The year 2008 has been proved as a critical year for Dyesand chemicals industry ,since there have been many ups and downs in the marketthroughout the year for various reasons like Olympics, Pre-registration ofREACH, and Global Meltdown etc. In order to prepare the country for 2008Beijing Olympic Games, Government of China had taken necessary action to focusingon the aspects of environmental protection. As a part of this plan, theGovernment had set about halting production, and closing down factories. Asmany as 1000 dyeing and printing factories had been shut down in Zhejiang Province while many others in Hebei, Henan and Shandong Province had stopped their production.


EU REACH was put into effect from June 1, 2008. Under thislaw, it is mandatory for exporters to provide specific details of the chemicalcomponents in the products. They are required to prove their safety, or elsethe products are not allowed to enter the EU market. The six-month REACH pre-registrationperiod closed on 1 December at midnight. EU/EEA-based companies submitted wellover two million pre-registrations covering more than 100,000 substances. Reportedly,several leading Chinese enterprises had set up a special department in chargeof REACH rules. However, many SMEs were having serious problems, especially dueto lack of knowledge and finance. These domestic enterprises were unable to followREACH rules and most were seriously considering giving up EU as a market.


In the last quarter of the year, industry was contaminatedby global meltdown which was started from US, and spread across the world. BASF-the world's largest chemical company in terms ofsales has been slashed its production, due to enormous decline in demand forits products. The company has temporarily shut down 80 of its plants; worldwide.In total, cuts and closures represent 20 to 25 percent of the company's global production capacity. It is believed that around 20,000 employees have been affected by thismajor step.


The Dow Chemical Company has taken a series of aggressiveactions to accelerate its transformational strategy in light of currenteconomic realities. As part of the actions announced, Dow has eliminated approximately 5,000 full-time jobs, closed 20 facilities in high-cost locations and divested severalnon-strategic businesses. The job reductions represent a reduction of roughly11 percent of Dow's global workforce. Once fully implemented, these actions areexpected to result in $700 million in annual operating cost savings by 2010 andare additional to the previously announced cost synergies of $800 million inthe same timeframe for the anticipated Rohm and Haas acquisition. In order tocope up with the current scenario, Dow has been temporarily idled approximately 180 plants and significantly reduced its contract workforce worldwide by approximately 6,000 as predicated by reduced operations.


Huntsman Textile Effect has cut 470jobs in a new effort to trim costs in the unit that makes textile dyes andchemicals, which represents around 12 percent of the 3,900 employees in thetextile-effects unit, acquired from Ciba Specialty Chemicals in June 2006.


Export of dyestuff declined in major Asian countries becauseEuropean countries were the principal consumer of dyes and chemicals and theirdemand drastically decreased. Textile chemicals, auxiliaries manufacturershave been in trouble due to the inventory cost of higher price in rawmaterials, which they purchased couple of months back. The price of major dyes, and other key chemicals from China, Korea, Japan, Taiwan, Hong Kong, Malaysia, and other countries have been decreased suddenly. Prices of major keychemicals and intermediates have been decreased by 40- 50 %.


Looking at the present scenario, year 2009 could be worsefor the Textile Industry as compared with 2008. It is believed that thesituation will be remain the same for next 2-3 years and in such case, productionwill shift to low cost areas such as Vietnam, Honduras, Indonesia andBangladesh. However, to sustain in the market companies has to focus onenvironmentally friendly products, Continuously Innovation in products, process and technology, Cost cutting strategy, etc to manage their businesssuccessfully.


References:


  1. http://www.rsc.org
  2. http://www.chron.com
  3. http://www.silobreaker.com
  4. www.reach-compliance.eu
  5. www.theonion.com