Mr. Pranay Sahu | Global Nonwovens Scenario

Welspun Group I Textiles

GLOBAL SCENARIO NONWOVENS

GLOBAL NONWOVENS SCENARIO

Welspun Group | Textiles


Global consumption of Nonwovens

North America

Consumption of 2 million tonnes

CAGR : 5.4% (13-18)

South America

Consumption of 0.4 million tonnes

CAGR : 6.2% (13-18)

Europe


CAGR : 4.6% (13-18)

Asia


CAGR : 11.1% (13-18) Rest of the world

Consumption of 0.4 million tonnes CAGR : 2.4% (13-18)

(Total maket size 8 million tonnes)Source: Future of Global Nonwoven Market, Smithers Apex 2014


About Nonwovens

• World Nonwovens consumption in 2013 stood more than 7 Mn MT valued at US $ 33 Bn • It is projected to reach 11 Mn MT by 2018 valued at US $ 47.5 Bn (CAGR 7.5%)

Source: Future of Global Nonwoven Market, Smithers Apex 2014

CAGR of 6.4% Projected CAGR of 7.5%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

5818 6001 63706854

73757936

85539188

988310637

11445

World Nonwoven Consumption

Consumption '000 MT


Global Consumption Trend

2008 2009 2010 2011 2012 2013

1556 1592 1640 1705 1795 1912

270 281 293 307 325 3471722 1739 1776 1834 1913 2000

1951 2059 23162641

29473241320 330

346366

395436

Geographic Nonwovens Consumption 2008-13, 000 tonnes

North America South America EuropeAsia RoW 27%

5%

30%

34%

5%

Global NW Consumption TrendNorth America South America EuropeAsia RoW

24%

4%

25%

41%

5%

Asian Consumption Increased by 8% over 5 years

FY 2008 5.8 Mn MT

FY 2013 7.9 Mn MT • Asia registered highest growth CAGR of 10.7% in

consumption of NW.• Asian NW consumption moved from US $ 7.5 Bn to

US $ 12.3 Bn.



Why Nonwovens Growing


Saves labour & time Cost (Energy/ resources/raw material)

Global Economics/Demographics

Global population changes for adult incontinence & baby products, Higher income

Environmental Issues- Regulatory pressure, Consumer

desires (Ex. Lenzing Tencel, PLA) , Retailer proactivity

Performance

Product differentiation/ customization


Nonwovens marketIndustry dynamic volatile and

competitiveFragmented, ripe for consolidation

Substitutes – Low, Increasing use of nonwovens at expense of other material

Suppliers – Forward

integration unlikely

Polymer market fundamentals to

remain weak

Barriers to entry- Product legislation, Innovation capacity & investment required.

Customers – Limited

backward integration.Very strong

relationships in hygiene

Nonwoven Industry dynamics


Sensitivities in Nonwoven Business

Raw material cost - Raw material cost represents 55-60% of sales. - Polypropylene and polyester key raw materials. - Prices dependent upon the price of crude oil and

manufacturing capacity and demand.- Industry usually follows ‘pass through’ mechanism.

Economics- Varies on factors such as economic conditions,

conditions specific to industry and specific to each company

- Other factors such as geographical, political etc.


Customer relationship - High degree of dependency on maintaining good relations

with key customers.- In hygiene market even one customer can account for as

much as 30% of sales.

Competition - Competition is intense & producers also faces competition

from global competition.- Competition based upon range & quality of products,

ability to deliver new product, geographical reach, reputation, price and client relationships.


Changes in technology- Important to maintain low cost position- Failure to continually invest to develop a steady stream of

successful new products and processes could increase the cost base and result in reduced competitiveness.

The supply/demand balance- Greatly effects both prices and profitability today on the

aggregate basis, the industry is oversupplied. - Expansion in capacities in China & India.

Legal and regulatory environment- There are many laws and regulations concerning products,

and their composition, use and disposal. These laws are becoming increasingly stringent.


5%5%

4%4%

4%2%

2%2%

2%1%

1%67%

FreudenbergDuPontKimberly-ClarkAhlstromPGIFiberwebJohns ManvilleFitesaGlatfelterAvgolSandlerOther

• Fragmented industry: Top 11 biggest players have market share less than 33% by value.

• Nearly 50% of all industry production of nonwovens is located in facilities in Western Europe, the US and Japan.

• Production is growing strongly in developing countries such as China & India.

Major Producers



Nonwoven Types

Disposable Nonwovens

• Hygieneo Feminine hygiene pads and linerso Baby diapers etc

• Wipeso Baby wipeso Home cleaning wipeso Industrial wipes etc

• Medicalo Surgical gowns & drapeso Instrument wrap & bandages etc

• Other Disposableso Softener sheets o Napkins & table cloths



Nonwoven Types

Durable Nonwovens

• Work wears

• Interlinings & Shoe Inserts

• Synthetic leather

• Coating substrates

• Household applications like table

linens

• Upholstery liners & bedding material

• Wall coverings, floor coverings

• Filtration

• Automotive

• Geotextiles

• Agricultural etc.Source: Future of Global Nonwoven Market, Smithers Apex 2014


Nonwoven Market Mapping

Nonwoven World Market: US $ 33.1 Bn, 7.9 Mn MT

Disposables Durables

• US $12.5 Bn

• 3.5 Mn MT

• US $20.6 Bn

• 4.5 Mn MT

57%

3%

15%

7%

8%

10%Hygiene

Industrial Wipes

Personal Wipes

Home Wipes

Medical

Other

20%

1%

10%

13%

10%10%

2%

7%

3%

6%

3%

12%3%

Upholstry

Garments

Floor Coverings

Building

Geotextiles

Automotive

Agriculture

Coating Substrates

Air Filters

Liquid Filters

Interlinings

Other

Leather

Break-up FY 2013 in Value Terms



Asia

2008 2014 2018 CAGR (13-18)Spunlaid 784 1740 2807 13.7%Drylaid 1054 1804 2524 9.1%Airlaid 79 85 101 3.5%

Wetlaid 34 48 62 6.5%

2008 2014 20180

500010000150002000025000

NW Consumption

NW Consump-tion

• Asia remains the global leader, with a market share of 40.8% and consumption of 3.6 million tonnes.

• The annual expected growth rate from 2013-18 is expected to be 11.1%.


‘000 tonnes


2008

2014

2018

0 500 1000 1500 2000 2500

HygieneMedicalPersonal WipesHomecare WipesIndustrial WipesOthers

2008

2014

2018

0 500 1000 1500 2000 2500

GarmentsInterliningsShoe/LeatherCoating substrates HouseholdFiltrationOthers‘000

tonnes

Disposable nonwovens

Total consumption – 1.2 million tonnesCAGR – 11.7% (2013-18)

Durable nonwovens



Asia


• Europe has market share of 25.2% and consumption of 2.0 million tonnes.• The annual expected growth rate from 2013-18 is expected to be 4.6%

2008 2014 20180

100

200

300

400

RestPolandRussiaTurkey

Western Europe - CAGR : 4.5% (2013-18) Eastern Europe - CAGR : 4.8% (2013-18)

2008 2014 20180

500

1000

1500

2000 ScandinaviaBeneluxSpainItaly UKFrance Germany

2008 2014 2018 CAGR (13-18)

Spunlaid 873 1062 1296 4.6%

Drylaid 624 726 856 4.2%

Airlaid 123 155 192 5.5%

Wetlaid 48 63 77 5.0%

‘000 tonnes


Europe


2008

2014

2018

0 200 400 600 800 100012001400


2008

2014

2018

0 100 200 300 400 500 600


tonnes



Durable nonwovens



Europe


North America has a market share of 24.1% and consumption of 1.9 million tonnes.

2008 2014 20180

1000

2000

3000

NW Consumption

NW Consump-tion

‘000 tonnes

2008 2014 2018 CAGR (13-18)

Spunlaid 693 923 1184 6.1%

Drylaid 644 780 925 4.2%

Airlaid 120 148 180 4.5%

Wetlaid 64 65 70 1.7%

• North America here is defined as the USA and Canada.

• The annual expected growth rate from 2013-18 is expected to be 5.4%


North America


2008

2014

2018

0200

400600

8001000

12001400

1600


2008

2014

2018

0 50 100150200250300350400450


tonnes



Durable nonwovens

Total consumption – .89 million tonnesCAGR – 5.4% (2013-18)


North America


2008 2014 20180

500

1000

1500

NW Consumption

NW Consump-tion

‘000 tonnes

2008 2014 2018 CAGR (13-18)

Spunlaid 141 180 212 4.3%

Drylaid 115 155 208 7.3%

Airlaid 11 28 42 11.4%

Wetlaid 1 2 3 10.1%

South America is positioned fourth and has slowly lost its market share from 4.7% to 4.1%. Its consumption is at 0.3 million tonnes.The annual expected growth rate from 2013-18 is expected to be 6.2%.


South America


2008

2014

2018

0 50 100 150 200 250


2008

2014

2018

0 20 40 60 80 100 120 140 160

GarmentsInterliningsShoe/LeatherCoating substrates HouseholdFiltrationOthers

‘000 tonnes



Durable nonwovens



South America


PP Polymer39%

PET Polymer5%PE Polymer

2%Other Polymer

1%

PP16%

PET17%

Rayon10%

BICO3%

Wood pulp8%

other fibre0%

PP Polymer; 47.7

PET Polymer; 0.2PE Polymer ; 0.8Other Polymer; 1.3

PP; 9.2

PET; 11.6

Rayon; 9.9

BICO; 3.9

Wood pulp; 14.7other fibre; 0.6

PP Polymer33%

PET Polymer10%

PE Polymer 3%

Other Polymer0%

PP21%

PET21%

Rayon10%

BICO1%

Wood pulp2%

other fibre0%

Nonwovens Disposable Durable

• Polypropylene is the most widely used both in polymer & fibre form.• Raw materials mainly dominated by polymers & synthetic fibre.• Other raw materials like cotton, PLA (Polylactic acid) etc growing @10.8% per annum &

expected to grow @12.5%.


Materials for Nonwoven


• Decreasing basis weight resulting reduced raw material costs, shipping, waste disposal & ware house cost.

• Permanently hydrophilic polypropylene/polyesters• New sustainable materials – PLA and Kenaf• Bicomponent fibres

- Utilizes the property of two fibres - Exploits capabilities of both polymers - Brings out multifunctional properties

2008-13, 5.5% decrease in basis weight

2008-13, hygiene dropped 6%Personal care wipes dropped 5.3

Kenaf

Materials Trends


Processes• Innovative SpunMelt• Carding – High speed/High volume processing• Coform - New innovative/combined processes

Post-processes• Surface treatments• Coating/laminations

Major Process Trends


Composite Nonwovens refers to a category of materials which consist of a resinous matrix reinforced by an embedded nonwoven fabric

Thinsulate© from 3M consits normal & micro fibres

• Layered Composites - multi-card process - multi- forming box - multi- beam spunbond process - combination of various forming process

• Composites made by lamination - made up from two or more layers of nonwovens - made up from atleast one nonwoven & at least one different layer (reinforcemet, film)

Spunbond +Spunlace

Product Innovations


EMBRYONIC GROWING MATURE AGING

SALE

S

TIME

Durables

Automotive

Wipes

Filters

Industrial

Personal careHealth careMedical

Interlinings

Carpet backings

N. Am...

W. E

u...Jap

an Asia

S. Am...

S. Afr.

..0

20

40

60

80

100Feminine care Baby careMedical fabricsIndustrial fabrics Apparel

Mar

ket P

enet

ratio

n %

Source: Company data, Fiberweb and Edison Investment Research

Potential for growth

Mr. Pranay Sahu | Global Nonwovens Scenario

Small Business & Entrepreneurship

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