Interview with Giulio Bonazzi

Giulio Bonazzi
President
CIRFS

I’m strongly convinced that sustainability means also profitability.

In this Face2Face interview on Fibre2Fashion with its Correspondent Cindrella Thawani, Bonazzi talks about the increased energy and cost, man-made fibre industry performance and deteriorated economic situation of Europe. Synopsis: CIRFS, known as European Man-Made Fibres Association, is the representative body for the European man-made fibres industry. It was founded in 1950, as the Comité International de la Rayonne et des Fibres Synthétiques from which its abbreviation CIRFS is derived. Moreover, it took its present name in 2009. Giulio Bonazzi is the current President of CIRFS, by 2011 end also he serves as the President and CEO of the Aquafil Group in Italy since 2008. In 1999 he returned to Italy as Vice Chairman of Aquafil Group. In 1994 he circle backed to Aquafil, and was working on the acquisition of Julon d.d. He graduated in Business Economics from the University of Venice. In 1987 he started his career while working in the family business and then after a year he joined the commercial and technical divisions of Aquafil. Excerpts:

How do you see the increased energy and raw material costs, heightened environmental awareness that are challenging the man-made fiber industry to explore new opportunities?

You are perfectly right saying that now-a-days the man-made fiber industry faces more costs regarding energy and raw material than in the past, because the raw material we use is comes from the crude oil and our production needs, a huge amount of energy. I can talk for my Group, but I can tell you that all the European companies are applying different solutions in order to maintain their competitiveness: we improve the efficiency of our production lines, to save energy; we use energy from different sources than from oil, for example solar panels, hydroelectric energy, etc., and last but not least, we are implementing the substitution of the usual raw material, which normally comes from crude oil derivatives with a recycled one. Somebody says that probably the natural fibers could completely substitute the man-made ones but this idea is not feasible. Besides, the statement that natural fibers are more environmental friendly than man-made one has to be demonstrated. The arable land in our planet Earth is about five percent only. The 71 percent is land underwater and 29 percent are dry lands. In 2010 the textile consumption worldwide was more than 70 mil tons (including: man-made (64 percent) and natural fiber (36 percent). In this situation the usage of natural fibers only, for all textile needs is not possible. Recycling is the only answer to solve the problem.

CIRFS being an industry representative, shares that, significant steps are needed for the reduction of CO2 emissions at both the European and global level. In this the man-made fibre industry is labeled as the risk of ‘carbon leakage’. How and why? Please elaborate.

The European Community has approved a very strict legislation regarding the carbon dioxide (CO2) also with green house gases (GHG) emissions and new taxes for the pollution caused by companies. This of course caused an increase costs for an industry, obliging the firms to do new investments in order to reduce these costs. But as a result the new investments increased productions efficiency, allowed not only the reduction of CO2 and GHG emissions, but increased the production efficiency as well. These are the rules in Europe and are valid locally. If the products are produced abroad we do not pay any carbon tax and this situation is not positive in my opinion. In this way the European companies loose competitiveness, if compared to the outside productions, where the environmental issues are not so important. Each country should act responsibly to reduce the pollution effects in every part of the world.

Please tell us your overview on the consumption of man-made fiber in to the briskly populated countries world-wide? And in which regions do you see its potent growth?

As we can imagine sooner than later, the population in our planet will arrive at 10 billion people and this means, of course an increase in demand of everything, not only food (which is a primary need), but textiles too. This is the reason why we absolutely need to correctly use all of the available resources that are at risk to vanish. The solution we see today is recycling and using all raw materials more consciously. We need to increase our investments in R&D to solve this matter.

How do you see the performance of man-made fiber industry in to the global ring with the efficient usage of renewable sources?

Man-made fibers are not deriving from renewable sources, except probably cellulosic fibers. All the others (polyamide, polyester, polypropylene etc.) derive from the crude oil. There are only few cases where companies are trying to use “natural resources” (such as corn,) to produce bio-polymers. But we are talking about very limited experiences and very low quantities. Today any life cycle analysis (LCA) was conducted to understand the real environmental impact of such bio-polymers. It is theoretically possible to develop fibers from renewable sources, but we need to understand all the positive and negative related issues like how much arable lands we need, how much water is used, the pesticide involved, etc. Regarding the man-made fiber industry performance, I can say that the Asian companies perform better than the European ones and this should be grateful to the larger dimension of the market which is growing faster with more profits

Please tell us future trends in the man-made fiber industry?

Sustainability is not only a concept but is also a new way to do our business as well as the development of recycled products is a key issue included in the paradigm. My company, for instance already invested a huge amount of money to implement a plant that allows the recycling of polyamide six post consumers and post industrial waste transforming it in the raw material. Also other European companies are acting in this direction. I’m strongly convinced that sustainability means also profitability.

There is an intense global competition in man-made fibre sector. How is it affecting the European industry as it is a major exporter?

Europe is not anymore an exporting country as it used to be some years ago, especially for specific consumption goods which are more imported than exported. On the other hand the productions realised in Europe are so specific and related to niche markets that are naturally protected from foreign competitors. In this framework it is important to try to propose our special and unique products abroad.

Being a major exporter, European industry also faces tough import competition from Asian countries; it will bring pressure to the industry profit periphery, exports/imports as well as on the trade motif/norms. How do you see it can be perpetuated or modulated?

The situation is not easy: As I said before we import a lot of fibers and ready made garments from overseas. The European economic situation is not so smart at the time being, and an import is must, considering the high cost we have to support here in Europe. This bad situation caused a lot of bankruptcies, many companies shut down (and not only small ones) and consequently there has been a significant loss of jobs. But in my opinion customers do not need products at a lower cost only. They ask for quality, experience and also for quick delivery times. This means that they are not always available to wait few months before receiving their goods. Furthermore as CIRFS, we are asking to the European Commission to define correct rules about the import/export duties. We are in favor, both to the abolition of the various duties or to the reciprocity. We would love to have no duty when we import as well as when we export to the various countries (China, India, North America, United States, Brazil etc.)

CIRFS looks after the risk of the propagation of energy taxes and probably this would make the competitive scenario in Europe and globally. Hence it can be detrimental to man-made fibre industry? Please interpret.

As we said before we give big importance to the energy costs: more energy costs means lower competitiveness and there is more probability to shift productions from elsewhere. Once more, efficiency and specialization of productions are the only alternative options to solve the problem in Europe.

Published on: 09/05/2012

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.