Source:Textile Review


Dyes and dye intermediates consist of basic dyes; azo acidand direct dyes; disperse dyes; fast color bases; reactive dyes; sulfur dyes;vat dyes; organic pigments; naphthols; and optical brighteners. Market demandfor dye and dye intermediates is expected to grow at a Compounded Annual GrowthRate (CAGR) of 4.7%, from 652,000 tonnes in 2004-05 to 900,000 tonnes in 2010-11.The organized sector dominates, with 65% share of the total market, while theunorganized sector controls the remaining 35% of the market. However, owing tostringent environmental regulations and awareness among customers, the cost ofoperations for small, unorganized players is likely to increase, therebyshrinking their share in the industry. The demand for dyes and dyeintermediates is expected to grow at around 6% during 2009-10, backed by strongdemand from the textiles, leather, and inks industries, which are expected toregister a growth rate of 6%, 4%, and 11%, respectively. Exports of dyes arealso expected to increase by 6.4% due to the shift of production bases fromdeveloped countries to India on account of stringent pollution control measuresbeing adopted in those countries.


Dyestuff sector is one of the core chemical industries inIndia. It is also the second highest export segment in chemical industry. TheIndian dyestuff industry is made up of about 1,000 small scale units and 50large organized units, who produce around 1,30,000 tonnes of dyestuff.Maharashtra and Gujarat account for 90% of dyestuff production in India due tothe availability of raw materials and dominance of textile industry in theseregions. The major users of dyes in India are textiles, paper, plastics,printing ink and foodstuffs. The textiles sector consumes around 80% of thetotal production due to high demand for polyester and cotton, globally.Globally the dyestuffs industry has seen an impressive growth. Initially theindustry's production bases were mostly in the west, but in the last few years,they have been shifting to the East. Dyestuff can be used for Printing inks,plastics, textiles, paper and foodstuff. The world consumption for dyestuffaccounts for printing inks at 40%, paints 30%, plastics 20% and others fromsegments like textiles.


At present, India contributes about 6% of the share in theglobal market with a CAGR of more than 15% in the last decade. The dye marketsare mostly dominated by reactive and disperse dyes. The demand for reactive anddisperse dyes is expected to grow in future as these two dyes are dominant inall the regions. The demand for reactive and disperse dyes are common in allthe regions whereas disperse vat and other dyes are stagnant. In the Asianregion, China, Korea and Taiwan are strong players in disperse dyes, whileIndia leads in the production of reactive dyes due to an availability ofintermediate vinyl sulphone in the country.


The dyestuff industry has recently seen movement towardsconsolidation and as a result, organized players are now poised to take a leadin the global market. Small units (around 1000) that exist today still competein the segments where price realization is lower and the competition severe.Large and organized players (around 50) are gearing up for globalcompetitiveness leveraging technology, product innovation and brand building.Increased focus is being laid on environmental friendliness and at the sametime the industry is ensuring greater customer focus through technical servicesand marketing capabilities, in order to face global competition.


The growthof dye sector in the future continues to depend on the performance of end userindustries like paints, textiles, printing inks, paper, plastics andfoodstuffs. The changing customer preferences, boom and expansion ofinfrastructure in certain parts of the world creates new market opportunitiesfor the dye industry. To achieve global standards the industry needs to putefforts in critical areas so as to adopt aggressive growth and focus onexports, R&D, comarketing alliances, up-gradation of manufacturingfacility, contract manufacturing with companies having established markets,identification of areas of core competence, consolidation, collaboration bycluster development, outsourcing, environmental consciousness, cost reductionetc. The industry is likely to see many new dyeing technologies coming into themarket with the help of good technical expertise and R&D achievements.Globally the high usage of cotton, polyester and the banned vat and azo dyes insome of the countries has paved the way for reactive and disperse dyes. It isexpected that in future these two dyes would lead the market. The Industryfeels unless the labour laws, power supply and infrastructure are improved, itwould be very difficult to compete globally with rapidly declining dutydifferentials and appreciation in the value of rupee.

In order to help the Industry to grow to international standards, the Government would require to take the following steps:


  1. Reduce the input costs through reduction in tariff on capital goods and building blocks and to eliminate multiple taxation.

  2. Implement power sector reforms and ensure reduced cost and improved quality of energy to all units by encouraging captive power plants through various subsidies from State Governments.

  3. Augment facilities at major Ports especially container terminals & bulk cargo terminals to reduce congestion. Implement uniform charges for berthing in all Ports.

  4. To encourage R&D by creation of R&D hubs with state-of-art testing with internationally recognized accreditation.

  5. Many of the Dyes & Dye intermediates plants are operating with obsolete technologies and below economic scale of operations. A Technology Up-gradation and Development Fund need to be established for up-gradation of such plants.

  6. Cost of finance in India is high as compared to many other countries. Finance for industry should be made available at reduced rate of interest.

Originally published in: Textile Review, August-2010


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