[ Russian government to ensure import replacement in domestic technical textiles industry.]

The Russian government plans to focus on the development of the domestic technical textiles industry for the next several years. Technical textiles is considered the most promising segment of the Russian light industry, according to Denis Pak, head of the department of development of domestic trade, light industry and consumer market of the Russian Ministry of Industry and Trade. According to Denis Pak, linen and wool currently occupy a small share of the Russian market and it is steadily declining. In contrast to this trend, the consumption of polyester and viscose is steadily growing. Denis Pak, head of the department of development of domestic trade, light industry and consumer market of the Russian Ministry of Industry and Trade. “Historically, the Russian light industry was focused on natural raw materials, and in particular cotton, wool, linen, while the production of synthetic fibres and technical textile materials was insignificant. However, according to our calculations, technical textile industry could potentially provide the largest contribution to the national GDP and we are planning to focus on the development of this segment during the next several years,” commented Denis Pak. However, according to official data from the Russian Ministry of Industry and Trade, despite all the efforts that have been taken by the Russian government in recent years, the volume of the domestic technical textiles production still remains low, while up to 80% of the market accounts for imports. Still, according to the government’s plans, the current situation is going to be changed in the coming years. According to the Russian Ministry of Industry and Trade, the forthcoming implementation of a series of investment projects in the field of technical textiles in Russia should provide import replacement in the domestic technical textiles market that would amount to 70 billion rubles (US$1,2 billion) a year. It is expected that high demand for future technical textiles production will be evident in numerous segments of Russian industrial production, such as special protective clothing, the current consumption of which in Russia is by 3-4 times lower than in the EU states. The government also plans to allocate funds to further accelerate the R&D activities in the field of technical textiles and in particular those aimed at developing new types of synthetic fibres and yarns. It is planned that state funding will be provided to more than 30 scientific and industrial research centres in Russia and Belarus, which conduct research activities in this field. Successful completion of the research activities will allow to speed up the implementation of some important investment projects in the field of technical textiles that have been declared by the Russian government and private investors in recent years. The Russian government has great expectations about the building of the Ivanovo plant for the production of synthetic fibre, which should begin in the coming months. Inside production unit of Kurskhimvolokno enterprise. Due to the current financial crisis in Russia caused by sanctions imposed by Western countries, the implementation of the project that can become the most important project for the Russian technical textiles industry since the collapse of the USSR has faced serious difficulties, as Vnesheconombank, one of Russia’s largest banks, which should become the main lender of the project, had serious questions regarding the potential demand for future production of the plant. However, according to an official spokesman of the Ivanovo government, to date, all the financial issues have been resolved. The overall volume of investments in the project is estimated at RUB 20 billion (US$400 million). At the same time, in addition to Ivanovo project, the intention to establish new capacities of technical textiles was announced by SvetlogorskHimvolokno, one of Russia’s largest producers of artificial fibre. Valery Yudenko, head of SvetlogorskHimvolokno, said that the company plans to establish a new production of nonwoven polypropylene material during the next several months. The capacity of the plant at the initial stage will be 3000 tonnes with a possibility of a significant increase during the next several years. According to Yudenko, the majority of future production will account for membranes, both construction and hygienic. The new production will be used in the manufacture of sanitary goods, and diapers, as well as medical surgical kits, in particular. According to Dmitry Bisa, a senior engineer-technologist of SvetlogorskHimvolokno, the production of construction membranes will be executed using the method of ultrasonic adhesion, while hygienic membranes will be produced in the adhesive way. This will be a unique production that has no analogues in Russia. It will be officially commissioned in January 2016, while future production will be supplied both to the domestic and foreign markets. Finally, building of a large plant for the production of synthetic fibres and yarns will soon be started by LLC "Scientific and technical center" Elbrus, one of Russia’s largest research and production companies in the field of technical textiles. The new plant is expected to be built in the Kashira district of the Voronezh region. The volume of investments is 46 billion rubles, while the majority of funds are expected to be provided by state banks under the guarantees of the Russian government. The new plant will be located close to the Novovoronezh nuclear power plant, one of Russia’s largest nuclear power plants, which should ensure regular supplies of cheap electricity for its needs. The commissioning of the new plant is scheduled for 2018. The new plant has the capacity to produce up to 2,000 tonnes of hydrocellulose technical yarn, 100 tons of activated carbon fibre materials, as well as 60,000 tonnes of hydrocellulose rayon staple fibre per year. The new plant will be located on the area of 54 ha, while payback period of the project will be 5-10 years. It is planned that the commissioning of new production facilities will contribute to tightening of competition in the market. To date, the majority of Russia’s needs in technical yarn and chemical fibres has been met by Kurskhimvolokno enterprise, which was launched as far back as 1960. Author: Eugene Gerden

See more at: http://www.innovationintextiles.com/russian-government-to-ensure-import-replacement-in-domestic-technical-textiles-industry/#sthash.uWyaNx6K.dpuf

[ Demand for Mobiltech to Push Textile Chemicals.]

Transparency Market Research has Published Research Report on Europe Textile Chemicals Market- Industry Analysis, Size, Share, Trends & Forecast 2014-2020

Posted via Industry Today. Are you into it? Follow us on Twitter @IndustryToday

Rising demand for high-quality, texture-exquisite fabrics is fueling the growth of the  
Europe textile chemicals market , states Transparency Market Research in its 
recently published report. The 80-page comprehensive report is titled “Textile 
Chemicals Market - Europe Industry Analysis, Size, Share, Growth, Trends 
and Forecast 2014 - 2020” and is available for sale on the company website. 
Registering a 4.2% CAGR from 2014 to 2020, the Europe textile chemicals market 
stands to grow from US$1.24 billion in 2013 to US$1.64 billion by 2020. 
Growth in mobiltech, rising demand for hometech, surge in research and 
development activities, presence of various government initiatives, and 
increasing importance of geotextiles has contributed to the growth of the textile 
chemicals market over the years. 
However, emergence of biobased alternatives and rising environmental 
concerns are anticipated tochallenge the European market.

Textile chemicals, chemical compounds used in the manufacturing 
and processing of textiles, enhance as well as optimize the entire process 
and lend remarkable properties to the final products to suit a desired appearance 
or specific functions. By product, the textile chemicals market is segmented into 
desizing agents,yarn lubricants,colorants and auxiliaries,finishing 
agents,bleaching agents,surfactants, and coating and sizing chemicals. 
The coating and sizing segment held a dominant share in 2013, accounting for 
30% of the textile chemicals market in Europe. However, growing demand for 
high-quality fabrics is likely to push the finishing agents segment to become 
the fastest growing product by 2020.

Browse the full Textile Chemicals (Coating & Sizing Chemicals, Colorants 
and Auxiliaries, Finishing Agents, Surfactants, Desizing Agents, Bleaching Agents 
and Yarn Lubricants) Market for Technical Textiles 
( Mobiltech, Indutech, Sportech, Buildtech, Hometech, Clothtech, Meditech, Agrotech, Protech, Packtech and Other Applications ) - Europe Industry Analysis, Size, Share, Growth, Trends and Forecast 2014 - 2020 report at 

http://www.transparencymarketresearch.com/europe-textile-chemicals-market.html

Textile chemicals in Europe find application in several end uses 
including:- 

Packtech,  
Buildtech, 
Oekotech,
Meditech,
Protech,hometech,indutech,mobiltech,geotech,
sportech,clothtech, and agrotech. With a 25% share of the overall textile chemicals 
market in Europe in 2013, mobiltech registered the highest growth among all 
other applications, presenting extensive demand from the ship, automotive, 
spacecraft, railway, and aircraft industries. The agrotech segment is likely to be 
the most rapidly developing application segment by 2020, according to the TMR 
report. Agrotech textiles have immense potential for usage in agriculture, 
floriculture, forestry, horticulture, and landscape gardening. There has been a 
significant increase in the number of organic farms in Europe, which has 
impacted the dynamics of technical textiles in the region. This will in turn fuel the 
demand for agrotech textiles by the end of the forecast period. 

Prominent players in the Europe textile chemicals market include Archroma 
Management LLC, BASF SE, Bayer MaterialScience AG, The Lubrizol Corporation, 
Solvay S.A., Omnova Solutions Inc., Zhejiang Longsheng Group Co., Ltd. (Lonsen), 

The DyStar Group, 
The Dow Chemical Company, Kiri Industries Limited, and Huntsman Corporation. 
These companies have been profiled in the textile chemicals market report on the basis 
of attributes such 
as company and financial overview, product portfolio, recent developments, and 
business strategies. Get Sample Report Copy:
http://www.transparencymarketresearch.com/sample/sample.php?flag=S&rep_id=4050

Textile Chemicals Market for Technical Textiles - Europe Product Segment Analysis

·         Coating & Sizing Chemicals

·         Colorants & Auxiliaries

·         Finishing Agents

·         Surfactants

·         Desizing Agents

·         Bleaching Agents

·         Yarn Lubricants

Textile Chemicals Market for Technical Textiles - Europe Application Analysis 

·         Mobiltech

·         Indutech

·         Sportech

·         Buildtech

·         Hometech

·         Clothtech

·         Meditech

·         Agrotech

·         Protech

·         Packtech

·         Other Applications (Including Geotech and Oekotech)

About Us

Transparency Market Research (TMR) is a global market intelligence 
company providing business information reports and services. 
The company’s exclusive blend of quantitative forecasting and trend 
analysis provides forward-looking insight for thousands of decision makers. 
TMR’s experienced team of analysts, researchers, and consultants use proprietary data sources and various tools and techniques to gather and analyze information. 

TMR’s data repository is continuously updated and revised by a team of 
research experts so that it always reflects the latest tre
nds and information. 
With extensive research and analysis capabilities, Transparency Market Research employs rigorous primary and secondary research techniques to develop distinctive data sets and research material for business reports.

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[ Arvind - A name respected by Indian Textile Technocrats.]

Mumbai: It’s a June afternoon. About 80 young women in blue uniform sit in three rows in

the lobby of a residential building in Chhatral, a town in Gujarat. They were waiting for

the bus that would take them to the Arvind Ltd textile factory in Santej, 17km away. Soon, they are escorted to the bus, which has an armed guard. The journey begins, tracked by the head of the company’s security department at the factory.

The 80 women are from a group of 300 Adivasi or tribal women, trained and employed by the

company, and put up at the residential quarters in Chhatral. Arvind’s inspiration: China’s giant factory complexes that provide residential accommodation for hundreds of thousands of workers.

For Sanjay Lalbhai, chairman and managing director of Arvind, the Chhatral experiment is a curtain-raiser to the bigger plan: A 50-acre factory and residential campus coming up in 

Dehgam, 50km out of Ahmedabad, which will house 10,000 tribal women.

The new factory will be key to Lalbhai’s efforts to transform Arvind from a textile manufacturer to a garment producer. It won’t be easy: The company currently produces about 282 million metres of textiles, of which only 5% is converted into garments. But then, for

Arvind, which branched out from denim to multiple fabrics and paid a heavy price for that

adventure, the future is clear, and it is in apparel.

When Arvind faltered.

When Lalbhai joined the family business in 1979, Arvind was a successful textile maker,

publicly traded since 1931. It was consistently profitable and paid regular dividends.

“However, the era of composite mills—with all the government restrictions—was soon coming to an end,” Lalbhai said in an interview at his office, adding that the company felt it would languish if it didn’t do something different. It was the licence raj era, and the government was not giving textile mills any more licences, which instead went to power looms and smaller firms. Smaller and nimbler rivals took on large mills such as Arvind, which were hobbled by a unionized workforce and high operating costs.

That prompted Arvind to make its first transformation, from a local maker of saris and dhotis to become the world’s second largest producer of denim. As the economy opened up in the early 1990s, the company built a 400-plus acre complex to manufacture fabric for shirts and trousers. It assumed the rupee would keep falling and help exports, and that demand for lifestyle textile denim would keep rising, generating money to invest in the new plant. The plans went awry, Arvind piled up debt, and almost went bust in the process.

In the year 2000, when Arvind went in for restructuring of its debts, the debt was Rs.2,500 crore, against sales of Rs.1,150 crore. The debt restructuring package was for Rs.800 crore, said Jayesh Shah, director and chief financial officer (CFO).

“Everything on paper looked right. The plan was aggressive, but strategically well-placed,” said Arvind Singhal, chairman and managing director of Technopak Advisors Pvt. Ltd, a Gurgaon-based retail consulting firm. But the company, he said, failed to anticipate the execution complexities and lacked management bandwidth.

“The projects took longer to come on stream and the capex cycles had started. They had to go through a significant amount of pain as they were overleveraged,” said Singhal.

Faced with a question of survival, “I personally met some 80 investors and admitted to our mistakes, and asked for a chance to set it all right,” said Lalbhai.

For Arvind, the first decade of the new millennium was the age of consolidation. Its debt-equity ratio is now 1.14, down from a peak of 3.16 in 2001-02. For the fiscal year ended 2015, its debt was Rs.3,094.67 crore, according to data from financial information provider Capitaline.

“You know the old ways of sticking to your core competence, basic strengths... That was relevant in the 1980s. Today, we are entering a phase where there will be a high level of disruption and if you don’t change or if you are not anticipating the future correctly, or you yourself are not planning to be disruptive, you will get disrupted,” said Lalbhai.

As it resumes its growth journey, Arvind is betting on the upheavals that lie ahead. With rising domestic consumption, it aims to become a dominant brand and retail (B&R) company. Within textiles, it is moving towards garments, which promise better returns on capital employed. It’s also looking at technology and investing in e-commerce and technical textiles (textile solutions used in sectors like industrial manufacturing, infrastructure, transport, energy and personal protection). Arvind also wants to be a one-stop shop for its suppliers.

The company has brought top global brands like Gap, Tommy Hilfiger, Nautica and Aéropostale to India in the last four years. It now wants to become India’s largest brand and fashion retail company, overtaking larger rival Madura Fashion and Lifestyle (Madura F&L), a unit of Aditya Birla Nuvo Ltd, an Aditya Birla Group company that is more than double its size.

Arvind currently earns 90% of its revenues from textiles, and B&R, but three years from now, it plans to demerge and list its real estate, B&R, engineering, water, technical textiles and e-commerce businesses.

The share of textiles in overall revenues fell from 72% in 2010-11 to 63% in 2014-15, while that of B&R rose from 23% to 30%. By March 2018, Arvind plans to reduce the share of textiles further to 48%, while raising retail revenues to almost 35%.

In the next three years, new revenue streams such as technical textiles and e-commerce will increase their contribution from 7% to 18% of overall revenues, according to a company presentation to investors in May.

However, this time too, the management bandwidth to handle the multiple programmes could be a challenge. “The change from a textiles manufacturer to garment requires operational excellence. The multiple joint ventures in retail and brands require management bandwidth and capital for their growth and expansion. Likewise, with e-commerce, it’s the future, but requires huge investments and management bandwidth,” said Singhal of Technopak Advisors, while pointing out that there is no other company in textile or retail attempting to do so many things at the same time.

But CFO Shah is not unduly worried. Unlike in the past, when the company targeted growth on borrowed money, this time it will be largely through internal accruals, he said. Arvind will invest Rs.500 crore every year for the next three years, said Shah, for growth based on an “asset-light model”.

“The company will get about Rs.500 crore in operating cash flow by fiscal 2016,” said Jignesh Kamani, an analyst at Nirmal Bang Institutional Equities Research, citing better margins in B&R and stable working capital.

In 2014-15, operating cash flow was just Rs.100 crore, thanks to Arvind’s heavy investments in B&R and formats like Megamart, its apparel retail chain.

Towards garments.

Arvind has been trying to shift from textiles to garments over the last 10 years, but the move is yet to gain scale. “I don’t see us selling any more fabric; in three years, we will only be selling the final garments,” said Lalbhai.

The shift is driven by a number of factors. The global apparel market will grow from $1.1 trillion (around Rs.73 trillion today) in 2012 to $2.1 trillion (around Rs.140 trillion today) by 2025, according to a textile and apparel sector report, The Road to 2025, by Wazir Management Consultants. A major share of this market creation is expected to happen in China, India, Brazil and Russia, where the growth of per capita spending on apparel will be higher than economic growth.

Brands are exploring how to reduce the time to convert cotton to yarn to garment. According to Harminder Sahni, managing director of Wazir Advisors, companies are becoming vertically integrated across the sector in India and Bangladesh.

As consumption balloons in India, start-ups and online vendors are also looking for final garments, creating opportunities for companies such as Arvind. Also, increasing costs and domestic consumption in China are making manufacturing there unviable.

“India is well-poised to pick up some of this business,” said Arvind’s Shah.

There are two reasons why Lalbhai thinks garment-making never took off in India in a major way. “Firstly, it’s come up in major metros, and even if it has come up in Tirupur, it’s all migrant labour coming there. That is constraining. As then, there are competing jobs available and the staff incurs a lot of cost in coming to the workplace, causing large attrition and absentees. In this industry, the biggest risk is attrition and absentees,” he said.

Lalbhai sees the answer in the Chinese dormitory model. The Chhatral experiment and the Dehgam plans are part of this grand strategy. Arvind has also taken a major position in Ethiopia for making garments and is building capacity for 2.8 million garments per month over the next couple of years.

Easier labour rules help as well. “As we speak, in Gujarat, now we can have workers on fixed-term contract, bring them on one-year contract and renew it every year. So, this reduces my labour liability, giving me flexibility,” said Lalbhai.

To be sure, the shift to a complete garment manufacturer will take longer than three years. “In three years, garment revenue is likely to be Rs.2,500 crore, accounting for 25% of fabrics converted into garments,” said Shah.

Retail road map.

Becoming India’s largest B&R company won’t be easy.

Madura F&L, which has an array of brands including Louis Philippe, Van Heusen, Allen Solly, Peter England and People, is 60% bigger than Arvind.

Its 2014-15 revenues were Rs.3,735 crore, against Arvind’s B&R division’s revenues of Rs.2,361 crore.

Moreover, the division’s operating profit margin is 5.2%, against Madura F&L’s 12.4%, while return on capital employed is 2%, compared with Madura F&L’s 71.9%.

To be fair, Arvind’s B&R business is just 12 years old,

while Madura F&L has been around since 1988.

The younger business is also growing at a faster clip of 25% since fiscal 2011, as against Madura F&L’s 19.8% growth in the same period, according to a 29 May report by Nirmal Bang.

However, the prevailing economic slowdown did not spare Arvind either, with the B&R business growing just 17.2% in the last quarter of 2014-15. Store area addition was also up just 5.5% at 0.76 million sq. ft in fiscal year 2015, against a compounded average growth of 47.2% from fiscal year 2012 to fiscal year 2014.

Moreover, Megamart is still floundering. Arvind shut its old format stores and trimmed store count to 140 in 2014-15 from 216 in 2011-12, said another Nirmal Bang report, dated 15 May.

If Lalbhai is worried, he doesn’t show it.

“We have added a lot of new growth engines and they (Madura F&L) haven’t added; so we should bridge this gap,” he said, referring to the portfolio additions of Gap, the Children’s Place and Nautica; e-commerce initiatives under Creyate and another forthcoming multibrand e-commerce platform.

In niche segments such as bridge-to-luxury and kidswear, Arvind already has a dominant position, said J. Suresh, managing director and chief executive officer of the B&R business Arvind Lifestyle Brands, adding that it’s looking at a strong No. 2 position in innerwear. Brands such as Nautica, Tommy Hilfiger and Calvin Klein constitute 70-80% of the bridge-to-luxury market. In kidswear, the company has a portfolio including US Polo Kids, Elle Kids, Gap kids, Nautica Kids and Cherokee at the lower end, retailed through Megamart.

The growth engines Lalbhai spoke of include Gap, which will have revenues of Rs.1,000 crore and the Children’s Place with revenues of Rs.500 crore in five years. The company’s power brands Arrow, US Polo and Flying Machine—which contribute Rs.1,200 crore, or 50%, of its overall B&R sales—will more than double to Rs.2,500 crore in three years. By 2018-19, the B&R division will be a Rs.5,000 crore business, growing 127% from the current Rs.2,200 crore. Profitability will also come with scale, and will be aided by brands such as Nautica and Calvin Klien becoming profitable, said Suresh.

However, rivals aren’t sitting idle. In three years, Madura F&L’s four power brands will bring in more than Rs.5,000 crore in revenues alone.

“We will have three Rs.1,500 crore brands in the next two to three years,” said Ashish Dixit, president of Madura F&L, adding that the fourth will be over Rs.1,000 crore in size.

The transformation, though, is still to be captured in Arvind’s share value. Currently, its stock trades at 92.68% discount to its peers in the textile and retail sectors, such as Vardhaman Textiles Ltd, Raymond Ltd, Welspun India Ltd, Trent Ltd, Kewal Kiran Clothing Ltd and Page Industries Ltd, thanks largely to its perception as a traditional textiles firm.

For Arvind and the women from Chhatral alike, the journey has just begun.

Sapna Agarwal

[ Technical Textile - Arville company video.]

Published on Apr 28, 2015

The Arville Group of companies integrates manufacturing capabilities across a full range of technical textiles expertise, offering a stand-alone or fully integrated portfolio of fabric design, weaving, finishing, coating and fabrication.