From the Sector

The international OEKO-TEX® Association, offering collaborative solutions for partners in the textile and leather industry, has once again recorded positive business development. Overall, OEKO-TEX® issued more than 43,000 certificates and labels between July 1, 2022, and June 30, 2023 - an increase of 21% compared to the previous financial year. The MADE IN GREEN product label recorded the strongest growth of 52%. OEKO-TEX® continues to drive urgently needed change through cooperation and joint action - with their services and at the organizational level.

For their two new certifications, OEKO-TEX® focused on cooperation with numerous parties along the global supply chain. Launched in November 2022, OEKO-TEX® RESPONSIBLE BUSINESS addresses the increasing global expectations and due diligence requirements. The tool and certification supports textile and leather companies in preventing negative effects from their own business operations, supply chains and broader business relationships. Companies working with OEKO-TEX® ORGANIC COTTON benefit from a global network of certified companies to facilitate sourcing of chemicals, materials and business partners - from cultivation to finished product.

At the organisational level, OEKO-TEX® is focusing on partnerships with multi-stakeholder initiatives to include as many different perspectives as possible and allow all parties to benefit. Working with ZDHC to promote sustainable chemical management and becoming an ISEAL community member are just two of many collaborations for OEKO-TEX®, which is striving to address the industry's most pressing challenges.

Meanwhile, the Association’s core business advances. For example, based on industry developments and scientific findings, OEKO-TEX® issued a general ban on the use of per- and polyfluorinated alkyl substances (PFAS/PFC) in textiles, leather and shoes certified by STANDARD 100, ORGANIC COTTON, LEATHER STANDARD and ECO PASSPORT. OEKO-TEX® also surpassed the milestone of 1,000 STeP certified production facilities. OEKO-TEX® is in a strong position to continue its work - enabling the industry and consumers to make more responsible decisions through partnership and education.

• Revenue of US$4B, a decline of 1% QoQ and 27% YoY
• Reported EBITDA of US$321M, an increase of 7% QoQ and decrease of 68% YOY
• Operating cash flows of US$491M
• Net Operating Debt to Equity of 0.95x
• Reported EPS of THB 0.04

Indorama Ventures Public Company Limited (IVL) reported marginally improved quarterly earnings as the company’s inherent advantages and continued focus on improving competitiveness helped bolster its business amid a continued weak operating environment.

Indorama Ventures achieved Reported EBITDA of $321 million in 2Q23, an increase of 7% QoQ and a decline of 68% YoY. Sales volumes remained resilient, rising 4% QoQ, amid continued destocking in the global chemicals industry from its peak in 4Q last year. Management is taking steps to conserve cash and safeguard the company’s competitive advantages as the global industry is impacted by increased capacity and lower margins with China boosting exports to offset muted domestic demand. Measures include redoubling efforts to reduce working capital and capex targeting $500 million of cash savings this year, optimizing the company’s European manufacturing footprint, and continued focus on Project Olympus, digitalization, and organizational enhancement.

Volumes are expected to improve in the second half of the year, with all three of Indorama Ventures’ business segments benefiting from the management measures and a gradual improvement in the outlook for the industry. Combined PET, the company’s largest segment, posted Reported EBITDA of $194 million, a 37% increase QoQ as destocking eased in most markets and supported stable volumes. Sales volumes are expected to grow in the second half of the year as manufacturing is optimized in Europe and expansion projects ramp up in India.

Fibers segment achieved Reported EBITDA of $20 million, a decrease of 37% QoQ, impacted by lower margins in the Lifestyle vertical and weak demand for Hygiene products in Europe. Volumes are expected to improve as manufacturing in Europe is optimized and expansion projects come online in the U.S and India. Mobility fibers volumes will see improvement in line with increasing automotive demand. Integrated Oxides and Derivatives (IOD) segment posted a 27% decline in QoQ Reported EBITDA to $94 million amid destocking in Crop Solutions market. Volumes will continue to be supported by reducing levels of destocking in the downstream portfolio.

From 16 – 18 August 2023, 1,022 exhibitors from 13 countries and regions will occupy four halls and 100,000 sqm gross at the National Exhibition and Convention Center (Shanghai). This Autumn Edition of Intertextile Shanghai Home Textiles will return to its regular format, as a comprehensive platform held separately from Messe Frankfurt’s other autumn textile fairs. Complementing the strong lineup of exhibitors over all three days, a varied selection of fringe events will communicate key insights, offer industry specific inspiration, and facilitate cross-sector exchanges for fairgoers.

Buyers from 66 countries and regions have already pre-registered for the show, while a range of international brands are preparing to showcase their latest innovations. Multiple exhibitors will gather according to origin, with three country and region pavilions a must-see for fairgoers seeking exotic home textiles:

• Belgium Pavilion: products on show include bedding fabrics and sets, curtains and curtain fabrics, sofa covers, upholstery, and much more. With the pavilion set to feature a number of Belgian brands, its highlighted exhibitors are Libeco and Love Home Fabrics.
• Taiwan (China) Pavilion: multiple Taiwanese exhibitors, including JWL Fabrics Co Ltd, Maxland Home Textile Industrial Co Ltd, and Vanttex International Co Ltd, will demonstrate specific examples of the varied applications of their home textiles.
• Türkiye Pavilion: organised by Uludag Textile Exporters’ Association (UTIB), the pavilion will showcase a range of curtains, upholstery fabrics, and other home textiles, from suppliers such as Aleran Tekstil Inşaat Gida Sanayi Ve Ticaret Ltd Şti, Küçükçalik Tekstil San Ve Tic A Ş and Weavers Tekstil San Ve Tic A Ş.

Beyond the pavilions, buyers can easily locate their desired home and contract textiles via conveniently placed product zones, covering categories such as curtain and curtain fabrics; sun protection and window shades; upholstery and sofa fabrics; furniture leather; bedding and editors; loungewear and bath; and rugs. Wide-ranging suppliers from China and beyond will showcase their various products, featuring international exhibitors such as Elastron – Leather & Fabrics, Morgan and PT Sinar Continental; and well-known domestic manufacturers including Hangzhou Aico Home Textile Co Ltd, Huatex International (Hangzhou) Co Ltd and Zhe Jiang Maya Fabric Co Ltd.

Fringe programme: keeping fairgoers up-to-date with range of industry developments
Business exchange at Intertextile Shanghai Home Textiles will once again be supplemented by multiple concurrent events, for home textile players to learn more about the latest industry innovations, as well as upcoming design trends. These include:

• International Intertextile Trend Forum 2023–2024: held in the afternoon of day one, the event will be hosted by a prominent member of the ‘2023 – 2024 Intertextile International Lifestyle Trend’ trend committee, Mr Shen Lei, joined on the panel by multiple designers. They will discuss various impacts on designs, such as sustainability’s effect, the influence of emerging technologies, and international integration and localised expression.
• IKASAS Japanese Home Design Gallery and themed seminar: the leading Japanese furniture brand IKASAS will utilise a display area to illustrate its unique design philosophy, by showcasing innovative furniture products that predominantly align with contemporary trends. The company’s founder, Mr Akiyuki Sasaki, will delve deeper into his design views in a seminar held on the morning of day one.
• The New Power of Healthy Home Decoration Environment: a first-time collaboration with CRECC Full Decoration Council, the cross-sector conference in Hall 5.1 on day two will welcome keynote speakers from the real estate industry, to discuss topical insights at the intersection of realty and home textiles. The audience will come away with a widened scope of the different applications and demands of home textiles, and an ability to more accurately identify business opportunities within the property market.

adidas and Manchester United Football Club announce the extension of their partnership. Manchester United commenced a historic agreement with adidas at the start of the 2015/16 season, reuniting after 23 years.

The new deal increases the focus on the Manchester United women’s team since their reintroduction in 2018 – continuing Manchester United and adidas’ commitment to drive the women’s game forward.

Manchester United Chief Executive Officer, Richard Arnold said:  
“The relationship between Manchester United and adidas is one of the most iconic in world sport , forged through a shared commitment to style, flair and, most importantly, high performance.

“With its roots in the 1980s, our partnership has been reinvented over the past decade with some of the most innovative designs and technology in sportswear. We are now looking forward to refreshing this powerful partnership again through the remainder of this decade and into the 2030s.”  

Chief Executive Officer at adidas, Bjørn Gulden, said:  
“We are extremely proud to announce the extension of the contract with Manchester United. adidas and Manchester United are two of the most important brands in International Football and it is very natural for us to continue our cooperation. We will combine tradition and innovation to please both the players and the fans. 

The Munich-based startup Sizekick launches a new technology and attracts well-known brands and retailers to reduce size-related returns in e-commerce. With the apparel technology know-how of the strategic partner and investor Hohenstein and the AI-based technology of Sizekick, more sustainable shopping in e-commerce with less CO₂ emissions will be made possible. The technology company is now celebrating a successful market entry: The newly developed sizing AI is now available for fashion e-commerce stores and is pleased about the first successfully acquired customers. The first customers to join the company include the Swiss multi-brand store for sustainable fashion, Rrrevolve, the premium outdoor brand Black Diamond from the USA, and Marc Cain, a global brand with German roots in the premium sector.

The solution promises to add value for both brands and consumers when shopping online by taking individual body measurements into account when recommending the right clothing size. The AI-based technology always offers two options to help arrive at the appropriate size recommendation. With BodyFinder, the AI suggests realistic body shapes to choose from. Alternatively, the video-based BodyScanner option enables a body scan via the smartphone's video function. All it takes to do this is to turn around in front of the phone's camera. Fashion brands and fashion retailers now have easy access to the new technology, as integration in the e-commerce store takes just a few minutes.

Hohenstein's expertise helped the Sizekick team to link accurate body measurements with the right product properties. Hohenstein is considered a leader in the field of size & fit and has been advising companies in the textile industry for over 75 years. The Sizekick fit analysis not only supports the brands' product teams, but is also used as direct input for Sizekick AI.

West Yorkshire is to have a first-of-its-kind apprenticeship training course for textile engineering technicians, reflecting a resurgence in the industry locally, and more generally in the UK.

Calderdale College has partnered with the Textile Centre of Excellence (TCoE) and the British Textile Machinery Association (BTMA) to develop the bespoke Level 3 apprenticeship course which will start in September 2023.

Engineering Technician apprentices at Calderdale College will receive training from the TCoE, helping them to develop the engineering maintenance skills required to close the skills gap in West Yorkshire’s textile industry.

While the region has been a flourishing hub for textile excellence since the 19th century and is being revitalised through digitalization and the localisation of supply chains, its success is currently being hindered by an ageing workforce and high staff turnover.

Through adapting the engineering training at Calderdale College to address the current requirements of the textile industry, the unique new course will ensure the passing on of vital know-how and good practice aligned with the new skills demanded by Industry 4.0 and automation.

Collaborative Apprenticeships
Calderdale College has developed the programme over a two-year period through close collaboration with the TCoE and the BTMA, as well as through consultation with British heritage weaver AW Hainsworth and a number of other local textile companies.

The course launch follows on closely from the success of the Collaborative Apprenticeships project launched in 2022 at Calderdale College. To date, this has seen the college engage with over 100 local employers on the benefits of increasing the quantity and improving the quality of the apprenticeships that they offer, as well as encouraging others to introduce apprenticeships for the first time.

“Over the years, we’ve seen how beneficial apprenticeships can be for several sectors, particularly in terms of helping businesses to retain staff and ensuring that they have a steady flow of skilled workers coming in,” said Claire Williams, head of employer engagement at Calderdale College. “Having identified that employers in the textile manufacturing industry were struggling to find apprenticeship training that was designed around their needs, we knew that alongside employers and our partners, we needed to satisfy this critical gap in the market. We hope that this programme will act as a leading example for the rest of the industry to follow.”

On the occasion of the 2023 UCI Cycling World Championships, the Union Cycliste Internationale chose Santini to make the bibs from recyclable materials. The UCI's partner brought together a pool of companies, all in the Bergamo area (Italy): RadiciGroup, Sitip, EFI Reggiani and Acerbis.

In 2022, the Union Cycliste Internationale released the UCI Climate Action Charter, which lays out an action plan to advance the environmental sustainability of the sport with a specific principle to reduce waste and accelerate the transition to a circular economy. This year, the UCI Cycling World Championships, which will be held from 3 to 13 August, are bringing together most of the cycling disciplines in a single location: Glasgow and across Scotland.

To mark the occasion, the UCI turned to its Official Partner, Santini, to make the bibs that the staff (judges, volunteers, commissaires etc.) and accredited photographers wear throughout the event. The bibs are "eco-designed", which means they are specifically created to have a second life after use. Once the event is over, the bibs could be collected and sent to RadiciGroup and transformed into new material, to be then processed by Acerbis to create X-Elite handguards for mountain bikes. This project is a concrete example of the circular economy at work, allowing 100% of the materials used to be recovered.

To optimise the production cycle of the bibs for the 2023 UCI Cycling World Championships, the products must be eco-friendly from the very first phase. The fabrics were therefore made from Italian nylon yarn produced by RadiciGroup. The choice of nylon – an infinitely recyclable thermoplastic material – is intertwined with UCI's sustainability goals for "limited-use" garments: RadiciGroup was able to channel its know-how and expertise in the field of chemistry to create "circular" bibs, working alongside the other partners. As the innovative yarn selected by RadiciGroup allows for easy and high-quality printing, the fabric is also customisable. The yarn is then provided to Sitip to create the "ARAS NG" warp-knitted fabric (95 g/100 m2): a recyclable single-fibre material made from 100% polyamide. The resulting fabric is the first nylon of its kind, designed to meet the transfer printing needs of the third project partner, EFI Reggiani, as well as the recyclability standards requested by RadiciGroup. The choice of fabric was born from extensive applied research, in which EFI Reggiani tested a wide range of fabrics to find the best colour results and the best resistance to rubbing and perspiration, which is vital for the bibs' intended use. In addition to using the new GOTS-certified EFI Reggiani IRIS Plus water-based inks, EFI Reggiani opted for a printing solution on transfer paper that does not consume water and requires a minimal amount of energy per square metre. Finally, the white fabric from Sitip and the transfer paper printed by EFI Reggiani arrived at Santini, who were responsible for transferring all the graphics for the 2023 UCI Cycling World Championships bibs from the paper onto the fabric. Santini also took care to assemble the garments using only thread and components made from nylon or chemically similar materials, allowing the bibs to enter the recycling process at the end of their lives without any further processing.                   

Fashion for Good launches new pilot with brand partners adidas, Inditex, Target and Zalando, and footwear recycling innovator FastFeetGrinded to test and validate the innovative footwear recycling process to support the uptake of recycled content in footwear, driving the change towards a more circular footwear industry.

Globally, 24 billion shoes are added to the market each year*, and a staggering 90% of shoes are either landfilled or incinerated*. To tackle this challenge, Fashion for Good has launched a new pilot with partners adidas, Inditex, Target and Zalando, in collaboration with innovator FastFeetGrinded, aiming to test and validate the footwear recycling process and support the uptake of recycled materials in footwear. FastFeetGrinded possesses the unique capability to deconstruct any type of pre- and post-consumer shoe, breaking it down into its macro-components. These macro-components are then subsequently grinded down into smaller high purity granulates which FastFeetGrinded may use to create material streams for repurposed use.

Through this collaborative pilot, the partners will divert pre- and post-consumer footwear to FastFeetGrinded, who will transform them into various new material granulates. The next step involves FastFeetGrinded’s network of supply chain partners, who will produce output products, such as outsoles, midsoles, and flip flops. The brands will closely evaluate the products’ quality and purity, aiming to showcase the potential of FastFeetGrinded's footwear recycling technology and pave the way for scalable solutions.

*World Footwear Yearbook (2020). Footwear production with a new record of 24.3 billion pairs.
*Vivobarefoot. 22 billion pairs of shoes are dumped into landfill each year. It’s time for change.
*WRAP (2019) Valuing our Clothes.
*Material Innovation Initiative (2021). 2021 State of the Industry Report: Next-Gen Materials.

Highlights Q2 2023 (compared with Q2 2022)

• Revenue 4% down on unfavorable exchange rates, 3% up in constant currencies1
• Pricing up 5%, volumes 1% lower
• Operating income up 36% at €279 million (2022: €205 million)
• Adjusted operating income2 up 25% at €311 million; ROS3 11.3% (2022: €249 million and 8.7%)
• Net cash from operating activities positive €305 million (2022: negative €52 million)

2023 Outlook
AkzoNobel expects the ongoing macro-economic uncertainties to continue and weigh on organic volume growth. The company will focus on margin management, cost reduction, working capital normalization and de-leveraging.
Cost reduction programs are expected to partly mitigate higher than expected inflationary pressure on operating expenses for 2023. AkzoNobel expects declining raw material costs to have a favorable impact on profitability.
Based on current market conditions, AkzoNobel targets to deliver €1.40 to €1.55 billion adjusted EBITDA.
The company aims to lower its leverage ratio to less than 3.4 times net debt/EBITDA, including the impact of the Kansai Paint Africa acquisition, by the end of 2023 and return to around 2 times post-2023.

According to preliminary figures for H1 2023, SGL Carbon's Group sales increased year-on-year from €549.8 million to €560.5 million, with EBITDApre¹ almost unchanged at €88.0 million (H1 2022: €87.9 million). The expected good business performance of the Business Unit Graphite Solutions and the better-than-expected sales and earnings development of the segments Process Technology and Composite Solutions compensated the drop in demand in the Business Unit Carbon Fibers.

Graphite Solutions (GS) increased sales by 15.3% year-on-year to €280.6 million and EBITDApre by 20.6% to €65.1 million. With a 30.9% rise in sales (€64.4 million) and a significant improvement in EBITDApre from €4.1 million to €11.9 million, the business performance of Process Technology (PT) was significantly ahead of the original budget. Composite Solutions (CS) also reported a higher-than-expected sales increase of 14.4% to €79.6 million in H1 2023 and an increase in EBITDApre of 26.8% to €12.3 million compared to H1 last year. By contrast, the business performance of the Carbon Fibers (CF) unit was not in line with expectations, with a 28.9% decline in sales to €125.1 million and an EBITDApre contribution of €6.1 million (-78.4% compared to the 1st half of the previous year).

An important market segment of the Carbon Fibers Business Unit is the wind industry. Demand for carbon fibers for the wind industry has declined sharply since the beginning of the year. According to current estimates, the expected recovery in demand in H2 2023 will not materialize for the time being. SGL Carbon expects customer demand from the wind industry to pick up in 2024.

Based on this, an impairment loss of between €40-50 million will be recognized on the assets of the Carbon Fibers Business Unit as of June 30, 2023. The impairment relates exclusively to Carbon Fibers, the operating business of the other Business Units is not affected.

SGL Carbon's equity ratio after the impairment as of June 30, 2023 is approximately 36% (December 31, 2022: 38.5%).

Further information on the first six months of fiscal year 2023 can be obtained from the half-year report, which will be published on August 3, 2023.

¹The definition of key figures used in this release is aligned to the Annual Report 2022.