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Overcapacity in man-made fibres has worsened situation – DG, CIRFS

Jul '09
He continued, “Too much capacity has been built, thanks to incentives from governments and easy financing from banks, without any proper market analysis. The biggest share of excess capacity is, of course, in China and one of the biggest factors driving down prices and profit margins, everywhere in the world. Overcapacity leads to dumping by producers which are desperate to fill their plants, and sometimes anti-dumping action may be necessary in order to prevent serious damage to the industry in the importing countries. This may be regrettable, but sometimes it is essential”.

He added by saying, “In man-made fibres everyone suffers because of the huge subsidies which some countries give to stimulate production of cotton – over US $3 billion a year. The excess cotton production which results adds to the pressures on man-made fibre producers. I think that everyone in man-made fibres also needs to be aware of society's rising expectations about the environmental performance of the products they buy. This is spreading rapidly from the developed regions of the world to almost all emerging economies”.

“Long-term market growth depends on proving to the public that man-made fibres have a good environmental record, and that producers are taking action to reduce their impact. Any company with polluting processes risks losing market share in the future. I am sure that we will see renewed growth in man-made fibres – but not before 2010 at earliest. And we will not see a return to prosperity unless all players are much more cautious than in the past about building new capacity, and about how they trade in export markets”, he concluded by saying.

To conclude the interview we asked him as to what bottlenecks he sees in the growth of the European man-made fibres industry, to which he said, “European man-made fibre producers have a strong competitive position and the quality of their production is extremely high., since they operate in a very flexible way, with the ability to produce speciality products even in limited quantities, and to change from one specification to another with very little problem. They are one of the global leaders in fibres innovation, with a very good record of bringing innovative products to the market”.

“Their strict respect for the local and global environment meets the expectations of society. and their command of logistics and market understanding gives them a competitive advantage in marketing to the textile industry and other markets throughout the whole European, Middle East and African regions. Europe has a very strong market position in cellulosic and acrylic fibres, in niche applications in polyester and polyamide, in aramid and other speciality technical fibres, and it is the world's largest producer of polypropylene fibres”, he added by saying.

“Of course, there are bottlenecks too. Some of the traditional textile processing activities in Europe are in long-term decline, andwill consume less fibre in the future. This is not always fully compensated by market increases in alternative technologies such as nonwovens or many technical applications and there is also the issue of distorted conditions of competition, and distress selling of fibres in the European market at dumped prices”, he said.

“These drive down margins, and make re-investment more difficult and CIRFS will continue to take action against this problem whenever necessary. I have confidence in the ability of European fibre producers to meet the market challenges and to remain one of the most flexible and innovative man-made fibre producing regions in the world”, he concluded by saying.

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