From the Sector

TradeBeyond is hosting Global Sourcing Day 2024, an exclusive, invite-only conference bringing together top executives, thought leaders, and industry experts from the retail supply chain sector. This year’s event will focus on innovative strategies, sustainability, and technological advancements that are transforming retail sourcing.

WHEN: Nov. 12, 2024, 9 AM – 4 PM HKT
WHERE: Cordis Hotel, Hong Kong

Featured speakers include:

• Britton Russell, COO, MGF Sourcing
• Jeff Alpert, CEO, Pillar AI
• Aubree Evangelista, Global Product Manager Social, amfori
• Sophie You, RESET Carbon
• Rick Horwitch, Vice President of Strategy & Innovation, Bureau Veritas

Global Sourcing Day 2024 offers a unique opportunity for senior supply chain professionals to explore the future of sourcing and sustainability. Key topics include:

• AI and Digital Transformation: How artificial intelligence is reshaping sourcing operations.
• Sustainable Sourcing and Compliance: Adapting to evolving environmental regulations and standards.
• Traceability and Transparency: Elevating supply chain visibility to build trust and accountability.

This event provides critical insights for those aiming to navigate the challenges and seize the opportunities within global supply chains in 2025 and beyond.

EDANA, the global association for the nonwovens and related industries, concluded its annual Sustainability Forum at the KBR Royal Library of Belgium in Brussels. This year's forum, themed “Building a Sustainable Future Together,” featured a series of keynote addresses, panel discussions, and collaborative sessions focused on environmental responsibility, corporate social responsibility, and circular economy innovations within the nonwovens sector. With an agenda that bridged policy and practice, the Forum highlighted the latest advancements and strategies aimed at tackling climate change, reducing waste, and enhancing sustainability practices.

Keynote Highlights
The forum featured two keynote speakers: Ana Rovzar, Founder of Polygon AR, opened the Forum with a keynote on the accelerating transition to clean energy. In her speech, she discussed the shift from conventional energy investments to renewables, noting a 50% growth in renewables in 2023 alone. “It is accelerating much faster than people think” she remarked, emphasizing that “real progress requires a united front from governments, businesses, and communities to remove regulatory and technological barriers”.

In another keynote, sustainability expert Mike Barry, formerly of Marks & Spencer, stressed the importance of aligning corporate strategy with sustainability. “Citizens see climate change as a top priority, and companies must act boldly to reduce emissions, especially Scope 3”, he said. “Sustainability is now a vital part of brand identity, and consumers expect more transparency and commitment than ever”.

Innovative Industry Perspectives and EU Policy Impacts
Brieuc Lits, Public Affairs Director at EDANA, examined the potential effects of the EU Green Deal on the nonwovens industry. “The EU’s shift towards balancing sustainability with competitiveness will shape not only policy but the very framework within which we operate”, he noted, emphasizing that the sector must adapt to stay competitive and aligned with regulatory expectations.

Lastly, Paolo Haeusermann, Senior Brand Director and Europe Sustainability Leader at Procter & Gamble, shared insights on advancing sustainability in absorbent hygiene products and emphasized the importance of these items. “We are talking about essential products in people’s lives”, he remarked.

Corporate and Product Sustainability: A Deep Dive
Several industry leaders shared insights on integrating sustainability at every level of business. Carsten Ruff from Nitto Advanced Film Solutions discussed the challenges and strategies of embedding sustainability in corporate culture, particularly in a multinational setting. “Sustainability is not a contradiction to industrial applications; it’s a powerful driver of innovation”, he observed.

Martijn Gipmans from Sphera Solutions highlighted the business value of transparency and life-cycle assessments (LCA). “LCA and transparent ESG reporting can catalyse both business growth and environmental progress”, he explained, stressing the importance of integrated sustainability assessments to reduce the carbon footprint of entire product portfolios.

Christophe Morel-Fourrier, Sustainability Leader for Hygiene, Packaging, and Converting Adhesives at Bostik, introduced the Archimedes tool as a strategic asset for Portfolio Sustainability Assessment. “Archimedes allows us to make transparent, informed decisions that align with our long-term sustainability goals”, he explained. He highlighted that this tool helps companies evaluate the sustainability of their product portfolios, empowering them to make impactful choices that support environmental goals.

The Path Forward: Advancing Circularity and Green Innovation
One of the most discussed topics was the industry's transition toward a circular economy. Albert Hammerschmied from Freudenberg Performance Materials highlighted the importance of post-industrial waste in achieving circularity, particularly in the automotive sector. “The potential for nonwovens in the automotive circular economy is vast, but requires industry-wide collaboration”, he commented.

In a session addressing the future of sustainable practices in building insulation, Alexandre Butté of ANDRITZ Laroche emphasized the importance of sustainable materials and collaboration among stakeholders. “The building industry faces unique sustainability challenges, but with innovation and eco-friendly materials, we can bridge the gap between goals and achievable practices”, he said.

Building a Sustainable Health Sector
Danielle van Horzen, Global Marketing Manager for Hygiene and Healthcare at SABIC, discussed advanced recycling solutions in the healthcare sector. Addressing the challenges of medical waste recycling, she stated, “A significant amount of medical waste is not contaminated, offering us opportunities to create circularity in healthcare.” She pointed to the potential for advanced chemical recycling to enable circular models, helping to tackle the pressing issue of sustainable medical waste management.

The day concluded with a session on the circular potential within healthcare. Kristien Depraetere, Sustainability Coordinator at UZ Leuven, outlined sustainable practices in hospitals, from waste reduction to advanced recycling in medical waste. “Healthcare can lead by example in the transition to circularity, yet we need practical and legislative support to address unique industry challenges”.

Visit to the European Commission
The third day of EDANA’s Sustainability Forum 2024 concluded with an insightful visit to the European Commission, offering attendees a unique opportunity to engage directly with policymakers and gain firsthand insights into the EU's sustainability agenda. Hosted at the Charlemagne Building, discussions centered on pivotal elements of the EU Green Deal, including the establishment of Extended Producer Responsibility (EPR), the scope and implementation of the Single-Use Plastics Directive (SUPD), and the Ecodesign for Sustainable Products Regulation.

Featuring presentations from prominent EU officials like Vicenzo Gente and Werner Bosmans, attendees delved into how these regulations are shaping sustainability strategies across industries. Bridging policy and practice emerged as essential, reinforcing the forum’s dedication to aligning industry actions with current EU regulatory frameworks. The session offered a strong conclusion to the event, reinforcing a shared commitment to a sustainable future in collaboration with EU leaders and regulatory bodies.

Project Re:Claim, a joint venture between the Salvation Army Trading Company and Project Plan B, has been nominated for the Plastics Industry Awards 2024 in the "Recycler of the Year" category. Using an ISEC evo system from PURE LOOP to process used garments and other textiles, the project is Europe’s first polyester textile recycling system. The award ceremony will take place on 22 November in London.

The UK produces more than half a million tonnes of polyester textile waste every year. Project Re:Claim aims to recycle post-industrial and post-consumer clothing and textiles. The focus is on the recycling of post-industrial polyester from contract textiles for hospitals or hotels (e.g. bed and table linen), workwear and school uniforms, as well as promotional banners (e.g. printed sports banners). The fabrics and textiles come from controlled material streams (closed-loop systems), ensuring minimal impurities. The recycling technology used is an ISEC evo 302 E from PURE LOOP. This innovative technology, developed by the EREMA Group’s member, enables efficient production of high-quality rPET from textile waste.

Europe’s first polyester textile recycling system
The plant, installed at a Salvation Army Trading Company (SATCoL) processing centre in Kettering in early 2024, represents Europe’s first commercial scale polyester textile recycling system specialising in post-consumer polyester. SATCoL is the trading arm of The Salvation Army and UK’s largest charity owned textile collector.

Together with Project Plan B, a specialist in garment design with a focus on design for recycling, PURE LOOP optimised its integrated shredder-extruder combination ISEC evo for the specific requirements. "Plan B has a vision, and we are convinced something great can come out of it," emphasises Manfred Dobersberger, Managing Director at PURE LOOP. Thanks to the configuration of shredder and extruder on one drive shaft and the patented double feed ram system, the ISEC evo 302 E gently processes discarded polyester into rPET, which can be reused for new yarns and other products. "Up until now, polyester that had no useful life left would have been disposed of," explains Tim Cross, CEO of Project Plan B. "With the ISEC evo, we can now return textile waste as a valuable material back to the supply chains. It’s a carbon saving solution, and it plays a significant role in helping our collective journey to Net Zero."

Textile recycling: an industry with growth potential
The plant aims to recycle 2,500 tonnes of polyester in its first year, doubling this amount in the second year. In addition to the environmental benefits such as diverting unwearable textiles away from landfill, initial estimates indicate that the production of pellets from Project Re:Claim uses only one-tenth of the energy compared with pellets produced from virgin polyester. One prerequisite for this is an energy-efficient recycling machine such as the ISEC evo.

A new generation of space materials left Earth November. 5 as they head to the International Space Station (ISS) to undergo testing in the brutal conditions of low Earth orbit.

Developed at the University of Bristol, these high-performance materials could be used to build future space stations, spacecraft for interplanetary travel or a new ISS.

They will be placed on the Bartolomeo platform, located on the front of the ISS, where they will orbit Earth up to 9,000 times over the next 12 to 18 months at speeds of 17,000 mph.

The carbon fibre reinforced composites will need to survive temperatures between -150ºC and +120ºC, space debris travelling seven times faster than a bullet, severe electromagnetic radiation, high vacuum and atomic oxygen, which erodes even the toughest materials.

Prof Ian Hamerton, Professor of Polymers and Sustainable Composites in the University of Bristol’s world-leading Bristol Composites Institute, said:  

“Space is the most challenging environment for which to design new materials. You’re pitting your materials expertise, skills and ingenuity against extremes of temperature, mechanical stress, radiation, high speed impacts and more.

“Any one of those might be difficult, and, unfortunately, gaining access to repair them is not an easy option, so the materials we build must survive without maintenance.  

“The opportunity to test our materials in the proving ground of space is priceless and will help our University of Bristol scientists on the ground improve fibre-reinforced materials for next-generation space missions.”

There are four laboratory-made polymers heading to the ISS, each of which has been reinforced with carbon fibres and two contain nanoparticles. All four are the result of University of Bristol research and one is patented.

 If the materials cope in the harsh environment, they could be used to create longer-lasting space components, allowing spacecraft to travel further, and spend more time in space.

Future communities on new planets will need protection against galactic cosmic radiation. Dr Ali Kandemir, Senior Research Associate at the University of Bristol, is one of several Bristol researchers, supported by the UK Space Agency (UKSA), examining the effects of simulated galactic cosmic radiation on the materials, in a European Space Agency (ESA) project.

Dr Kandemir said: “We want materials that are resilient in the space environment and, importantly, materials that can shield humans from that radiation.

“We also want to make these materials sustainable, so that when they reach the end of their life they can be recycled and used again for the same purpose.”

The launch of the Space X Dragon CRS-2 spacecraft this morning is the culmination of five years of work for Prof Hamerton and his team.

It has included the efforts of early career researchers, postgraduates and several Aerospace Engineering undergraduates at the University of Bristol, whose final year research projects have been linked to the space materials project.

The practical support of the University of Bristol-hosted National Composites Centre (NCC) was crucial to the scale up of the composite materials.

Prof Kate Robson Brown, Vice-President for Research, Innovation and Impact at University College Dublin, and a collaborator on the project, said:

“After nearly five years of research to develop novel composite materials for space applications it is very exciting to see our experiment launch to the International Space Station.

“I am proud to be part of this mission, and to be working with the multidisciplinary and multisector research team to deliver integrated real world and digital testing for innovative materials which will help to drive growth in the new space economy.

“This mission also demonstrates how space research funding creates career changing opportunities for early career researchers and PhD students in a sector of huge value to both Ireland and the UK.”

Funding to support the project was supplied by the ESA, the UKSA, Oxford Space Systems and others.

Neste, Alterra and Technip Energies have signed a collaboration agreement to advance the circularity of plastics by providing the industry a standardized technology solution for chemical recycling, also referred to as “advanced recycling”.

The partners aim to globally offer a standardized modular solution, based on Alterra’s proprietary liquefaction technology, to parties interested in building capacity for chemical recycling.

This solution will come in the form of readily designed and engineered liquefaction plant modules, which will allow for lower pre-investment costs, accelerated implementation time, high predictability on project economics and reduced overall capital costs. Contributing to more effective execution of chemical recycling capacity projects, the solution helps the industry to reduce dependency on virgin fossil resources and accelerate the circularity of polymers and chemicals.

Alterra’s technology is a thermochemical liquefaction process, which converts hard-to-recycle plastics into a liquid hydrocarbon product. This liquid intermediate product can then be further refined into high-quality raw materials for new plastics and chemicals. As of today, Neste alone has processed more than 6,000 tons of plastic-derived feeds, including ISCC PLUS certified oil from Alterra’s industrial-scale site in Akron, Ohio.

Combining the expertise of three companies in one solution
Alterra and Neste started collaborating in chemical recycling in 2021, jointly improving aspects of Alterra’s technology and creating respective value chains. Alterra and Technip Energies started their collaboration in chemical recycling in 2022. The three companies now join efforts in a unique endeavor: Alterra and Neste will license the liquefaction technology and Technip Energies will design, engineer and deliver the standardized liquefaction plant solution to interested parties globally.

In the third quarter of 2024, the order index for Italian textile machinery, as reported by the Economics Department of ACIMIT, the Association of Italian Textile Machinery Manufacturers, showed a decline compared to the period July – September 2023 (-19%). In value terms, the index stood at 50.6 points (base 2021=100).

This drop is due to the decrease in foreign markets (-23%), which account for 86% of total orders. Instead, a 15% increase was observed in Italy compared to the third quarter of 2023. The absolute index value for foreign markets was 49.1 points, while in Italy it reached 61 points. In the third quarter, the order backlog amounted to 3.8 months of guaranteed production.

Marco Salvadè, President of ACIMIT, stated: “The order index remains at low levels. The foreign demand is of greatest concern. Investments in machinery remain stalled in some of the major markets for Italian textile machinery, such as India, Turkey, and Bangladesh.”

The growth in order collection in the domestic market is not sufficient to bridge the gap recorded abroad. Furthermore, the increase needs to be compared with the same quarter in the previous year, when orders were already low. Given the weak demand in several key markets, Italian manufacturers are working to seek new opportunities in Countries where the textile industry is still technologically underdeveloped. Marco Salvadè added: “Recently, ACIMIT organized exploratory missions to Turkmenistan and Kyrgyzstan to assess the local textile market and understand the technological needs of its companies.”

Rieter has placed a bond of CHF 65 million with a term of five years and a coupon of 3.5%. The net proceeds of the issue will be used for general corporate purposes. “The bond also extends the maturity profile of our debt financing and increases the diversification of the investor base as well as our strategic flexibility,” said Oliver Streuli, Rieter Group CFO.

The bond was issued by UBS, Zürcher Kantonalbank, Commerzbank and Basler Kantonalbank. The bond will be listed on the SIX Swiss Exchange.

Europe’s textile sorting and recycling industry is currently experiencing an unprecedented crisis, even more significant than during the COVID-19 pandemic. The sector is under immense pressure due to several global disruptions, including the war in Ukraine, logistical challenges in Africa, and the rise of ultra-fast fashion.

As a result, there is an oversupply of used textiles and a sharp decline in demand from traditional export markets. The trade in used textiles between the EU and non-EU decreased from 464,993 tonnes in 2022 to 430,185 tonnes in 2023. Looking at Germany alone, the exports of used textiles to Ghana (one of Europe’s key export markets) have decreased from 7911.2 tonnes in 2020 to 4532.9 tonnes in 2023. Additionally, demand for recycled materials remains low: recycled cotton had an estimated production volume of 319 000 tonnes in 2023 (compared to 24.4 million tonnes of virgin cotton) globally.

Consequently, prices for second-hand textiles have plummeted, while the costs of collection, sorting, and recycling have skyrocketed. Since spring 2024, the prices for sorted second-hand garments no longer cover processing costs, leading to major cash flow problems for sorting operators. Warehouses are becoming overwhelmed, increasing the risk of textile waste being incinerated.

In a joint statement EuRIC Textiles and Municipal Waste Europe expressed their concerns about the development of Europe’s textiles sorting and recycling sector. They have clearly specified what support they expect from Brussel:

“We call on the EU to encourage Member States to lower VAT on textile repair, reuse, and recycling activities, within the existing VAT Directive framework, and explore the possibility of introducing a tax on new, petroleum-based materials. Such measures, if adopted at national levels, would incentivise the use of recycled materials and reduce the environmental impact of virgin textile production.

This situation is likely to raise processing costs for municipalities, potentially resulting in higher waste disposal fees for residents, with the fear that the textiles will be thrown in the residual waste instead. Downstream players in the recycling chain, such as tearing and spinning mills, are also feeling the strain, leading to significant staff cuts.

To avert widespread bankruptcies, immediate financial and legislative support is essential. Short-term financial incentives for EU companies that contribute significantly to a sustainable circular textile chain are needed to safeguard the industry from collapsing. Investment in recycling technologies and infrastructure, alongside targeted support for municipalities dealing with textile waste stagnation, is crucial. We urge the EU to facilitate public-private partnerships to foster innovation in textile recycling and to scale up recycling technologies. This will help increase Europe’s capacity to process textile waste sustainably and efficiently. A swift revision of the Waste Framework Directive (WFD) and rapid implementation of Extended Producer Responsibility (EPR) schemes are also imperative.

In the mid-term, efforts should focus on making the textiles reuse and recycling sector competitive, in line with Commission President Ursula Von der Leyen’s ambition for a competitive and strong circular economy (through a future Clean Industrial Deal and Circular Economy Act). To reach this ambition, the EU needs to increase demand for recycled textiles, expand recycling capacity, and promote the use of sustainable materials through upcoming ecodesign requirements. We call for the mandatory inclusion of a percentage of recycled textile content (most preferably from post-consumer textiles) in all new textile products placed on the EU market, with a clear trajectory for increasing this percentage over the coming years. Without urgent action, Europe risks undermining its climate goals and jeopardising the future of its textile sorting and recycling industry.”

In September, Ontex reached a binding agreement to sell its Brazilian business activities to Softys SA for an enterprise value of approximately €110 million, enabling improved focus on retail brands and healthcare in Europe and North America. Net proceeds of approximately €82 million are due at closing, which is expected during the first half of 2025, subject to customary conditions.

In October, the social negotiations regarding the transformation of the operating footprint in Belgium were successfully concluded. This transformation fits in Ontex’s footprint optimization, allowing to further strengthen Ontex’s competitive position. The total one-time cost is estimated at €(66) million, of which €(37) million was already recorded in the second quarter.

Q3 2024 results

• Revenue was €468 million, up 1.7% like for like. Volumes, including mix effects, were up 4.4%, driven by contract gains and supportive demand in adult care, and by growth in baby care with new retail customers in North America. Sales prices were 2.6% lower, as expected, reflecting raw material index decreases and investments in increased competitiveness. Forex fluctuations were supportive, adding 0.7%, bringing total growth at 2.4%.
• Adjusted EBITDA was €56 million, up 29% year on year, thanks to volume and mix growth and the cost transformation program delivery, contributing €8 million and €14 million respectively. The operational efficiency improved further by 3.7%, driving stronger profitability and competitiveness. Index-driven lower raw material costs more than compensated for lower sales prices, leading to a €4 million positive net impact. The increase of other operating and SG&A costs had a €(12) million effect, mostly due to continued inflation. Forex fluctuations had an adverse effect of €(2) million. The adjusted EBITDA margin thereby rose to 12.0%, up 2.4pp year on year.
• Operating profit was €8 million, compared to €29 million in 2023. The decrease relates to the transformation of the Belgian operating footprint and reflects the additional one-time provisions taken following the recent successful conclusion of the social plan negotiations.
• Discontinued operations generated a €14 million operating profit, compared to €12 million in 2023. While revenue was 3.0% lower like for like and the adjusted EBITDA margin dropped to 7.6%, reflecting more challenging market conditions, this was compensated by a net gain on disposal, that was triggered by the agreement to divest the Brazilian business.
• Net financial debt for the Total Group dropped €9 million to €579 million over the quarter. Combined with the adjusted EBITDA improvement, the leverage ratio thereby fell from 2.5x at the end of June to 2.4x at the end of September.

2024 outlook

Ontex’s management confirms its guidance for adjusted EBITDA margin, free cash flow and leverage for the full year. While new customers are on-boarded in North America, the ramp-up is phased more gradually over the third quarter and the coming months, leading management to review its revenue growth guidance, now expecting:

• Revenue [1] to grow between 2% and 3% like for like;
• Adjusted EBITDA margin [1] of 12%;
• Free cash flow higher than €20 million;
• Leverage ratio below 2.5x at year end.

GarmentTech Istanbul, Turkey's comprehensive meeting point in the field of garment technologies, will bring together leading garment machinery manufacturers and representatives of world-famous brands. The exhibition, which will host professional visitors and global buyers in Istanbul for 4 days, will offer important opportunities to change the stagnation experienced in the sector in the recent period, to take strong steps towards the future and to bring dynamism to the sector.  

The Exhibition will be held at Istanbul Expo Centre (IFM) between 25-28 June 2025 and presents all technologies used in garment and ready-to-wear production from sewing to cutting, ironing systems to packaging, embroidery to denim.

Ready-to-wear and garment, which is the 3rd most exporting sector in Turkey, is one of the leading sectors with its employment and export revenues. Despite the general stagnation in the Turkish and global economy, the increase in ready-to-wear and garment exports, especially in September, reveals the sector's resilience and competitiveness in international markets. The sector, which exported approximately 1.6 billion dollars in September, reinforces its contribution to the national economy with its success. This is made possible by companies' innovative approaches and their ability to adapt quickly to global market demands. GarmentTech Istanbul Garment, Embroidery Machinery Spare Parts and Sub-Industry Exhibition is organised to ensure the sustainability of this success and to provide a new vision to the companies in the sector.