Technical Textiles: Emerging Opportunity
Source: fiber2fashion Date: 2010-03-09
China Tells a Good Story
Recent news from China is worth watching and will be helpful for framing policies to support the growth of technical textiles sector in India. This week, China reported that in 2009 its GDP grew by 8.7% from its previous year. Strikingly its fourth quarter growth in 2009 has been 10.7%. The year-on-year growth in 2009 for India has been 6.7%. China economic growth story made global news with a forecast that China may very well be the worlds second largest economy by 2010-11. How much impact this shift will have on the global economy and in particular, on Indias technical textile industry? It is well accepted that the growth of nonwovens and technical textiles sectors are related to the GDP growth of nations. Developed economies such as the US, Western Europe and Japan have followed this pattern. Will India be different? Industry associations such as the USA based Association of the Nonwoven Fabrics Industry (INDA) predict a linear relationship between the GDP growth quantified by Purchasing Power Parity (PPP) and the growth of nonwovens industry. If this hypothesis holds good for India, we will certainly have a positive growth. Discussions with many leaders over the past two months have revealed that the growth is not happening fast as expected. It is therefore necessary to create a good understanding on the factors that affect the growth of technical textiles sector in India, more importantly the relationship between Indias economic growth and the development of nonwovens and technical textiles sector.
Economic Growth and Technical Textiles Industry
Early in 2008, I predicted based on the available GDP data from World Bank that Indias technical textiles sector will grow by 13.3%. It will be convenient to state that the projected growth of Indias technical textiles sector will be in double digits. At that time, although recession was just beginning, effects of serious recession were not felt. Understandingly, the double digit growth prediction had a good bit of skeptics. Around 2008-09, Government of India commissioned a market survey on the technical textiles sector. The study carried out by ICRA Management Consultancy came out with a conclusion that the technical textiles sector will grow by 11%. This correlates more or less with my earlier empirical forecast that Indias technical textiles sector will have a double digit growth. These reports indicate that although GDP alone cannot be a gold standard to predict the growth of technical textiles sector, it still can be used as a valuable yard stick for shaping the growth of technical textiles sector. Several factors such as the economic growth as measured by GDP growth, population and its growth rate and the availability of disposable income play important roles in the growth of nonwovens and technical textiles sector. Here again, China lends us a helping hand. As indicated earlier, recent forecast on Chinas economic growth foretells China will be the second largest economy soon. How is this possible and what is the relevance with the growth forecast of Indias technical textile industry? China will push Japan to the third place even though Japans per capita GDP is 4-5 times higher than that of China. As the old adage goes, it is the number that makes all the difference. Chinas population is 1.3 billion whereas; Japans population is 128 million. The combinatorial effect of the population number and per capita GDP will do the magic to push Japan to the third place. The combinatorial effect will also play an important role in enhancing the technical textile sectors growth in India. For instance, population growth rate is on Indias side. Furthermore, the middle class consumer population will be a favorable factor. The middle class population is expected to reach half a billion by 2050. This will enable the growth of Indias technical textiles sector. A great leap will occur in Indias technical textiles industry around 2020. This decade (2010-2020) will experience growth and the industry has just started to crawl.
Emerging Opportunity
I am an optimistic person who sees the glass to be half full. There is certainly opportunity in the technical textiles sector in India. However, greater understanding and proper investments are necessary to enable growth. Technology utilization and dissemination of techno-commercial information are needed to have viable growth. Just as I was penning this article, I had the opportunity to attend an intellectually stimulating panel discussion here in Lubbock hosted by Texas Tech University in partnership with US based Society of Environmental Journalists. This discussion focused on agriculture, environment and other topical themes and was eyeing what will happen in 2050? With the population growth and the potential depletion of some finite natural resources, the panel debated the options to keep the world alive and kicking. Two things came out loud and clear, which are aptly suited for the growth of Indias technical textiles sector: 1) Suitable technology utilization and 2) Communication. For example, the panel discussion focused on the situation of water in West Texas and its impact on cotton crop in near future. Cotton requires around 18 inches of precipitation, whereas West Texas normally gets around 3-4 inches of rain. How is cotton plantation viable then? This is possible because of the modern agricultural practices adopted by cotton growers and the constant research and development activities undertaken by the cotton industry here in the USA. In this context, attention was brought on the phenomenal efforts in R & D undertaken by the cotton sector using molecular biology and genetics. These have resulted in the development of drought tolerant and herbicide resistant cotton varieties. Such R & D efforts tell us the need to use methods and technologies that are suitable for ones own environment. In the case of West Texas, due to weather conditions, it is necessary to develop cotton varieties which can withstand severe drought conditions. Farmers are conserving water by using drip irrigation method. These are some examples of technology adaptation. In addition, the US cotton industry is doing a great job in communicating with all stakeholders such as the Government with regard to support programs and with end-users with regards to sustainability and comfort characteristics of cotton. These practices are enabling the US cotton industry to be highly competitive. The Indian technical textiles industry should learn from such success models and should bring in technologies that are relevant and viable to Indian situation and market conditions.
Enablers and Action Items
There are four important enablers which will help the nascent technical textiles sector in India. These are:
Growth in the economy. It is predicted that the GDP growth in 20010-11 will be around 7.8%.
Population growth and abundance of young population.
Rise in disposable income and
Need for diversification in the textile industry for its survival and growth.
Necessary Action Items for Growth
Relevant technology adaptation.
Developing the converting sector. The sector which takes roll goods (or fabrics) and makes them into usable products is of much need in India.
Creating a supply chain for the technical textiles sector which will link roll good manufacturers, fiber producers, convertors, retailers and end-users. Heretofore, this aspect is a missing link.
Creating growth friendly policies with particular emphasis on the converting sector. Policies to-date are not focusing on this sector.
Creating communication channels to infuse technology and techno-commercial information across the supply chain.
In summary, proper planning, pertinent technology adaptation, creating supply chain and proper knowledge dissemination for all stakeholders will enable the growth of technical textiles in India.
