The global market size of eco fibre was estimated at USD 37.24 billion in 2018, growing at a CAGR of 9.2 percent in the period of 2019 to 2025. To identify the prevailing trends in the fibre industry, Fibre2Fashion analyses the industry the drivers, restraints, opportunities, and challenges along with new business opportunities in the near future.
Both natural and man-made fibres are the basic and most vital raw materials for the textile industry. These fibres are used for making yarns, which is used as key input material for making fabrics garments, or any other industrial goods.
Over the decade, the consumption pattern of fibre has changed significantly after the commercialization of the polyester. And it accounts for nearly 54 percent of the consumption in the year 2019. Apart from polyester, the other key fibres discussed in this report are cotton, silk, wool, nylon, acrylic, cellulosic, and polypropylene.
Market Research Methodology
The report has been prepared by undertaking extensive researches, both - primary and secondary, to arrive at the global consumption level of fibre by the textile and apparel industry. The secondary research was aimed at gathering the key information about the industry's supply chain, the market's monetary chain, the total pool of the global players, market segments, and regional and country-level markets. The secondary sources involved in the study are - investor relationship presentations, annual report & other company pages, paid databases, news agencies, and interviews with the industry expert on the supply side of the value chain. And the main primary sources are fibre manufacturers, raw material suppliers, association representatives as well as industrial users. The primary research was conducted to validate the information gathered from the secondary research.
The global fibre market has positive factors that are excepted to promote and boost the growth of the industry. These factors are also responsible for the development of the new market. Market drivers play a vital role in formulating the business strategy to boost revenue and overall growth.
Market restraints are the factors that are anticipated to hinder the industry's growth. These factors are posed as a hurdle to industry growth and development. Market players need to focus on opportunities to boost their market share.
The driving factors responsible for the growth of fibre market are:
1) Abundant availability, cost-effectiveness, and wider scope of application
The production of natural fibre depends on the availability of the cultivable land and favourable water conditions, which is changing faster than ever in
the 21st century because of global warming and its effects. While the man-made fibres are derived from organic raw materials, which is expected to be available virtually on the unlimited basis of the coming decades, and will cost significantly cheaper than natural fibre.
Apart from this, the other factor that ensures unlimited availability of fibres are recycling of MMF as against that of natural fibre and freedom of designing these fibres in research and production to alter properties to make it suitable for other applications.
2) Availability of cultivable land reducing day-by-day
Cotton represents nearly one-third of the global fibre market by cotton production occupies only 3.0 percent of the global arable land, the rest of which is used for producing food crops. This small is also witnessing a drop because of the increasing population and expanding human inhabitancy across the globe. Cotton production is harvested twice a year, and production per acre of land has increase4fsd considerably due to the use of scientific and modern agricultural practices. Still, shrinking arable land and frequent environmental changes have resulted in an overall decline in cotton production globally. Moreover, increasing demand for sustainable cellulosic fibre due to growing concern over the environment and increasing awareness among people is expected to drive the demand of MMF in the near future.
3) Global rising per capita consumption of fibre
Growing per capita consumption of fibre is another major growth driver for the MMF globally. Other major factors are fast-changing fashion trends, increasing urbanization, and growing disposable income.
In 1960, globally, per capita consumption was around 3.5Kg, which has reached 10.2Kg in 2015, growing at a CAGR of 2.1 percent and urban population, which currently accounts for nearly 52 percent of the global population, grew almost 2.2 percent between 2008 and 2015. According to the United Nations, the global urban population is expected to represent two-thirds of the overall population by 2020.
The following restraints majorly drive the global fibre market.
1) The market is cost-effective
The market cost needs to reduce without compromising on quality. Crude oil is the main material for the MMF industry as these fibres are derived from the intermediate products obtained from the crude oil. Prices of these intermediate products and MMF are closely related to the price movement in the crude oil.
In recent times, crude oil has been volatile by dipping around 60 percent of the price level in 2014. The effects of the plunge in the crude oil prices have triggered a rapid fall in the prices of the various intermediate products such as Purified Terephthalic Acid (PTA), Mono- Ethylene Glycol (MEG),
Caprolactam, resulting in the rapid fall in the prices of the MMF in 2015 where the majority of the MMF prices lost about 50 percent of the values.
According to the World Bank, crude oil prices are expected to remain below $50 mark till 2018 and is expected to reach $80 mark by 2025. That means the prices of MMF will be low, and manufacturers will remain profitable.
Hence, the volatility in crude oil and raw material prices is expected to be the major restraining factor in the MMF industry's growth globally. Moreover, the prices of seeds and fertilizers are also very volatile, and also the availability of quality seeds is not regular.
The global fibre market has the following opportunities:
1) Economic growth in Asia and other emerging countries
According to the United Nations, the world population is estimated to reach 8.1 billion by 2020, and it is moving up the food chain, creating nearly 35 percent of the additional demand for food products. On the other hand, this increase in population is expected to shrink the limited availability of the arable and cropland, creating situation of food crisis. Hence, limiting the availability of the arable land and stagnating cotton production. The increasing production is also expected to increase the textile fibre's demand, both natural and man-made by 60 percent.
Both the increasing population and increasing consumption of textiles with a limited production of cotton are expected to result in a cellulosic gap by 2025.
Viscose Staple Fibre is the only substitute available to cotton due to its favorable properties, and it is estimated that cellulosic fibre will still account for 30 percent to 33 percent of the total fibre consumption. As certain features of cellulosic fibre, especially their physiological performance, make it difficult to substitute petroleum-based synthetic fibres. Henceforth, creating a significant growth opportunity for MMF globally.
2) Growing usage of MMF into industrial segments & replacement of natural fibre in apparel
The growing demand for technical textiles is expected to offer a vast exponential growth potential opportunty for the MMF in the near and long term. MMF manufacturers are focusing on developing non-woven technologies for various applications such as filtration, roofing, geotextiles, and automotive. Currently, approximately 20 Kgs of MMF is used in automotive in numerous applications such as seat belts, roof lining, airbags, floor covering, the interior lining of trunks & doors, seat covers, upholstery and insulating matting in the engine compartment to make the vehicle more comfortable and safer. And its use is expected to grow further with the innovations in the MMF.
MMF's application in technical textiles is not only limited to automotive, but also used widely for the construction, medical, and packaging industry. MMF is also used extensively in geotextiles applications such as stability roads, dams, walls, and non-woven fabrics are also widely used for roof covering in the construction industry due to its properties such as energy efficiency and heat retention, and soundproofing. All these applications of technical textiles have been widely accepted in the developing economies.
However, the applications are increasing in the developing economies such as India, Indonesia, Vietnam, and many other Asian and African nations, providing a tremendous growth opportunity for MMF in the near future.
Market Porter's Five Force Analysis
This analysis helps to understand better the competitiveness of the market and strategies for any textile and apparel business. The five forces considered here are:
1) Threat of New Entrant
The threat of new entrant hints at the attractiveness of the market and ease of entering the business. The global MMF market is already experiencing overcapacity with majority plants in polyester, cellulosic, and any other fibre operating around 80-85 percent of their capacity globally.
Current overcapacity, decreasing profitability, volatile raw material prices, and intense competition to stay in business do not throw any lucrative opportunity for the new entrant in the MMF business. Hence, threat of New entrants is medium in this MMF market.
2) Threat of Substitute
The threat of substitutes describes the availability of alternative products in the market with similar or superior properties to replace the product. Several types of MMF are available, but each fibre type has its unique properties, which can be modified and altered to the extent of modifying the manufacturing process and R & D's help to them suitable for the specific purpose.
However, there is no direct substitute available for the MMF expect natural fibre. Hence, the unavailability of direct substitutes for MMF makes the threat of substitute is low.
3) Bargaining Power of Supplier
The bargaining power of suppliers indicated the authority executed by the suppliers of the raw materials needed in the production of MMF over manufacturers of MMF. Crude oil is the major raw material required for the production of the MMF.
In the textile and apparel industry, the major players who are also huge business houses in the petrochemicals and other crude-oil based businesses
have developed their own backward integrated capabilities for producing the major raw material required for the production of MMF from the crude oil.
This empowers the raw material suppliers to the extent but also gives a competitive advantage to the MMF manufacturers with backward integrated capabilities to control the market. Hence, in this MMF market, the bargaining power of suppliers is medium.
4) Bargaining Power Of Buyer
The bargaining power of buyers indicates the power in the hands of buyers over the suppliers/manufacturers in the industry. Globally, the MMF market is currently flooded with a large number of large scale and small-scale manufacturers, and it's facing the overcapacity problem, especially due to increasing installed capacity in China. This surplus capacity low operating rates and large numbers of manufacturers, especially in China, make the market even more competitive. Hence, in the MMF market, the bargaining power of suppliers is high.
5) Degree of Competition
The degree of competition signifies the intensity of the rivalry amongst the industry players to expand the business. The intensity of competition amongst the MMF market players is assumed to be medium to high as essential factors, such as threat of substitutes and threat of new entrants, do not affect this market. Hence, the degree of competition is expected to be medium to high in the MMF market.
The global demand for man-made fibre is expected to grow at a CAGR of 3.66 percent during the forecast period to reach 87,001 K tons from the current level of 70,387 K tons in 2019. The demand for natural fibre is expected to grow slower than man-made fibres and the growth of textile fibres even slower. As the textile fibre market is driven by the emerging economies where synthetic fibre is gain more penetration in textile fabrics due to increasing consumption of synthetic fibres in Industrial application.
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