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29.03.2022

The man-made fibers industry at the turning point of time

"You don't tear down a house before the new one is ready for occupancy."

Textination talked to the Managing Director of the Industrievereinigung Chemiefaser e.V., Dr. Wilhelm Rauch, about his assessment of the turning point that the man-made fibers industry is currently facing. What are the risks and threats, and what needs to change in order to remain a competitive player on the global market.

"You don't tear down a house before the new one is ready for occupancy."

Textination talked to the Managing Director of the Industrievereinigung Chemiefaser e.V., Dr. Wilhelm Rauch, about his assessment of the turning point that the man-made fibers industry is currently facing. What are the risks and threats, and what needs to change in order to remain a competitive player on the global market.

US President Joe Biden has called his Russian counterpart Vladimir Putin a war criminal in connection with the invasion of Ukraine. The United Nations' highest court, the International Court of Justice in The Hague, has ordered Russia to immediately end its war against Ukraine. How do you personally assess Russia's behavior?
Dr. Rauch:
With family roots in the Rhineland, Central and East Germany, I grew up at a time when, as a result of the division of Europe, families were separated and people were ruthlessly shot in the middle of Germany who wanted to cross the inner-German demarcation line towards the West. Since 1989, the fall of the Iron Curtain has led us into a period that lasted more than 30 years and allowed us, at least in Europe, to experience an era of peaceful coexistence between the great power blocs, intensive trade relations and prosperous states.

It is more than shocking to see today how Russia is trying to turn back the wheel of history in Europe with a brutality that the youngest generation growing up in Europe has fortunately not had to experience so far, and it brings back the worst memories of the Cold War, which everyone hoped would never return. If today in Ukraine even facilities for the peaceful use of nuclear energy are fired upon, a dimension has been reached that one does not want to extrapolate any further. In addition to the unspeakable human suffering caused, which we can only begin to alleviate by accepting Ukrainian refugees, in the long term all trust in political promises is being gambled away, which, however, is essential both for peaceful coexistence and for economic cooperation. We are facing a reordering of the world in which supply relationships and dependencies with or on autocratic states must be evaluated much more sensitively for each individual case.

The economic consequences of the Russia-Ukraine conflict are becoming increasingly clear. The Association of German Chambers of Commerce and Industry (DIHK) is correcting its forecast for 2022, but does not yet see a recession. What are your expectations for the industry in the current fiscal year?
Dr. Rauch:
The man-made fibers industry has been severely affected by the SARS-CoV-2 pandemic in the last two years. Planned investments were first postponed and then finally abandoned. By the end of 2022, three man-made fibers producers will close their doors in Germany compared to 2019. The industry started the current year on a very hopeful note, although previous issues such as REACH and, above all, energy costs were already increasing in severity before the Russia-Ukraine war. The economic consequences of the war will have a negative impact both directly in the form of increased energy prices and indirectly through changes in international competitive conditions.

What do the war in Ukraine and the economic sanctions against Russia entail for the upstream supply chains of the manmade fiber industry?
Dr. Rauch:
The immediate upstream supply chains will not be affected much by this war at first. However, we must expect supply chains in other industries to be disrupted. If, for example, certain raw materials or products are no longer available, this can have a noticeable impact, starting with logistics (mobility) and extending to components in production technology facilities. An example of this is the availability of cable harnesses, which were previously produced in Ukraine and are indispensable in many electronic components for man-made fibers production.

What is the relevance of Ukraine and Russia as sales markets for IVC member companies?
Dr. Rauch:
If we take the last year before the outbreak of the SARS-CoV-2 pandemic as the reference year, exports to Ukraine and the Russian Federation account for around 1.6% of total exports of man-made fibers from Germany. On average, a loss of sales to these countries can be tolerated, although it should not be forgotten that in individual cases - depending on a company's product portfolio - the impact can be quite significant. Looking beyond the horizon, it is not only the direct exports of man-made fibers to the war region that are of significance, but also deliveries of products in which man-made fibers are processed. Here, there are now interrupted supply relationships that result in order losses for the man-made fibers industry.

Certain industries are particularly affected by the consequences - what does this mean for the man-made fibers sector as a supplier industry?
Dr. Rauch:
Wherever production is cut back along the downstream value chain in which man-made fibers were used, the effects will be noticeable with a temporal delay. This applies, for example, to deliveries to the automotive sector, where the production of new vehicles comes to a standstill due to a lack of components originating from Ukraine.

How are exploding energy prices and the gas embargo affecting man-made fibers producers in the DACH region?
Dr. Rauch:
Even before the Russia-Ukraine war, European energy costs were already at a level that hit our members hard. For example, European gas costs currently rose by ten times from approx. 12 EUR/MWh to approx. 120 EUR/MWh as a result of the war, while in the USA they "only" rose by two and a half times from approx. 8 EUR/MWh to approx. 18 EUR/MWh. The situation is similar for electricity prices in Germany in particular, which have also risen by a factor of 10 from an already high level. Further price increases in Europe cannot be ruled out, but are more likely. Against this background, moderate adjustments in man-made fibers prices are only a drop in the bucket. A market development with virtually exploding energy costs cannot be reliably depicted by any company, nor can it be priced in such a way as to cover costs.

As the industry association of the man-made fibers industry, what do you think of "Freeze for Peace" or a stop to all Russian gas and raw material imports?
Dr. Rauch:
In Germany in particular, we have deliberately made ourselves dependent on Russian gas, contrary to all international warnings, by defining it as necessary for the bridge technology of electricity generation that we will need after the shutdown of coal- and nuclear-based power plants, before the availability of a sufficient amount of so-called "green" energy is assured. Gas is also needed for heating purposes and as a raw material, so it takes on the function of an all-rounder.

A boycott-related import stop would not only have serious negative consequences for the man-made fibers sector, but for the entire German industry and the majority of private households. As I mentioned at the beginning, it is the order of the day to help alleviate human suffering by taking in Ukrainian refugees. But this is not the end of the crisis. It must be assumed that the war situation will not be resolved in the near future. However, in order to cope with a protracted crisis situation, our economic strength must be maintained in order to be able to cope with the challenges ahead. An import freeze would be counterproductive in this respect. Since, due to the latest developments, gas deliveries are now to be paid for in rubles, there is rather a risk that Russia, for its part, will stop gas deliveries. In their effect, the two scenarios do not differ. The only thing that is certain is the fact that the availability of Russian gas to Europe is no longer guaranteed. Ultimately, the Russian demand to switch payments to rubles, which is not only aimed at revaluing the ruble, makes it clear that Russia is not dependent on Europe as a buyer of its gas. This would mean that a "freeze for peace" would lead to nothing. In the Far East, there is already a potential buyer of Russian gas to obtain it cheaply and safely, and which is also a major competitor of the European chemical fiber industry: China.

Are agreements with the United Arab Emirates and Qatar a good substitute solution for gas and oil supplies from Russia?
Dr. Rauch:
It is not a question of evaluating a measure in the sense of good or bad, but of whether it appears suitable in this particular situation to reduce unilateral dependencies on an aggressor before sustainable solutions are available in sufficient quantity. In this respect, there should initially be no ideological barriers in the measures to be examined for feasibility. The agreements concluded with the United Arab Emirates and Qatar after certainly careful political scrutiny are individual decisions and represent only one piece in the mosaic among many.

Does the saying "First we had bad luck, then we were not lucky at all" apply to the current economic performance of the industry - or: how do you assess the influence of the Corona pandemic and the war situation in this respect?
Dr. Rauch:
Both the SARS-CoV-2 pandemic and the Russia-Ukraine war are events with a global character. While the first event affected all countries equally sooner or later, the impact of the Russia-Ukraine war must be assessed in a more differentiated manner. The consequences of the war primarily affect companies in Europe, and there in particular those countries which - as mentioned above - have placed themselves in unilateral dependencies like Germany. This does not apply to the man-made fibers industry in particular. Although there are many fellow sufferers in other industries, this does not improve the situation, of course.

What does the industry expect from the political leaders in Berlin and Brussels in the future?
Dr. Rauch:
The wish list can be fixed to a few core elements:
In the long term, we need a supply of energy and raw materials that is not based on the dependence of a few autocratic states. On the way there, against the backdrop of the Russia-Ukraine war, previous exit scenarios from coal and nuclear energy must be reconsidered without prejudice with regard to their timeline. Or to put it more concisely: You don't tear down a house before the new one is ready for occupancy.

But energies from renewable raw materials must also be offered at prices that allow global competitiveness. According to a study by DECHEMA and FutureCamp, the chemical industry has calculated a price of 4 ct/kWh (including all taxes and fees). We are miles away from this today.

The revision of REACH must not lead to further bureaucracy and requirements that tie up capacity in companies. What we need in Europe is not dotting the i on Maslow's hierarchy of needs, but to ensure that we do not slide down the levels step by step and that the i dot floats in the air without an "i".

European economic policy must focus on the international competitiveness of European industry. It is not sufficient to consider and regulate the European Union only from the point of view of the internal market. The planned carbon border mechanism is such an example. It is intended to impose customs duties on imports that carry a high CO2 burden. This may protect the domestic market, but it does nothing at all to help export-oriented European industry such as the man-made fibers sector on the international world market, because European production costs remain too high by global standards despite the carbon border taxes.

The European Commission must increasingly recognize the European industry and with it the man-made fibers industry as problem solvers. Man-made fibers are indispensable as products for the energy turnaround (rotor blades for wind turbines), lightweight construction in mobility (lightweight car bodies in composite systems), sustainable road construction (geotextiles to reinforce the road surface and increase its service life), reduction of steel-reinforced concrete and thus cement, sand and gravel (reinforcement with high-tensile man-made fibers) and medical products (medical masks, bandaging materials, stents).

In Europe, we again need more market economy and no small-scale regulations that are adapted again and again and proliferate into an impenetrable thicket.

With all the wishes to politicians mentioned above, let me finally mention the following with regard to the current situation: In 1961, after the Berlin Wall was built, Russian and American tanks faced each other at Checkpoint Charlie at a distance of less than 50 meters, ready to fire.

A year later, in October 1962, nuclear-equipped American and Russian naval units met head-on in the Cuban Missile Crisis. Both John F. Kennedy and Nikita S. Khrushchev - bitter rivals in the contest of political systems - were sensible enough at the time not to let the situation escalate.

At present, I wish our national, European and transatlantic politicians’ unconditional determination in the defense of our free democratic values, but I also appeal to all politicians worldwide to take to heart one of Albert Einstein's fundamental perceptions: "I don't know what weapons will be used in the Third World War. But I can tell you what they'll use in the Fourth - rocks!"

Source:

Textination

The Interview was conducted by Ines Chucholowius, CEO Textination GmbH

(c) Deutsche Messe AG / Sonia Wedell-Castellano, Global Director DOMOTEX
15.10.2019

Interview with Sonia Wedell-Castellano about DOMOTEX 2020

  • Sonia Wedell-Castellano, Global Director of DOMOTEX,answers key questions on DOMOTEX 2020
  • "We're the world's flagship fair: At DOMOTEX, you can view the entire range of products from the global floor coverings industry."

As Global Director of DOMOTEX, you took over responsibility for DOMOTEX just over a year ago. What have you been able to accomplish so far?

  • Sonia Wedell-Castellano, Global Director of DOMOTEX,answers key questions on DOMOTEX 2020
  • "We're the world's flagship fair: At DOMOTEX, you can view the entire range of products from the global floor coverings industry."

As Global Director of DOMOTEX, you took over responsibility for DOMOTEX just over a year ago. What have you been able to accomplish so far?

In rapid response to the wishes voiced by our exhibitors and visitors, we have, for example, opted for changes in the fair's layout. Previously, premium suppliers were located in the immediate vicinity of the special Framing Trends showcase. They will now go back to their traditional market environments, in their respective halls. For visitors, this means shorter distances and easier on-site orientation. We are also addressing our target visitors in an even more differentiated and more targeted way. We have also reassessed the concept of our classic "Preview" press conferences, and are now touring key media cities, visiting editorial offices and organizing informal dinners, to which we invite exhibitors as well as partners and the press – a networking event with a view to 2020.

Nearly 97,000 square meters of space have already been sold for DOMOTEX 2020. Who are some of the more interesting exhibitors that visitors can look forward to at the event?

With some 1,500 exhibitors anticipated, the list is already quite long, so I'll only mention a few: Rug Star by Jürgen Dahlmanns, Naziri, Creative Matters, Galleria Battilossi, Rica Basagoiti will be showing in the handmade carpets segment. In the category of machine-woven carpets we are looking forward to Oriental Weavers, Carmel Carpet, Royal Hali, Prado Egypt, Stefany and Reinkemeier. US Floors, Windmöller, Moderna (MeisterWerke) and IVC will be exhibiting their resilient floor coverings, while ter Hürne, Decospan, BIMBO, SWISS KRONO and Forestry Timber will be presenting parquet, wood and laminate flooring. The manufacturers of installation technologies include Mapei, Selit, Välinge, Unifloor, Uzin Utz and Küberit.

What is the ratio of domestic to foreign exhibitors?

Of all Deutsche Messe events, DOMOTEX is by far the most international. This applies to exhibitors and visitors, alike. German exhibitors account for some 12% of display space, with the international share consequently running at 88%. This is naturally quite an achievement for the world's leading marketplace for floor coverings and carpets. That said, we also aim to expand our exhibitor lineup by attracting more exhibitors from Germany and the rest of Europe.

As a result of the changes made to the show's layout plan, Hall 8 will now be devoted entirely to the Framing Trends display. What can visitors expect to see there – and what's new?

Hall 8 will star as the pulsating, emotive heart of the event, with visitors being welcomed and wowed by a large textile horizon showing projections of atmospheric images. Our new lead theme of "ATMYSPHERE" will address how floors can improve our sense of well-being. In a series of Frames, we'll be showing the contribution that a floor's appearance makes to the overall atmosphere, how its texture dampens noise and how ecological production techniques make for a healthier indoor climate. Manufacturers, artists, universities and, for the first time, start-ups will take up these and numerous other characteristics to create soothing, personal worlds of experience via their creative approach.

Our partner agency, Schmidhuber will moreover be staging four pavilions consisting of furnished themed rooms, so as to make the lead theme even more tangible. "Hotel – Sustainable", for example, illustrates the impact of materials and furniture, including acoustic paneling in a hotel room. "Wellness – Green Living" emphasizes health-promoting and environmentally friendly aspects. "Conference – More than Floor" focuses on acoustic solutions, going all the way to upholstered seating landscapes, while "Health – Wellbeing" features a yoga room for relaxation. In the space between these focal points, the advantages of outdoor floors and a flowing transition from indoors to outdoors will be highlighted. The aim is not only to provide inspiration to designers, architects and retailers, but also to illustrate concrete areas of application.

Visiting professionals from retail, the skilled trades and architecture are among the main target groups at DOMOTEX. All of these groups have different needs and requirements. Apart from having interesting exhibitors, what will DOMOTEX be offering its attendees?

There will be something for everyone at the event. For top buyers from the wholesale and retail trades, we'll be offering a special service package to make their visit at DOMOTEX as pleasant as possible.

Craftspeople can look forward to a more state-of-the-art "Treffpunkt Handwerk" – a forum featuring issues ranging from the challenge of digitalization for the skilled trades and topics related to personnel and recruiting young talent to current product trends and cutting-edge application techniques. In addition, craftspeople can visit their associations here, such as the Federal Association for Parquets and Flooring Technology. In the adjacent live-action zones, our exhibitors will once again be giving practical tips on how to prepare and lay wooden floors.

As a special showcase, Hall 8 is ideal for architects and designers. On all four days of the event there will also be a wide range of presentations by renowned architects followed by discussions. This year for the first time ever, exhibitors can join in on staged panel discussions. The focus will be on the latest social transformations and their significance for architecture, in particular as it applies to floors. In specific terms, trendy topics such as building information modeling (BIM) or healthy living and working will be explored. In addition, AIT Dialog Tours – guided tours where internationally renowned architects and interior designers will share their personal highlights of DOMOTEX – will be conducted daily.

Exhibitors displaying new products and services for digitalization will be of interest to all three target groups. For retailers, this will consist of digital sales tools, for architects, the focus will be on building information modeling, and for craftspeople, interest will revolve around things like how to introduce an up-to-the-minute order database.

What do you see as the top USPs of DOMOTEX?

We are the world's only global business platform for carpets and floor coverings: At DOMOTEX, you can see and experience the entire range of products on offer by the global floor coverings industry.

Here you can get an overview of the latest trends and developments in the international market and keep abreast of the latest developments. Manufacturers and buyers as well as partners, architects and designers from all over the world come together at DOMOTEX. New business relationships and cooperation opportunities are emerging that were hitherto inconceivable. The show attracts visitors of extremely high caliber, nearly 90 percent of whom play a decisive role in their companies' buying decisions.

 IVC introduces the 16th Edition of the Study "The Fiber Year" with Key Sector Data © The Fiber Year GmbH
10.05.2016

IVC INTRODUCES THE 16TH EDITION OF THE STUDY "THE FIBER YEAR" WITH KEY SECTOR DATA

  • Fiber Production for the first Time in five Years lower than Consumption
In a press conference on May 3rd 2016, the industry association IVC published in an established tradition both the national and the global sector data: Andreas Engelhardt, CEO of The Fiber Year GmbH left no question about all important raw materials, natural and synthetic fibers and nonwovens unanswered and presented In his study a forecast horizon till 2020. 20 country profiles of leading production as well as consuming nations completed next to statements from sector experts and an extensive statistical annex the new edition. The key messages were focused on production, consumption and trading volume.
 
For the first time in five years fiber production is less than consumption
 
Since 2008 the global fiber production dropped again for the first time.
  • Fiber Production for the first Time in five Years lower than Consumption
In a press conference on May 3rd 2016, the industry association IVC published in an established tradition both the national and the global sector data: Andreas Engelhardt, CEO of The Fiber Year GmbH left no question about all important raw materials, natural and synthetic fibers and nonwovens unanswered and presented In his study a forecast horizon till 2020. 20 country profiles of leading production as well as consuming nations completed next to statements from sector experts and an extensive statistical annex the new edition. The key messages were focused on production, consumption and trading volume.
 
For the first time in five years fiber production is less than consumption
 
Since 2008 the global fiber production dropped again for the first time. The global volume fell by 0.7% to 94.9 million tons. The decline was decisive caused due to cotton which experienced its steepest decline in forty years. The production in the current season is estimated with 22.0 million tons, a decrease of 15.6% compared to the previous season.  With a slight decrease in demand by 2.2% at the same time the stocks remain with over 20 million tons still at an enormous height. High growth rates of China's chemical fiber industry let expect a massive supply surplus. The global fiber demand in the past year has grown to 96.7 million tons. This represents an increase of 3.1% over the previous year, the weakest growth in four years due to a continuously decreasing growth of demand.
 
With a world population of about 7.3 billion people, this results in an average consumption per capita of 13.3 kg of textile materials for garments, home textiles, carpets and technical textiles. Synthetic fibers showed an increase of 6.6% to 60.7 million tons, significantly driven by a growth of polyester. The increase is largely caused by the area of filament yarn, as staple fibers achieved a moderate growth of 2.4% only. This can be seen as a recovery after this part of the sector showed in the last year a decline for the first time since 2008.
 
Cellulose fibers showed for the first time after seven years with strong growth a slight fall in production of 1.2% to 6.1 million tons. The market is almost completely dominated by staple fibers. Due to a growth across Europe and Asia viscose fibers could increase their volume by 1.1% to 4.9 million tons. In contrast Acetate showed a loss in a second consecutive year. A decreasing production activity was seen in all markets and regions with a global slump of 7.5% to 0.9 million tons. This drastic cut was significantly stronger than the losses in the end-use consumption, which can be seen as a clear indication of global destocking. The long-term shrinkage of cellulosic yarns for textile applications has developed further, so that the global supply of about 350 000 tons is equivalent to the level of the early 1930s.
 
The market for natural fibers experienced with a reduction of 13.2% to 28.1 million tons the biggest annual decline since 1986, which is mainly due to cotton. The production of wool was unchanged at 1.1 million tons while for bast fibers a reduction of about 5% is expected.
 
In a focus on the different countries, the People's Republic of China could further strengthen its dominant position with an increase in production output by 8.9% to more than 47 million tons. The United States could consolidate their second place despite a slight  decline of 2.5% to 2.9 million tons, while India experienced a continued decline in the fifth following year to 2.6 million tons.
 
Trading volume grows unabated
 
According to the World Trade Organization (WTO) during the year 2014 the textile and clothing exports reached around USD 820 billion. The for the yearbook researched trade flows of 26 countries and the EU (28) estimate that the worldwide export will fall to USD 780 billion in 2015. While the Chinese exports developed a first decrease in six years, Bangladesh, Cambodia, Myanmar and Vietnam were able to continue to raise their export value. The dynamic development particular of Vietnam with its booming textile industry can be attributed to the influence of free trade agreements.
 
Fiber production in Germany
 
Despite international trends and many political challenges, which increasingly plague the German chemical fiber producers, man-made fibers "made in Germany" are still no dying species, Dr. Wilhelm Rauch, managing director of the industry association said.
 
While in 2014 the chemical fiber industry in Germany suffered a decline in production volumes of 6.1%, the production volume stabilized at almost the same prior-year level. The production of cellulosic fibers remained with a reduction of - 6.8% (previous year - 8.6%) - conform to the worldwide slump of cotton. Synthetic fibers (in particular Polyester) however achieved a slight increase of + 1.6% (last year - 4.9%). Thus the reduction in production volumes kept with - 0.9% in limits.
 
As consequences of this a sales decline of - 4.8% and associated necessary personnel adjustments with -1.4% are alarming signals, that the site conditions for chemical fiber producers in Germany (and Europe) are urgently in a need of improvement. A positive turnaround could certainly bring a fair competition protecting and an industry-friendly approach of the EU business policy. But the emphasis of the current policy debates - about the recognition of the market economy status of China as an example of politically motivated developments let suppose a very different intension, so Mr. Rauch. Despite unfavorable economic expectant conditions it is to owe the commitment and innovation power of the local manmade fiber sector that they claim to withstand the international competition.  
 
Nevertheless, the sector would appreciate a somewhat lower political headwind.
 
Fiber processing
 
In 2015 the processing of all types of fiber in Germany could not keep the level of the previous year and suffered a decrease of -11.6%. The total imports of chemical fibers - mostly from the 28 EU countries with +54% followed by Asia with + 40% - show a plus of 1.1% (synthetic staple fibers +1.9% and filaments +1.7%), while cellulosic fibers suffered a slump of -7.4%. The total export is declining slightly (- 2.0%). Despite the reduction of total exports, here the shares in the various regions of the world compared to the previous year stood unchanged.
 
Further information is available at:
 
Andreas Engelhardt 
CEO
The Fiber Year GmbH 
Hauptstraße 19 
9042 Speicher, Schweiz 
Tel.: + 41 / 71 / 450 06 82 
 
Creta Gambillara
Economics and Public Relations
Industrievereinigung Chemiefaser e.V.
Mainzer Landstraße 55
60329 Frankfurt am Main
Tel.: 069 / 279971 – 39