Investkonsult Sweden AB is a small, family-owned Swedish company, operating worldwide. Since 1976 we have gone from traders of conventional second hand textile machinery to professional consultants with a strong focus in the nonwoven and hygiene industries, developing extensive knowledge in these sectors. The company has been working in the Indian market for many years and sees huge growth opportunity in manufacturing of nonwoven and hygiene products. We spoke to Mr. Johan Berlin of Investkonsult on the company’s outlook for the Indian market.
Can you give a brief on Investkonsult and the services offered?
We are a small, family-owned and Swedish-based consulting company and we are one of few companies in the world solely focusing on the nonwoven and disposable hygiene sectors. Over the years we have attained extensive knowledge of machines and production lines, and we’ve also developed an extensive network of contacts within these sectors. These factors enable us to offer excellent consultancy services to the existing producers and recommended set-ups for new ventures. Our key mission is to provide suitable machinery at an attractive price, but we also offer market studies and objective valuations of equipment. Since we have nearly 40 years of experience in brokering of machinery, we are also a reliable partner regarding dismantling, packing, loading, shipping and project implementation.
Since how long have you been associated with the Indian market? What are the services you offer to the customers in India?
India has been a very important market for us ever since we started operations in 1976 in the conventional textile field. We have a strong belief in the growth potential for nonwovens and disposable hygiene products in India, and in recent years we have focused on India and expanded our activities there. Our aim is to transfer knowledge and awareness of technology issues and market potential.
Can you name some of the major projects that you have been part of in the Indian market?
We are currently starting a joint venture, Jajoo Hygiene Pvt. Ltd., together with our Indian partner Jajoo Surgicals. We begin production of underpads and sanitary napkins this autumn. Our idea is to use the facility as a showroom for other companies which are considering entry into production of disposable hygiene products. We want to demonstrate the viability of setting up an efficient unit by using second-hand disposable hygiene machinery. Furthermore we have in recent years sold a number of nonwoven production lines to India. Since we usually work on a highly confidential basis, we cannot reveal any company names, but during the past two years we have delivered a complete wide-width needle punch line, a complete PP fiber making line and a complete resin- and thermobond line, along with single units of equipment, all over India.
Although India offers a huge market, what is your perception of the investment potential for manufacturing nonwoven and hygiene products?
Despite the fact that the Indian economy has been temporarily weakened during 2013, we see a huge potential for production of nonwovens and disposable hygiene items for domestic consumption. We believe that India has the potential to become one of the world’s most important markets and producer countries for nonwovens and disposable hygiene products. Consumption of nonwovens in India today is far below the average nonwoven consumption (calculated in kg/person normally) in Europe, the US and Japan. Hence there is a huge growth potential there. On top of that, more than 80 per cent of the consumed nonwovens in India are imported. So there is a double possibility of increased consumption as well as having that consumption coming from domestic producers.
What will be the factors driving demand for investments in nonwovens and hygiene products. In traditional textiles, exports have been a major driver of investments. This may not be true in the case of nonwovens. What are your views on this?
The main factors driving demand for nonwovens and disposable hygiene are the increasing disposable income and the growing middle class. The growth potential is particularly evident in the disposable hygiene sector, with 27 million babies 
born per annum in India. There is of course a good potential for domestic production of baby diapers. It’s not just for economic reasons that the domestic production of nonwoven and disposable hygiene products is bound to increase. The awareness of environmental aspects amongst Indian consumers has increased and, as a consequence, demand for locally produced goods will go up.
On the side of nonwovens, we will see growing increasing demand for products within the geo-textiles segment when roads, railroads, runways for airplanes, etc., are being modernized and expanded. There will also be a big increase in nonwovens in the automotive sector, with more cars produced locally in India. Nonwovens play a big role in automotive production today, with nonwovens being used as sound insulation, seat covers, headliners, trunkliners, flooring, engines, air filters, etc.
The third big nonwoven boom will probably be in the filter media segment where demand for cleaner air will drive sales. India is in many places a “hot” country and the need for air-condition equipment is everywhere. All these AC units have filters that are made of nonwovens. There are filters in cars, and there are a growing number of big filter units for other industrial processes too.
With major investments already made in the field of technical textiles in many global markets, including China and the more developed markets of Europe and the US, and the fact that this technology has less human dependence, do you see India offering any advantage in terms of manufacturing. Since there is high level of automation, the labour cost may not be a major component of cost deciding the competitiveness. Your views?
There are both economic and environmental advantages of producing the goods closer to the end user. Further, India is one of the world’s largest suppliers of natural and man-made fibres and it’s advantageous to produce the nonwoven where the fibres are. Another advantage of locating production to India is that the workforce generally is highly skilled. The long tradition of textile production generates good experience and the educational level is high compared to other emerging markets. Another positive aspect is that the English language is predominantly used in business unlike, for instance, in China.
Within the field of technical textiles, which are the segments you feel will have promising growth opportunities in the future – Agri, Pack, Geo, Auto, Medical and Hygiene. Some of these segments might already be having over-capacity in manufacturing globally. What would be your advice to Indian companies keen to invest in technical textiles?
There are many industries that would benefit from a larger share of domestic production of nonwovens. The Government has announced huge investments in infrastructure and as a consequence demand for needle-punched geotextiles will be growing in the years to come. Therefore venturing into production of needled geotextiles may be a wise step.
Further, India is one of the world’s largest automotive producers. Still much of the nonwovens for cars are imported. Thus demand for nonwovens targeting the automotive sector should be growing steadily. The population growth and the rising income levels will have a positive impact on the disposable hygiene market. Though the penetration rate is still very low, the growth opportunities are strong. Increasing health consciousness is a growth driver in the medical sector, and the use of spunbond fabrics in surgical gowns and drapes will continue to increase.