From the Sector

• Sustainability Report 2021 combines financial and non-financial performance indicators
• 2011-2021: 60% reduction in greenhouse gas emissions per metric ton produced. 51.7% renewable source energy achieved
• ESG criteria (environmental impact (E), social values (S), organizational governance (G)) determine sustainability strategy

The new RadiciGroup Sustainability Report has been published. With the goal of continuous improvement, the 2021 report has a broader reporting boundary compared to prior years and takes into consideration all the Group companies, including sales and service companies. Over 30 sites located across Asia, North America, South America and Europe have provided their 2021 data on economic, social and environmental performance.

Not only indicators of a financial nature but also measures of environmental impact (E), social values (S) and good organizational governance (G): the latter so-called ESG criteria have become a priority for RadiciGroup, which is preparing for the new European Union non-financial reporting directive in order to contribute to the transition towards a fully sustainable economic system and increase the value of its companies.

On the environmental front, the themes of climate change and decarbonization are RadiciGroup priorities and part of a policy aimed at the uncoupling of growth and resource usage. The Group undertakes to lower emissions from production and choose limited-impact energy sources. This commitment is confirmed by the numbers: in the 2011-2021 period, total emissions per metric ton produced were reduced by 60%, while renewable source energy used by the Group reached 51.7%. Specific investments to decrease environmental impact are ongoing: in 2021, EUR 3.1 million were allocated to introduce best available techniques and improve emissions abatement and energy efficiency.

RadiciGroup promotes professional growth by valuing competence and investment in training: Group training hours once again rose after the pandemic period from 36,000 hours in 2020 to 46,000 hours in 2021. The training method was often a hybrid, taking advantage of aspects experimented with during the pandemic, that is, less traveling and use of facilities in favour of higher groupwide attendance, without the need for participation limits. Fifty-five percent of total training hours was dedicated to health and safety, which has yielded positive results based on the related indicators.

Angelo Radici, president of RadiciGroup: “Today, the United Nations 2030 Agenda for Sustainable Development is our main guideline on sustainability issues. It shows us an ambitious scenario and urges us to confront a multitude of challenges that affect our enterprise from every point of view. We try to be quick to react and tenacious, staying faithful to our roots and our style, but expanding our perspective to become increasingly more competitive and proactive in the businesses we are engaged in. From the viewpoint of achieving less environmental impact in the future, we propose to be an enabler and facilitator for our stakeholders on themes such as the circular economy, where we see ourselves as protagonists in ecodesign and recycling, as well as innovation, which we put at the service of anyone who is processing and using our products, so as to offer real sustainability solutions together.”

SUPPLY, DEMAND, & TRADE
The latest USDA report featured reductions to figures for both world production and mill-use for both the 2021/22 and 2022/23 crop years.  For 2021/22, the global production estimate was lowered -0.7 million bales (to 116.2 million) and global consumption was lowered -1.9 million bales (to 119.8 million).  For 2022/23, the global production forecast was lowered -1.2 million bales (to 120.7 million) and global consumption was lowered -1.6 million bales (to 119.9 million).

With the decreases in use exceeding the declines in production, figures for global ending stocks increased.  For 2021/22, the projection rose +1.1 million bales (to 84.0 million).  For 2022/23, the forecast increased +1.6 million bales (to 84.3 million).

At the country-level, the largest changes to 2021/22 production were for Brazil (-400,000 bales to 12.3 million) and Uzbekistan (-100,00 bales to 2.7 million).  The largest changes for the 2022/23 harvest were for the U.S. (-1.0 million bales to 15.5 million) and Brazil (-200,000 bales to 13.0 million).

It may be notable that there were no upward country-level revisions for mill-use in either 2021/22 or 2022/23.  The largest revisions for 2021/22 included those for China (-1.0 million to 37.0 million), Vietnam (-400,000 bales to 6.9 million), Bangladesh (-300,000 to 8.0 million), Pakistan (-100,000 bales to 10.9 million), and Uzbekistan (-100,000 bales to 2.7 million).  For 2022/23, consumption estimates were lowered for China (-500,000 bales to 37.5 million), India (-500,000 bales to 25.0 million), Bangladesh (-300,000 bales to 8.6 million), and Vietnam (-300,000 bales to 7.1 million).
The global trade forecast for 2022/23 was lowered -1.1 million bales (to 46.4 million).  The most significant changes on the import side included those for China (-500,000 bales to 10.0 million), Bangladesh (-300,000 bales to 8.5 million), and Vietnam (-300,000 bales to 7.2 million).  On the export side, the largest updates included those for the U.S. (-500,000 bales to 14.0 million) and Australia (+300,000 bales to 6.0 million).
 
PRICE OUTLOOK
Recent volatility was not limited to the cotton market.  A wide range of commodities lost significant value in June.  Between June 9th and July 5th (dates chosen unsystematically to describe the magnitude of declines), cotton fell -25% (NY/ICE December futures), corn fell -19% (Chicago Board of Trade, December contract), soybeans fell -17% (Chicago Board of Trade, November contract), wheat fell -25% (Chicago Board of Trade, December contract), copper fell -20% (London Metal Exchange, nearby), and Brent crude oil fell -12% (ICE, nearby).

The breadth of losses throughout the commodity sector suggests a sea change in investor sentiment for the entire category.  The effects of inflation, the withdrawal of stimulus, rising interest rates, and concerns about a possible recession could all be reasons explaining a reversal of speculative bets, and all could be contributors to the losses.  While the macroeconomic environment can be expected to continue to weigh on prices, there are also supportive forces for the market that are specific to cotton.

The current USDA forecast for U.S. cotton production is 15.5 million bales, and it may get smaller over time because of the severe drought in West Texas.  The current harvest figure is two million bales lower than the 2021/22 number and is equal to the five-year average for U.S. cotton exports (2017/18-2021/22).  On top of exports, the U.S. will need to supply domestic mills with 2.5 million bales.  The last time the U.S. had a severely drought-impacted crop (2020/21), the harvest was only 14.6 million bales.  In that crop year, the U.S. was able to export more than it grew because it had accumulated stocks in the previous year.  The U.S. is coming into the 2022/23 crop year with low stocks.  This suggests U.S. shipments may have been rationed.  Since the U.S. is the world’s largest exporter, this may lend some support to prices internationally.

With the goal of making recycling of lightweight, high-volume fiber and flake recyclate much more economical and, in some cases even possible, Coperion has developed a new version of its ZS-B side feeder. Using the innovative ZS-B MEGAfeed, plastic recyclate with a bulk density under 200 kg/m³, long considered intake-limited and thus not worth recycling, can be reliably fed in large quantities into Coperion’s ZSK twin screw extruder and be concurrently recycled and compounded.

The ZS-B side feeder’s novel design makes it possible to feed very high rates of fiber and flakes, such as PA, PE, PET, and PP. As a result, the ZSK twin screw extruder’s high capacity can be fully exploited when the ZS-B MEGAfeed is used. Very high throughputs in both mechanical and chemical recycling of post-industrial and post-consumer waste are achieved.

Increased Throughput in Numbers
With a ZSK 58 Mc18 twin screw extruder, the throughput increase and thus the potential of the new ZS-B MEGAfeed becomes very clear. When recycling PA fibers with a bulk density of ~40-50 kg/m3, throughputs of 70 kg/h were previously achieved using conventional equipment. When the PA fibers were fed into the ZSK extruder using the ZS-B MEGAfeed, throughputs increased about fourteenfold to 1,000 kg/h. Similar results were achieved recycling carbon fibers with a bulk density of ~50-70 kg/m3; in this case, throughputs increased from 50 kg/h to 2,500 kg/h using the ZS-B MEGAfeed. When recycling PCR (Post-Consumer Recycled) flakes, throughputs increased from 50 kg/h to 700 kg/h, and from 80 kg/h to 1,300 kg/h with multilayer film flakes.

Key to Economical Recycling of A Wide Variety of Plastics
Plastics previously considered not recyclable are becoming a valuable raw material using the new Coperion ZS-B MEGAfeed. For example, PCR flakes or recyclate from carbon fiber-reinforced plastics can now be fed into the ZSK extruder at high feed rates and recycled economically.

In the case of mechanical upcycling, upstream processes necessary for compounding, such as compacting, melting and agglomeration, are completely eliminated using the ZS-B MEGAfeed technology. In this recycling process, flakes and fibers can be fed directly into the ZSK extruder, where they are melted, compounded, devolatilized, and filtered in a single step. In so doing, both investment costs and energy consumption drop. The production process becomes significantly more efficient. Moreover, the thermal product stress is reduced and recyclate quality increases.

Even when recycling PET, the feed rate is no longer a limiting factor. With the ZS-B MEGAfeed, PET flakes and fibers can be fed into the ZSK twin screw extruder in large quantities with no pre-drying or crystallizing, where they can be processed with the highest degree of profitability.

The ZS-B MEGAfeed can also feed large quantities of post-consumer waste, adding appreciable value to the chemical recycling process with the ZSKs. ZSK throughput rates are very high with the ZS-B MEGAfeed. Preheating of the recyclate via mechanical energy input of the twin screws thus becomes even more economical for further processing in the reactor.

Existing Coperion extruders can be retrofitted with ZS-B MEGAfeed technology to greatly expand their spectrum of applications and increase their throughput rates.

• Target markets: automotive, furnishings, sports and technical apparel
• New product entry: radipeople® line of personal protective equipment

RadiciGroup is at Techtextil 2022, the leading European trade fair for technical textiles, taking place in Frankfurt am Main, Germany, from 21 to 24 June. On display in the RadiciGroup exhibition area are the Group’s latest products for the automotive, furnishings and apparel markets: from nylon and polyester yarn, including biosource and recycled lines, to nonwovens and the new radipeople® line of personal protective equipment (PPE).

Indeed, at Techtextil, RadiciGroup is showcasing RENYCLE®, a yarn obtained from recycled nylon; REPETABLE®, a polyester yarn from post-consumer recycled plastic bottles; RESPUNSIBLE®, a nonwoven fabric from recycled polypropylene; and BIOFEEL®, a brand identifying a yarn line obtained from renewable sources of both nylon and polyester.

Moreover, RadiciGroup is participating in a forum organized by the Technical Textiles Section of Sistema Moda Italia in collaboration with the Italian Space Agency (ICE) (Hall 12.1 – Stand C58), with the goal of introducing product innovations not only coming from a single manufacturer, but also from an innovative synergistic approach all along the supply chain, from raw materials to finished products. An example of this synergistic collaboration is the “Mars Spacesuit”, recently tested in the USA by analogue astronauts as part of a space medicine project designed to measure the vital signs of future astronauts and develop technologies to support the simulation of life in space and planetary environments. RadiciGroup teamed up with major Italian textile companies and supplied the materials to make the suits for the six analogue astronauts participating in the mission and coordinated the development of the technologies needed to create the technicalwear for use in extreme environmental conditions.

Natural fibers are among the most important raw materials in the textile and fashion industry worldwide. For centuries, they have fed millions of people through their cultivation or breeding, and it is impossible to imagine daily life without them. Especially at the moment, natural fibers are gaining special importance due to the intense discussions about sustainable living. Even though natural fibers have accompanied mankind for a long time, they are changeable, technical, and adaptable to the challenges of the textile industry.

The Discover Natural Fibres Initiative (DNFI) is celebrating natural fibres in a program to be conducted during Heimtextil in Frankfurt on 23 June. Anyone with an interest in the role of natural fibres in the world economy, economic indicators of textile activity, innovations in natural fibre research, and updates on proposed EU legislation affecting textiles is welcome to attend.

The program will include various presentations by the previous and current award winners, presentations, and discussions:

Overview of world natural fibre production, employment, and value,

• Economic indicators and impacts of coronavirus on textile industries,
• Updates on innovative uses of natural fibres:
• Use of wool in automobile insulation applications for enhanced sustainability,
• Using cellulose from cotton to produce a biodegradable plastic substitute,
• Manufacturing waterproof fabric from a blend of cotton and jute as sustainable
• Substitute for polypropylene tarps
• Proposed EU textile legislation and potential impacts on natural fibres

Suominen further strengthens its position as the frontrunner in sustainable nonwovens by launching HYDRASPUN® Circula, the market’s first ever nonwoven made with recycled paper.

HYDRASPUN® Circula is biodegradable, plastic-free and can be used in multiple applications. The product was created in cooperation with Codi Group, one of Europe’s leading wet wipe producers. Drawing from both parties’ industry expertise, the new product offers a variety of applications to meet consumers’ daily needs.

“It is important for Suominen to continuously develop new sustainable products to be able to offer even more choices to our customers. HYDRASPUN® Circula is a perfect example of how we can develop our nonwovens with innovations and more sustainable raw materials. HYDRASPUN® Circula is also a proof of great product development towards circular economy without compromising excellent quality and functionalities,” says Johanna Kivistö, Manager, Category Management, Europe.

Indorama Ventures, VALORPLAST, Klöckner Pentaplast (kp) and CITEO collaboration delivers a commercial recycling solution for monolayer PET trays

Thai-based Indorama Ventures Public Company Limited (IVL) with its facility Wellman France Recycling in Verdun, has been working on the PET trays recycling for 6 years and through an ongoing project with VALORPLAST and supported by CITEO.

The project has the objective to develop and validate recycling for monolayer and multilayer PET trays. VALORPLAST has collected significant quantities of post-consumer PET trays and several industrial runs have been conducted by Wellman. The produced flakes are being tested by several actors to develop high quality applications. Those tests have led by IVL to develop a commercially feasible recycling solution for monolayer PET trays with the collaboration of Klöckner Pentaplast.
The new technology is processing monolayer PET trays used for food packaging (meat, produce and cheese) into a high-quality product, suitable for new tray production.

This new recycling innovation will see over 50 million post-consumer PET trays diverted away from landfill or incineration.

Testing has now moved into commercial production. 500 tonnes of PET trays are now being processed monthly and transformed into a high-quality tray flake, which can be used to produce new trays. The purity of the flakes is comparable with high-quality bottle flake. A further scale up is foreseen, and the company plans to process 10KT of tray flake in 2022.

International textile producers meet again in Istanbul, Turkey, from June 14 – 18, 2022 on the occasion of the ITM + Hightex Exhibition. In Hall 9 (Hightex) the exhibitors will present the complete industry value chain from nonwovens raw materials, production machines and accessories to the endproduct. The related industries covered include hygiene, filtration, fabrics and apparel, medical, automotive, wipes, home furnishings and upholstery. DiloGroup offers tailor-made production systems from one supplier and will inform about its portfolio and the latest equipment developments from fibre opening to the finished felt.

DiloGroup will inform about complete lines as well as high speed needlelooms for spunbonds. A new, simplified elliptical needle beam drive makes Hyperpunch technology also attractive for standard application. Hyperpunch HαV allows a more uniform stitch distribution in the preneedling process especially in combination with the new needle pattern 6000X. In a complete needling line this felt homogenization process can be improved further. The new needle pattern 8000X is a milestone in the needle pattern development process and results in endproduct surfaces with low markings over a wide range of advances/stroke.

Another strong pillar of the sales program over decades has been fibre preparation and high speed webforming equipment for other nonwoven technologies. The further development of the high-speed layering principle “Hyperlayer” made progress for better CD strength through a combination of inline cards and crossline card with crosslapper. Particularly, carding machines in a working width above 3.5 m up to 5.1 m have been supplied by DiloSpinnbau as complete high speed carding systems, comprising two or even three cards in a line to directly feed the hydroentangling units of various suppliers. Together with DiloTemafa not only have high throughput rates been achieved in the fibre preparation section of the line but also dedusting filtering and air-conditioning systems have been successfully engineered and integrated.

Together with Sicam, Dilo has combined know-how for hydroentangling technology and therefore can provide complete lines as general contractor including equipment for cutting, winding and packaging.

Another interesting machine is the 3D-Lofter, first presented during ITMA 2019 in Barcelona, which offers a wider range of nonwovens applications by exploring the third dimension. A series of single web forming units which work according to the aerodynamic web forming principle deliver defined fibre masses in varied patterns on a base needlefelt. A stress oriented production of technical formed parts resulting in fibre savings or patterned DI-LOUR or DI-LOOP felts with or without repeat are two examples for this technology which explores new application areas for needlefelts.
The 3D-Lofter technology may also be used “inverted” as “IsoFeed” for filling up bad spots in web mats and thus achieves a better homogeneity of spunlace or airlay products.

The DiloLine 4.0 concept offer I4.0 modules which not only support the user but also facilitate quality control and maintenance by a maximum data transparency in production and control of operation. The Dilo solutions “Smart Start” for a fully automatic start of the production line or “DI-LOWATT” for energy savings are accompanied by Siemens solutions which can be selected via App or Data Cloud “MindSphere”.

• Low impact of Ukraine war on business performance in 1st quarter
• 12.2% increase in sales to €270.9 million based on growth in all four business units
• Adjusted EBITDA improves by 11.5% to €36.8 million

SGL Carbon generated consolidated sales of €270.9 million in Q1 2022 (Q1 2021: €241.5 million). This corresponds to an increase of €29.4 million or 12.2% compared to the same period of the prior year. All four business units contributed to the pleasing increase in sales. In parallel, adjusted EBITDA improved by 11.5% to €36.8 million in the reporting period.

Sales development
In the first three months of fiscal 2022, the sales increase of €29.4 million was driven by all four operating business units: Graphite Solutions (+€11.3 million), Carbon Fibers (+€6.6 million), Composite Solutions (+€7.2 million) and Process Technology (+€6.0 million).
In particular, sales to customers in the automotive and semiconductor industries and a significant recovery in the industrial applications segment were key factors in the increase in sales. Sales of the Process Technology business unit to customers in the chemical industry also developed pleasingly. The effects of the war in Ukraine, which has been ongoing since the end of February 2022, had only a little impact on SGL Carbon's sales performance in the 1st quarter.

Earnings development
Despite the increasingly difficult market environment in the course of Q1 2022, associated with temporary supply and production bottlenecks at their customers, temporarily interrupted transport routes, and significantly higher energy prices, SGL Carbon was able to keep the adjusted EBITDA margin almost stable year-on-year at 13.6%.  
Adjusted EBITDA increased by 11.5% to €36.8 million in the reporting period. Higher capacity utilization in the business units and product mix effects contributed to the improvement in earnings, together with the cost savings achieved as a result of the transformation. By contrast, higher raw material, energy and logistics costs as of end of February 2022 had a negative impact on earnings. The Carbon Fibers business unit was particularly affected by the energy price increases. One-time expenses of €9.2 million in conjunction with energy transactions burdened the Carbon Fibers business unit in the 1st quarter of 2022.  
To secure our production and delivery capabilities, around 85% of the energy requirements of the entire SGL Carbon for 2022 are price-hedged.
Adjusted EBITDA and EBIT do not include in total positive one-time effects and special items of €8.5 million, among other things from the termination of a heritable building right to a site no longer in use. Taking into account the one-time effects and special items presented as well as depreciation and amortization of €14.1 million, reported EBIT increased by 83.5% to €31.2 million (Q1 2021: €17.0 million). The net profit for the period developed correspondingly and more than tripled from €6.1 million to €21.4 million in a quarter-on-quarter comparison.

Outlook
The sales and earnings figures for the 1st quarter 2022 confirm the stable demand from different market segments. Price increases and volatility in the availability of raw materials, transportation services and energy were largely offset by savings from the transformation program and pricing initiatives at the customers.
For 2022, SGL Carbon continues to expect volatile raw material and energy prices, which were included in their forecast for 2022 at the time of planning. However, there are uncertainties about the extent and duration to which SGL Carbon and the customers will be affected by the impact of the war in Ukraine or temporary supply chain disruptions due to the lockdowns in China. Therefore, SGL Carbon's outlook for fiscal 2022 does not include supply and/or production interruptions at customers or the impact of a possible energy embargo that cannot be estimated at this time.  
SGL Carbon's forecast also implies that factor cost increases can be at least partially passed on to the customers through pricing initiatives. SGL Carbon has also included the revenue and earnings impact from the expiry of a supply contract with a major automobile manufacturer at the end of June 2022 in our forecast.

The Trevira CS brand will be presented at Heimtextil 2022. This year the trade fair will be held as a one-time Summer Special from 21 to 24 June in Frankfurt am Main, Germany. The booth will feature more than 200 fascinating, versatile, flame retardant Trevira CS fabrics.

These will be displayed in the Long Stay Apartment installation. Changing lifestyles, living and working arrangements as well as the housing shortage in countless large cities mean the Long Stay Apartment segment of the hospitality sector has experienced exponential growth, becoming ever more important. For this reason, it is the focus of this year’s Trevira CS booth. The presentation of the “Long Stay Apartment by Trevira CS” is intended to familiarise visitors – particularly interior architects, designers and furnishers – with the trendsetting, innovative uses of Trevira CS fabrics in the contract sector.

For the design of the apartment installation, the traditional Trevira CS Fabric Competition 2022 was announced at the end of 2021 and invited all customers to submit their latest Trevira CS products according to certain specifications. The winning fabrics will be announced at the trade fair and specially exhibited at the Trevira CS booth.

Director Marketing & Business Development Anke Vollenbröker: “Our exhibition gives exciting new insights into the modern concept of the Long Stay Apartment, presenting the live application of our customers’ Trevira CS innovations. An apartment designed for Long Stayers is a special challenge since it has to provide more than a hotel room or even an ordinary rental apartment: It needs to be an attractive temporary home while also offering the services and advantages of a hotel. We have made the Long Stay Apartment particularly “textile” and included submissions from all participants of our Trevira CS Fabric Competition 2022.”