Escalating Raw Materials' Costs spoil festive mood of global MMF producers

14 Dec '09

8 min read

Commenting on economical crisis, Mr. Berger narrates that crisis had a strong negative impact on nearly all part of the European textile industry. Especially, the automotive and the spinning-companies have had to go through a disastrous time. Even the filtration-sector in geo-textile industry has been affected. The only sector which confronted minimal loss was the wadding and the hygiene industry, according to him.

Mr. Berger also feels that second half of this fiscal compared to first shall bring more life and movement in the market. In general, as Multi-Fiber producers, Mr Berger expresses dissatisfaction with current situation.

Mr Greg De Kemmeter, Mktg Director, Minot Recyclage Textile- France, notes change in the over all market including textile. He reveals that players of their kind are waiting for the consumption to pick up again, and, he senses the need for flexibility. According to Mr Kemmeter, industry is not free from clutches of economy downturn yet. However, he foresees second half better than the first but not as good as the period before August 2008.

Mr Miguel Falcao, Director, RECIT- Portugal, sees the industry making move towards the regions that facilitate less production cost. He too thinks industry is still facing recessionary trends and can possibly witness the betterment by next half of current financial year.

Expressing times to be very hard for industry, Mr Jimmy Tan, Sr Mktg Mngr, Pt. Tyfountex Indonesia, told that the raw material prices are keeping escalating trend. He reveals that Rayon, and Polyester fiber manufacturers in Indonesia announced more than 10% up on price with immediate effect. He also remarks that the industry is much affected during this economic crisis resulting into order figures tapering off and all costs rising up. Industry players are jostling to snatch the orders to keep factory running in this difficult time. Unlike our above interviewees, Mr Jimmy, however, has different opinion on the upcoming two quarters of current fiscal. He finds it would be still tougher as free trade between Asian countries will add to difficulty competing with other low cost sources like China, Cambodia, and Vietnam etc.

Mr Sanjay K Verma, Marketing Head, Birla Cellulose, Grasim Industries ltd – India, estimates that in Q1'10, almost major fibre and downstream industries in value chain may witness shortage of key raw materials leading to prices of their goods rising. And most of cases will not be supported by increase in demand but by cost push only. He presumes that buyers off take may increase in Dec'09 /Jan'10 due to anxiety in covering volumes at lower prices but then Feb/March'10 may see demand coming down due to increased inventory in pipe line. He further shares that full recovery is still not happening even though green shoots are appearing in most of economies. He pointed up that recent financial setback like Dubai may again cloud the economic horizon. In his view, real recovery may happen only by Q3'10 provided industry is not taken up by any more surprises in financial markets. Mr Verma also nods about coming both quarters to be overall favorable for VSF industry.

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