By Mr. Nikhil Kaitwade, Lead Analyst at FMI
Technical textiles and nonwovens represent the most lucrative sectors in the global textile industry. Technical textiles, which represented 29% of the global textile market value in 2014, are expected to gain traction, as demand from end-use industries continues to soar. The global technical textiles market is expected to be worth USD 162 billion by the end of 2016, up from USD 148.5 billion in 2014.
The production, import and export of technical textiles is robust in Asia Pacific. The textile industry for long has been dominated by Asian countries, especially China and India. Availability of low-cost labour has given these countries a distinct competitive advantage over their Western counterparts; however, owing to increasing labour costs in the recent past, manufacturers have had to shift their focus on developing highly functional products, which in turn, has given a boost to the technical textiles industry.
China
China is an important market for technical textiles, both in terms of value and volume. Domestic consumption and exports in China totalled 5.76 million tonnes in 2014. Demand for technical textiles in China is expected to increase at over 8% annually till 2020. China is one of the rapidly growing economies globally. Although growth rates have taken a hit recently, the long-term outlook on the Chinese economy is optimistic.
The sheer demand for technical textiles, especially Buildtech and Hometech, from China’s burgeoning construction industry is anticipated to offer growth opportunities to manufacturers. Expenditure on construction is expected to increase at a rate of nearly 8% through 2020, with non-residential buildings being the most lucrative segment. Owing to these factors, the demand for Hometech in China is expected to reach nearly USD 9 billion by the end of 2016; by 2020, the valuation is expected to be USD 12 billion.
Clothtech, a form of technical textiles used to impart durability to apparels and footwear, is expected to witness robust demand on account of growth in the end-use industries. Sales of clothing, shoes, and knitwear in China is to the tune of USD 15o billion (approx.) so far in 2015. Use of Clothtech in apparel and footwear industry is gaining traction, owing to consumers focus on durability and functionality. China’s Clothtech market is expected to reach USD 5.1 billion by the end of 2016, up from USD 4.45 billion in 2014.
India
The technical textile market in India is expected to reach USD 13.3 billion in 2016, up from USD 11.2 billion in 2014. In terms of domestic consumption, imports and exports, demand is set to reach 2.5 million tonnes by the end of 2016, up from 2.1 million tonnes in 2014.
The textile industry is a major employer in India and contributes nearly 14% to the total industrial output. However, the conventional textiles market in India has reached a level of saturation, with profit margins shrinking on account of high inflation levels. Like China, the focus has shifted to producing highly functional textiles, giving a fillip to the domestic technical textiles market.
Infrastructural development, increasing spending on healthcare and a burgeoning middle class of over 300 million offer a plethora of opportunities to technical textile manufacturers.
As is the case in China, Hometech will account for the bulk of demand for technical textiles in India as well. Consumption of Hometech in Asia Pacific is expected to reach 2.1 million tonnes by 2016, out of which demand from India is expected to be nearly 431,000 thousand tonnes. Buildtech and Meditech are other categories of technical textiles that are expected to witness robust demand between 2015 and 2020.
Key players in the technical textile industry are aware of the opportunities present in China and India. A majority of leading manufacturers have scaled up efforts to increase production in these two countries. London-based Low & Bonar announced plans to build a new manufacturing facility in Changzhou, Shanghai, China in 2014. Derbyshire, U.K.-based Baltex sources a majority of raw materials from China to offer competitive pricing to its end-users in Europe. Du Pont, a leading chemical manufacturing company based in Wilmington, U.S., recently collaborated with India-based Reliance Industries and Vipul Sarees to make eco-friendly ladies ethnic wear.
China and India will continue to remain the most lucrative markets for technical textiles. By 2020, the market in these two regions will reach nearly USD 68 billion in terms of value, and 13 million tonnes in terms of volume. Western manufacturers will have to expand their presence in these two countries to succeed in this fiercely competitive market.