 100% 24
  25. 25. Pros and cons of recycling in Nylon Filaments and in plastics Both solutions are technically feasible but: e Up to 100% 25
  26. 26. RadiciGroup for Sustainability 26
  27. 27. RadiciGroup: Nylon Sustainability & PerformanceBalance of Energy requirements relative toperformance Ger/Average Textile Strength (MJ/MPa) 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 PA66 Radici PA6 PETa PP HDPE 27
  28. 28. Topics RadiciGroup Today Macrotrends Fibre Consumption Trends Nylon Textile Filament  Global Overview  Sustainability and Performance Summary and Conclusions 28
  29. 29. Summary Limited growth expected with demand to keep above 1.5 millions MT Commodity business: competition with polyester continuing Cost and availability of raw materials open issue for the whole business Positive trend of demand of core nylon products in emerging countries, stability in Western countries. More regional demand: cultivate growing Asian markets, More regional sourcing in Europe, less commodity export opportunities to Western countries. 29
  30. 30. Conclusions Functional approach to market development  Build on Nylon TF best features Environmental performance in relation to functionality deployed. Recycling into the plastics business Eco-design to enhance recyclability REQUIRECloser cooperation along the polyamide chain between chemical & polymer producers, spinners and textile /apparel customers and retailersto foster technology/product innovation and application development targeted to 30 specificity of local markets and customers.
  31. 31. Thank You !www.radicigroup.com 31