From the Sector

Oerlikon Manmade Fibers Solutions recently hosted its highly anticipated Innovation and Technology Day at the Deltin Hotel in Daman by end of January 2025. The event attracted over 300 participants, including industry experts, partners, and stakeholders, who gathered to explore the latest advancements and trends in the manmade fibers industry in India.

Customer Event in Daman, India
The Innovation and Technology Day commenced with a warm welcome and introduction by Wolfgang Ernst, Chief Sales Officer (CSO) at Oerlikon Manmade Fibers Solutions, and Debabrata Ghosh, Head of Sales at Oerlikon Textile India. They provided an overview of the Indian market and its challenges.

“The Indian textile industry, particularly the chemical fiber sector, is experiencing significant growth and transformation. This development is driven by increasing production capacities, strategic investments, and a shift in global consumption patterns”, said Ghosh. India's production of manmade fibers (MMF) is robust, with annual outputs of 4.8 million tons of Polyester Filament Yarn (PFY), 1.7 million tons of Polyester Staple Fiber (PSF), 0.7 million tons of viscose, 0.2 million tons of Polyamide 6 (PA 6), and 25 thousand tons of acrylic. Additionally, the country boasts substantial capacities for PET bottles and films, growing at rates of 7% and 15% per annum, respectively. The Indian market is witnessing significant expansions in PTA (Purified Terephthalic Acid) capacity, with major projects underway by Indian Oil Corporation, GAIL, MCPI, Reliance Industries, and the Adani-Indorama joint venture. These expansions are set to increase the PTA capacity from the current 6.296 million tons to over 14 million tons by 2030.

Market Dynamics and strategic investments
“The global consumption landscape is shifting towards India and emerging Asia, driven by rising incomes and changing demographics. By 2050, India and emerging Asia are expected to account for 30% of global consumption at purchasing-power parity (PPP), up from 12% in 1997. This shift underscores the growing importance of these regions in the global economic landscape”, Ghosh continuous. Significant investments are being made to enhance production capacities and integrate advanced technologies. Indian Oil Corporation, in a joint venture with MCPI, is establishing a 900 TPD continuous polymerization unit in Odisha, supported by substantial government subsidies. Similarly, the Adani Group, in partnership with Indorama, is entering the petrochemical sector with a $3 billion PTA plant in Maharashtra.

Challenges and Opportunities
Despite the positive outlook, the industry faces challenges such as ensuring cost efficiency, scalability, and the seamless integration of new technologies into existing production processes. However, the sector is optimistic about improving profitability, driven by favorable supply-demand dynamics and strategic investments. “The Indian textile and chemical fiber industry is poised for significant growth, supported by strategic investments, capacity expansions, and a favorable global consumption shift. These developments position India as a key player in the global textile market, driving towards a sustainable and prosperous future”, said Ernst.

After the introduction about the current market situation, the event continued with numerous technical presentations in which Oerlikon and its partners presented their technological and solution expertise along the textile value production chain “From Melt to Yarn, Fibers and Nonwovens”.

“To spin an excellent yarn, you need the prefect melt”, said Moderator André Wissenberg, Head of Marketing, Corporate Communications, and Public Affairs at Oerlikon Manmade Fibers Solutions. How this can be produced using extrusion or continuous polycondensation technology was demonstrated by the keynote speakers Sven Streiber, Regional Sales Director at Oerlikon Barmag, Deepak Lokre, Head of Engineering at Oerlikon Textile India, and Matthias Schmitz, Head of Engineering Recycling Technology at BB Engineering (BBE).

The second session focused on Oerlikons technology partner for manmade fiber spinning mills. Presentations covered topics such as enhancing manmade fiber production with innovative air engineering, automatic handling solutions and quality inspections, as well as air texturizing solutions. Notable speakers included Praveen Kumar Singh, Managing Director of Luwa India, and Luca Lacitignola, Sales Director at Irico Gualchierani Handling (IGH), Simone Ducceschi, Sales & Project Manager at Thema Systems, as well as Ralf Morgenroth, Head of Engineering Textile Machinery at BBE.

The third session delved into solutions for producing the perfect fibers and yarns, with a focus on Oerlikon Barmag POY/DTY, FDY, IDY technologies as well as Oerlikon Neumag BCF and staple fiber line plants. Presentations were delivered by Philip Jungbecker, Head of R&D, and Guido Dresen, Regional Sales Director, both at Oerlikon Barmag, as well Chetan Bhagat, General Manager Sales, and Sameer Mehrotra, General Manager Service at Oerlikon Textile India. Ralf Morgenroth added further insights of the compact spinning solution VarioFil from BBE.

Environmentally friendly recycling solutions
The fourth session highlighted environmentally friendly recycling solutions, featuring insights from Sven Streiber and Sudipto Mandal, Sales and Marketing Manager at Oerlikon Textile India, and again Matthias Schmitz, BBE. They provided a detailed portfolio overview in the field of mechanical and chemical recycling. The new partnership between Oerlikon Barmag and Evonik was also presented to the audience. Finally, this was followed by a session on customer services and digital solutions, where Michael Ruebenhagen, Head of Global Service Sales and Ivan Gallo, Digital Solutions, both at Oerlikon Manmade Fibers Solutions discussed current upgrade and retrofit options, the Digital Academy, and the future of digitalization in manmade fiber spinning mills. Shared Kulkarnie, General Manager Service Sales & Workshops, as well as Chandru Gurbaxani, Digital Solutions, performed together with their German colleagues.

The event concluded with closing remarks again from Wolfgang Ernst, who provided a global market overview and outlook for 2025. Final remarks were given by Atul Vaidya, Managing Director of Oerlikon Textile India. Finaly the event ended with a gala evening with more than 500 participants featuring a fashion show, music, dancing, and excellent food, supported by Decathlon and Garden Vareli.

Indorama Ventures Public Company Limited (IVL), a global sustainable chemical producer, posted a marked improvement in quarterly performance as the chemical industry struggles to recover from a prolonged downturn and the company’s management executes their 3 year IVL 2.0 strategy to enhance competitiveness and drive efficiencies.

Indorama Ventures reported Adjusted EBITDA  of $427 million in 3Q24, a gain of 32% YoY, supported by steady volumes, improving industry spreads, and the company’s unstinting focus on optimizing assets and reducing fixed costs. The quarter marks Indorama Ventures’ first YOY improvement for the year, with all three business segments recording earnings growth, following a prolonged industry downcycle marked by customer destocking and suppressed margins. Volumes remained steady for the Combined PET and Fibers segments, while Indovinya posted a robust performance amid a peak season in the Crop Solutions market.

Fibers reported Adjusted EBITDA of $48 million, a gain of 44% YoY, driven by improved industry spreads in Lifestyle and higher volumes in Mobility and Hygiene. Management is focused on reducing fixed costs and improving profitability across the entire portfolio and taking firm action to restore market share in key verticals.

Looking ahead, the global economic outlook remains uncertain amid continued inflation, geopolitical tension, and supply chain disruptions. However, throughout the downcycle, Indorama Ventures’ experienced management team has worked hard to optimize and deleverage the business under their IVL 2.0 evolved strategy to emerge stronger and drive enhanced earnings quality in a new era of sustainable profit growth. In 3Q24, this unrelenting focus delivered fixed-cost savings of $19 million, which will sequentially increase into next year as the benefits are fully realized. Operating rates for the group increased to 82% in the quarter—from 69% previously—as the company completed its planned optimization program for CPET and Indovinya, with Fibers under implementation.

The company’s digital transformation program is accelerating according to schedule following the implementation of the SAP S/4HANA ERP platform as a digital core. North America is already benefiting from an AI-based procurement solution, while the Connected Worker Platform is driving manufacturing excellence. The first sales and supply chain solutions are expected to go-live early next year.

INDA, the Association of the Nonwoven Fabrics Industry, has released a new report, North American Nonwovens Industry Outlook, 2022-2027. This report is the twelfth edition detailing demand data for 2017 through 2022, with forecasts to 2027 and provides analysis across end-use markets through 2027.

It includes:

• Economic and population drivers contributing to market growth over the next 5 years for markets in the U.S., Mexico, and Canada.
• Disposable, Filtration, Wipes, Medical and Other applications.
• Long-Life durable sectors for Transportation, Building and Construction, Furnishings, Geo and Agro Textiles, and Apparel.
• Key drivers for the demand models and reasons for market upsets like the COVID pandemic.
• A summary of historical and future trends that will affect the nonwovens market.

The report provides analysis across all nonwoven end-use markets, providing a comprehensive and accurate view of the total North American nonwovens industry. INDA redesigned this report to support strategic business planning and decision-making. The projections in the report were made by analyzing current market trends and drivers to highlight the market potential in terms of dollar value, units, and volume in both square meters and tonnage.

The new North American Nonwovens Industry Outlook report is available at 6,000.00 $, the discounted member price is 4,500.00

• Revenue rose to EUR 2.57 bn, while EBITDA declined to EUR 241.9 mn
• Implementation of EUR 70 mn cost reduction program proceeding according to plan
• Largest investment program in the company’s history including the lyocell plant in Thailand and the pulp mill in Brazil implemented on time and within budget
• Outlook: Lenzing expects EBITDA in 2023 to be in a range of EUR 320 mn to EUR 420 mn

The Lenzing Group was increasingly affected by extreme developments on the global energy and raw material markets in the 2022 financial year, in tandem with most of manufacturing industry in Europe. The market environment also deteriorated significantly in the third and fourth quarters, while worsening consumer sentiment placed an additional burden on Lenzing’s business growth.

In the year under review, revenue increased by 16.9 percent year-on-year to reach EUR 2.57 bn, primarily as a result of higher fiber prices. The quantity of fiber sold decreased, while the quantity of pulp sold rose. In addition to lower demand, the earnings trend particularly reflects the increase in energy and raw material costs. Earnings before interest, tax, depreciation and amortization (EBITDA) decreased by 33.3 percent year-on-year to EUR 241.9 mn in 2022. The net result for the year was minus EUR 37.2 mn (compared with EUR 127.7 mn in the 2021 financial year), while earnings per share stood at minus EUR 2.75 (compared with EUR 4.16 in the 2021 financial year).

Outlook
The war in Ukraine and the tighter monetary policy pursued by many central banks to combat inflation will continue to exert pressure on the global economy. The easing of China’s zero-Covid policy could lead to an unexpectedly rapid recovery. However, the IMF has warned that risks remain high overall and projects growth of 2.9 percent in 2023. Exchange rate volatility looks set to continue in regions that are important to Lenzing.

These challenging market conditions are also continuing to weigh on consumer confidence and sentiment in the sectors relevant to Lenzing. The outlook has improved slightly of late, with inventory levels returning to normal across the value chain. Nonetheless, subdued demand remains a source of concern for market players.

Inventories in the bellwether cotton market have diminished recently, although they remain above pre-pandemic levels. A decline in crops is foreseeable in the current 2022/2023 harvest season. The sharp rise in prices on the energy and raw material markets will continue to pose significant challenges for the market.

Overall, earnings visibility remains restricted.

In structural terms, Lenzing expects a continued rise in demand for environmentally friendly fibers in the textile and clothing industry, as well as in the hygiene and medical sectors. Thus, with its “Better Growth” strategy, Lenzing is very well positioned and will continue to drive growth in specialty products, while pursuing its sustainability targets including the transformation from a linear to a circular economy model.

In light of these factors and assuming a further market recovery in the current financial year, the Lenzing Group expects EBITDA in 2023 to be in a range of EUR 320 mn to EUR 420 mn.

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.

• 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.

As part of Suominen Corporation’s Half-Year Financial Report for January 1 – June 30, 2021 the company shared their insights and actions defined in their sustainability agenda.
A new Code of Conduct was launched in the beginning of 2021 and a mandatory training program about the Code will be start in the third quarter of this year.

Suominen is committed to continuously improving their production efficiency and the efficient utilization of natural resources. What active measures towards reducing energy consumption, greenhouse gas emissions, water consumption and waste to landfill are concerned, the commitment is to diminish them by 20% per ton of product by 2025 compared to the base year of 2019.
Offering a comprehensive portfolio of sustainable nonwovens and continuously developing new and innovative solutions with a reduced environmental impact, the target is a 50% increase in sales of sustainable nonwovens by 2025 compared to 2019, and to have at least 10 sustainable product launches per year. During the first half of the year, nine sustainable product launches were made.

OUTLOOK FOR 2021
As announced on August 12, 2021 Suominen expects that its comparable EBITDA (earnings before interest, taxes, depreciation and amortization) in 2021 will decrease from 2020 due to the slowdown in the demand for nonwovens in the second half of 2021 as well as some continuing volatility in the raw material and transportation markets. In 2020, Suominen’s comparable EBITDA was EUR 60.9 million.