Bangladesh consumes textile dyes and chemicals worth about 800 million USD every year. Which is a significant amount, and so the country should play a potential role in dyestuffs and chemicals manufacturing industry. Mechanisms should be devised to get more control in the supply chain.
Textile Today Research
Manufacturing of textile dyestuffs has been halted and disturbed for several times through several months in major manufacturing countries. Strict implementation of some regulations in China affected the supply of raw materials for dyes manufacturing to major global manufacturers located in India, Korea and even in China. As textile fabric mills had to continue to process fabrics for global brands (who hardly considers backend supply difficulties), the demand for dyes was strong and so price continues to rise. Fabric mills didn’t receive dyes consistently even after paying the higher amount.
Figure: Recently Bangladesh has been increasing its fabric manufacturing capacity significantly. A great number of new state of the art dyeing machines like this one in the picture (in Knit Concern Ltd.) has been installed.
Altogether the supply chain have been disturbed and the most affected counterpart was as always the fabric mills located in countries like Bangladesh. As the whole scenario was going unpredictable and nobody gave any precautions, the mills had to source dyes in much high price and many within the system played the situation taking advantage.
Industry insiders opined that such incidents have been happening occasionally through last 4-5 years. And most of the time the fabric manufacturers have been suffering. With a trend where dyestuff manufacturers are being more centralized and the industry is getting more monopolized, the fabric mills are becoming victims. Introduction of control systems like Zero Discharge to Hazardous Chemicals (ZDHC) and ‘Bluesign’ has made things even difficult.
Recently in a Textile Today seminar participants from fabric mills mentioned that everybody is always showing the finger to fabric mills for complying MRSL, RSL and delivery commitments, whether the input suppliers like dyestuff manufacturers are not supporting by supplying right products uninterruptedly. Fabric mills urged resolution of such supply chain uncertainties very soon and these should not be repeated in future. However as the structure of the industry is not getting any better shape, vulnerability is expected to continue.
The demand for dyestuffs continues to rise
Amid such sever uncertainties, a report published by quantified B2B market research platform MarketsandMarkets™ has said that the textile dyes market is projected to grow from USD 7.34 billion in 2017 to USD 9.82 billion by 2022, at a CAGR of 6 percent between 2017 and 2022.
The report also predicted that Asia Pacific (APAC) is expected to dominate the global textile dyes market during the forecast period. Low labor cost and growing demand owing to the large population in APAC countries are some of the factors that are driving the growth of the textile dyes market. Textile Today published an analysis on the dyestuff market in June 2018 issue. The report titled ‘Factors affecting textile dyestuffs market’.
The MarketsandMarkets™ report also said, policies mandating the use of environment-friendly and low Volatile Organic Compounds (VOC) products have led to innovation in the textile dyes industry. In addition, the strengthening economy of countries such as China and India is attracting new investments in the region. These factors are driving the growth of the textile dyes market in APAC, said the report.
Major players in dyestuff market
Some of the major players in the textile dyes market include Archroma (Switzerland), Kiri Industries (India), Huntsman Corporation (US), Lanxess (Germany), and Zhejiang Longsheng Group Co (China).
These players have adopted various strategies, such as mergers & acquisitions and new product launches, to achieve growth in the textile dyes market. Mergers & acquisitions were the key strategies adopted by the major players to achieve growth in the textile dyes market between 2014 and 2017. This strategy accounted for a share of 50% of all growth strategies adopted by key market players. This strategy has helped companies enhance their product portfolio and expand global presence.
The report explained Archroma as an actively involved company in acquiring emerging companies in the textile dyes market space. For instance, during 2015–2017, it completed the acquisition of two companies. In September 2017, Archroma announced the acquisition of additional 26% shares of M. Dohmen (of which 49% had been acquired in 2014), a multinational group specializing in the production of textile dyes and chemicals. In July 2015, Archroma acquired the textile chemicals business of BASF. The acquisition is expected to consolidate Archroma’s leading position in supplying chemicals dyes to the global textile industry.
Kiri Industries Ltd. is a diversified chemical company based out of Gujarat, India. It manufactures and exports dyes and dyes intermediates in various forms such as powder, granular, and standardized spray. It is also a supplier of basic chemicals in the Indian market and overseas, serving the needs of many industrial sectors such as automotive, textile, and leather. It manages its business across 50 countries and 7 continents through its 2 geographic business segments, namely, India and outside India. The company is highly focused on organic strategies.
For instance, in April 2016, DyStar (a subsidiary of Kiri Industries) introduced ‘Cadira Reactive’ – a new module in DyStar’s Resource Efficiency program at Interdye Shanghai. This concept considerably reduces water, waste, and energy consumption. The concept is expected to help brands, retailers, and production partners to reduce the carbon footprint of their textile goods.
Based on dye type, the disperse dye segment is expected to witness the highest growth during the forecast period. This is due to its use in multiple types of fibers such as synthetic hydrophobic fibers, polyester, and acetate fibers.
The price and supply turmoil of textile dyes
The price of textile dyes has been rising for quite a long time and it will go up more especially for the disperse dyes. In very recent times the price of reactive dyes is getting to ease however the supply uncertainties continue to remain. According to the MarketsandMarkets™ report, based on dye type, the disperse dye segment is estimated to be the largest dye type segment of the textile dyes market in 2017, in terms of both value and volume. The demand for disperse dye continues to be driven by its use in many types fibers such as nylon, polyester, acetate, and triacetate.
Mentioning a news report Wang Rui, Senior Marketing Specialist at YaBang (dyes, pigments, pharmaceuticals, and intermediates supplier from China), informed that every October 1st week, when the air quality is declining and there are foggy weather warnings, all chemical companies must stop the peak production in China. It is foreseeable that from October 2018 to 2019, the whole Zhejiang will continue to take much stricter measures in environmental protection. And the supply of dyestuffs and raw materials of dyestuffs won’t be smooth soon.
According to the industry insiders, the production of major dyestuff manufacturers in China are still being disturbed and affected because of the environmental protection in the northern of Jiangsu province, China. In the face of the upcoming season of printing and dyeing industry, the continuous reduction of intermediates and dye stocks, the disperse conventional varieties, including Disperse Black ECT 300% and Disperse Blue BGE, the shortage of such small varieties of dyes, the prices of disperse dyes increased again at the end of August, 2018.
Authentic sources from several Chinese dyestuff manufacturing companies said that the Environmental supervisor team of China recently met in Hangzhou, the capital and most populous city of Zhejiang Province in East China. The team announced to investigate from August 11th to September 11th in Zhejiang province, means in the following days many factories are facing to be limited to produce or stop production or close the door. A notice from a major dyestuff manufacturer to a Bangladesh customer mentioned that “All small items like Red 167, Green 9, Red 343, Yellow 114, Orange 29 etc won’t be produced during the time”.
The sources also said that very recently, the paper industry has been affected as well, carton box factory announced they are unable to get raw materials and eventually has increased the price; electroplate industry is almost closed due to smell and pollution. In this regard, dyestuff manufacturers are facing serious environmental check not same as before, the price increase is being a daily issue in China.
What is the way out to the challenge?
There is no doubt that the textile dyeing industry is one of the most chemically intensive industries on the planet. However, there is a growing consumer consciousness to purchase eco-friendly garments. And eventually, textile industry initiatives like ZDHC and Blusign is in effect already. The dyeing processes used to color the garment are opting for low-VOC technologies and eco-friendly procedures and fabric mills have to comply with MRSL and RSLs. Consumers are also willing to pay a higher price for such products. But all these aspects are hitting mostly to the fabric manufacturers.
Being one of the major textile fabric manufacturers in the world Bangladesh has to craft policies to save its industry from such turmoil. When the global superpowers like the US and China are becoming more protectionists, it is clear that countries like Bangladesh also have to be protectionist. Instead of believing in so-called free trade, Bangladesh has to reduce risk in supply and availability of raw materials. Dyes and chemicals are major raw materials for textile mills. Bangladesh consumes dyes and chemicals worth about 800 million USD every year. Which is a significant amount, and so the country should play a potential role in dyestuffs and chemicals manufacturing industry. Mechanisms should be devised to get more control in the supply chain.
Alternative environment-friendly sources of raw materials for dyestuff manufacturing have to be explored. Research and development in this aspects is needed. The brands should be aware of the supply chain difficulties and they should adjust their requirements and budget accordingly as if other stakeholders in the supply chain won’t get affected only. Industry initiatives like ZDHC and Bluesign should promote them more in the consumer level to make sure extra expenditure from the consumers for the environment and health-friendly products. And the initiatives itself to make sure that that extra money paid by consumers flow back to the manufacturers who are the real contributor to manufacturing the right products for them.