Background


Dyestuff industry plays an important role in the economic development of a country. The Indian Dyestuff industry, which was primarily started to cater to the needs of domestic textile industry, now not only meets more than 95%requirement of the domestic market, but has gradually also made a dent in the global market. All ranges of dyes such as disperse; reactive, vats, pigments and leather dyes are now being manufactured in India. This industry forms an important link in the chain of other chemical industry such as textiles, leather, plastic, paper, packaging, printing inks, paints and polymers etc. The textile industry is the major consumer of dyestuffs and about 70% of the total production of dyes is consumed by this sector.


Global Scenario


The world market for dyes, pigments, and dye intermediates is estimated to be around US $23 billion. Of this dyes and pigment market comprise 1.3 million tones valuing to be US$ 16 billion, and dye intermediated comprise US$ 7 billion. Though the overall growth of dyestuffs industry during the last 5 years has slowed down, the industry is still expected to maintain a growth of about 2% per annum in the next decade.


China, Korea, India, Japan and Taiwan are the major players in this industry. However in terms of market share, European countries have remained the largest producers because they have concentrated on specialty products. 'DyStar', the joint venture between Hoechst AG and Bayer AG, is the largest producer of dyestuffs with 15 per cent market share in the world market. This is followed by 'BASF', which has a market share of 12 per cent.


World textile chemicals industry is valued to be around US $15 billion, and is growing 3-4% annually. According to a study on dyes & organic pigments, the worldwide demand for organic colourants (dyes and organic pigments) is projected to increase to $10.6 billion in 2008 with an average annual increase of 4.9% from 2003. Generally, the dyestuff industry comprises three sub-segments, namely dyes, pigment and intermediates. These are important sources in major industries like textiles, plastics, paints, paper and printing inks, leather, packaging sector etc.


The impact of Global Meltdown on Indian Dyestuff Industry


In India, Dyestuff Industry supplies its majority of production to the textile industries. Enormous amount of dyestuff products from India are exported to textile industries in Europe, South East Asia and Taiwan. India presently manufactures all kinds of synthetic dyestuffs and intermediates and has its strong hold in the natural dyestuff market. India is a one of the major global producers of dyestuffs and dye intermediates, principally for reactive, acid, vat and direct dyes. India has approximately 6 percent share in the world production of dyestuff products.


Indian dyes and textile chemicals industry is no more insulated from the global meltdown. Industry sources say that the exports of Indian dyestuff is expected to go down in the second half as compared to the first half of this year due to global melt down and tough competition from China. Indian dyestuff industry faced less competition during the time of Olympics because some of the Chinese companies were shutdown temporarily due to the environmental laws introduced by China's Government. However the Chinese companies are back in business now, which is believed to probably affect the Indian exports. The dyestuff industry in India is mostly located in Gujarat and Maharashtra. Gujarat comprises of more than 1200 small scale industrial and factory sector units.


In order to give a comprehensive understanding as to what extent this meltdown will affect the textile chemical industry; Fibre2Fashion spoke to Mr. Janak Mehta, President of Dyestuff Manufacturers Association of India, a national body representing the Dyestuff Industry in India.

Commenting on the economic crisis and recessionary trends, Mr Mehta said, "The economic turmoil gripping the developed nations all over the world has also undoubtedly affected our industry very adversely. A lion's share of dyestuffs from our country is exported to US, EU and South Asian Countries. Slow down of economy and recessionary trends for the last few months mainly in US and Europe has cast a shadow on our exports to these regions both directly and indirectly. Consuming sectors including garments and textiles, leather, etc., have been hit most seriously.


As more than 60 percent of dyestuffs products are consumed by these industries and coupled with the downtrend in the consuming industry, the impact has been very severely felt by the dyestuffs industry and direct exports in particular as well, as a consequence. As per available data, export growth has slipped to almost 10 percent in September 2008 vis--vis a robust average of 27 percent witnessed during the earlier months of the current fiscal."


Mr Mehta, commended the steps taken by the Government saying "No doubt infusion of liquidity by the recent Govt. measures like reduction in CRR and SLR, REPO rates etc. has brought in an additional Rs.100, 000 crores into the system and appreciation of the US dollar to almost Rs.49 in recent days has provided a much sought relief to our export fraternity although imports have become astronomically prohibitive."


But in a solemn voice he lamented that "Saddled with the high cost of inputs and accumulation of inventory on the one hand, exporters are facing the irony of cancellation of export orders in the changed scenario on the other hand. Drying up of orders mainly from countries like US, EU and Japan, we are afraid, is likely to hit our exporters harder in the next few months, if the present slow down in the global economy continues unabated."


Industry sources say that the year 2009 could be worse for the Dyes and Chemicals industry as compared with 2008. However, it is expected hopefully that the situation will be back in the normal stage and Indian Dyestuff industry will be recuperate its position in the world market.


References:


  1. http://www.cygnusindia.com/
  2. http://economictimes.indiatimes.com/
  3. www.ficci.com/chem/dyestuff.htm
  4. www.silobreaker.com