The Fiber Year 2008/09 A World Survey on Textile and Nonwovens Industry

The Fiber Year 2008/09A World Survey on Textile and Nonwovens Industry

Issue 9 – May 2009

Dear readers,

2008 – what a year! Can you remember a similar economic situation with such a dramatic sales

downturn of the entire textile trade? A historical incidence, which found its absolute climax in

2007 after three formidable years, was on the verge of falling into a bottomless abyss last year.

Certainly, our industry is extremely cyclical, but nobody could anticipate such a vehement

slump. The German Federation “Verband Deutscher Maschinen- und Anlagenbauer” (VDMA)

and the Swiss “SWISSMEM” reported drops in orders and turnovers in the entire sector of

more than 60% in 2008. Some companies, mainly in other countries, were hit even harder. They

recorded order losses of more than 90%.

Due to their innovative product portfolio and their market-leading machine and system

technologies for staple fiber and man-made fiber spinning as well as nonwovens production, the

Business Units of Oerlikon Textile could present themselves above average, but had to accept

a sales decrease of 37.8 % and thus corresponding losses. As the market leader in the fields of

rotor and ring spinning, winding, twisting, and embroidery as well as spinning and texturing

of man-made fibres, and last but not least the globally unique nonwovens full liner with the

technology fields airlaid, carding, and spunbond, we and our units again gave new impulses in

2008 for the market of the future. With our products WINGS (Winder Integrated Godet System)

by Oerlikon Barmag, Autoconer 5 by Oerlikon Schlafhorst and Sytec One by Oerlikon Neumag

alone we revolutionised the former production processes in the corresponding technological

fields.

Together with you, our customers, we want to concentrate in the future even more on your

requirements and requests. Due to their dedication and commitment to the textile business, their

highly productive innovations and their internationally skilled service staff, our Business Units

will provide the decisive advantage about your competitors when the next upturn comes.

We will do our utmost to continue to be your reliable and highly innovative partner with our

five Business Units Oerlikon Barmag, Oerlikon Neumag, Oerlikon Saurer, Oerlikon Schlafhorst

and Oerlikon Textile Components.

Yours sincerely,

Thomas Babacan

CEO Oerlikon Textile and

Chief Operating Officer,

OC Oerlikon Management AG,

Pfäffikon/Switzerland

Thomas Babacan

CEO Oerlikon Textile and

OC Oerlikon Management

ForewordThe information in this report is mainly based on the global network and in-house experience.

Special thanks go to all companies and institutions below mentioned for their precious

contribution.

ABRAFAS

Airbus S. A. S.

All Pakistan Textile Mills Association (Punjab Zone)

Asian Development Bank

Association of the Nonwoven Fabrics Industry

Autoliv Inc.

Bangladesh Garments Manufacturers and Exporters Ass.

Bangladesh Textile Mills Association

Brazilian Textile and Apparel Industry Association

Boeing Co.

Camara Industrial Argentina de la Indumentaria

China Chemical Fibers Association

China Chemical Fiber Economic Information Network

China Cotton Textile Association

China Nonwovens & Industrial Textiles Association

China Textile Information Center

Dralon GmbH

EDANA

Federal Bureau of Statistics (Pakistan)

Fiber Economics Bureau

Food and Agriculture Organization of the United Nations

General Aviation Manufacturers Association

German Association of the Automotive Industry (VDA)

Global Wind Energy Council

Hexcel Corp.

INDA

Indonesian Synthetic Fiber Makers Association

International Cotton Advisory Committee (ICAC)

International Wool Textile Organisation (IWTO)

Japan Chemical Fibers Association

Lenzing AG

Malaysia Trade and Industry Portal

Malaysian Textile Manufacturers Association

Mexican Clothing Industry (CNIV)

Ministry of Economic Affairs, R.O.C.

Ministry of Textiles (India)

National Bureau of Statistics of China

National Council of Textile Organizations (NCTO)

Performance Fibers GmbH

Proexport Colombia

Spinners & Weavers Association of Korea

State Committee of the Republic of Uzbekistan

Taiwan Textile Research Institute

The World Bank Group

Trevira GmbH

Turkey State Institute of Statistics

United Nations Conference on Trade and Development

United States Agency for International Development

United States Department of Agriculture

United States Department of Commerce

U.S. Census Bureau

Vietnam Textile Association (Vitas)

World Bank

© OC Oerlikon Corporation AG, Pfäffikon 2009 The content of this report is protected by

copyright. Oerlikon permits recipients of this report to make copies of Oerlikon’s copyright

material in this report for their own use. Further distribution and/or publication is permitted

provided that the source is acknowledged and no changes to the content are made. However,

Oerlikon reserves the right to withdraw any of these permissions in relation to any particular

user at any time.

The information provided in this report has been investigated and compiled with reasonable

care. However, the information is provided “as is” without warranties of any kind, expressed or

implied, including accuracy, timeliness and completeness.

For further information:

Andreas Engelhardt

Oerlikon Saurer Arbon Ltd.

Textilstrasse 2

CH-9320 Arbon

Tel. +41 - 71 - 447 51 89; Cell. +41 79 571 34 33

[email protected] or [email protected]

03The Fiber Year 2008/09

04 The Fiber Year 2008/09

Table of contents

1. Executive Summary and Outlook 2009/10.........................................................................05

2. Textile Tracking & Traceability .............................................................................................09

3. Raw Material Industry............................................................................................................13

3.1 Cotton .......................................................................................................................................13

3.2 Wool...........................................................................................................................................18

3.3 Crude Oil ..................................................................................................................................20

4. Fiber Consumption in 2008 ..................................................................................................22

5. Manmade Filament Yarn and Staple Fibers .......................................................................24

5.1 Polyester ..................................................................................................................................26

5.2 Polyamide.................................................................................................................................31

5.3 Polypropylene ..........................................................................................................................35

5.4 Acrylic .......................................................................................................................................35

5.5 Cellulosic..................................................................................................................................37

5.6 Carbon Fibers ..........................................................................................................................40

5.7 Aramids.....................................................................................................................................42

5.8 Spandex Yarns .........................................................................................................................42

6. Spun Yarn .................................................................................................................................44

6.1 Americas...................................................................................................................................45

6.2 Asia............................................................................................................................................52

6.3 Greater Europe........................................................................................................................68

6.4 Africa.........................................................................................................................................71

7. Nonwovens and Other Unspun End-Uses ..........................................................................74

8. Textile Chain ............................................................................................................................78

9. Statistical Appendix ...............................................................................................................80

“The Fiber Year 2008/09” is the ninth issue to describe in detail developments in the

comprehensive picture on the textile industry. Statistical information is instrumental in

politics explain much activity in this industry today and have consequences far beyond the

boundaries of the industry.


1. Executive Summary and Outlook 2009/10

These both charts may best describe the current textile crisis. Monthly retail sales in clothing

slumped from September 2008 in the United States, where the credit crunch began and then

quickly spread globally. Even discounts at year-end of up to 70% did not lure consumers,

marking the worst holiday-shopping season in 40 years. The global situation became even

worse due to above-average capacity additions of textile machinery in the past and surging

crude oil prices until July as well as soaring cotton prices until August.


The monthly manmade fiber production growth in Japan was in negative territory the entire

year and even gaining continuously momentum from February onwards. Despite an annual loss

of 10% or 120,000 tonnes, inventories steadily grew. At year-end, the manmade fiber inventory

accounted for 125,000 tonnes, up 13% from the end of 2007.

Up and down of the crude oil price has taken place in an unpredictable way. OPEC was cutting

output rate several times but could not avoid the collapse of prices. Given stable political

surroundings, reduced consumption was and will continue to be an obstacle for another roller

coaster ride despite the prediction to achieve Peak Oil in 2010. Looking at break-even price

for most countries, they are currently operating at a loss. So, the price should go up to avoid

massive cutbacks in investments and curtailing of seeking new oil fields. Several investments

for new and expanded refineries in the Middle East have already been postponed.

The downswing in cotton prices has begun in August 2008 as direct response to softening

textile demand and higher returns from other crops. Substantial reduction in area under crops

in all leading countries will result in less supply. Ultimately, a rise in prices is unavoidable.

All the more, when manufacturing activity gains momentum and consumption considerably

exceeds supply.


All fiber types were negatively affected by the economic slump. While cotton use has witnessed

its second consecutive decline, the long-term downswing for wool continued. Cellulosics,

experiencing an all-time high in 2007 after six years of strong growth, were down 9.1% last year.

People engaged in the synthetics fiber industry need a distinguished capacity for remembering

as the last decline in world production dates back to the year 1982 – the year when Leonid

Ilyich Brezhnev, the former General Secretary of the Communist Party of the Soviet Union and

thus political leader of the Soviet Union, died.

Consequently, every single sub-category was also down. The entire filament yarn industry has

lost a volume of 680,000 tonnes last year. The strongest decline in volume terms in carpet yarn

spinning has resulted from the United States housing bubble where housing prices peaked in

early 2005 and started to decline in 2006. In December 2008 the Case-Shiller home price index

reported its largest price drop in its history. The staple fiber processing volume dropped by 4.2

million tonnes, of which two thirds were due to lower output from cotton spinning.


Total fiber consumption dropped 6.7% to 67.3 million tonnes, equal to an average per capita

consumption of 10.0 kg. This demand shortfall of about 4.85 million tonnes, unprecedented in

modern textile history, is a direct response to the economic slump.

The International Labour Organisation (ILO) predicts that up to 51 million jobs worldwide

could disappear by the end of this year as a result of the economic slowdown. This worst-case

economic scenario could push up the world’s unemployment to 7.1%, compared with 6.0% in

2008 and 5.7% in 2007. A reduced number of wage and salary earners as well as the considerable

concern about long-term job security, resulting in a slowdown of consumer spending, might

lead to an ongoing decline in textile and clothing demand in 2009. As is known, the textile

industry has always been a forerunner of fluctuation in economic activity. Therefore, it would

not be a big surprise to see a modest recovery in 2010 already.


2. Textile Tracking & Traceability

AgResearch is New Zealand’s largest Crown Research Institute with

key role to play in boosting the productivity of its bio-dependent

economy.

“A simple practical system for traceability throughout the textile supply

chain has long been a desire of most of the participants in the chain:

yarn is involved;

is used by the maker-up, not a cheaper, inferior copy;

and that the specified fibre, yarn and fabric has been used throughout

the manufacturing process.

A defining characteristic of the world textile market is the sheer

complexity of the manufacturing and supply chain. Most textile goods

are not only produced in a large number of steps by several distinct

sub-contractors but most brand owners also use several suppliers.

With the globalisation of these supply and manufacturing chains, it is

not unusual for the components that make up your fashion garment to

have travelled several times around the world before reaching the retail

store. Thus the possibilities for covert substitution of the specified

materials for cheaper fibre, yarn, fabric or garments are manifold and,

until now, difficult to detect.

A number of textile tracking methods using specialty fibres have been

proposed. While these methods can identify particular yarns, textiles

or garments, the verification involved is generally specialist in nature

and destructive, requiring a sample to be removed and laboratory

tested.

A new development, Verifi TT fibre, developed by AgResearch Textiles,

New Zealand, in cooperation with Datatrace DNA, Australia, is set

to change the face of textile authentication. Verifi TT fibre is a fine,

synthetic fibre containing a unique, customer-distinct tracer material.

These fibres are blended with any other textile fibre at an early stage

in processing, at a ratio of 1:3000 (around 300 g/tonne). At this level

the fibre is invisible to the eye and has no discernable influence on any

fabric properties.

At any stage in the production sequence, the product (fibre, yarn,

fabric, garment) can be instantly and simply verified by scanning the

product with the Verifi TT hand-held scanner. There are no expensive,

time-consuming and destructive laboratory tests, just a simple scan

which will verify whether or not the product is the genuine article.


The Verifi TT fibre will be available in a range of fibre lengths and

diameters, as well as in continuous filament form.

The authentication system is also ideal for use in textile labels. A label

containing Verifi TT in a garment can be quickly scanned to check its

authenticity, even at point of sale, to confirm to the customer that they

are buying the genuine article. Labels containing Verifi TT can be used

by the brand owner to prevent unauthorised production overruns of

leading brand garments by commission manufacturers, which are often

sold on the ‘grey’ market.

The Verifi TT system was launched at the recent Air New Zealand

Fashion week in Auckland when identical twins wearing seemingly

identical Stitch Ministry garments came onto the catwalk. An

AgResearch scientist ran the scanner quickly over each of the twin’s

dresses. The green light flashed and the message ‘Genuine Stitch

Ministry Garment’ came up on the scanner screen for one dress; there

was no signal for the fake dress.

Extensive laboratory and in-mill testing has shown that the signal from

the Verifi TT fibre is unaffected by any physical or chemical process

such as carding, spinning, dyeing, bleaching, autoclaving, etc.

The Verifi TT system was developed as a result of enquiries from some

large manufacturers. AgResearch is now working with some major

textile firms who want to be first in line to use the verification fibre,

and there is strong interest from companies in Europe, USA, Asia and

Australia for a variety of uses and products.”


FAO Trade and Markets

“2009 is the International Year of Natural Fibres, proclaimed by the

United Nations General Assembly in December 2006. The Food and

Agriculture Organization of the United Nations (FAO) is coordinating

the Year, which was officially launched in Rome on January 22.

Natural fibres are derived from animals and from plants. Production in

total is worth around US$40 billion annually to the world’s farmers.

For some countries natural fibres are of major economic importance.

Cotton is a major source of income in some west African countries

where, for example cotton accounts for more than 50% of the value of

Burkina Faso’s exports. Sisal is an important export for Tanzania, and

jute is still important in Bangladesh. In other cases natural fibres are of

less significance at the national level but are of major local importance

within some countries, as in the case of alpaca fibre in the Andes, and

sisal in north-east Brazil. Farmers and processors in these countries

depend on proceeds from the sale and export of these natural fibres for

their income and food security.

On the consumption side, natural fibres have a wide range of uses,

from high priced apparel to industrial applications. They are important

materials in clothing and home textiles. Other natural fibres are used

in traditional ropes and sacks, but increasingly they are finding their

way into a range of newer uses, including pulping for paper and as

reinforcement in plastic composites, particularly in the automotive

industry. In many of these applications natural fibres are subject to

competition from synthetic substitutes.

The International Year of Natural Fibres is aimed at raising the profile

of natural fibres, contributing to the incomes and food security of the

farmers who produce them, as well as contributing to a cleaner global

environment. The objectives also include promoting the efficiency and

sustainability of natural fibre production and fostering an international

partnership among the various natural fibre industries.

Considerable progress has been made in the first few months of 2009.

We have established a website (www.naturalfibres2009.org) with

content in 8 languages and it is expanding daily. We have prepared a

video, we have a logo, a brochure and a poster. We held a symposium

in October 2008, and an official launch ceremony in January 2009.

But perhaps of most importance is the international partnership that

has brought together people from all the natural fibre industries. An

International Steering Committee has been formed, and members of this

committee, and many others as well, have planned events throughout

the year. The Calendar of Events shown on the website currently has

around 50 entries, and we are adding more every week.

There is a lot more to be done. We need to continue to develop the

website, to generate posters, brochures, press information kits,

shopping bags and ‘T’ shirts etc, to provide information about natural

fibres and to generate awareness and support for the international

year. We plan to hold a conference in the Philippines in October, and a

closing event at FAO in December. We hope to have a presence at one

or more international textile fairs and fashion shows. A photographic


or art competition would also increase involvement and raise support

for the International Year.

But these things cost money. We have managed so far with FAO’s own

resources, and with donations from the Common Fund for Commodities,

the New Zealand government, and from cotton, wool and jute industry

organizations. We need support from donor countries or industries if

we are to achieve the goals of the International Year of Natural Fibres

and realise its full potential benefit.”


3. Raw Material Industry

3.1 Cotton

Latest estimates for current season’s world cotton production account for 23.6 million

tonnes. This would be a decline of 10.2% over the last season. World consumption is

season.

The cotton production used to grow according to the red trend line until 2002/03. The increasing

approval and cultivation of genetically modified cotton has resulted in soaring cotton yields.

In the season 2003/04, the actual cotton production started to outpace the long-term trend.

Since then, the cumulative oversupply accounts for about 25 million tonnes. This scenario has

surely triggered surging investments in polyester staple fiber in 2004/05, the major product

in blends with cotton. This supply-driven growth has ended in the actual season as the global

cotton farmland is forecast at 31.0 million hectares, down about 2.1 million hectares from the

last season.

Country Production (mill. t) ± in % vs prev. year Yield (kg/ha)

PR China 7.8 -3.2% 1,299

India 5.0 -6.5% 536

United States 2.8 -33.2% 893

Pakistan 2.0 +1.1% 676

Brazil 1.3 -21.2% 1,427

Uzbekistan 1.2 +4.4% 824

Turkey 0.5 -25.8% 1,318

Australia 0.3 +125.9% 1,859

Turkmenistan 0.3 +3.9% 490

Rest of the World 2.5 -8.4% 411

World 23.6 -10.2% 761


Most of the leading producing countries, representing about 90% of world cotton production,

will experience a fall in current season’s output. The strongest declines are expected to occur

in the Americas – United States (-33%) and Brazil (-21%). Reasons for the lower supply from

Brazil are increasing costs of production and high returns for soy and corn. Soybeans and corn

require less fertilizer than cotton and require no fertilizer the first year after a cotton crop.

However, a severe drought in southern Brazil from mid-November until January will result in

significantly lower production of both crops in the current season.

The Cotlook A Index moved in the range from 52 US cents per pound to 90 US cents. Cotton

prices have continued its long-term trend until August 2008. The sustained weakening demand

for cotton on the international market has led to a deep plunge in the fourth quarter. In November,

cotton prices have reached a temporary bottom somewhere at 52 cents after the dramatic fall

witnessed in the last three months.

World cotton area for 2008/09 is forecast at 31.0 million hectares, down about 2.1 million

hectares from the last season. Three quarters of the global cotton area is located in six countries

– India (9.4 million hectares), PR China (6.0 million hectares), United States (3.1 million

hectares), Pakistan (2.9 million hectares), Uzbekistan (1.4 million hectares) and Brazil (0.9

million hectares). The long-term trend in the U.S. cotton production has dramatically reversed

after bumper crop in 2005-06. Diminishing local demand, lower subsidies and more biofuels

result in further declining cotton output. The U.S. cotton area in the actual season is the lowest

in 25 years.


It has been quite normal in the past to experience changes in the world cotton growing area.

However, the future looks rather gloomy as all leading growers have reduced cotton growing

farmland. Cotton would not be grown other than for use by the textile and clothing industry.

Thus, the sharp decline in cotton cultivation area is a direct response to softening textile

demand and higher returns from other crops. However, there is no visionary power necessary

to predict that mankind in future continues to prefer wearing clothes. That means, the more

drastic reductions are being executed at the moment, the more sustainable and escalating will

be the recovery.

International trade has become increasingly important due to geographic shifts in mill use of

cotton as a result of the textile trade liberalization. Although the globalization is expected to

widen the gap between producing areas, having favorable environmental conditions and access

to technology, and cotton consuming regions, having low labor costs, the current cotton trade

volume will suffer from a substantial setback. The long-term development of cotton exports is

shown below.


“International Cotton Advisory Committee (ICAC) is an association

of governments of cotton producing, consuming and trading countries.

The Committee was formed in 1939, and the Secretariat was established

in 1946. The ICAC currently has 42 members.

Three Crises Affecting Cotton

Since 2007, the world cotton market has been affected by three

successive events: a global commodity price crisis, which resulted in

higher agricultural production costs and reduced world cotton area; a

crisis in the cotton futures market, which hurt cotton trade mechanisms;

and a global financial and economic crisis, which has had multiple

effects on cotton mill use, trade and production.

1. The Global Commodity Price Crisis

Prices of most commodities increased significantly between 2003 and

the first half of 2008, and the increase in energy prices triggered an

escalation in fertilizer prices starting in mid-2007 and ending in the

middle of 2008. The World Bank fertilizer price index increased by a

factor of ten between 2003 and July 2008, which generated an increase

in agricultural production costs. Fertilizers account on average for

around 20% of overall cotton production costs. Consequently, in the

countries where shifts in acreage among crops were possible, many

farmers opted out of cotton production to turn towards production

of alternative crops, and world cotton area declined from 36 million

hectares earlier this decade to 30 million hectares expected during

2009/10.

2. The Cotton Futures Market Crisis

Futures prices were extremely volatile during March 2008, mostly

because of increased speculative activity at the Intercontinental

Exchange (ICE) and volatility in prices of competing commodities.

The Cotton #2 contract for May 2008 delivery fluctuated between

69 cents per pound and 90 cents per pound during March 2008. The

short-lived spike in futures prices caused a liquidity crisis. As a result,

some merchants hedging their positions at the exchange were faced

with huge margin calls and were forced to liquidate their positions

at a loss. Many merchants could not recover from these losses in the

physical market. Some were driven into bankruptcy and others decided

to go out of the cotton business. A consequence is that it is now more

difficult for merchants to purchase in advance and at fixed prices large

quantities of cotton (as was commonly done before the futures market

crisis).

3. The Global Financial and Economic Crisis

We now know that August 2007 marked the beginning of a period

of global economic deceleration and crisis in the functioning of

the housing, financial and commodity markets. The World Bank’s

projections published on March 30, 2009 forecast a contraction of

1.7% in global economic growth in 2009 and a modest recovery to

2.3% in 2010. The global economic outlook for 2010 remains very

uncertain.

Washington DC


While the two crises mentioned earlier primarily affected cotton

production and trade, the global economic crisis is influencing

mainly textile purchases by end-use consumers and therefore cotton

consumption. In addition, tightening credit conditions for textile mills

are slowing their purchases of raw materials, including cotton. In some

countries, for example in Europe and in the United States, the global

economic crisis is accelerating a decline in cotton mill use that started

many years ago, due to other factors. In other countries, such as China

and India, the two largest industrial users of cotton, cotton mill use is

contracting in 2008/09 for the first time in many years. World cotton

mill use is expected to fall by 13% in 2008/09 to 22.9 million tons.

This would be the strongest decline recorded since World War Two.

The global economic crisis, through its impact on world cotton mill

use, is also affecting cotton trade, stocks and production. The lower

demand for cotton is causing a drop in imports, and exporters are being

forced to carry larger stocks than desired. Finally, the tightening of

credit conditions worldwide will also affect world cotton production

in 2009/10, as it is making it more difficult for cotton producers to

finance their inputs.

Conditions in Place for Longer Term Growth

With a rebound in world economic growth expected to begin in 2010 and

improve in 2011, demand for cotton will strengthen again. Technology

changes in cotton production are contributing to both higher yields are

reduced environmental impacts, creating the conditions for long term

growth in the cotton sector. World consumption of cotton reached a

record of more than 26 million tons in 2007, and a return to that level

is likely within a few years after the recession has run its course.”


3.2 Wool

Remark: Following the re-structure of the Woolmark/AWI statistical department, reliable figures

on wool production and availability at spinning stage are not available for the current year.

World wool production is believed to have continued its long-term downward trend, falling in

2008, down about 3% to 1.16 million tonnes clean weight, the lowest level since the 1940s.

Disappointing spring rain in southeast Australia, following a dry winter and autumn, has taken

its toll on the national wool clip in Australia. The decline in total wool production 2008 was due

to a decline in the production of wool used in its two major end-uses. Apparel wool production

fell by 2.3% in 2008 to about 560,000 tonnes, while production of wool used in interior textiles

declined by 5.3% to approximately 480,000 tonnes.

Wool prices for coarse crossbred wool, a heavy grade accounting for about 80% of New

Zealand’s output, fell to the lowest in 30 years as the slump in global construction sapped

flooring demand for new buildings and home renovations.

Dominant topic in the European woolen industry was the closure of the BWK Elders wool top

production facilities in Germany and Turkey. The German plant in Bremen was a substantial

wool topmaker and one of the last remaining large wool top makers outside PR China. Its

closure marks the end of 125 years of wool processing at BWK Germany. This means that in

terms of volumes, the relocation of the wool topmaking industry to PR China has continued,

with some in the Asian region as well as in Latin America and only a few processors left in

Europe. In 2000, about a third of wool was processed at spinning stage in Europe with Italy

being the second largest wool spinning country in the world, using 177,000 tonnes (a share

of 12% of world use). In 2008 that had fallen by more than half to below 70,000 tonnes. Its

spinning industry is shifting away from Italy due to higher labor costs, notably to Central

Europe (Czech Republic, Bulgaria, Poland etc).

Furthermore, some world-famous companies in wool business for decades have discontinued

operations in Australia and New Zealand. Nevertheless, MICHELL Wool’s reopened its wool

scouring plant in Adelaide after the closure of Western Australia’s last wool washing plant -

Jandakot Wool Washing was scouring and preparing wool clip for exports in the last 70 years.

Wool processor Chargeurs New Zealand closed the country’s last medium-grade wool mill.

In addition to that, the New Zealand Commerce Commission has approved a restructuring

proposal to merge some wool scouring units and reduce capacity by about a third.


A new trend appears to gain increasingly importance as the demand for unmulesed wool is

spreading from retailers to processors and manufacturers. Mulesing is the surgical removal

of skin from the backsides of sheep, to prevent flystrike, and is common practice for many

wool growers. While European retailers insist on unmulesed wool for their garments, Chinese

buyers of wool are demanding the same. An United States retailer is considering to stop using

Australian wool because of concerns about the practice of mulesing.

“International Wool Textile Organisation (IWTO) is the international

body representing the interests of the world’s wool-textile trade and

industry. IWTO membership covers woolgrowers, traders, primary

processors, spinners, weavers, garment makers and retailers of wool and

allied fibres in its member-countries, as well as all kind of organizations

related to wool products and the wool business in general.

Wool is a natural fibre for the world we live in today. It is a fibre with a

true ‘green’ lineage that is both sustainable and biodegradable – which

are now highly valuable assets to the textile industry. This environmental

advantage is increasingly a sought after requirement of fibre but wool

has many other inherent benefits that have historically earned it a

quality reputation from global manufacturers and consumers.

Performance is critical in textiles and wool’s multi-capable reputation

in the finished product is built on a legacy that goes back over 10,000

years. Transcending generations of change shows the vast potential of

wool to meet, adapt and fulfil complex product scenarios. Wool offers

practical attributes that far exceed man-made fibres and as it is grown,

not made, its physical cell structure is complex allowing wool the

natural ability to breathe. Uniquely it absorbs and releases humidity and

provides a climate that is capable of adjusting to individual situations

which ensures you are warm but never hot.

In addition it is the safe fibre - a high water and nitrogen content make

it naturally flame retardant and it meets many international regulations

without the need for chemical treatments. It absorbs unhealthy carbons

in the atmosphere providing a better environment.

Wool is a globally traded commodity and its market diversity is

vast and ever expanding. It is found in many sectors; apparel and

fashion, activewear, flooring and interiors, aviation, architecture,

manufacturing, medical use and protective apparel. These all use wool

and with this dynamic versatility, it has proved itself to be the original

‘Smart’ fibre.

Research and development with wool continually pushes this potential

further, opening doors to a future that will safeguard an industry,

which is a major worldwide employer and bringing multiple benefits

to people, products and the planet.

Despite all these positive attributes, consumers, industry and

governments continue to be oblivious of the Health and Safety benefits

wool can bring. As a result of subsequent low wool prices, less and less

farmers are likely to grow wool in the future. With this in mind, the

wool industry needs support to redress this threat to the existence of

the wool industry.”

Belgium


3.3 Crude Oil

Crude oil prices were on a roller coaster ride, starting 2008 at about US$90, afterwards surging

to US$147 in July and dropping to below US$40 until the end of the year. Nobody can afford

paying US$147 a barrel and, on the other hand, just a few can afford selling oil at US$40.

Looking at the break-even price for most countries, they are currently operating at a loss.

Oil prices at US$40 would result in a massive cutback in investments, cancelation of new

exploration projects and massive national budget deficits.

Why do not loss-making countries stop exploring and exporting oil now that it is around

US$40? Apart from the negative effect on the labor market, many countries are too reliant on oil

revenues. There is a number of countries, e.g. Algeria, Kuwait, Libya, Nigeria, Saudi Arabia,

UAE and Venezuela, with the majority of export revenues stemming from oil. They depend on

selling oil at any price to fund government programs and prevent political instability.

Which influence had the oil price on fiber intermediates? The impact of soaring oil prices has

often been overrated. So, polyester fiber intermediates did not follow this surge in prices, putting

increasing pressure on the converters. As a consequence, we have witnessed several shutdowns

in the fiber intermediates industry. The increase in MEG price in the fourth quarter of 2007 is

a statistical blip rather than a genuine indication of surging oil prices. Lower production due to

an explosion at a SABIC unit in August 2007 was the reason.

Paraxylene (PX):

While expansions came on-stream as scheduled, lifting capacity to 31 million tonnes, declining

demand has led to worsening utilization rates at about 85%, several shutdowns and capacity

adjustments. Permanent closures were seen in North America and more may be seen in the

coming years. Investments for new units and de-bottlenecking occurred in PR China, Russia,

South Korea and Thailand.

After the exceptional previous year with almost 5 million tonnes growth in capacity, investments

have slowed in 2008. New nameplate capacity of 1.3 million tonnes was commissioned,

achieving a size of 45 million tonnes. BP Chembel N.V. in Belgium and FCFC in PR China and

Taiwan were responsible for this growth. The delay in new projects, in particular in PR China,

will help to increase utilization rates from 85% in 2008.


Mono Ethylene Glycol (MEG):

The industry has witnessed an increase of nameplate capacity of about 1.7 million tonnes in

2008 despite two major delays in plant start-ups in the Middle East. Expansions were completed

in the Middle East and PR China, South Korea and Thailand. Global production cuts together

with large-scale projects scheduled to come on-stream in the Middle East in 2009, have caused

a drop in prices at year-end 2008 to a level we have not seen in the last six years.

The market development appears to be difficult to predict due to the new OMEGA process from

Shell. The first full-scale plant using this technology has just come on-stream in South Korea

in May 2008. A second unit in Saudi Arabia is due to start-up this year. The OMEGA process

is said to have 10% lower capital costs and nearly no by-products. Lower energy and water

consumption are said to be on top. The industry may feel the margin squeeze from this new

technology.


4. Fiber Consumption in 2008

long-standing economic activity in full swing may be result of PR China’s accession to

innumerable manufacturers in the western hemisphere out of business.

All fiber types suffered from slowing demand. Small-scale fiber types like aramid and carbon

fibers weathered the downturn not bad until the fourth quarter 2008. Although firm demand fell

in aerospace, automotive, military and wind power, they managed to stay on positive territory

in terms of the growth rate. On the other hand, established fibers like polyester, polyamide,

polypropylene and acrylic were down in volumes. The usage of cotton, wool and silk also

decreased by 10.1% to 25.2 million tonnes, manmade fibers fell by 4.5% to 42.2 million tonnes.

The third section with kapok, ramie, flax, hemp, jute, sisal and coir is anticipated to have

stagnated at 5.9 million tonnes. This segment is only mentioned for the sake of completeness,

it will not be included in any further comments.


Manmade fibers slightly improved their relative market position at 63%, while cotton, wool and

silk hold a market share to 37% of the world textile market. A world population of 6.75 billion

corresponds to an average per capita consumption of 10.0 kg.

On a world basis, fiber demand of cotton, wool, silk and manmade fiber has decreased by

6.7% to 67.3 million tonnes, the steepest decline in history. The chart above shows the long-

term inter-fiber competition. Since the beginning of the 1990’s, manmade fibers have been the

most important fiber type in terms of volume. The average annual growth rate since 1980 for

manmade fibers accounts for 3.9%, for natural fibers it amounts to 1.9%.

Filament yarns declined by 2.8% to 23.9 million tonnes, mainly driven by losses in industrial

and carpet yarn. Staple fibers, the input material for spun yarn and nonwovens, were down 8.8%

to 43.3 million tonnes. This segment suffered decisively from slowing demand for cotton and

double-digit declines of viscose staple, nylon, acrylic and polypropylene fibers.


5. Manmade Filament Yarn and Staple Fibers

tonnes.

The development in the synthetic fiber segment was also negatively affected by the economic

slowdown, in particular the established types of fiber. The total market was down 4.1% to

38.8 million tonnes while acrylics dropped 20%, polypropylene (-11%), polyamide (-10%)

and polyester (-2%). The only increasing segments were aramids and carbon fiber, jointly

accounting for a nearly 0.2% market share.

The manmade fiber spinning business has further declined in Europe, Japan and the United

States, while Asia continued to gain market shares. The Asian manufacturing volume of almost

33.5 million tonnes corresponds to a global 80% market share, of which 70% was manufactured

in PR China. The Chinese industry succeeded in lifting output by 2.5% to 23.5 million tonnes,

equal to the world manmade fiber output in 1995 – deeply symbolic, as it was the year in which

the Agreement on Textiles and Clothing came into effect to provide developing nations a better

access to industrialized countries during a ten-year phasing out period of quotas. The table

below summarizes the output of major manmade fibers:

Filament Yarn Staple Fiber TOTAL ± in % vs 2007

Cellulosics 370 2,969 3,339 -9.1%

Synthetics 23,509 15,308 38,817 -4.1%

- Polyester 18,263 12,055 30,318 -1.5%

- Polyamide 3,292 266 3,558 -9.7%

- Polypropylene 1,566 1,036 2,602 -11.0%

- Acrylics - 1,882 1,882 -20.0%

- Others 388 69 457 -5.9%

TOTAL -4.5%


Headquartered in Greensboro, NC, Unifi Inc. is a leading producer and

processor of multi-filament polyester and nylon textured yarns.

“With so many uncertainties around the global economy and the total

impact to the global textile industry still being defined, Unifi will

stay focused and committed to improving our business fundamentals,

including the growth of our value-added products and enhancing our

offering of sustainable textile solutions. Additionally, with initiatives

in place to grow our sales in the United States, China and Brazil, Unifi

is able to provide our product solutions and excellent customer service

around the world - supporting our customers where ever they choose

to do business.”


5.1 Polyester

The output of polyester fibers was down 1.5% at 30.3 million tonnes and all sectors were

negatively affected. Filament yarns weathered the turbulences surprisingly well by declining

just 0.4% to 18.3 million tonnes while staple fibers, in line with falling cotton demand, were

down 3.2% to 12.1 million tonnes. The fundamental change of the polyester business has

continued in favor of PR China.

The only growth region was Asia, increasing its contribution by 0.4% to 27.5 million tonnes while

output in Greater Europe dropped 16.9% to almost 1.2 million tonnes and the manufacturing

volume in the Americas declined 16.5% to below 1.4 million tonnes.

The Chinese share in the polyester industry accounted for 66%, a staggering growth rate from a

27% ratio in 2000 and a 12% market share in 1990. Chinese polyester industry has been showing

a significant increase in excess supply with production more strongly rising than consumption.

Exports surged in both filament yarn and staple fiber while imports dramatically fell. The

polyester filament and fiber trade surplus accounted for US$1.4 billion last year compared

with US$140 million two years ago. Higher exports were partly helpful to compensate slowing

domestic demand and to sligthly lift up operating rates to avoid a drop below 60% utilization.


The table below summarizes last year’s performance of the leading five polyester industries:

The filament market is mainly producing yarns for textile and industrial applications. Although

demand for polyester and PTT carpet yarn has continued growing in the United States, the

volume still is quite small. Polyester textile yarns roughly stagnated at 17.1 million tonnes

(-0.2%) and industrial filaments declined by 2.6% to almost 1.2 million tonnes. Last year was

a classic POY-year with only about a quarter of investments for FDY. As more than 1,000

texturing machines were sold in 2007, sales nosedived by half in 2008.

A modest growth in the polyester textile yarn production just occurred in Asia, lifting output by

1.2% to 16.3 million tonnes. This corresponds to a market share of 95%. The textile powerhouse,

PR China, like Malaysia and Vietnam were the only Asian nations with increasing production

volumes. The contribution from Greater Europe and the Americas declined double-digit. Turkey

suffered from the steepest decline as the output has plunged 38% with the effect that Sönmez

Filament has halted production permanently. Sönmez was in the business since 1972 and had

been operating at loss since 2003. Measures to cut capacity and increase productivity turned out

to be not successful to rebound.

The industrial yarn business has not only suffered from the downturn in the automotive industry

but also from changing trade flows.

Although the global trade volume declined by 4.5% to 535,300 tonnes last year, PR China

was able to boost its exports by 42% to 166,900 tonnes despite an increase in average prices

of 3.6%, capturing 31% of world trade flows. Extraordinary growth in shipments has been

observed to the following countries:

PES-FY ± in % PES-SF ± in % TOTAL ± in %

PR China 12,829 +5.0% 7,216 +2.7% 20,046 +4.1%

India 1,335 -4.2% 748 -13.8% 2,083 -7.9%

Taiwan 1,019 -17.2% 503 -13.6% 1,522 -16.0%

Korea 680 -4.1% 477 -14.2% 1,157 -8.6%

USA 302 -19.9% 646 -17.2% 947 -18.1%

Others 2,098 -12.6% 2,465 -6.6% 4,563 -9.4%


Tires are the biggest consumer of polyester industrial yarn. As tire producers reported disastrous

financial figures, they will increase cost-cutting measures, shut down units and cut expenditures.

Continental will lower commercial vehicle tire production throughout Europe by a total of 27%.

Cooper Tire & Rubber Co. likely will close one of its four U.S. tire plants. Michelin reduced

passenger and light truck tire production for the last two months last year at its three U.S.

plants and cut production at its BFGoodrich tire manufacturing plant in Alabama. Additionally,

Kumho Tire Co. Ltd. has postponed completion of its first U.S. plant in Georgia. Toyo Tire

USA Corp. slowed the pace of work on its US$270 million expansion in Georgia. Michelin has

canceled plans to build a second tire plant in Mexico. This may explain the 11% reduction of

polyester industrial yarn output in the NAFTA region.

On the other hand, shifting of tire capacity has continued. Kesoram Industries Ltd. will expand

its tire unit in India. Kumho Tire Co. Ltd. has broken ground on its US$165 million tire plant

in South Korea and has further inaugurated production at its US$200 million car tire plant in

Vietnam. Pirelli intends to increase capacity for radial truck tires at its Egyptian plant by 50%

with an investment of US$65 million. Yokohama Rubber Co. Ltd. has inaugurated production

at its newest tire plant in Vietnam primarily for the local market. Apollo Tyres Ltd. has broken

ground in India for its US$24 million factory expansion for off-the-road tires, with production

expected to start in the second quarter of 2009.

In 2008, Mexico weathered the global collapse in vehicle sales better than its North American

neighbors. The country produced 2.1 million vehicles (+4%) versus a decline of 20% in the

United States. Mexican exports rose 2.5% to 1.7 million units thanks to stronger shipments

to Canada (+26.9%), Latin America (+19.6%) and Europe (+9.8%). A wave of investments

from Chrysler, Ford, GM has helped to exceed 2 million cars for the first time in 2007. The

vehicle output is forecast to increase to 3 million units by 2015. While U.S. companies may be

restricted for accepting Relief Program funds, Asian manufacturers are about to turn to Mexico.

China FAW Group plans to build a factory that will start-up in 2010. Other Asian companies,

including Hyundai and Tata Motors, are looking to invest for the first time. Finally, Toyota has

just lifted its truck capacity. Despite a global 4.1% reduction in vehicle output to 69.1 million

units, there still are positive examples in today’s economic turmoil. However, to tell the whole

story, Mexico’s auto production could fall as much as 25% this year after witnessing the worst

two-month period in January-February 2009 since 1995, according to the Mexican Automotive

Industry Association. Opposed signals from Brazil that has even outperformed the Mexican

results by lifting last year’s vehicle output by 8.1% to 3.2 million units. Here, the automobile

production rose in January for the first time since July 2008, surging 92.7% in January from the

previous month and production in February further rose by 8.4% from January as well as 36.2%

in March over February.

Relief for the entire market for technical textiles should come following the recent World Bank

announcement to support an extra US$100 billion over the next three years for infrastructure

expansion projects. For instance, Latin American investments in roads appear to be a promising

consumer of technical textiles. In Argentina are 450 road projects currently underway as part

2007 2008 ± in %

USA 24.1 39.5 +63.7%

Korea 12.8 26.9 +109.5%

Germany 14.6 18.7 +28.0%

Netherlands 7.8 11.3 +45.9%

South Africa 1.0 7.0 +567.5%

Malaysia 1.8 3.1 +72.6%

Italy 4.0 5.0 +23.4%

Others 51.1 55.4 +8.4%


of the 2008 US$2 billion budget, comprising 30,000 km of national roads and 20,000 km of

toll roads. Brazil is extending for almost 1,600 km a highway that is a major transportation

route between Argentina, Brazil, Paraguay and Uruguay. Colombia will spend US$58 million

constructing a highway from Tunja city to Puerto Boyacá. Of the 280 km road, only 56 km are

currently paved. Rural roads in Colombia will also receive a boost as the national road authority

- Invías - expects to invest US$68 million to improve road conditions. This rural investment

program aims to improve regional connectivity and increase local competitiveness. Peru is

considering to invest US$770 million in road, airport and port infrastructure, Another US$202

million will be spent on five highway projects. Just an example out of many others that future

demand for technical textiles will be on the rise again.

The staple business witnessed the strongest decline, accounting for 3.2% to 12.1 million tonnes.

All regions had a negative growth, Asia mastered the adverse situation the best. Total production

in Asia just declined 1.7% at 10.4 million tonnes. PR China, Malaysia and Vietnam managed

to grow. Vietnam’s first producer of polyester staple fiber from recycled bottles, Hop Thanh

Co. Ltd., has commissioned its 20,000-tonne plant lifting combined annual capacity of its two

plants to 50,000 tonnes. Double-digit decreases happened in the remaining world. The most

dramatic single-market drop in manufacturing volume was in the United States after already

losing 270,000 tonnes production volume in the last three years. As a consequence, Wellman

Inc., second largest domestic polyester staple fiber manufacturer, filed voluntary petitions for

relief under Chapter 11 in February 2008. According to the amended plan of reorganization, the

company will exit the polyester staple fiber and engineering resins businesses, consolidate the

polyester resin production at its Pearl River facility and shut its Darlington plant.


“In July 2008, the first production plant started-up for the manufacture

of polytrimethylene terephthalate fully drawn yarn (PTT-FDY) at

Jiangsu Zhonglu Technology Co., Ltd., an affiliate of Shenghong

Group. With 32 spinning positions, this PTT plant is currently the

largest in China. Located in the Chinese province of Jiangsu, the plant

achieved the desired yarn quality upon commencement of operations.

As one of the largest polyester manufacturers in China, Shenghong Group

is increasingly focused on sophisticated materials and applications.

“The pressure on the margin for commodity yarns is extremely high.

We are increasingly exposed to competition from other Asian countries

who can produce these goods at lower cost. Thus in the future we will

focus on the high-priced segment and niche markets. In this respect,

PTT is an outstanding addition to our portfolio,” said Miao Han Gen,

CEO of Shenghong Group. PTT is a polyester variant which is a very

complex material in terms of processing, so that complete control of

the production process by the yarn manufacturer is an absolute must.

Due to their special properties, PTT yarns are not only substitutes

for polyester and polyamide in textile applications, but open up new

possibilities for use as well. PTT is extraordinarily soft and highly

elastic, yet retains its shape very well. High light-fastness and wash

resistance make this material ideal for use in areas where durability is

required. Furthermore, PTT repels dirt and builds up hardly any static

charge. Accordingly, PTT is used primarily for sports clothing - in

particular for swimsuits in this case - and for home textiles.

The unique properties of PTT yarn as well as the sophisticated

production process ensure attractive margins for yarn manufacturers.”


5.2 Polyamide

Polyamide fibers declined 9.7% to 3.6 million tonnes in 2008. After some years of continuous

growth in the textile and industrial yarn business, both markets were on the downswing. Carpet

yarns continued its mid-term trend and staple fibers confirmed its long-term trend as shown in

the chart below.

Persistent high caprolactam and polymer prices until the last quarter of 2008, the depressed

housing market in the United States and lower vehicle build rates have put a strain on the

industry.

As the global capacity utilization of caprolactam plants fell below 60%, several manufacturers

temporarily closed facilities and reduced production in the second half of 2008. BASF AG

has reduced its worldwide production of caprolactam to about 65% at the sites in the United

States, Belgium and Germany. Fertilisers and Chemicals Travancore in India has restarted the

caprolactam plant in February 2009, which was closed for the last six months. Several Asian

caprolactam producers have reduced production rates by 30%. On the other hand, investments

have also been announced. In 2009, Zhejiang Hengyi Group has started to construct the biggest

single caprolactam line of 200,000 tonnes in Zhejiang province. Lanxess AG will expand

its capacity of caprolactam in the Netherlands by 10% until 2010. Honeywell of the United

States and Chongqing Chemical and Pharmaceutical Holding (Group) Company have started

feasibility studies for a caprolactam project of about US$400 million. Ube Industries aims to

finish a 10,000 tonnes expansion of its Thai capacity for caprolactam to 120,000 tonnes per

year in 2010.

According to the National Association of Realtors in the United States, vacation-home sales

dropped 30.8% to 512,000 last year, while investment-home sales fell 17.2% to 1.12 million in

2008. Primary residence sales declined 13.2% to 3.77 million in 2008. As part of the American

Recovery and Reinvestment Act, there is a new US$8,000 tax credit for home buyers available

in 2009 and the credit does not require repayment. This stimulus together with lowest mortgage

interest rates and lower house prices might support a recovery in nylon carpet filament from

residential demand.

VDA reported a 4.1% decline in world automotive production at 69.1 million vehicles. As about

three quarters of nylon industrial filament have been targeting the automotive industry, lower


build rates directly affect the demand for tires and airbags. Although the polyester lobby has

been trying to branch out into this segment for several years, the airbag sector still is a 100%

nylon market. However, trials are underway in the coated fabrics sector to achieve commercial

approbation. Even if third party certification should be granted, bulkier polyester airbags due

to more yarns needed will restrict the scope of action for car designers.

The nylon filament business supplies yarns for textile, industrial and carpet applications. A

declining demand was noticeable for all end-uses. The total volume produced was down 8.6% at

3.3 million tonnes. Reductions in the manufacturing activity occurred across the world exempt

from PR China that managed to increase its output by 6.5%. Apart from a higher domestic mill

consumption, surging polyamide exports by 50% have helped the Chinese industry. Nevertheless,

the country still is a net importer of polyamide, purchasing nylon-related products amounting

to US$2.2 billion in 2008.

Almost 90% of nylon yarn production for textile end-uses is located in Asia and Greater Europe.

The global supply in 2008 accounted for 1.5 million tonnes, down 6.1%. While capacity in the

United States continued to decrease, acquisitions were the hot topic in Europe. In Turkey,

the long-term contraction went on, starting a couple of years ago with the closures of Insa

(Sabanci) and Tekstiplik. Last year, yarn maker Sifas Tekstil cut production and send some of

its workers on unpaid leave. In both regions, the Americas and Greater Europe, manufacturing

volume was down. The Nafta output dropped by 19.1% to 61,000 tonnes while Latin America’s

production remained at previous year’s level of 54,000 tonnes. The volume in Greater Europe

declined by 9.8% to 212,000 tonnes. Contrary signals came from the Chinese market with

innumerable small textile firms shutting down, foreign investors from neighboring countries

with one-step manufacturing units leaving the market and some Chinese companies expanding

nylon 6 and predominately nylon 66 textile filament yarn capacity. Companies like Fujian

Creator Group, Danylon, Hangzhou Yongchang, Liheng at Changle, Shanghai Rongyang,

Quanzhou Tianyu, Yantai Hualun and Xiamen Donglun have either started-up new capacity

or are in the construction phase. In total, those investments will raise the annual capacity by

about 50,000 tonnes. This seems to be reasonable in a market that grew 8.2% in 2008. The

strong build-up of Chinese capacity has already replaced nylon-related POY and textured yarn

exports from Taiwan. Shipments of Taiwanese FDY to the mainland are expected to suffer from

corresponding expansions shortly. Hence, Taiwan’s nylon industry suffered from poor textile

yarn volumes that slumped 21.5% to 302,000 tonnes. In total, the Asian output of textile yarns

was 4.6% lower at 1.1 million tonnes.

The nylon industrial yarn industry still is a little more balanced, athough at present Asia holds

a 63% market share compared to 50% in 2000. Greater Europe takes in a 21% market share and

the Americas amount to 13%. Last year’s production was on the decrease by 7.5% to below 1.0

million tonnes. The only growing industry was domiciled in PR China where production rose

3.0% to 314,000 tonnes. Despite qualified concerns about current excess capacity, manufacturers

like Hangzhou Dikai, Yixing Hongcheng and most prominently Invista, that has inaugurated its

US$50 million airbag yarn facility in November 2008, will further raise the installed capacity

in PR China. Double-digit declines took place in every American manufacturing nation with

Mexico worst hit, falling 44.1% to 7,100 tonnes after the withdrawal of AKRA. The United

States weathered the slump in nylon industrial yarn demand the best. Although output decreased

by 12.2% to 65,300 tonnes, manufacturers were running at full capacity following a long-term

contraction of capacity. Here, additional capacity will be put into operation from SANS in

North Carolina. The company will transfer a line from South Africa where production was

ceased. Europe, where the automotive production declined 4.0%, saw a reduction of nylon

industrial yarn production by 4.7% to 221,000 tonnes.

The global nylon carpet yarn suffered from the steepest decline as production fell 14.1%

to 824,000 tonnes. Above-average reduction arose in the United States with manufacturing


volumes dropping 16.1% to 521,500 tonnes and majors like Mohawk, Shaw and Solutia closing

several spinning plants. The real estate crisis is one explanation for the poor carpet volumes,

but steadily growing polyester carpet yarn volumes have additionally started to substitute nylon

carpet yarns. Investments in new polyester carpet yarn capacity may call for further growth

at the expense of both, polypropylene and nylon carpet yarn. The Canadian output was also

down 13.5% to 87,200 tonnes as it used to be the prime supplier to the United States. A similar

development has been observed in Greater Europe that was, in addition to lower consumer

spendings, suffering from the loss of exports to the Middle East as a consequence of the strong

Euro. The Chinese industry was enjoying growing manufacturing activity, mainly in the contract

market, due to Beijing Olympics, Shanghai Expo in 2010 and the Asian Games in Guangzhou

in 2012. To respond to increasing domestic demand, Shenma has doubled its nylon carpet yarn

capacity to 4,000 tonnes and Invista is building a 2,000-tonne facility.

The production of staple fibers has further slumped by 21.4% to 266,000 tonnes, largely driven

by strong cutbacks in the United States. Nevertheless, the U.S. industry still is the main center

of production with a global share of 47%, although output dropped by another 70,000 tonnes in

2008. In total, the U.S. industry has lost almost 150,000 tonnes of annual output in only three

years. Greater Europe, mainly the western part, also suffered from a double-digit decline. The

sustained Chinese development of nonwovens further boosted the staple market, up by 12.5%.

The development in Japan and Taiwan was slow without any significant changes.


Gujarat Polyfilms Private Ltd. founded in 2004 as a joint venture

of Pratibha Group and T.M. Patel Group, is located in Surat, the

Indian synthetic fiber capital. The two companies involved have

been successfully active in the textile industry for over 25 years now.

Gujarat Polyfilms is specialized in the manufacturing of polyamide 6

FDY yarns. During ITME 2008 in Bangalore, ITME Daily News editor

D. J. Gohain spoke to Ritesh Gupta, Executive Director of Gujarat

Polyfilms Pvt. Ltd. about the manmade fiber market, his business and

his future plans.

How do you see today’s situation of shrinking profit margins in India’s

corporate world? Has the present situation hurt your business?

“Today’s business scenario is tough for everybody, especially

considering our high interest rate legacy in India, as compared to the

Far East. Also there are certain taxation structures which are difficult

to live with. On top of that, we have this situation of a global financial

meltdown. So, no doubt it is a difficult situation for everybody. We are

still battling it out and trying to keep afloat. I can’t say this situation

will not hit us. It may be so at some point in time, maybe in the very

near future.”

What is the strategy you are adopting to survive in this slowdown

environment?

“To tackle the slowdown in the market, our strategy is to make products

which will be consumed in the market quickly because prices are down

worldwide. In other words we want to sell and quickly clear up our

inventories.”

How does Oerlikon Barmag machinery assist your company in its

achieving goals?

“We have installed Oerlikon Barmag machinery in our plant and so far

the results are quite appreciable. We are coming with very new products

to the Indian market and trials are still going on. We are sure that these

innovative products will give us an edge over our competitors in the

market. Oerlikon Barmag machinery will definitely help position us as

a niche supplier of quality and innovative products.”

How does Oerlikon Barmag machinery and services add value to your

products?

“We are manufacturers of very fine denier Nylon FDY and have recently

introduced Micro filament Nylon FDY in India with Oerlikon Barmag

machinery. Oerlikon Barmag machinery adds value to our products

and we are able to provide high-quality and innovative products to the

customers.”

What is your view on the current situation of the synthetic fibers

market?

“Of late, chemical fiber prices have come down drastically. I feel that

low fiber prices will push up the demand again. The demand was low

because fiber prices were very high due to the rapid increase in raw


material prices of chemical fibers. But now the chemical fiber prices

are down by 40 to 60% and this should give a boost to demand. Once

inventories are cleared, these manufacturers will come to a reasonable

level of operational capacity.”

5.3 Polypropylene

The world polyproyplene market decreased by 11.0% to 2.6 million tonnes, suffering not

only from slowing textile consumption but to a greater extent from high raw material costs

compared with polyester fiber intermediates. The underlying market definition does not take

into consideration nonwovens, monofilaments, tapes, slit film and fiberfill.

While staple fiber applications dropped by 10.7% to 1.0 million tonnes, output of filament yarns

declined by 11.2% to 1.6 million tonnes. The industry was facing ongoing margin pressure due

to high raw material costs and the upstream industry could not pass these price hikes on. This

pressure has further supported the substitution of polypropylene by low-cost polyester yarns.

As low margins have forced producers to switch to niches, this could not compensate big-

volume end-uses. On top of that, the slump in carpet yarn demand was particularly responsible

for lower polypropylene spinning activities. This has mainly affected carpet yarn industries in

the United States and in Europe. The polypropylene business has additionally witnessed modest

activities for fine denier textile and high-tenacity yarns.

Despite double-digit declines of the polypropylene filament and fiber output in the Americas

and in Greater Europe, both regions were defending their leading market shares. The Americas,

with a predominant position of the United States, accounted for a 39% share. The contribution

from Greater Europe amounted to 34%. In Asia, the manufacturing volume was up nearly 3%,

driven by a 19% higher output in PR China and a 16% higher manufacturing volume in the

small-sized Indian industry.

5.4 Acrylic

The acrylic fibers market has continued its downswing, dropping by 20.0% to below 1.9 million

tonnes. This has resulted in a dramatic slump in world utilization rate to below 65% of nameplate


capacity from almost 90% in 2003/04. The industry around the globe continued suffering from

flat demand and further increased raw material prices. Fiber prices have developed unfavorably

compared with polyester fibers, continuously widening the gap until year-end. All Asian

manufacturing nations suffered from double-digit declines, with the exception of India that

managed to slightly grow by 2.8%. The output in Greater Europe was down 13.4% and the

volume in Latin America declined by 6.6%. Top performing countries were Egypt and Iran,

both enjoying a double-digit production growth. The chart below shows major suppliers with

Asia accounting for a 56% share of world output followed by Greater Europe (35%) and the

Americas (6%).

Global demand for acrylic fibers was extremely weak and the situation even worsened after

crude oil prices started their dive in July. The downstream industry was expecting lower raw

material prices, but the decline by some 20% until end of November was rather moderate

compared with a loss of 60% in crude oil. This expectant mindset has resulted in buying just

minimum volumes to have as little stock as possible. Furthermore, substitution away from

acrylic continued to be a strong burden. In December, this disproportion has lessened and

caused a slight upward movement in activity.


As a consequence, several manufacturers around the world have temporarily or completely

shut down units. Other companies are planning to sell their acrylic assets or to reduce capacity.

Mitsubishi Rayon Co. Ltd. has already downsized its fiber operations by reducing annual

capacity for regular types of fiber from 130,000 tonnes to 52,000 tonnes. Furthermore, certain

facilities will be switched to the production of carbon fiber precursor materials. To end with

promising news, Radici Fibras Industria e Comercio in Brazil announced a perennial process

of investments to develop acrylic fibers for civil construction. Taekwang Industrial Co. built

a facility at the North Korean border to produce annually 4,000 tonnes acrylic fiber, expected

to start operation in February 2009. The company with annual acrylic fiber capacity of 57,000

tonnes in South Korea is considering to transfer part of its production facilities in the South to

the industrial complex.

5.5 Cellulosics

The cellulosic fiber market, producing an average annual growth rate of 3.5% over the last six

years, suffered from a decline in output by 9.1% at 3.3 million tonnes. Staple fibers dropped

by 7.9% to 3.0 million tonnes while filament yarns declined by 17.4% to 370,000 tonnes. As in

previous issues, data on the production of TENCEL®, the third-generation cellulosic fiber, is

included in this survey.

The filament business continued its long-term decline. Additional pressure resulted from a fire

at Glanzstoff Austria in January 2008. The company used to produce 10,500 tonnes industrial

yarns and 1,000 tonnes textile yarns at this site per year. Due to technically and economically

unfeasible future regulatory requirements, Glanzstoff Group had decided to cease production at

its St. Pölten factory at the end of 2008. The ongoing flat demand has additionally occasioned

Indian Century Textiles & Industries Ltd. to suspend operations of viscose yarn by end of

February 2009. Finally, Enka Group will close its textile viscose yarn production at its Elsterberg

site in Germany, established in 1909, by end-June 2009 as orders dropped more than 20%.

Acetate tows, used in the manufacturing of cigarette filters, rose by 2.1% to 732,000 tonnes. The

continued slowdown in growth may be result of the global efforts to restrict smoking. However,

this industry still is comparatively balanced in regional terms. Daicel Chemical Industries Ltd.,

the market leader in Asia, has commissioned its new production facility for cigarette filter


acetate tow in October 2007, increasing total capacity by about 20%. In the first nine months

(April – December 2008) of the current fiscal year 2009, cellulosic derivatives have achieved

revenues of ¥60.7 billion and an operating income of ¥7.4 billion – ROS of 12.2% appears to

be enviable for the tough conditions in the global textile industry. Therefore, it is not surprising

that the company had announced to construct a new acetate tow plant for cigarette filters at its

Aboshi plant, Japan, with start-up in the first quarter 2010. Its goal is to meet growing demand,

mainly for use in super slim cigarettes, in overseas markets. Combined with the capacity at

its Ohtake plant, its domestic acetate tow capacity for cigarette filters will increase by 10% to

71,500 tonnes per year.

Although demand for viscose staple fibers in nonwovens, textile applications and flame retardent

products has been promising, this fiber has been negatively affected by excess capacity and,

since September 2006, an increasingly unfavorable price differential between viscose and

polyester staple fiber.

TENCEL®, the new age cellulose fiber, has successfully continued to gain market shares in a

range of end-uses in the home textiles and clothing sector as well as the nonwovens industry. As

a result of the persistent strong demand, Lenzing AG had completed the 10,000-tonne expansion

of high-quality TENCEL® fibers at its Austrian facility. This growth seems to be driven by

nonwovens made up of Lenzing’s staple fiber types, that had been certified as compostable

materials as they are fully biodegradable. However, bad news came from Finland as viscose

fibers manufacturer Kuitu Finland Ltd., formerly Säteri Oy, had filed for insolvency.

Viscose staple fibers may regain lost territory as soon as the price differential to polyester

staple fibers will further shrink. An increasingly tightened competition when the new facility

from Shandong Boxer as well as capacity additions from Fulida and Aoyang will come on-

stream in 2009 may lead to a decline in prices.


“The Lenzing Group is an international group of companies,

headquartered in Austria. Lenzing provides the global textile and

nonwovens industry with high-quality cellulose fibers - from special

cellulose fibers to high-tech plastics polymers. Seventy years of fiber

production expertise make us the only producer world-wide of all three

man-made cellulose fiber generations, from classic viscose to lyocell

and modal.

The fiber boom of record year 2007 drove our business up to the middle

of 2008. Then the situation changed markedly: The financial crisis,

triggered in the USA, successively spread into the real economy and

thereby affected our customers in the textile chain. We experienced a

massive decline in fiber business which became even more pronounced

by the end of the year. The impact of falling prices was in part

aggravated by high raw material prices and sinking demand.

In this dramatic development, which brought about the first decline in

global fiber production in decades, Lenzing sustained its position well.

Thanks to our consistent cost management and our strong position

as market and innovation leader we even managed to gain further

market share. Last, but not least we succeeded because of the good

fundamentals of the Lenzing Group:

The excellent and long-standing relationship with our customers is

based on our continuous focus on the superior quality and performance

of our products, maintained and enhanced by steady quality assurance

and ongoing optimization, and on our track record as a reliable and

stable supplier. The Lenzing Group has proven itself as a steady partner

even in a turbulent phase of the economy: A keystone to success in

difficult times.

The ecological advantages of our fibers made from the raw material

wood have never been as topical as today. And here we benefit from

our past high investment in the future: Ecologically sound production

and the natural raw material wood are unique sales propositions for

our customers in the textile and the nonwovens industry. The market

demands the superior absorbency and the excellent ease of wear of

cellulose fibers, a result of their natural origin.

Ongoing product development and innovative strategies in customer

cooperation are further important reasons for the high acceptance of our

products and services in the supply chain: They enable our customers

to differentiate themselves in their markets. A tradition of strong links

with machinery suppliers, as well as the accumulated expertise of

decades are crucial elements of the reliability and the success of our

innovative products with our customers.”

Management Board

Austria


5.6 Carbon Fibers

This technologically advanced fiber continued to be on the upswing although some worrying

issues emerged in the course of last year, in particular related to the aircraft and wind power

segment. However, production is believed to have further gone up to about 38,000 tonnes.

In addition to the full commercial operation of some manufacturers’ expansion of existing

facilities in 2007, three new manufacturing sites went on-stream in Mexico, Spain and Turkey

in 2008.

No doubt that the superior carbon fiber properties will branch out into new markets and

increasingly substitute traditional materials. Nevertheless, adverse conditions will go along with

this development arising from temporary excess capacity and disappointments in consumption

of some end-uses. First evidence has been experienced in worsening business figures of major

carbon fiber producers.

According to the General Aviation Manufacturers Association, worldwide deliveries of general

aviation airplanes amounted to 3,969 airplanes in 2008, valued at US$24.8 billion, compared

with 4,272 units valued at US$21.9 billion during this same period in 2007. The business jet and

turboprop shipments continued to show strength while the piston engine airplane sector, most

susceptible to economic changes, was down 20.8%.

Annual deliveries of Airbus and Boeing, dominating the market for more than 100-seat

commercial planes, were down 4.0% at 858 aircraft. The new composite-intensive aircraft in

commercial and military aerospace has not achieved its original target of consumption. Boeing’s

B787, originally scheduled to enter service in May 2008, has been delayed four times to first

delivery in 2010. Airbus fell short of its targeted A380’s deliveries in 2008 and will continue

to be under plan this year. The Airbus A400M military transport plane, which was initially

contracted for first delivery in 2009, has even been delayed three years. In addition, a two-

month strike at Boeing has resulted in the loss of about 60 planes scheduled for delivery in the

fourth quarter.

The build rate of commercial aircraft as well as business and regional jet will soften. Airbus

and Boeing, the world’s largest planemakers, plan to deliver a little less, but prepare already to

adjust output for a significantly lower level in 2010. Bombardier Aerospace, the third largest

maker of aircraft, expects fiscal year 2009/10 deliveries to be slightly less than last fiscal year.


Embraer, the fourth largest aircraft maker, slashed its deliveries forecast for this year to 270

aircraft from a previous estimate of as many as 350.

New composite-intensive aircraft programs will also not contribute to a significant stimulation

in 2009. Nevertheless, the outlook remains positive due to the Asian traffic growth, the rising

number of low cost carriers and more retrofitting. Moreover, a number of new aircraft programs

(Airbus’s A350 and A320 successor, Boeing’s Yellowstone Project, Bombardier’s CSeries,

United Aircraft’s MS-21, Mitsubishi Regional Jet) with targeted first flight between 2013 and

2015 will boost demand for lightweight composite materials.

Wind power has continued its surging capacity additions. According to the Global Wind Energy

Council, wind power installations increased by 29% in 2008 to 120,791 megawatts (MW). The

market for last year’s turbine installations accounted for about US$47.5 billion.

This segment is increasingly gaining attractiveness for carbon fibers as the continuously

increasing average blade length requires the usage of lightweight materials. Between 2000 and

2008, the average blade length has doubled to about 45 meters.

Nearly three quarters of the wind power capacity is installed in the United States, Germany,

Spain, PR China and India. The Chinese wind energy market has again doubled and the United

States passed Germany to take the lead in wind power installations. The outlook for both markets

is promising as the development of wind energy is one of the key economic growth areas in PR


China. Furthermore, the wind energy helps to achieve President Obama’s ambition of doubling

renewable energy production in three years.

However, the financial crisis along with drastically falling crude oil prices have hit the wind

sector in the second half of the year, resulting in a declining demand for carbon fibers. The

economic slowdown has also caused a slump in demand for sports applications, automotive

and other industrial markets, reflecting both weak markets and inventory adjustments by

customers.

5.7 Aramids

The markets of aramids comprise para-type aramid, used for a variety of reinforcements

reflecting its high-tenacity and high-strength, and meta-type aramid, equipped with superior

properties in heat resistance and flame retardancy. Last year’s production is believed to have

accounted for 69,000 tonnes, predominantly provided by U.S. based DuPont and Japan based

Teijin. Both companies have been dominating this industry in recent decades and continuously

expanding their capacities on global basis. In mid-2008, Teijin has completed the first phase of

expansion and gradually increased its para-aramid fiber capacity by 15% at its Dutch facility –

an investment that was decided in November 2006. DuPont’s multi-phase expansion to lift para-

aramid capacity by more than 25%, an US$500 million investment announced in September

2007, will be delayed at least a year. It was originally scheduled to open in late 2010. However,

the meta-aramid expansion in Spain has recently been completed, the final step in a three-phase

US$100 million investment.

This segment has been offering a multitude of growing opportunities in various end-uses such

as aircraft, automotive and tires, protective clothing, ballistics, friction, reinforcement material,

heat and cut resistance applications and civil engineering/geotextile. Although the outlook for

future growth still looks promising, the steady and firm demand fell in aerospace, automotive

and military. However, the commitment of the both industry leaders remains high, in particular

to defend the market leadership.

Teijin will reorganize its High Performance Fibers Business Group into Aramid Fibers Business

Group and Carbon Fibers Business Group that separately handle aramid fibers and carbon

fibers effective April 1, 2009. DuPont sued South Korean Kolon Industries Inc. in February

2009, claiming theft of trade secrets for protective clothing from aramid fibers. Kolon is a

latecomer to this segment, entering this industry mid-2005. In general, quiet a challenging

ambition to step into competition with two dominant global players as this segment is believed

to be consistently covered by patents.

5.8 Spandex Yarns

The spandex industry has also been negatively impacted by the slowing textile consumption. Last

year’s output is believed to have dropped by at least 10% to below 350,000 tonnes. In addition

to that, specific circumstances have significantly worsened the manufacturers’ situation. The

chart below shows prices that started soaring to extremely high levels from mid-2006 onwards,

leading to massive new investment plans with scheduled start-up in 2007 and 2008.


The main target of capacity additions has been PR China. As already mentioned in last year’s

issue “… the capacity will again outstrip demand. This may worsen the manufacturer’s

margins…” New capacity of about 135,000 tonnes came on-stream in PR China. As the average

Chinese capacity utilization was just about 55%, it is no surprise to have witnessed a number

of domestic producers shut down operations and even industry majors like Shandong Yantai

Spandex Plant reported utilization rates of merely 40%. A conference in October, organized

by China Chemical Fiber Association, was aimed at further cutting operation rates as earlier

agreed production cuts of 30% turned out to be not enough. In total, Chinese consumption in

2008 fell to about 160,000 tonnes with both exports and imports declining by 13% each.

Despite lower exports, some markets have come under significant attack from Chinese exports.

Most shipments (8,973 tonnes, +32%) went to Turkey where the new 15,000-tonne facility

from Hyosung Corp. started operation in the first quarter of 2008. While deliveries to Japan

moderately rose by 11% to 6,676 tonnes, exports to South Korea almost doubled to 5,996

tonnes. This is quite remarkable as it is the home market for Hyosung, the second largest

producer of spandex in the world, that can produce a combined 92,000 tonnes of spandex at

local and overseas plants.

Spandex activity in Europe has continuously worsenend with volumes below 2007 and capacity

significantly under-utilized despite voluntary liquidation of Fillattice that had already downsized

its Italian facility in 2007. New capacity was launched from Asahi Kasei Fibers Corp. in

Germany that had bought the Dorlastan® spandex business of Lanxess in November 2005. This

additional 400-tonne capacity together with the commercial production at the Hyosung plant in

Turkey just accounted for a fraction of new installed equipment in PR China and Vietnam. In

Vietnam, Hyosung commenced operations of its new 15,000-tonne spandex plant and Texhong

Textile Group of China is constructing two plants for manufacturing spandex.

While the U.S. spandex producers were running near full capacity in 2007, the business climate

has steadily worsened as well with a drop in capacity utilization to below 70% in the fourth

quarter 2008. Increased exports from PR China at 4,017 tonnes (+10%) may pose a minor reason

for the slowing spandex business in the United States. In particular, the reduced domestic mill

consumption is to blame following the closure of several processing companies.


6. Spun Yarn

The 2008 world output of yarns was down 6.5% to 59.2 million tonnes. The three yarn types

were differently affected by the worldwide slump in demand. Filament yarns decreased

31.2 million tonnes and long staple yarn even fell 10.5% to 4.1 million tonnes.

Spun yarns still dominate the world market with a 59.6% share compared with 64.0% in 2000.

However, filament yarns have been producing higher dynamics. The average annual growth

rate over the period 1995 until 2008 accounts for 5.8% in the filament business and 2.4% in the

spun yarn industry. In 2008, output of filaments amounted to 23.9 million tonnes (-2.8%) and

spun yarns accounted for 35.3 million tonnes (-8.9%). The chart below shows the long-term

development of filament and spun yarns.


6.1 Americas

United States of America

The U.S. textile industry continued its long-term contraction. The chart below shows best the

ongoing process leading to an increasingly weakening domestic textile and apparel industry.

The spun yarn output declined 11.8% and the production of manmade fibers was down 7.3%.

The scope of 32 company closures in 2008 comprises several spinning companies, spun yarn

facilities and mainly nylon carpet yarn operations, weaving, knitting and finishing mills. This

has caused the loss of about 60,000 textile and apparel jobs. Moreover, sad is that companies

with more than a century of textile history have shut down - Elizabeth City Cotton Mills was

one of the oldest continuously operating mills in North Carolina, mainly producing yarns for

high end upholstery fabrics and Trio Manufacturing, a 109 year old carded cotton ring spinning

plant in Georgia. Nevertheless, investments were also made, like for instance Parkdale Mills,

expanding its rotor spinning capacity.

According to data from the U.S. Department of Commerce, textile and apparel imports have

declined by 3.3% to US$93.2 billion in 2008 with 35% of shipments from PR China. Total U.S.

exports increased by 1.4% to US$16.2 billion with almost half of shipments targeting Canada

and Mexico. The chart below shows the long-term development of the US textile and apparel

trade.

United States of America 2007 2008 ± in %

Cotton Production 4.2 million t 2.8 million t -33.2%

Cotton Consumption 1.0 million t 0.8 million t -20.3%

Manmade Fiber Output 3.0 million t 2.8 million t -7.3%

Wool Availability 10,400 t n/a n/a

Spindles 1,043,000 907,000 -13.0%

Rotors 364,000 340,000 -6.6%

Spun Yarn Production 900,000 t 794,000 t -11.8%

Textile and Apparel Jobs 523,500 462,000 -11.7%

Population (mid-year) 301,279,593 304,228,257 +1.0%

Textile & Clothing Imports US$96.4 billion US$93.2 billion -3.3%

Textile & Clothing Exports US$16.0 billion US$16.2 billion +1.4%


The chart below represents the ten leading textile and apparel importing nations into the United

States. Last year’s volume of this group increased by 1.0% to US$66.0 billion, accounting for a

70.9% share in imports. Vietnam and Bangladesh have clearly benefited from quota-free trade,

increasing its exports by 19.0% and 10.8% respectively. The NAFTA partners, Canada and

Mexico, have further lost significant volumes. While Canadian shipments fell 25% to US$1.7

billion, Mexican deliveries dropped 11.9% to US$5.0 billion.

As shown in the chart below, the largest import category (338/339) comprises cotton knit shirts

and blouses. Imports declined by 3.2% to US$14.2 billion. The local market size in volume

terms fell 2.3% to 437 million dozen, the domestic share of production decreased from above

50% in the mid-1990s to about 4% last year.


This market segment is representative for a number of other end-uses. The second ranked U.S.

import category (347/348) for cotton trousers, slacks and shorts, amounted to US$12.2 billion

(-3.2%) in 2008. Likewise, the local share of production decreased from above 50% in mid-

1990s to about 2% in 2008. Other segments like coats, skirts, sweaters, night- and underwear

have similarly developed.

However, the United States still is significantly involved in the global textile industry as it is the

largest exporter of raw cotton. In the current 2008/09 season, 2.6 million tonnes of cotton are

designed for exports, that accounts for 41% of world cotton exports. Moreover, it is the biggest

textile and apparel consuming single country. On top of that, it is strongly impacting worldwide

flow of machinery and equipment. The reduction of domestic capacity has led to increased

sales of used machines to Asia and Africa. Although used equipment has lower purchase costs,

outdated technology will not guarantee a successful export production, which is necessary to

earn foreign exchange.

Mexico

Mexico’s economic growth slowed to 1.3% in 2008 after an 3.3% expansion in the previous

year as the U.S. slowdown has negatively affected the domestic economy. In the fourth quarter,

gross domestic product even contracted 1.6%, mainly driven by a sharp contraction in the

industrial sector, which declined 4.2% annually. The annual headline inflation of 6.5% closed

the year at the highest level in eight years, and more than doubled the Central Bank’s long-term

inflation target of 3.0%. Foreign direct investment fell to below US$18 billion last year, down

from US$24.7 billion in 2007.

Mexico 2007 2008 ± in %

Cotton Production 135,000 t 134,000 t -0.7%

Cotton Consumption 435,000 t 392,000 t -9.9%

Manmade Fiber Output 342,000 t 283,100 t -17.2%

Wool Availability 4,100 t n/a n/a



The deepening recession in the United States is leading many companies to slow down operations

as 80% of Mexican exports are U.S.-bound. Manufacturers have laid off some 175,000 workers

last year through November, of which about 10% were employed at clothing facilities. The U.S.

uniform maker Aramark Uniform Manufacturing has shut its factory in Mexico, Kimex closed

its polyester and nylon extrusion business to concentrate on its successful circular knitting

operation and underwear maker Hanesbrands Inc. closed a sewing plant. In total, Hanesbrands

is closing nine North American plants, shifting manufacturing to lower-cost regions. While this

move is expected to be completed by summer 2009, affecting 8,100 employees, the workforce

in Asia was increased by 50% to 6,000 by the end of 2008.

The continuing contraction of the textile and apparel supply has three major reasons. The textile

and apparel exports to the United States fell from a record US$9.6 billion in 2000 down to

US$5.0 billion in 2008. In 2002, a quarter of all U.S. textile imports came from Mexico and

Central America, and 13% from PR China. Last year, PR China provided 32% of all U.S.

clothing imports and only around 15% came from neighbors of the United States. On top of that,

Mexico’s textile and apparel industry is losing domestic market share to low-cost production

countries such as PR China. Probably the proximity to the big U.S. market size has prevented

so far serious attempts of most Mexican manufacturers of textiles and clothing to export their

produts to the EU or to South America. Finally, almost half the 110 million population is under

the age of 25. This represents a potential for considerable demographic and economic growth

for the decades to come but holds, on the other hand, the necessity of creating jobs. About half

of the population lives on less than US$2 a day, consuming very cheap Chinese clothing. But

there is also a considerable number of consumers buying luxury apparel from Europe. CNIV,

the National Chamber of the Mexican Clothing Industry, estimates the national clothing market

at US$18 billion annually with almost 60% illegal sales of smuggled, stolen, counterfeited and

second hand clothing.

Argentina

Argentina’s economy expanded 7.1% in 2008, which marks the slowest full-year growth pace

since 2003, as consumers limited purchases and commodity prices fell. The official inflation

closed the year at lowest level since 2004 at 7.2%. Reduced forecasts for its top crops, such as

soybeans and corn, in the current season’s output due to drought will additionally put pressure

on the economy.

The tragedy from March 2006 when a fire at a small textile factory in Buenos Aires killed

six people has spurred actions against sweatshop operations. Government has increased the

number of controls and lifted the number of inspectors from about 20 prior to this tragedy to

more than 400. They have done over 6,500 inspections to workshops since March 2006, finding

irregularities in more than 2,300 companies.

The Argentine government has pushed a new law to help regularize the situation of workers

from the textile industry. According to an investigation published by La Nacion newspaper,

Buenos Aires hosts over 4,000 illegal sweatshops and about 78% of the textile industry workers

are in an illegal labor situation in Argentina. The exploited people are mainly immigrants from

Bolivia who are recruited in their home towns.

Argentina 2007 2008 ± in %






This disaster may be responsible for the declining textile activity as regular labor costs in

Argentina are significantly higher than in Brazil, Colombia and Peru. The local cotton

consumption is expected to drop by 6% to 169,000 tonnes. Furthermore, the approximately 15

local spinners are predominantly targeting the home market. Reduced consumer spendings and

soaring Chinese garment imports have further contributed to the decline of the national textile

and clothing industry.

Brazil

Brazil’s economy, Latin America’s largest, expanded 5.9%, the best performance in 14 years.

However, economists expect growth of only 1.5% in 2009, the slowest pace since 2003. The

country was extremely successful in attracting foreign direct investments as it received an

annual record in 2008 of US$45.1 billion, the highest since Brazil began keeping records in

1947. Nevertheless, this source does not appear to be long running. According to predictions

from the World Bank, global foreign direct investments are set to fall to US$400 billion in

2009 from US$580 billion last year because of tighter liquidity and the economic slowdown in

developed countries.

Brazil is the world’s second largest producer of soybean and the third largest of corn. Both crops

are projected to be significantly down in current season’s production due to severe drought in

the southern part of the country. On top of unfavorable climatic conditions, the current season’s

cotton growing area is down 21% at 850,000 hectares. This leads to a steep decline in projected

output by 21% to about 1.3 million tonnes, still the world’s fifth biggest growing nation.

However, cotton may follow in the footsteps of soy after the Technical Commission of National

Biosafety, the lower house of Congress and the Senate have approved commercial release of

transgenic cotton. Cotton grown from transgenic seeds is estimated to cover 150,000 hectares.

Brazil is already home to the world’s third largest area of genetically modified seed cultivations

with 15 million hectares in 2007. The United States ranks first for genetically modified seed

Brazil 2007 2008 ± in %

Cotton Production 1,602,000 t 1,263,000 t -21.2%

Cotton Consumption 1,002,000 t 936,000 t -6.6%




cultivation with 58 million hectares in 2007, half the world´s transgenic farmland. Argentina

takes in second place with close to 20 million hectares. The approval of Bt cotton may help

to bring down production cost. In addition, the Ministry of Agriculture has provided US$327

million to the cotton industry for commercialization.

Brazil has the second largest population in the Western hemisphere with more than 195 million

people. The Brazilian population is also young, more than half is under the age of 29. This may

explain that the clothing expenditure per capita of about US$400 is relatively stronger than in

other emerging countries. This adds up to an annual domestic apparel market size at retail level

of nearly US$80 billion. Even more appealing that the local clothing market used to rise 7%

annually.

It already became apparent in the fourth quarter of 2008 that consumer spending on clothing

cooled down. Relief for the domestic textile consumption may arise from governmental efforts

to revive economic growth. President Luiz Inacio Lula da Silva has announced plans to build

one million homes by 2010 to protect workers in the construction industry. This may help to

lift demand for home textiles, actually demanding 425,000 tonnes of predominantly cotton and

polyester products on annual basis.

Colombia

The economy rose only 3.5% last year after growing at a rate of 7.9% in 2007 on strong

consumer and industrial demand. Higher prices in food and beverages have caused a rise in

annual inflation rate at 7.7%, which represents the highest year-end inflation rate since 2000.

However, the country has never experienced hyperinflation, maintaining single-digit levels

since 1999. Substantial foreign direct investments continued to flow into the country. This may

result from the World Bank business environment ranking in the 2009 “Doing Business Report”.

Colombia has been recognized during the past years as one of the countries that introduced the

most reforms to improve the business platform. Colombia is now located at position 53 in

the rank of 181 countries. This makes Colombia the country that generates the most reforms

to facilitate business in Latin America. Additionally, according to the World Competitiveness

Yearbook 2008, Colombian managers are recognized by multinational companies as one of

the most qualified in the region. On top of that, labor force is available at competitive wages,

compared with other developing and industrialized countries.

Colombia 2007 2008 ± in %


Cotton Consumption 79,500 t 80,000 t +0.6%



The majority of FDI was destined for the oil and mining sector. In the clothing sector, Kaltex,

a Mexican textile producer, acquired the majority share of Coltejer-Cia. Colombiana de Tejidos

S.A. at the price of US$96 million. Coltejer’s product mix includes natural and synthetic fibers,

woven and knitted fabrics, clothing and home textiles. Coltejer started its new denim plant in

Colombia at costs of US$32 million in 2006. Furthermore, Brazilian-based Hering Store, a

clothing manufacturer and sales company, has opened a clothing retail store and is planning to

open 11 more in Bogota before 2011.

Colombia’s textile and apparel industry, generating about 700,000 direct and indirect jobs,

comprises nearly 500 textile mills and 10,000 clothing companies, most of which are small-

and medium-sized. The textiles and apparel sector covers the entire supply chain from cotton

and synthetic fibers, through spinning, weaving, knitting, finishing, dyeing and printing, to

the manufacture of garments and accessories. However, there still is a shortfall of cotton yarn

and denim, leading to textile imports of about US$1 billion that could be replaced by local

production. The elimination of the 10% import tariff on cotton may pose a promising measure

to spur upstream spinning activities as higher imports will be required. Heavy rainfalls during

the planting season will lead to a 5,000-tonne decline in cotton production. The excellent supply

of energy at competitive costs and the demand of the downstream industry might call for higher

investments in new capacity.

Looking ahead, the following issues might put pressure on Colombia’s textile and apparel

industry:

a) Smuggling of clothes is very common. According to the Colombian Association of Textile

Manufacturers and The National Business Association of Colombia, 30% of the domestic

market consists of illegal trade.

b) Currency

c) Competition from Asia

d) Lacking international business as meager 5% of textile and clothing exports are being shipped

beyond the American borders

Peru

Peru’s economy grew 9.8% in 2008, the fastest expansion since 1994. The annual inflation

almost doubled to 6.7%, which is the highest year-end figure observed since 1996, but slowed

in December on falling fuel prices and electricity rates. The textile industry of Peru has

gradually gained importance backed by its low labor costs. According to Werner International,

the average hourly cost per operator accounted for US$2.02 in 2008 with 8,232 mill operation

hours per year.

Peru 2007 2008 ± in %

Cotton Production 65,000 t 65,000 t ±0.0%

Cotton Consumption 114,000 t 114,000 t ±0.0%



As cotton is considered the white gold of Peru, the domestic clothing industry has heavily relied

on this main input to grow its exports. In particular, the increase in total exports of textiles

and apparel to the U.S. has been quite remarkable, since 2000 doubling to more than US$800

million. Almost 90% refer to cotton export products in value terms.

Next to low cost of production and the high quality of raw material, duty-free access to the U.S.

market and vertical integration of the local manufacturers, generating about 350,000 direct jobs

in the apparel chain, have helped to boost exports. Peruvian textile investments during 2008,

estimated to have increased to about US$200 million, may be considered as a token of strength.

Nevertheless, in light of a high national poverty rate of 40%, investors might start worrying

about the presidential election in 2011 that could reverse President Alan Garcia’s free-market

policies and pro-business programs.

In addition to conventional cotton, Peru belongs to the top ten organic cotton producing

countries. Spurred by higher demand from numerous small- to large-sized retailers, organic

cotton cultivation surged 152% in the last season to 145,872 tonnes grown on 161,000 hectares

in 22 countries around the world. Primum mobile for retailers seems to be that organic cotton

can sell for a premium. However, to help ensure the quality and value of organically grown

products, growers must not have used synthetics for three seasons before they can apply to

be an organic grower. This three-year gap has kept some farmers away from the conversion.

In an attempt to support the growth of the organic cotton industry, Wal-Mart Stores Inc. will

purchase so-called “transitional” cotton at the same premium cost of certified organic cotton.

The world’s largest retailer needs a large and steady supply to further increase the number

of organic products in its U.S. stores to serve an U.S. business already topping US$1 billion

annually.

6.2 Asia

Asia 2007 2008 ± in %



Wool Consumption 705,800 t n/a n/a


Bangladesh

Bangladesh’s US$72 billion economy needs to grow by more than 7% a year to become a

middle-income country by 2020 and by more than 8% to halve poverty by 2015. Around 40% of

Bangladesh’s more than 150 million people live below the international poverty line. Although

the country was expected to suffer greatly after the expiration of the Multi Fiber Agreement in

January 2005, which imposed quotas on developing countries’ exports to developed countries,

it has benefited from the removal of quotas, as its labor is some of the cheapest in the world.

Its textile industry is the number-one export earner, accounting for about 75% of the country’s

exports and foreign exchange earnings. In 2008, a total of 43 new spinning mills came into

operation with 945,000 spindles versus 28 mills in 2007 with 443,000 spindles. The industry

has enjoyed an annual increase in installed spindles of almost 15% on average over the last

eight years. At present, the country has a total of 341 spinning mills. Anyhow, conditions have

worsened as yarn stocks at the mills increased and yarns from neighboring countries were partly

offered below raw material costs.

As a consequence of strong investments and favorable perspectives for garment exports, the

textile industry now employs more than five million people and contributes about 13% of the

country’s GDP. The output was also steadily on the rise. The chart below shows the development

and, at the same time, the persistent necessity for further investments in spinning, weaving,

knitting and processing mills.

Bangladesh 2007 2008 ± in %

Cotton Production 8,000 t 13,000 t +62.5%



Yarn Consumption 650,000 t 680,000 t +4.6%


Number of Garment Units 4,490 4,740 +5.6%



Bangladesh is almost entirely dependant on raw cotton imports to meet rapidly growing demand,

as cotton is a relative less desirable crop and high-yielding varieties are lacking. Rainfalls,

floods and pest infestations which are common in Bangladesh worsen profitability vis-à-vis

competing crops.

Apparel exports have significantly changed, knitwear exports exceeded woven apparel exports

in 2007/08 for the first time. Total exports went up 29% at US$12 billion in 2008, even strongly

gaining momentum in the second half of 2008 as U.S. and EU retailers progressively turned

to lower-priced products. The majority was sold to the European Union and US$3.5 billion

were shipped to the United States. This represented a strong 11% increase in deliveries to

the largest single consumer market. This is consequence of trade advantages with the United

States and several other countries through various instruments, including the Generalized

System of Preferences, and bilateral trade and investment treaties. Given political stability,

textile industry looks with optimism to the future. The Bangladesh Garment Manufacturers and

Exporters Association even aims to double apparel exports to US$25 billion by 2013.


This target seems to be supported by almost all renowned international retailers that have

enhanced their procurement volume. Furthermore, Bangladeshi government has received

innumerable proposals for textile and garment investments worth more than US$1 billion

last year. Nevertheless, power shortages have increasingly blocked industrial expansion, and

therefore the country crucially needs a large expansion in generation capacity, as well as an

upgrading of transmission and distribution networks. The 2008/09 budget aims to accelerate

growth and to protect the poor from rising prices for food, fuel and fertilizer. To boost production

and investments, it has reduced income tax and import duty rates. It also provides various tax

incentives to stimulate business activity and investment.

Cambodia

Cambodia, the second poorest country in Southeast Asia, heavily relies on the garment industry,

providing about 80% of its foreign exchange, accounting for 12% of the gross domestic product

and employing almost 330,000 people. Its export garment market is worth about US$2.8

billion with majority of exports to the United States. In particular, exports of US$1.5 billion

in categories protected by U.S. quotas on shipments from China such as 338/339 (cotton knit

shirts) and 347/348 (cotton trousers) might be at risk as quotas expired at the end of 2008.

Actually, the increasing pressure in the U.S. market has already led to a decline in those large-

volume categories, causing the closure of some 30 garment factories, leaving about 30,000

workers unemployed. This shows the necessity for the country’s apparel industry to further

develop. The economic stimulus to extend the profit tax exemption for garment factories until

the end of 2009 appears to be not far-reaching enough. The absence of domestic spinning

and weaving companies due to prohibitive high energy costs will avoid a break through. To

safeguard employment, according investments seem to be crucial as low labor costs and high

ethical standards due to the International Labor Organization’s monitoring system will not be

enough to ensure long-term survival. Better Factories Cambodia runs a program of unannounced

factory visits to check on working conditions. Moreover, the international competitiveness of

its export industries - garment and tourism - is being undermined by high transaction costs and

the potential for diversifying the economy into other sectors as agro-industry and assembly is

correspondingly limited.

PR China

Cambodia 2007 2008 ± in %


Garment Factories 290 260 -10.3%

Apparel Workforce 361,900 330,000 -8.8%

Textile & Clothing Exports US$2.89 billion US$2.80 billion -3.2%

PR China 2007 2008 ± in %


Cotton Consumption 11,213,000 t 9,907,000 t -11.6%


Manmade Fiber Output 22.88 million t 23.45 million t +2.5%

Spun Yarn Output 20.0 million t 21.5 million t +7.5%

Short-Staple Spindles 99.0 million 104.4 million +5.5%

Open End Rotors 2.04 million 2.12 million +4.0%

Population (mid-year) 1,321,851,888 1,330,044,605 +0.6%

National Trade Balance US$262.2 billion US$295.5 billion +12.7%

Foreign Direct Investment US$74.8 billion US$92.4 billion +23.6%

FOREX Reserves US$1,528.2 billion US$1,946.0 billion +27.3%



Softening demand for Chinese exports and policy tightening by the authorities have trimmed

economic growth from 11.9% in 2007 to 9.1% last year. However, foreign direct investment rose

23.6% to a record US$92.4 billion. Outbound investment jumped 63.6% to US$40.7 billion,

with mergers and acquisitions accounting for half of that. Foreign investments proceed target-

oriented to upgrade Chinese industrial and strategic positions in global competition and to earn

financial returns from large multinational companies. A considerable portion also focusses on

energy and resource projects to secure the nation’s growing demand for power and raw materials.

The Chinese foreign exchange reserves have jumped to No.1 in the world at US$1,946 billion at

the end of 2008. The reserves grew, especially between 2002 and 2008 on average of US$247.7

billion per year, as a consequence of the accession to the WTO in 2001.

The appreciation of the Chinese currency against the U.S. Dollar and weaker economic growth

in industrial countries damped exports, as did a reduction in tax rebates on exports in the first

half of 2008. However, tax rebates on textile and garment exports have been lifted several times

in the second half after the clothing industry has witnessed an impressive wave of bankruptcies

and layoffs. Exports reached a new record high in trade surplus of US$295 billion, of which

textile and apparel exports accounted for almost 57%. Although the growth rate in exports of

textiles and clothing was the slowest in seven years, a total of US$185 billion was shipped

abroad.


For the first time since 2004, dynamics in textile exports were stronger, growing 16.6% in

2008 compared with a 4.1% growth in clothing exports. This clearly serves as proof of slowing

downstream activities. Further on, rising exports of yarns and fibers increasingly pressurize

spinning industries abroad.

The private consumption continued to be strong, despite a pickup in inflation. Retail sales grew

by 21.6% compared with 16.8% in 2007, supported by growth in real incomes. Nevertheless,

it cannot compensate reductions in foreign shipments. Annual spending on garments is only

US$75 per person or about 25% of what foreign tourists spend when visiting the country,

compared with more than US$700 clothing expenditure per capita in the United States.

This dependance on export production will remain, like the necessity of importing several raw

materials to fuel downstream apparel industry. Although the economic slowdown has resulted

in lower cotton imports of about 1.4 million tonnes (-44%), foreign supplies may increasingly

gain importance in the years to come as Chinese cotton farmers are likely to reduce cotton

growing area by 10-30% as a response to the economic climate.

Chinese government has declared textiles and apparel to be a “pillar industry of the nation”

and has spent tens of billions of U.S. Dollars to create an industrial sector that no nation on

earth can compete in. However, most of the textile and apparel mills have suffered from low

utilization rates, e.g. Weiqiao Cotton Mill, the largest cotton textile enterprise, inactivated two

million spindles to cut production. Explosive political issues may further arise from massive

layoffs, thousands of company closures and more than 20 million migrants returning to the

countryside jobless. Thus, it is not surprising to have witnessed several measures in an attempt

to cope with the downturn and to spur growth:

a) Transformation reform from production- to consumption-based VAT to encourage companies

to improve technology and to release their burden by US$17.5 billion. The textile industry is

expected to see tax relief totaling US$2.4 billion in 2009.

b) Boost wages of more than 50 million workers, lift ceiling on tax-free income and channel

more funds to low-income households as part of efforts to boost local consumption. Other pillars

of the plan include higher subsidies for low-income housing and lower health-care payments

for rural residents.

c) Export tax rebate on textile and garment again was increased several times to 16% from April

1, 2009.

d) The policy of security margin for light and textile processing trade was suspended.

e) Interest rates were slashed, dramatically stepping up the pace of monetary easing to help

cushion the blow of financial crisis.

Latest news arrived in April 2009 as the State Council announced a three-year plan (2009-2011)

to upgrade the textile and apparel industries. Cornerstones of this program will be to enhance

R&D for the development of new fibers and new applications, to increase automatization, to

reduce energy and water use, to develop the domestic market and to lower the dependance

on textile machinery imports from 40% down to 30%. At last, the VAT rebates for textile and

apparel exports will be further increased to a maximum amount of 17%.

Although economic slump is expected to continue, the perspectives for the Chinese textile

and clothing industry may look bright as it will seek to conquer an untapped US$40 billion

U.S. import market. Its share in total U.S. imports accounted for 35% in 2008, in non-quota

restricted categories its share went up to staggering 51%, but its share in quota-restricted

categories amounted to 20%. The total import value of quota-restricted categories was worth

US$51 billion, but China only supplied US$10 billion in 2008. Although the battle for market

shares in formerly quota-restricted categories will intensify because quota-restricted categories

are still on higher price levels, this opportunity opens up new vistas.


India

India’s growth may slow to 7.1% in the fiscal year to March 2009, the weakest pace since

2003. Inflation is expected to ease to less than 3% by March on falling commodity prices.

Private consumption, which accounts for about 60% of the US$1.2 trillion economy, is holding

up – an indication that recovery in India might be faster than in other countries. However, the

country has become increasingly vulnerable to economic slowdowns in other countries as trade

represents about 35% of gross domestic product. In addition, half the population is under the

age of 25, which represents a tremendous potential for considerable demographic and economic

growth.

The textile industry is strong in the conventional fiber-to-garment sectors with a surplus cotton

balance and the world’s largest polyester producer is domiciled in the country. The total output

of spun yarns and manmade fibers amounted to 6.5 million tonnes, consolidating its second

position in world textile industry. While spun yarn output was quite stable at 4.0 million tonnes,

manmade fibers declined, in particular due to losses in the polyester and viscose sector. This

industry plays a vital role in the local economy, constituting 4% of GDP, employing about 90

million people in textile and allied sectors, and exports account for about 20% of the country’s

total foreign revenues.

India 2007 2008 ± in %





Spun Yarn Output 3.96 million t 3.94 million t -0.7%

Short-Staple Spindles 38.88 million 41.22 million +6.0%

Open End Rotors 613.992 652.077 +6.2%

Population (mid-year) 1,129,866,154 1,147,995,898 +1.6%



According to the Ministry of Textiles, the number of installed spindles increased by 6.0%

to 37.0 million spindles, with 4.3 million (+6.1%) spindles in the small-scale industry not

included. Installations of open-end rotors were lifted by 5.7% to 483,000 at the end of last year,

again small-scale installations of about 169,000 (+7.2%) rotors not included. The total number

of spinning mills went up by 2.4% to 3,061.

Yield prospects are expected to be adversely impacted by a delay in cotton planting and less-

than-favorable weather conditions compared with last season. However, cotton yield still is

on quite a high level compared with results prior to cultivation of Bt seeds. According to the

Ministry of Agriculture, the area planted under official Bt seeds in the current season further

increased by 8% to 6.8 million hectare. Nevertheless, the offical target to achieve yields of 800

kg per hectare by 2010 seems to be a little to challenging.

Indonesia

The economy in Indonesia, Southeast Asia’s largest economy, expanded 6.1% last year, slowing

from 6.3% growth in 2007. An US$6.3 billion economic stimulus plan is intended to keep the

economy growing at not less than 4.5% this year. In 2008, the country recorded total direct

investments, both domestic and foreign, of US$17.1 billion, 20% higher than in 2007. While

foreign direct investment soared by 44% to US$14.9 billion, domestic investment fell 42% to

US$2.3 billion. Indonesia will likely face a tough time sustaining foreign investment growth

due to tight liquidity and fierce international competition. Indonesia’s per capita income rose

24% to US$2,271 in 2008, almost doubling in five years.

Industry manufacturing growth slowed because of rising wages, inflexible labor laws and low

investments in manufacturing. Low level of investments in the textile sector in recent years has

been a consequence of the banks’ reluctance to provide loans to this business. This is a particular

problem for the textile industry where the majority of installed textile and garment machines is

Indonesia 2007 2008 ± in %








older than 20 years. The government has teckled this issue already two years ago with a textile

industry revitalization program to help renew machinery. Under this program, which originally

only covered the textile industry, the government subsidizes part of the interest rate which

banks charged on loans so that manufacturers could buy new machinery. It disbursed US$19

million to 78 textile and garment manufacturers in 2007 and disbursed another US$23 million

in 2008. For 2009, textile and garments makers will be entitled to another US$27 million in

subsidies. Used machinery already is not eligible for benefit from the revitalization program

and the ban on imports of used machinery should help lift the technological profile. That is

crucial in today’s globalized competition as state-of-the-art equipment consumes less energy

and meets today’s quality requirements.

Additional obstacles that need to be addressed are smuggling of second hand clothes and a surge

in illegal imports, both issues slowly deteriorating the local market. The texile industry, one

of the ten core industry clusters, offers direct and indirect employment to 5.5 million workers

and achieved a trade surpus of about US$8 billion. Its large size with the fourth largest ring

spinning and the sixth largest manmade fiber capacity shows the national importance. Together

with the fourth largest population of about 238 million, the textile and apparel prospects should

be auspicious.

Nevertheless, capacities in both manmade fiber and spun yarn segment were temporarily

closed and output was down. However, companies embarking on a long-term strategy have

made investments that will enable them to take in an advantageous cost position due to new

equipment. For instance, Indorama Synthetics had commissioned a brand-new state-of-the-art

compact yarn spinning plant of 26,000 spindles, lifting total capacity now close to 450,000

spindles across the world.

Japan

Japan’s economy, the world’s second largest, shrank 0.6% - the first decline in nine years.

The export-reliant country suffered from plummeting exports at a record 22.9% in the fourth

quarter from last year’s period. Consumer spending, which accounts for about 55% of Japan

‘s GDP, and capital expenditure, a main driver of Japan’s eight-year economic recovery, also

both dropped.

Japan is the third largest clothing market in the world, after the United States and the European

Union. Average costs exceeding US$30 per operator hour, compared with Bangladesh, India,

Indonesia, Pakistan and Vietnam at below US$1 each, prevent a labor-intensive industry. Annual

clothing imports used to account for more than US$20 billion in recent years and even surged

last year thanks to the dramatic increase in the Yen against the US Dollar. The preponderance

of China-made clothing becomes obvious with an annual share of more than 80% in imports

since 2003. However, the Japanese government wants to broaden its purchasing base by moving

clothing import flows from PR China to other Asian countries. The target to reduce Chinese

imports to 50% from currently 83% opens up a roughly US$10 - 15 billion opportunity that

garment facilities in Bangladesh, Cambodia, Indonesia, Thailand and Vietnam might tap.

Japan 2007 2008 ± in %


Population (mid-year) 127,433,494 127,288,419 -0.1%

Manmade Fiber Output 1,192,848 1,070,904 -10.2%

Textile & Clothing Imports US$30.0 billion US$32.1 billion +6.8%


In the light of the severe economic recession, selective trade agreements with duty-free clothing

imports may be instrumental to ease the price pressure. Definitely those agreements appear

to be more straightforward than the increasing use of so-called safeguard actions and anti-

dumping tariffs. Nevertheless, all kinds of trade sanctions, while imposing textile quotas is now

against WTO rules, seem to be contrary to the idea of free trade. A mandatory precondition for

free trade is fair trade like Joe Biden, the U.S. Vice President, mentioned during the election

campaign in October 2008 in North Carolina. In consequence, as long as unfair trade and

competition still prevails, the vision of a free evolvement of market forces will not come true.

Korea

South Korea’s economy grew 2.7% in 2008, the weakest pace since 1999. The country relies

largely on exports, which accounted for 63.5% of GDP in 2008. Total year’s exports rose

13.8%, but the global economic slowdown has already led to a significant decline in the fourth

quarter. On the other hand, the country’s need to import nearly all its energy, making it the

world’s fifth largest crude oil buyer, has resulted in soaring imports in value terms following

the surging crude oil prices. This has already turned the 2007 trade surplus of US$14.6 billion

into a deficit of US$12.8 billion in 2008. Additionally, consumers have lost confidence amid

rising unemployment and inflation, while falling stock and property prices have reduced the

wealth of households.

As the country does not grow cotton, imports of raw cotton as well as cotton yarn imports give

information about the condition of the downstream garmenting industry.

2007 2008 ± in %


Spindles & Rotors 1,177,260 1,135,204 -3.6%


Balance of Trade +US$14.6 billion -US$12.8 billion




Last year’s contraction in the upstream spinning industry has further lost momentum. The

number of installed spindles was reduced by 4% to 1.1 million spindles, while the number of

looms dropped by 6% to 313 at the end of 2008.

To raise the overall competitiveness of the industry, closer cooperative ties with North Korea

are expected to offer access to a manufacturing base for cheaper priced textiles and clothing.

Recently, a new US$30 million textile company, a 50:50 joint venture between North and South

Korea, was inaugurated in Pyongyang. Taekwang Industrial Company has built a facility at the

North Korean border to produce annually 4,000 tonnes acrylic fiber, expected to start operation

in February 2009. The company with an annual acrylic fiber capacity of 57,000 tonnes in South

Korea is considering to transfer part of its production facilities in the South to the industrial

complex.

Malaysia

Malaysia, Southeast Asia’s third largest economy’s expansion has weakened to 4.7% in 2008

from 6.3%. The domestic momentum, high savings and relatively clean banking systems should

allow the country to flourish. Malaysia does not rely heavily on foreign capital, has large

reserves of foreign currency and a savings rate of 37%. Additionally, Malaysia recorded a

strong growth in foreign direct investments.

The government’s initiatives toward promoting investments were very well received. In 2008,

the approved manufacturing investments continued to clearly exceed the target set under the 3rd

Industrial Master Plan (2006-2020). Total investments accounted for US$18.1 billion with more

than 70% foreign investments. Domestic investments that achieved an all-time high in 2007

dropped by 37%. In total, 18 textile and apparel projects, valued at about US$120 million, were

approved. This corresponds with a 71% decline in approved investments over 2007.

The Malaysian textile industry is focused on producing medium- to high-end apparel. The

industry consists of four segments:

Malaysia 2007 2008 ± in %




Textile & Apparel Jobs 66,989 57,100 -14.8%



- primary textiles (polymerisation, spinning, weaving, knitting and wet processing),

- made-up textiles,

- made-up garments and

- textiles and clothing accessories.

A total of 662 companies is involved in the four segments. In addition, about 1,000 small

textiles and apparel companies, which are exempted from having to obtain manufacturing

licences, are in operation. They are mostly involved in made-up garment manufacturing. Textile

and clothing exports accounted for about 1.5% of Malaysia’s total exports of US$190 billion in

2008. The industry presently employs nearly 60,000 workers. The production index for textiles

and clothing has continued to decline from 90% in 2006 (2000 = 100%) to 80% in 2007 and

77% last year. While spun yarn production went down 2.9%, the output of manmade fibers rose

by 7.0%.

The export-driven industry weathered the current economic turmoil superbly despite a 7.5%

decline in shipments to the United States at US$666 million and a 9.3% drop in deliveries to

Turkey. To some extent, brisk domestic sales have helped the textile industry to compensate the

shortfall in main export markets. The industry’s practice of six-month forward-buying has not

yet affected the domestic industry. However, the downturn triggered by the crisis is expected to

take a turn for the worse in 2009.

A competitive disadvantage for the Malaysian textile industry is its minor contribution to the

country’s exports. Therefore, the domestic textile and apparel industry will most likely only

fractionally benefit from the US$18.1 billion - equivalent to 10% of one year’s gross domestic

product - economic stimulus package that Malaysia’s government unveiled in November 2008

and March 2009. To reduce the cost of doing business, the government has exempted levy

payments to the Human Resources Development Fund for six months for workers in the textile

industry with effect from February 1.

Pakistan

Pakistan’s GDP growth rate in 2008 was about 4.7%. Inflation jumped up to over 20% during

2008 from 8.8% in December 2007. As result of political and economic instability, the value of

Pakistani rupee has depreciated. The country faces an economic crisis and the government has

just started to implement reforms on petroleum and power prices, tightening monetary policy

and controlling expenditures.

Pakistan’s farm sector, accounting for a quarter of the economy, has developed at the disadvantage

of cotton. Current season’s cotton harvested area is 8% less than the earlier forecast at 2.8 million

hectares due to substitution to rice and corn. Unfavorable weather conditions and pest attack

have also adversely affected cotton productivity. In total, the governmental cotton production

target of 2.4 million tonnes will be clearly missed.

Additionally, Pakistani farmers are losing estimated US$770 million annually on unnecessary

pesticide spray on cotton cultivated from normal cotton seed and are losing their competitive

edge to Indian cotton farmers growing Bt cotton which requires less pesticide. Furthermore,

Pakistan 2007 2008 ± in %

Cotton Production 1,938,000 t 1,960,000 t +1.1%


Cotton Yarn Exports 680,188 t 524,470 t -22.9%


Balance of Trade -US$15.2 billion -US$14.0 billion +7.8%



60% of the current crop cotton are believed to be planted to illegal Bt cotton varieties or rather

to spurious seeds marketed under the name of Bt cotton.

In consequence, Pakistan is a net importer of extra long staple and medium long staple cotton

from the United States and, in general, of better grades of cotton. Actual season’s drop in

imports by 40% to 544,000 tonnes has its reason in falling textile and clothing demand. The

spinning sector, mainstay of Pakistan’s textiles, has been suffering from declining yarn sales

and rising production costs. Cotton yarn exports fell 23% in volume terms and 16% in value

terms at US$1.2 billion. Out of 450 spinning mills, 100 were closed and about 300 operated on

loss.

Taiwan

Taiwan’s economy just managed to stay on positive territory by growing 0.1% in 2008.

The worsening balance of trade mainly results from slowing exports. Private consumption

expenditure as well as private investments already turned negative during 2008.

Last year’s industrial production index showed a decline along the textile value chain. The textile

industry ended with a 18.0% lower volume of 2.1 million tonnes manmade fibers produced

and 174,000 tonnes cotton locally consumed. Textile production was confronted with a steep

drop of 30%, adjusting its output to the steadily declining apparel production. Consequentially,

textile and clothing exports declined by 7.9% to US$11.7 billion, now accounting for 3.3% of

Taiwan’s total exports.

Taiwan 2007 2008 ± in %



Balance of Trade US$27.4 billion US$14.8 billion -45.9%

Manmade Fiber Output 2,591,764 t 2,108,630 t -18.6%



Taiwan’s textile industry used to be a major foreign exchange earner, but growing competition

has forced several textile plants to relocate, where production costs are lower. Vietnam has

become an important production base for Taiwan’s textile industry. Tainan Spinning Co. has

520,000 spindles installed there.

Nevertheless, local textile manufacturers have been supported in an attempt to increase the

competitiveness against foreign textile companies. Taiwan Textile Federation, Taiwan`s largest

textile industry association, will invest US$8.3 million in four years to enhance the global

marketing partnerships with internationally renowned textile brands. The Taiwan Textile

Research Institute disclosed programs to strengthen Taiwan’s textile industry: (1) horizontal

integration of the entire textile industry, merging all of the related associations into one,

(2) vertical integration of the textile industry and (3) creating better designs and innovative

marketing schemes.

Given the high Taiwanese labor costs, the only promising direction seems to be manufacturing

of innovative and sophisticated textile products. Furthermore, with ecology and environmental

protection becoming increasingly popular, Taiwan should continue steadily increasing the

production of “green textile products”.

Thailand

Thailand, Southeast Asia’s second biggest economy, grew 3.0%. Renewed political uncertainties

and rising inflation have undercut consumption and investments in 2008. Despite higher labor

costs than most other suppliers in Asia, Thailand’s apparel industry resisted foreign competition

over the past four years. This may be a consequence of the steady upgrading of the local

industry towards high-end markets. Further on, the fall of the Baht helped in stimulating sales

while large availability of domestic textile materials remained a very strong advantage for Thai

Thailand 2007 2008 ± in %







producers. Thailand however benefited from a 16% decline in the Baht in 2008 against the U.S.

Dollar while the Renminbi gained 6.6%. Clothing exports to the European Union were much

stronger in the last year, thanks to the rise in the Euro. Textile and apparel exports rose 2.4%

to US$7.2 billion and this time, the value-added clothing export production turned positive, in

particular in manmade fiber and wool garments. Nevertheless, more than 10,000 Thai workers

in the textile and garment industries lost their jobs through a hundred plant closures in 2008.

The local cotton production is commercially meaningless at 3,000 tonnes as the government

still bans commercialization of all transgenic plants. In addition to that, the acreage expansion

for crops like cassava and sugarcane is more lucrative as the government does not subsidize

cotton prices or production and has been allowing raw cotton to enter the country duty-free for

several years.

Vietnam

Vietnam’s economy expanded 6.2% last year, the least in nine years and slower than an 8.5%

pace in 2007, as the crisis deepened. The government targets a growth rate of 6.5% this year. To

bolster growth, the government will use US$972 million from its stimulus package to subsidize

loans for companies that export, import or produce essential products for the economy. It may

subsidize garment and textile shipments and halve cotton-import taxes to 5% to help the nation’s

second-biggest export earner.

Vietnam 2007 2008 ± in %


Cotton Consumption 207,000 t 229,000 t +10.6%





Vietnam’s textile industry employed around two million workers, according to the association,

and generated about 15% of the nation’s exports by value last year. The textile industry is

actually targeting exports of about US$10 billion this year compared with US$9.1 billion in

2008. However, textile shipments from Vietnam fell 12% to US$1.2 billion in the first two

months of 2009 but increasing 6.0% to US$909 million to the United States. This shows the

impressive dependance on the U.S. market, where total textile and clothing imports fell by

13.5% to US$13.1 billion in the two-month period of 2009.

As demand from overseas customers already started falling by 20% in the fourth quarter of

2008, several large and medium-sized companies have shut down. The actual number may be

much higher than that as small companies do not report closures. About 100,000 textile workers

have lost their jobs in January and February 2009 as orders slumped.

The governmental roadmap for the textile and garment industry, always very welcome to have

a strategic approach to the development of an essential business, targets 16-18% annual growth

in production and 20% growth in exports over the next two years. The industry is expected to

achieve revenues of US$14.8 billion in 2010, rising to US$31 billion in 2020. It also targets

exports of US$12 billion in 2010 and US$25 billion in 2020. To achieve the targets, the focus

is on expanding local raw materials and seeking more investments.

Under the 2001-2010 cotton development program, Vietnam aimed to expand the cotton acreage

to 150,000 hectares to produce approximately 80,000 tonnes but the actual output of 2,600

tonnes is way below the official target. In fact, the acreage under cotton cultivation has been

shrinking year on year, except for the 2002-03 crop when it reached a record high of 32,000

hectares. Current cotton acreage has been reduced to 6,000 hectares as farmers grew other crops

compared with target for 2010 of 150,000 hectares.

The government also plans to build textile and garment industrial parks and to seek more local

and foreign investments in the industry, especially in dyeing, weaving and producing cotton

and synthetic fibers. Though Taiwan is already the largest foreign direct investment contributor

to Vietnamese textiles, Vietnam’s textile industry is attempting to lure still more investors.

According to statistics from the Vietnam Textile Association, there are about 500 foreign textile

and apparel facilities operating in Vietnam, of which 150 are Taiwanese.

A more short-term relief for Vietnam’s textile and clothing industry may result from the recently

signed free trade agreement with Japan. Vietnamese apparel and textile products are expected to

greatly benefit from this agreement. Secondly, the recommendation from Le Quoc An, chairman

of Vietnam Textile and Apparel Association, to focus more on local consumers may help to


cope with shrinking exports. The home market is attractive with a population of 86 million

people. Apparel accounted for 5% of the country’s US$45-billion retail market last year and the

market is forecast to grow to US$6 billion by 2010. According to a recent survey conducted by

Business Studies and Assistance Center, consumers in the 20 to 45 age group in Ho Chi Minh

City spend 18.5% of their income on clothes, compared with 11% the year before. Finally, from

a manufacturer’s point of view, producers can earn a higher profit by selling locally instead of

exporting apparel.

6.3 Greater Europe

Turkey

Turkey’s economy expanded 1.1% in 2008, bringing GDP per head to about US$10,400 in the

European Union membership candidate of 76 million. The unemployment rate of more than

13% reached a historic high as falling orders from home and abroad sparked massive job losses

in manufacturing. Inflation was strong at 10% at the end of 2008 and interest rates are at a very

high level. An agreement could be soon concluded with the International Monetary Fund (IMF)

to help weather the global crisis. At least, Turkish government and IMF have agreed in principle

on the conditions of a new loan deal worth up to US$45 billion.

The textile and apparel industry has been the backbone of the Turkish economy, accounting

for 8% of GDP, 16% of total industrial production and 11% of manufacturing jobs. Textile

and apparel exports account for 20% of total Turkish export earnings. There are an estimated

7 million spindles and 550,000 rotors in Turkey. Total textile sales are about US$50 billion,

of which half are exports. Total investments in the sector exceeded US$50 billion in the last

decade. At first sight, last year’s export performance was satisfying in the light of the global

economic slowdown. However, it is deceptive, as the crisis in the textile industry began way

before the global economic slowdown, generated by a low exchange rate combined with high

input costs and a high interest rate policy. Exports started declining already in the second half

of 2008 with textile and apparel exports falling more than 25% in December. At the same

time, clothing imports continued increasing. The 24% fall of the Lira in 2008 against the US

Dollar has among other things caused a slowdown in imports. The Turkish currency also lost

21% against the Euro and this should limit the current fall in exports. Additionally, slowing

apparel exports are also reflecting the current relocation of the Turkish clothing industry to

other countries in the region.

Greater Europe 2007 2008 ± in %



Wool Consumption 422.400 t n/a n/a

Turkey 2007 2008 ± in %




Foreign Direct Investment US$22.0 billion US$17.7 billion -19.6%




Consequence of such unfavorable circumstances was a dramatic number of company closures.

Reportedly, more than half the mills either seized operations or began working at a reduced

capacity. In addition to that, about 40 mills have either moved to low cost countries such as

Egypt or sold their machinery to other countries, such as India. Industry sources indicate that

more than 1 million spindles of spinning capacity have moved out of the country during the last

twelve months. Yarn producers were especially hard hit, partly due to surging imports in the

past years. Anti-dumping sanctions were taken to protect spun and filament yarn manufacturers

from competitors in Asia, but this could not prevent a sharp fall in production. Further on,

the steep decline in the planting area of 27%, the lowest cotton planting level since 1995,

has drastically lowered local availability of cotton. Better returns on corn and wheat, lack of

irrigation water, ecological problems and insufficient crop supports caused the decline. The

government plans to allocate about US$12 billion in five years and to irrigate a total of 1.7

million hectares of land. In an attempt to persuade farmers in the region to continue planting

cotton, the Agricultural Minister also announced that seed cotton will be under a production

bonus system until 2011. The chart below shows the dramatic crash with a reduction of cotton

use of 36% in just two years.

The government has presented an economic stimulus package in February 2009 to reduce some

corporate tax on investments by up to 90% and also cut taxes in textiles and retail apparel by

75% for a five-year period if they move their plants to certain cities. It has further imposed

registration requirements for textile and apparel imports. It seems questionable whether those

measures will result in a sustainable recovery.

Uzbekistan

Uzbekistan 2007 2008 ± in %

Cotton Production 1,124,700 t 1,174,200 t +4.4%

Cotton Exports 958,000 t 653,000 t -31.8%

Cotton Yarn Outpuut 152,000 136,100 -10.5%

Textile-related FDI US$87 milliom US$119 million +36.8%



Uzbekistan, producing a 9.0% growth of GDP last year, is the world’s sixth largest producer of

cotton with an output volume of 1.2 million tonnes in 2008, up 4.4%. Weather-related problems

and ongoing irrigation shortages have lowered yields and the need to increase production of

food crops in order to meet domestic demand will lead to a reduction of the cotton planted area

by 100,000 hectares to 1.315 million hectares in the current and next season.

Cotton represents 20% of the country’s exports and accounts for over 15% of its GDP. The fall

in current season’s cotton exports by 32% is partly related to the economic slowdown. More

essentially, it is result of the growing number of North American and European companies and

retailers that have taken measures to exclude Uzbek cotton from their merchandise because of

alleged abuse of children in the cotton fields.

Official reports state around 150 mills under Uzbekengilsanoat Association, representing more

than 90% of the country’s capacity and output. Of these mills, 90 are involved in the production

of yarn and woven cloth, a further 50 produce knitted garments, 12 manufacture ready-made

garments and 3 produce hosiery goods. Although current capacity allows for the production of

250,000 tonnes of yarn, 480 million sqm of fabric, 110 million pieces of knitted garments and

40 million pairs of hosiery, the current capacity utilization rate is much lower.

The Uzbek government has worked out a state program on development of textile industries

between 2007 and 2012 with a total of 79 projects worth US$615 million to help create about

36,200 new jobs and to produce 407,100 tonnes of cotton yarn by 2012. In 2007, over US$87

million of foreign investments were addressing the industry with 23 new companies coming

on-stream and creating some 10,000 new jobs. Last year, 25 new textile enterprises were

established with an annual capacity to produce 45,100 tonnes of cotton yarn, 22.8 million

units of clothing and knitwear as well as 2,400 tonnes of stockinet. The Uzbek state controlled

joint stock company, Uzbekengilsanoat International, will set up seven new greenfield spinning

mills with a combined annual capacity of 27,000 tonnes cotton yarn of various counts, when

fully operational in the next few years. Some Turkish manufacturers, forced by low exchange

plants to Uzbekistan as four factories that produce cloth and yarn in Bursa are up for sale. Even

a heavyweight in textiles like Japan’s Toray Industries has found out how the land lies to launch

a production of finished textile goods.


6.4 Africa

The industry is very much fragmented with the top five cotton producing countries – Burkina

Faso, Tanzania, Egypt, Nigeria and Benin - accounting for just half the continent’s total output.

Still some 70% of regional output is being exported, enabling other industries to improve value-

added production, although this would be of vital importance for those low income cotton

producing nations.

Burkina Faso

Burkina Faso is expected to rebound cotton production to 185,000 tonnes after an extremely

disappointing year in 2007/08. The cotton area will likely increase by 10% to 440,000 hectares

in the actual season. This may be result of the US$15 million subsidy on seed and fertilizer.

Additionally, the country has planted 8,000 hectares of Bt cotton in 2008/09.

Several African nations are forecast to significantly increase its current season’s cotton

production, such as Cameroon (+17% at 54,000 tonnes), Sudan (+71% at 41,000 tonnes),

Tanzania (+85% at 124,000 tonnes), Uganda (+70% at 22,000 tonnes) and Zambia (+35%).

However, the local cotton consumption is predicted to increase in not even a single African

country.

Although African cotton industries set goals to develop the textile industry, most of them

appear to be not realistic. These nations need to overcome a number of obstacles, like access to

technical and financial resources, abolition of direct subsidies to production provided in other

countries as well as improvement in research, yields, quality of seeds and fiber, logistics as well

as downstream textile chain.

Ethiopia

Ethiopia’s US$500 million target for textile and apparel exports has been postponed two years

as the ambitious projections are lagging way behind with exports amounting to less than US$15

million in 2007. Now, the authorities aim to achieve the export target by 2011. Ethiopia offers

a low cost production location but prior to setting up vertically integrated textile and garment

operations, it appears to be crucial to improve the quality of cotton spinning and textile mills

under the special guidance of the Ethiopian Textile and Garment Manufacturers’ Association.

However, an integrated Turkish textile group, Ayka Addis Textile and Investment Group, has

recently started-up its spinning mill with a capacity to process 20 tonnes of cotton per day.

Other Turkish investments are in the governmental focus. In total, the Ministry of Trade and

Africa 2007 2008 ± in %

Cotton Production 1.2 million t 1.2 million t +0.7%


Wool Consumption 73.600 t n/a n/a

Burkina Faso 2007 2008 ± in %

Cotton Production 147,000 t 185,000 t +25.9%




Industry assumes that this goal requires investments of US$1.6 billion to install around 48 units

for spinning, approximately 31 for grey textile production, nearly 22 in knitted sector, 53 in

woven, 31 in garment and 6 for finished textile.

Tanzania

Tanzania is also in the process of developing and promoting the textile industry by inviting

investors to expand garment production. The program aims at doubling productivity of

seed cotton to 1,500 kg per hectare by 2010 and to 2,500 kg by 2015 compared to 300 kg at

present.

Zambia

Zambia, planning to diversify its economy away from copper mining, will award farm land to

foreign investors to improve agricultural production and reduce food shortages. It has created

two major farm blocs, each over 100,000 hectares in size for farmers to grow cash crops.

The project has however been hindered by delays in setting up the required infrastructure.

The Ministry of Trade and Industry is currently considering to impose additional duties on

imports of textile and clothing to help the ailing domestic sector. Just recently, the Zambia-

China Mulungushi Textiles Joint Venture Ltd. has been restarted. The textile company has

an annual capacity to produce 1,800 tonnes of cotton yarn, 17 million meters of fabrics and

100,000 units of garments. Over the years the mill went in to backward integration and also set

up cotton ginneries.

Egypt

Egypt’s economic recovery continued with an expansion of real GDP by 7.2% in 2007/08, the

fastest pace of growth in more than a decade. The country realized significant improvements

in various business segments, on the back of the reform program, initiated in 2004. Such

improvements created a better investment climate, attracting foreign investors to engage

in various projects, looking for lucrative margins realized from vast available investment

opportunities. This was reflected by the incline of inflows from foreign direct investment,

jumping by 36% to US$17.8 billion in 2007/08. Thus, Egypt has evolved into the leading

recipient country in Africa.

Egypt 2007 2008 ± in %



Cotton Exports 137,000 t 54,000 t -60.6%





The year 2008 witnessed skyrocketing rates of inflation. The accelerated money supply in the

market, resulting from the encouraging investment climate, led to an increase in consumption,

which was not met by sufficient production levels, resulting in higher local prices. Inflation

rate reached its peak in August 2008, as it reached 23.6%, compared to 6.9% in December

2007. However, the latest inflation figures reflect a decline as inflation rate stood at 18.3% in

December 2008. This came as a result of the drops in international food and energy prices.

As more than half the 82 million population is younger than 25, Egypt needs a sustainable

growth to create jobs and lower the unemployment rate. A labor intensive apparel industry

could be beneficial but the 16% decline in cotton use is a clear indicator for the domestic

condition of the textile chain. It had lost competitiveness due to mostly operating on outdated

equipment and financial difficulties of textile companies. However, foreign investments in the

textile and apparel segment may help to lift the technological profile.


7. Nonwovens and Other Unspun End-Uses

Last year’s output of nonwovens and unspun end-uses has witnessed a decline by 3.5%

to 6.7 million tonnes after a long expansion phase. The majority of about 6 million tonnes

well as padding material for reinforced building structures.

Unlike the spinning industry, bad news about closures or restructuring measures in the nonwovens

industry were significantly less. For instance, DuPont has closed one of its nonwoven lines at

its Old Hickory plant. Fiberweb is in the process of reducing its twelve European spunbond

lines in France, Germany and Sweden by a third as more competitive capacity will start-up in

Italy by mid-2009 and closing its loss-making airlaid plant in Italy. Freudenberg has shut down

production at two U.S. manufacturing lines that were serving the North American automotive

markets. PGI closed its U.S. facility, which produced carded thermal and chemical bonded

products for hygiene and medical markets. This listing makes no claim to be complete. On the

other hand, investments for new capacity were spread across the world. Quite active in last

year’s investments was Ahlstrom Corp. with a glassfiber tissue plant in Russia, needlepunch

lines for dust filtration in South Carolina and PR China, a spunlace line for wipes in Brazil,

a spunmelt line for infusion materials in the UK, an industrial nonwovens line in Italy and,

finally, a medical nonwovens plant in India with scheduled start-up in 2009.

Spunlaid nonwovens still take the quantitative lead in the web forming process. Announcements

for spunlaid investments to come on-stream in 2008/09, indicating an addition of annual capacity

of more than 150,000 tonnes, will outpace last year’s production growth of almost 4% at about

2.7 million tonnes. The reason for this sustainable growth is that spunlaid technology offers

the advantage, which makes it the benchmark for efficiency, of skipping a production stage.

From polymers in the beginning it delivers finished fabrics. The other technologies start from

raw material to fiber and then to a finished fabric. Spunmelts are mainly addressing hygiene

products such as baby and adult diapers, feminine care, and medical products such as protective

apparel. Spunmelts have also expanded into more technical end-uses for construction, coating

substrates, automotive, agriculture, battery separators or packaging. The current market share

of polypropylene in spunmelts accounts for nearly 80%. Bi-component materials will continue

to witness above-average growth rates.


The ongoing growth in this sector is being expressed by expanding spunlaid capacity as well as

retrofitting and upgrading existing spunlaid technology. While big-scale manufacturing nations

like PR China and the United States have enjoyed an ongoing flow of investments, Brazil and

Mexico were also in the focus from majors like Companhia Providencia, the largest nonwovens

producer in Latin America, and PGI that enjoyed the sixth consecutive year of revenue growth to

US$1.15 billion (+8.1%) in 2008. Fitesa, among the largest polypropylene nonwoven producers

in the world, will build a new US$120 million facility in South Carolina. In addition to that,

new capacity came on-stream in emergent medical and hygiene markets like Poland and Russia.

Finally, Ahlstrom has started up its new nonwovens line in the UK.

Carded nonwovens output was down by 2% to about 2.4 million tonnes. This technology with

four web forming processes has continuously lost market shares. The chart below illustrates

changes in this segment in favor of the spunlace process.

The spunlaced technology has continued to benefit from further growth in hygiene and

household wipes in Western Europe and North America due to its specific properties such as

soft hand and drapability. As new requirements in interior automotive products and filtration

had triggered considerable investments in 2007/08 around the globe, last year’s main challenge

was to maintain a continuous production process and optimize utilization rates. Consequently,

new investments were at quite low level. Anjani Non-wovens, an Indian nonwovens industry

newcomer, will start spunlace production mid-2009 to manufacture cotton pads and wipes

mainly for exports to Europe, Japan and the United States.

The traditional method of needlepunching is an eco-friendly technology, as it allows processing

any kind of recycled material like RPET fibers. The range of fibers comprises staple fibers

and continuous filaments, making needlepunching a very universal and flexible technology.

While needlepunched products have been experiencing a steady growth over the last decade,

thermal and resin bonded applications have developed below average. The largest market for

carded thermal bonded polypropylene nonwovens was cover stock. The shift from carded

fabrics towards spunbonded materials due to more cost-effective production for low weight

materials could not be compensated by developing new markets. In mid-2008, investments

for needlepunched nonwovens were completed in PR China, Denmark, Germany, Middle East

and the United States. While Fibertex Group in Denmark has replaced older equipment, a new

line for the industrial fabric production at Foss Manufacturing Co, one of the world’s largest

manufacturers of needlepunched nonwovens, went into service.


The demand for airlaid nonwovens mainly used in wipes, hygiene products and absorber pads

for the food industry was slightly up to about 450,000 tonnes in 2008. All major manufacturers

were profitable after the industry has recovered from undamped capacity additions in the early

2000s. Despite a downsizing of Buckeye Technologies at its Canadian facility at the beginning

of last year, sales steadily increased until the October-December period when revenues fell

at a double-digit rate. This will lead to a reduction of planned capital spending by a third

this year. Furthermore, some new capacity came on-stream or is about to start-up. Concert

Industries Corp., a manufacturer of cellulose fiber-based airlaid products for hygienic end-uses

with manufacturing locations in Germany and Canada, will increase capacity at its German

plant. The investment of about US$80 million is expected to start-up in September 2009. Mid-

2008, Fiberweb (China) Airlaid Co. Ltd. has started operations at its Tianjin expansion project,

increasing total annual capacity in PR China by about two thirds to 26,000 tonnes. Finally,

Fibertex Group from Denmark has modernized its airlaid line in the Czech Republic in the

middle of last year.

Investments in the highly concentrated segment of wetlaids were less. The big players in this

industry are Ahlstrom Corp. and Hollingsworth & Vose Co., accounting for about half the world

production. The output remained static at about 230,000 tonnes in 2008. The main products are

tea bag and filter materials, medical barrier fabrics, speciality wipes, battery separators and

several other small-sized applications. As the technology is fairly mature, some end-uses have

been substituted by other nonwoven technologies.

The most dynamic technology has been spunlaid, taking in a 46% world market share. Carded

nonwovens have performed at significantly lower growth rates in the previous decade, now

accounting for a 42% share.



Sectors covered by Oerlikon Textile business units Sectors covered by Oerlikon Texti


Textile business units with partners Sectors not covered by Oerlikon Textile business units


World Fiber Use

Unit: ‘000 tonnes

* cotton, wool and silk included

Year Natural *Manmade

‘000 tonnesTOTAL

Population

billion

Consumption

kg / capita

2008 25,171 42,156 67,327 6.75 10.0

2007 28,012 44,161 72,173 6.64 10.9

2006 28,205 40,864 69,069 6.57 10.5

2005 26,641 39,512 66,153 6.49 10.2

2004 24,970 37,463 62,433 6.41 9.7

2003 22,672 35,228 57,900 6.34 9.1

2002 22,761 33,477 56,238 6.23 9.0

2001 21,941 31,595 53,536 6.15 8.7

2000 21,496 31,147 52,643 6.08 8.7

1999 21,266 29,400 50,666 6.00 8.4

1998 19,990 28,296 48,286 5.92 8.2

1997 20,189 27,523 47,712 5.85 8.2

1996 20,237 24,680 44,917 5.77 7.8

1995 19,600 23,594 43,194 5.69 7.6

1994 19,461 22,613 42,074 5.61 7.5

1993 19,631 20,765 40,396 5.53 7.3

1992 19,673 20,481 40,154 5.45 7.4

1991 19,740 19,738 39,478 5.37 7.4

1990 21,460 19,380 40,840 5.28 7.7

1989 21,409 18,944 40,353 5.20 7.8

1988 21,072 18,543 39,615 5.11 7.8

1987 20,638 17,864 38,502 5.02 7.7

1986 20,743 16,886 37,629 4.94 7.6

1985 17,732 16,259 33,991 4.85 7.0

1984 16,240 15,764 32,004 4.77 6.7

1983 15,705 14,850 30,555 4.69 6.5

1982 15,469 13,597 29,066 4.61 6.3

1981 15,189 14,631 29,820 4.53 6.6

1980 15,227 14,301 29,528 4.46 6.6

1975 13,349 10,677 24,026 4.09 5.9

1970 13,484 8,394 21,878 3.71 5.9

1965 13,401 5,486 18,887 3.35 5.6

1960 11,607 3,367 14,974 3.04 4.9

1950 7,723 1,681 9,404 2.56 3.7


Consumption of Natural Fibers

Unit: ‘000 tonnes

Year Cotton Wool Silk TOTAL ± in %

2008 23,907 1,164 100 25,171 -10.2%

2007 26,713 1,201 98 28,012 -0.7%

2006 26,875 1,232 98 28,205 5.9%

2005 25,328 1,216 97 26,641 6.7%

2004 23,658 1,214 98 24,970 10.1%

2003 21,344 1,231 97 22,672 -0.4%

2002 21,398 1,271 92 22,761 3.7%

2001 20,536 1,317 88 21,941 2.1%

2000 20,067 1,343 86 21,496 1.1%

1999 19,820 1,363 83 21,266 6.4%

1998 18,527 1,386 77 19,990 -1.0%

1997 18,690 1,424 75 20,189 -0.2%

1996 18,727 1,439 71 20,237 3.3%

1995 17,998 1,510 92 19,600 0.7%

1994 17,774 1,618 69 19,461 -0.9%

1993 17,885 1,678 68 19,631 -0.2%

1992 17,870 1,736 67 19,673 -0.3%

1991 17,745 1,928 67 19,740 -8.0%

1990 19,406 1,988 66 21,460 0.2%

1989 19,388 1,955 66 21,409 1.6%

1988 19,122 1,886 64 21,072 2.1%

1987 18,743 1,832 63 20,638 -0.5%

1986 18,891 1,789 63 20,743 17.0%

1985 15,929 1,744 59 17,732 9.2%

1984 14,440 1,744 56 16,240 3.4%

1983 13,993 1,657 55 15,705 1.5%

1982 13,782 1,632 55 15,469 1.8%

1981 13,516 1,616 57 15,189 -0.2%

1980 13,575 1,599 53 15,227 2.7%

1975 11,723 1,578 48 13,349 -0.2%

1970 11,784 1,659 41 13,484 0.1%

1965 11,884 1,484 33 13,401 2.9%

1960 10,113 1,463 31 11,607 4.2%

1950 6,647 1,057 19 7,723 n/a


Production of Manmade Fibers

Year Cellulosics * Synthetics TOTAL

2008 3,339 -9.1% 38,817 -4.1% 42,156 -4.5%

2007 3,672 7.5% 40,489 8.1% 44,161 8.1%

2006 3,414 5.0% 37,450 3.3% 40,864 3.4%

2005 3,252 1.0% 36,260 5.9% 39,512 5.5%

2004 3,220 9.0% 34,243 6.1% 37,463 6.3%

2003 2,953 6.1% 32,275 5.2% 35,228 5.2%

2002 2,783 4.6% 30,694 6.1% 33,477 6.0%

2001 2,661 -3.5% 28,934 1.9% 31,595 1.4%

2000 2,758 6.9% 28,389 5.8% 31,147 5.9%

1999 2,579 -7.1% 26,821 5.1% 29,400 3.9%

1998 2,775 -3.6% 25,521 3.6% 28,296 2.8%

1997 2,879 0.3% 24,644 13.0% 27,523 11.5%

1996 2,870 -3.5% 21,810 5.8% 24,680 4.6%

1995 2,973 4.9% 20,621 4.3% 23,594 4.3%

1994 2,834 3.3% 19,779 9.7% 22,613 8.9%

1993 2,743 -1.6% 18,022 1.9% 20,765 1.4%

1992 2,788 -4.7% 17,693 5.2% 20,481 3.8%

1991 2,924 -8.3% 16,814 3.8% 19,738 1.8%

1990 3,189 -4.6% 16,191 3.8% 19,380 2.3%

1989 3,342 -0.9% 15,602 2.8% 18,944 2.2%

1988 3,371 2.6% 15,172 4.1% 18,543 3.8%

1987 3,286 1.4% 14,578 6.8% 17,864 5.8%

1986 3,241 0.2% 13,645 4.8% 16,886 3.9%

1985 3,234 -4.5% 13,025 5.2% 16,259 3.1%

1984 3,387 2.3% 12,377 7.3% 15,764 6.2%

1983 3,310 3.6% 11,540 10.9% 14,850 9.2%

1982 3,194 -7.8% 10,403 -6.8% 13,597 -7.1%

1981 3,464 -1.6% 11,167 3.6% 14,631 2.3%

1980 3,522 1.8% 10,779 7.7% 14,301 6.0%

1975 3,216 -2.2% 7,461 9.2% 10,677 4.9%

1970 3,585 1.0% 4,809 18.7% 8,394 8.9%

1965 3,446 5.3% 2,040 23.7% 5,486 10.3%

1960 2,664 5.2% 703 58.6% 3,367 14.9%

1950 1.611 n/a 70 n/a 1,681 n/a

Unit: ‘000 tonnes

* since 2002 with Tencel® included


Global Fiber Consumption

Unit: ‘000 tonnes

Year Cotton Wool Synthetics Cellulosics TOTAL

1960 68% 10% 5% 18% 14,974

1970 54% 8% 22% 16% 21,878

1975 49% 7% 31% 13% 24,026

1980 46% 5% 37% 12% 29,528

1985 47% 5% 38% 10% 33,991

1986 50% 5% 36% 9% 37,629

1987 49% 5% 38% 9% 38,502

1988 48% 5% 38% 9% 39,615

1989 48% 5% 39% 8% 40,353

1990 48% 5% 40% 8% 40,840

1991 45% 5% 43% 7% 39,478

1992 45% 4% 44% 7% 40,154

1993 44% 4% 45% 7% 40,396

1994 42% 4% 47% 7% 42,074

1995 42% 3% 48% 7% 43,194

1996 42% 3% 49% 6% 44,917

1997 39% 3% 52% 6% 47,712

1998 38% 3% 53% 6% 48,286

1999 39% 3% 53% 5% 50,666

2000 38% 3% 54% 5% 52,643

2001 38% 2% 54% 5% 53,536

2002 38% 2% 55% 5% 56,238

2003 37% 2% 56% 5% 57,900

2004 38% 2% 55% 5% 62,433

2005 38% 2% 55% 5% 66,153

2006 39% 2% 54% 5% 69,069

2007 37% 2% 56% 5% 72,173

2008 36% 2% 58% 5% 67,327



Cellulosics * Synthetics

Year Filament Staple TOTAL Filament Staple TOTAL

2008 370 2,969 3,339 23,509 15,308 38,817

2007 448 3,224 3,672 24,122 16,367 40,489

2006 448 2,966 3,414 21,814 15,636 37,450

2005 456 2,796 3,252 20,947 15,313 36,260

2004 482 2,738 3,220 19,639 14,604 34,243

2003 474 2,479 2,953 18,393 13,882 32,275

2002 463 2,320 2,783 17,368 13,326 30,694

2001 480 2,181 2,661 16,334 12,600 28,934

2000 533 2,225 2,758 15,995 12,394 28,389

1999 527 2,052 2,579 15,040 11,781 26,821

1998 581 2,194 2,775 14,141 11,380 25,521

1997 611 2,268 2,879 13,235 11,409 24,644

1996 640 2,230 2,870 11,594 10,216 21,810

1995 654 2,319 2,973 10,903 9,718 20,621

1994 630 2,204 2,834 9,957 9,822 19,779

1993 652 2,091 2,743 8,925 9,097 18,022

1992 695 2,093 2,788 8,577 9,116 17,693

1991 759 2,165 2,924 8,025 8,789 16,814

1990 837 2,352 3,189 7,637 8,554 16,191

1989 927 2,415 3,342 7,156 8,446 15,602

1988 950 2,421 3,371 6,855 8,317 15,172

1987 915 2,371 3,286 6,436 8,142 14,578

1986 934 2,307 3,241 6,026 7,619 13,645

1985 933 2,301 3,234 5,792 7,233 13,025

1984 959 2,428 3,387 5,444 6,933 12,377

1983 983 2,327 3,310 5,065 6,475 11,540

1982 967 2,227 3,194 4,612 5,791 10,403

1981 1,053 2,411 3,464 4,986 6,181 11,167

1980 1,130 2,392 3,522 4,854 5,925 10,779

1975 1,148 2,068 3,216 3,790 3,671 7,461

1970 1,391 2,194 3,585 2,398 2,411 4,809

1965 1,372 2,074 3,446 1,124 916 2,040

1960 1,131 1,533 2,664 417 286 703

1950 872 739 1,611 54 16 70

Unit: ‘000 tonnes



World Production of Synthetic Fibers

Unit: ‘000 tonnes

Year Polyester Polyamide Acrylics Others TOTAL

1970 34% 40% 21% 5% 4,809

1975 45% 33% 19% 3% 7,461

1980 47% 30% 19% 4% 10,779

1985 50% 26% 18% 6% 13,025

1986 50% 26% 18% 6% 13,645

1987 52% 25% 17% 6% 14,578

1988 53% 25% 16% 6% 15,172

1989 54% 24% 15% 7% 15,602

1990 53% 24% 14% 9% 16,191

1991 54% 22% 14% 10% 16,814

1992 56% 21% 13% 10% 17,693

1993 57% 20% 13% 10% 18,022

1994 58% 18% 13% 11% 19,779

1995 60% 19% 12% 9% 20,621

1996 61% 18% 12% 9% 21,810

1997 63% 16% 11% 10% 24,644

1998 65% 15% 10% 10% 25,521

1999 66% 15% 9% 10% 26,821

2000 66% 14% 9% 11% 28,389

2001 67% 13% 9% 11% 28,934

2002 68% 13% 9% 10% 30,694

2003 69% 12% 8% 10% 32,275

2004 70% 12% 8% 10% 34,243

2005 72% 11% 7% 9% 36,260

2006 73% 11% 7% 9% 37,450

2007 76% 10% 6% 8% 40,489

2008 78% 9% 5% 8% 38,817



mill. tonnes 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

PR China 5.8 6.7 8.2 9.9 11.7 13.7 17.5 19.5 22.9 23.5

USA 4.1 4.2 3.6 3.8 3.8 3.7 3.4 3.1 3.0 2.8

India 1.8 1.9 1.9 2.0 2.0 2.2 2.2 2.5 2.8 2.5

Taiwan 3.1 3.2 3.1 3.2 3.2 3.2 2.8 2.6 2.6 2.1

South Korea 2.7 2.8 2.4 2.3 2.2 2.1 1.7 1.5 1.5 1.4

Indonesia 1.2 1.4 1.5 1.4 1.3 1.2 1.2 1.2 1.2 1.1

Japan 1.5 1.5 1.5 1.3 1.2 1.2 1.2 1.1 1.1 1.0

SUBTOTAL 20.3 21.7 22.1 23.9 25.5 27.3 29.9 31.6 35.1 34.4

ROW 9.1 9.4 9.5 9.6 9.7 10.2 9.7 9.3 9.0 7.8

TOTAL 29.4 31.1 31.6 33.5 35.2 37.5 39.5 40.9 44.2 42.2

mill. tonnes 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

PES FY 10.1 10.7 11.2 12.0 12.9 13.8 15.3 16.0 18.3 18.3

PES SF 7.6 8.1 8.3 8.8 9.4 10.1 11.0 11.5 12.4 12.1

PA FY 3.4 3.6 3.3 3.5 3.5 3.7 3.6 3.7 3.6 3.3

PA SF 0.5 0.5 0.4 0.5 0.5 0.4 0.4 0.4 0.3 0.3

PP 2.6 2.8 2.9 3.0 3.0 3.1 3.0 3.0 2.9 2.6

PAN 2.5 2.6 2.6 2.7 2.7 2.7 2.6 2.5 2.4 1.9

Cellulosics * 2.6 2.8 2.7 2.8 3.0 3.2 3.2 3.4 3.7 3.3

Others 0.2 0.2 0.3 0.3 0.3 0.4 0.4 0.4 0.5 0.5

TOTAL 29.4 31.1 31.6 33.5 35.2 37.5 39.5 40.9 44.2 42.2



Top 3 Producing Countries

Unit: ‘000 tonnes

* Turkey included

PES FY 2008 share 2005 share 2000 share 1995 share

PR China 12,829 70.3% 8,903 58.3% 3,152 29.5% 1,022 15.7%

India 1,335 7.3% 1,039 6.8% 829 7.8% 344 5.3%

Taiwan 1,012 5.5% 1,275 8.4% 1,525 14.3% 1,225 18.8%

SUBTOTAL 15,176 83.1% 11,217 73.5% 5,506 51.6% 2,591 39.8%

PES SF 2008 share 2005 share 2000 share 1995 share

PR China 7,216 59.9% 5,509 50.1% 1,815 22.5% 922 16.5%

India 748 6.2% 615 5.6% 561 7.0% 230 4.1%

USA 646 5.4% 916 8.3% 1,041 12.9% 1,039 18.6%

SUBTOTAL 8,610 71.5% 7,040 64.0% 3,417 42.4% 2,191 39.2%

PA FY 2008 share 2005 share 2000 share 1995 share

PR China 962 29.2% 679 19.0% 333 9.3% 252 8.0%

USA 626 19.0% 811 22.7% 851 23.8% 830 26.2%

Taiwan 362 11.0% 466 13.0% 421 11.8% 294 9.3%

SUBTOTAL 1,950 59.2% 1,956 54.7% 1,605 44.9% 1,376 43.5%

PAN SF 2008 share 2005 share 2000 share 1995 share

PR China 604 32.1% 784 30.1% 475 18.5% 234 9.7%

W. Europe * 576 30.6% 767 29.5% 780 30.4% 883 36.4%

Japan 145 7.7% 261 10.0% 377 14.7% 374 15.4%

SUBTOTAL 1,325 70.4% 1,812 69.6% 1,632 63.6% 1,491 61.5%


Manmade Fibers Industry 2008/07

Polyester Textile Yarn Industrial Yarn Staple Fiber TOTAL

2007 2008 2007 2008 2007 2008 2007 2008

Europe 465 333 232 194 738 666 1,436 1,192

NAFTA 337 240 167 148 813 679 1,317 1,067

South America 116 99 28 24 172 174 316 297

PR China 11,854 12,379 370 450 7,027 7,216 19,251 20,046

India 1,392 1,334 1 1 868 748 2,262 2,084

Japan 179 169 83 75 204 191 465 435

Korea 524 510 185 170 556 477 1,265 1,157

Taiwan 1,162 954 69 65 582 503 1,813 1,522

ROW 1,119 1,092 50 26 1,491 1,401 2,659 2,519

SUBTOTAL

Polyamide Textile Yarn Industrial Yarn Carpet Yarn TOTAL

2007 2008 2007 2008 2007 2008 2007 2008

Europe 221 198 227 204 181 160 628 561

NAFTA 75 61 120 101 725 611 920 772

South America 54 54 40 30 1 1 95 85

PR China 573 620 305 314 25 28 903 962

India 27 28 68 65 0 0 95 93

Japan 44 41 65 63 8 7 117 111

Korea 86 74 60 52 6 5 152 131

Taiwan 384 302 70 60 0 0 454 362

ROW 131 121 94 81 15 13 241 215

SUBTOTAL 970 959 824

Unit: ‘000 tonnes


Manmade Fibers Industry 2008/07

Staple Fiber Acrylics Polyamide Cellulosics TOTAL

2007 2008 2007 2008 2007 2008 2007 2008

Europe 761 659 78 71 661 633 1,500 1,362

NAFTA 64 63 195 125 270 267 529 455

South America 67 60 2 2 66 42 135 104

PR China 801 604 48 54 1,246 1,146 2,095 1,804

India 79 81 0 0 277 244 356 325

Japan 236 145 5 5 129 140 370 290

Korea 52 43 0 0 8 9 60 51

Taiwan 137 84 11 9 136 106 284 198

ROW 154 143 1 1 432 384 587 528

SUBTOTAL 339 266

Unit: ‘000 tonnes


Yarn 2008 share 2005 share 2000 share 1995 share

Filament 23,879 40.4% 21,403 37.0% 16,514 36.0% 11,557 30.9%

Spun 35,295 59.6% 36,435 63.0% 29,368 64.0% 25,895 69.1%

TOTAL 59,174 57,838 45,882 37,452

Yarn 2008 AAGR 2005 AAGR 2000 AAGR 1995 AAGR

Filament 23,879 3.7% 21,403 5.3% 16,514 7.4% 11,557 6.4%

Spun 35,295 -1.1% 36,435 4.4% 29,368 2.5% 25,895 -0.6%

TOTAL 59,174 0.8% 57,838 4.7% 45,882 4.1% 37,452 1.2%

Yarn 2008 AAGR 2005 AAGR 2000 AAGR 1995 AAGR

Cotton 20,383 -1.9% 21,595 4.8% 17,109 2.2% 15,345 -1.5%

Polyester 9,837 3.1% 8,979 6.4% 6,573 7.3% 4,629 3.7%

Acrylics 1,789 -10.2% 2,473 0.4% 2,440 1.9% 2,225 0.6%

Cellulosics 1,891 2.0% 1,781 4.6% 1,417 -1.7% 1,545 -1.4%

Wool 1,027 -1.4% 1,073 -2.0% 1,185 -4.1% 1,460 -5.4%

Others 368 -11.7% 534 -3.7% 644 -1.4% 691 2.8%

TOTAL 35,295 -1.1% 36,435 4.4% 29,368 2.5% 25,895 -0.6%

Unit: ‘000 tonnes

Unit: ‘000 tonnes

Unit: ‘000 tonnes

Global Yarn Production

Dynamics in Yarn Production

Fiber Types in Spun Yarn Production

Imprint

Oerlikon Textile GmbH & Co. KG

Leverkuser Strasse 65

42897 Remscheid

Germany

www.oerlikontextile.com

Editor and responsible for content

Andreas Engelhardt

Tel. +41-71-4475189

Editors

Andreas Engelhardt

www.oerlikontextile.com

The Fiber Year 2008/09 A World Survey on Textile and Nonwovens Industry

Documents

The Fiber Year 2008/09 A World Survey on Textile and Nonwovens Industry