From the Sector

• Sales Volume rose 3% QoQ and 2% YoY to 3.55MT
• Adjusted EBITDA of $366M, a rise of 32% QoQ and a decline of 2% YoY
• Operating cash flows of $184M
• Net Operating Debt to Equity of 1.12
• Reported EPS of THB0.17

Indorama Ventures Public Company Limited (IVL) reported an improved quarterly performance as the prolonged destocking trend showed further signs of easing. During the quarter, the company progressed its IVL 2.0 evolved strategy to enhance earnings quality and transform its business to emerge stronger from the downturn in global chemical markets.

Indorama Ventures’ reported Adjusted EBITDA1  of $366 million in 1Q24, a 32% increase QoQ and a 2% decline YoY. Sales volume grew 3% QoQ as the widespread customer destocking that sapped demand through 2023 shows signs of a gradual recovery across all sectors, partially offset by a winter freeze in the U.S. The result was supported by lower utilities costs in Europe, Red Sea-related supply chain disruptions that benefited the company’s import parity advantages, and favorable shale gas economics that bolstered profitability in the U.S.

Indorama Ventures expects the recovery in volumes to continue through 2024, albeit at a gradual pace as destocking normalizes and the approaching summer supports demand. However, the overall landscape for the global chemical industry remains challenging due to excess capacity builds, as well due to persistent inflation and high interest rates which weigh on industry spreads and continue to impair profitability, especially across the polyester value chain. Our HVA segment ‘Indovinya’ is progressing well into the second quarter post the easing of destocking and anticipating a healthy 2024.

The company’s experienced management remains intensely focused on managing costs, optimizing competitiveness, and maintaining high liquidity. Indorama Ventures’ diverse geographical footprint is a key advantage in the current low-margin environment, allowing its businesses to maintain their strong market premium, supported by protection from trade and non-trade barriers.

In 1Q, the company made headway with its IVL 2.0 three-year plan to leverage its global leadership position and forge a new era of opportunity amid significant structural changes in chemical markets. Under the evolved strategy, which the company outlined at its annual Capital Markets Day in March, Indorama Ventures is optimizing assets, reducing debt, and focusing on generating free cash flow to deliver enhanced shareholder returns. Today, 70% of the company's revenue has deployed the SAPS/4HANA ERP and is using the infrastructure to enhance digital procurement, sales excellence, and integration of supply chains across the business. The company believes these AI tools will improve productivity and costs, as well as release working capital in line with its modernization strategy.

As part of IVL 2.0, the company is optimizing 7 sites, including the ongoing evaluation of its PTA/PET operation in the Netherlands. It has also made significant progress in its program to refinance $1.1 billion of debt within the first half of 2024 to ensure ample liquidity. Recent capital raisings include a $255 million ‘Ninja loan’, a THB 10 billion debenture, a $100M bi-lateral loan, and this week’s successful close of a $500 million syndicated loan – achieved at lower-than-average spreads compared to previous issuances.

To unlock value, Indorama Ventures is preparing its packaging and surfactants businesses for IPOs. From 1Q24, the Indovinya segment (previously named ‘Integrated Oxides and Derivatives’) is focused on developing its attractive downstream surfactants operations as a separate segment. The segment’s Intermediate Chemicals business, consisting of shale base integrated Ethylene MEG, MTBE and merchant Purified EO assets, have been moved under the Combined PET (CPET) segment where they are a natural fit.

Segment Performances
In 1Q24, CPET segment (including Intermediate Chemicals) posted Adjusted EBITDA of $249 million, a 34% gain QoQ and 4% YoY as supply chain disruptions and a consequent spike in global ocean freight rates supported high prices and margins, and as Western markets benefited from lower energy costs. The Indovinya segment reported a stable Adjusted EBITDA of $70 million, impacted by the winter freeze in the U.S and a mini turnaround at a PO/PG plant. The Fibers segment achieved a remarkable 73% increase in Adjusted EBITDA to $39 million QoQ, and 2% YoY, as destocking waned across all three business verticals and drove an 8% QoQ increase in volume.

Indorama Ventures Public Company Limited, a global sustainable chemical company, announced that MSCI awarded the company an upgraded ‘AA’ from ‘A’ rating, ranking it in the ‘Leader’ category for its Environmental, Social, and Governance (ESG) performance towards achieving its ongoing sustainability goals and commitments.

Morgan Stanley Capital International (MSCI), a provider of research-driven indices and analytics, ranked Indorama Ventures among the top 12% of 57 global companies in the commodity chemicals sector. This upgraded rating illustrates Indorama Ventures’ performance to exceed industry peers while minimizing its environmental footprint.

London Marathon Events (LME) partnered with the Salvation Army Trading Company (SATCoL), the trading arm of The Salvation Army, to collect discarded participant clothing at its event in London. On 21st April The Salvation Army collected a record 18.9 tonnes of clothing from the mass participation event.

Salvation Army volunteers and helpers supported to collect clothing discarded by participants prior to the Start line. The clothing was transported to The Salvation Army’s processing centre in the East Midlands for sorting and distribution to be resold, reused or recycled.

The profits that the Salvation Army Trading Company raise, is donated to The Salvation Army to continue to support the work they do across the UK.

The scheme is one of LME’s new sustainability initiatives for 2024 aimed at reducing the environmental impact of its events, with a particular focus on lowering carbon emissions, cutting waste and improving circularity.

The Salvation Army team will continue with the clothing collections at the following events this year:

• Ford RideLondon on Sunday 26 May
• The Big Half on 1 September
• The Vitality London 10,000 on 22 September
• The Royal Parks Half on 13 October

• Revenue up 5.7 percent year-on-year to EUR 658.4 million
• EBITDA more than doubles year-on-year to EUR 71.4 million
• Free cash flow of EUR 87.3 million (compared with minus EUR 132.3 million in the first quarter of 2023) and thereby positive for the third consecutive quarter
• Performance program shows positive effect on revenue, EDITDA, and free cash flow
• Lenzing confirms EBITDA guidance for 2024

The Lenzing Group, a leading supplier of regenerated cellulose for the textile and nonwovens industries, recorded a further improvement in fiber sales volumes in the first quarter of 2024. An expected recovery in markets relevant for Lenzing has to date failed to materialize. Fiber prices remained at a low level. Although the costs of raw materials and energy continued to decrease, they remained higher than in the pre-crisis 2019 year.

Outlook
Even though the IMF has upgraded its growth forecast for 2024 from 3.1 percent to 3.2 percent, a number of risks remain for the global economy: potential geopolitical shocks, persistently higher inflation and key interest rates, as well as market risks emanating from the Chinese real estate market are currently considered to be the most relevant.

General inflation and falling incomes in real terms are continuing to exert a negative impact on consumer sentiment. A recovery in the consumer clothing market, which is important for Lenzing, will also depend on a further normalization of stock levels.

The currency environment is expected to remain volatile in regions relevant to Lenzing.

In the trend-setting market for cotton, a stable price trend is expected for the 2023/2024 harvest season.

Earnings visibility remains limited overall.

Revenue and earnings in the first quarter exceeded Lenzing’s expectations, despite the persistently difficult market. Lenzing is ahead of schedule with the implementation of its performance program. By appointing a separate Managing Board member, the projects identified to date are to be implemented even more rapidly, and new potentials are to be leveraged. Lenzing expects that these measures will increasingly contribute to further earnings improvement over the coming quarters compared to the first quarter of 2024.

Taking the aforementioned factors into consideration, the Lenzing Group confirms its guidance for the 2024 financial year of year-on-year higher EBITDA.

In structural terms, Lenzing continues to anticipate growth in demand for environmentally responsible fibers for the textile and clothing industry as well as the hygiene and medical sectors. As a consequence, Lenzing is well positioned with its “Better Growth” strategy and plans to continue driving growth with specialty fibers as well as its sustainability goals, including the transformation from a linear to a circular economy model.

• Continued growth in the semiconductor business
• Weak demand for carbon fibers further impacts Group sales and profitability
• Group sales down slightly at €272.6 million (-3.9%), adjusted EBITDA up 5.0% to €42.1 million
• Adjusted EBITDA margin at 15.4% after 14.1% in the same quarter of the previous year
• Outlook for 2024 confirmed

SGL Carbon had a solid start to the first quarter of 2024. Despite the slight decline in sales of 3.9% to €272.6 million (Q1 2023: €283.7 million), adjusted EBITDA improved by 5.0% to € 42.1 million (Q1 2023: € 40.1 million). Weak demand in the Carbon Fibers business unit in particular have a negative impact on the Group's sales and earnings performance. By contrast, slightly higher sales and, especially, the increase in adjusted EBITDA in the Graphite Solutions and Process Technology business units had a positive effect on the Group's performance.

Outlook
In line with the course of business in the first three months of 2024, the company confirms its sales and earnings outlook for the 2024 financial year. Consolidated sales for the 2024 financial year are expected to be at the previous year's level and adjusted EBITDA between €160 million and €170 million.

For Italian textile machinery sector, 2024 has begun without anything seemingly special. The first quarter has seen the orders index, as reported by the Economics Department of ACIMIT – the Association of Italian Textile Machinery Manufacturers – remain stationary compared to the same period the previous year. In absolute terms, the index came in at 61.2 points (basis: 2021=100).

This result is due to entirely different trends between the domestic and foreign markets. On the home front, orders were up 15% compared to the first three months of 2023, whereas orders abroad fell by 4%. The absolute value of the index on foreign markets came in at 59.4 points, in comparison to a 73.9 points in Italy. In both cases, new orders remained well below the numbers recorded for 2021, considered as a base year. During the first quarter, order backlog reached 4 months of assured production.

ACIMIT president Marco Salvadè thus commented the data: “The orders intake for the period from January to March 2024 confirms an overall sense of caution on foreign markets in planning new investments. The global geo-political framework remains complex, and these uncertainties are reflected in the buying decisions of many textile manufacturers. Therefore, our primary markets, which include China, Turkey and India, have failed to record any clear signs of growth in demand.”

On the contrary, domestic orders appear to be slightly on the rise. “Following a sharp decline in 2023, new orders from the beginning of the current year have recovered partially,” states ACIMIT’s president. “However, I don’t believe conditions are yet right for a clear inversion of this trend. Here in Italy as well, many investments remain on hold, awaiting the implementation of Transition 5.0 plan. Subsequently, we’ll be in a position see whether the domestic market will react positively to the adoption of these new measures.”

Levi Strauss & Co. announced the appointment of Gianluca Flore as executive vice president and chief commercial officer, effective July 29. Reporting to Michelle Gass, president and chief executive officer, Flore will join the company’s executive leadership team and will be responsible for the commercial operations of the Levi’s® brand across all global channels, including stores, e-commerce and wholesale.

Flore brings more than 20 years of international commercial experience in the luxury apparel and lifestyle sector. He joins LS&Co. from Burberry, where he was appointed chief commercial officer in 2021, overseeing five regions and a network of more than 400 stores. Prior to this, he served as the company’s president for the Americas and Global Retail Excellence, spearheading the expansion and productivity of the brand’s retail footprint, and elevating distribution and positioning across wholesale. Flore has also held leadership roles at the luxury group Kering, including CEO of Brioni, where he established a profitable retail business model for the brand, and at Bottega Veneta, where he led double-digit revenue increases across wholesale and retail channels. Flore holds a BBA and post-graduate certificate from LUISS University in Rome, Italy, as well as a post-graduate certificate from the London School of Economics.

Cascale, a non-profit alliance for driving impact in consumer goods (formerly the Sustainable Apparel Coalition), announces Colin Browne as its new Chief Executive Officer, effective May 1, 2024.

Browne previously served as Interim CEO and Chief Operating Officer of Under Armour, a Cascale member. During his tenure at Under Armour, Browne oversaw sustainability efforts and, in addition, led significant transformations across supply chain, go-to-market and technology. In 2023, the company shared achievements related to its environmental footprint, product circularity, and renewable energy goals – some accomplished with Cascale’s Higg Index suite of tools.

Prior to joining Under Armour, Browne was managing director of Asia Sourcing for VF Corporation, a Cascale member that includes The North Face, Timberland, Vans, and Smartwool brands. In addition to his experience leading brands, Browne also spent four years running manufacturing plants in Thailand and began his career at Bally Shoe factories in the UK. He has lived and worked in the UK, South Korea, mainland China, the Philippines, Thailand, Hong Kong SAR, and the USA; his international experience and localized approach underscore his commitment to Diversity, Equity, and Inclusion (DEI) both in and outside of the workplace. Browne also served as the Chairman of the American Apparel and Footwear Association and was on the board of the World Federation of Sporting Goods Industries. As a member of the Worldly Board, the leader in environmental and social impact data for the apparel and footwear industry and the exclusive platform for Cascale’s Higg Index tools, Browne will ensure a unified approach to advancing sustainability initiatives across both organizations.

During his first 100 days with Cascale, Browne will connect with the organization’s 300+ members across the value chain, emphasizing manufacturer engagement and relationship building. He will also engage Cascale’s broader ecosystem of stakeholders including NGOs, governments, and academia. Browne is personally committed to Cascale’s vision to lead the consumer goods industry to combat climate change, foster decent work for all, and build a nature-positive future.

The National Council of Textile Organizations (NCTO), representing the full spectrum of U.S. textiles from fiber through finished sewn products, held its officer elections for fiscal year 2024 at its annual meeting April 9-11.
NCTO has elected Charles Heilig, President of Parkdale Mills, as Chairman; and Chuck Hall, President and CEO of Barnet, as Vice Chairman.

In addition to the appointment of a new chairman and vice chairman, NCTO elected chairs for each of its five councils. NCTO is comprised of five councils to ensure a broad representation of the industry supply chain. Each council has an allotted number of members who are elected to the association’s Board of Directors, in addition to the Executive Committee.

Elected as NCTO Chairman and Vice Chairman for 2024:

• Chairman – Charles Heilig, President of Parkdale Mills based in Gastonia, North Carolina, a leading American manufacturer of yarn and cotton consumer products.
• Vice Chairman – Chuck Hall, President and CEO of Barnet based in Spartanburg, South Carolina, a 125-year-old manufacturer of technical textiles.

Elected to the NCTO Board of Directors:

• Fiber Council – David Adkins of Lenzing; John Freeman of Nan Ya Plastics; and Melissa Stewart of The LYCRA Company
• Yarn Council – Justin Ferdinand of Kentwool; Peter Iliopoulos of Gildan; Eddie Ingle of Unifi; Eric Noe of Buhler Quality Yarns; Marvin Smith of Shuford Yarns; and Jay Todd of Service Thread
• Fabric and Home Products Council – David Smith of Milliken & Company; James McKinnon of Cotswold Industries; Blake Millinor of Valdese Weavers; Leib Oehmig of Glen Raven; Dan Russian of Sage Automotive Interiors; and Walter Spiegel of Standard Textile
• Finished Textiles and Apparel Products Council – Marisa Fumei-South of Two-One-Two New York (Alternate: Gabrielle Ferrara of Ferrara Manufacturing)
• Industry Support Council – Todd Bassett of Fi-Tech; Greg Duncan of American Truetzschler; and Jim Reed of YKK Corp.

Elected by their respective Councils to serve on the Executive Committee:
David Adkins, Lenzing; Eddie Ingle, Unifi; Marvin Smith, Shuford Yarns; David Smith, Milliken & Company; James McKinnon, Cotswold Industries; Marisa Fumei-South, Two-One-Two New York; Gabrielle Ferrara, Ferrara Manufacturing; and Todd Bassett, Fi-Tech.

NCTO Chairman Charles Heilig has elected additional executives to serve on the Executive Committee: Anderson Warlick of Parkdale Mills; Norman Chapman of Inman Mills; John Maness of Gildan; Amy Bircher Bruyn of MMI Textiles; and Jackie Ferrari of American Fashion Network.

Elected to chair the Councils:

• Fiber Council: David Adkins of Lenzing
• Yarn Council: Justin Ferdinand of Kentwool
• Fabric and Home Products Council: David Smith of Milliken & Company
• Finished Textiles and Apparel Products Council: Marisa Fumei-South of Two-One-Two New York.
• Industry Support Council: Todd Bassett of Fi-Tech

National Council of Textile Organizations (NCTO) President and CEO Kim Glas issued a statement welcoming the appointment of Katherine White as Chief Textiles and Apparel Negotiator for the U.S. Trade Representative’s Office (USTR).

“Katherine White is an excellent choice for the critical position of Chief Textiles and Apparel Negotiator. We are also grateful to U.S. Trade Representative Ambassador Katherine Tai for elevating this position back to a political appointee role, which is historically how it has been designated.

Katherine comes to this position with an outstanding resume, including a strong knowledge base and expertise in manufacturing policy and on textile-related trade issues, having worked most recently as an International Trade Policy Advisor on the House Ways and Means Committee, and prior to that, at the U.S. Department of Commerce and the White House.

Given the prominence of both the agency and her political appointment, we know she will play a highly instrumental role in shaping policy impacting our industry. She is a fantastic choice.  We thank Ambassador Tai for the redesignation of this critical office and her support for our textile industry and its workforce. We also sincerely thank Dr. Laurie-Ann Agama for her service in the role through this transition.

We could not be more delighted to work with Katherine in her new capacity and look forward to coordinating with her on manufacturing and worker-centered trade policy that will help bolster the vital domestic textile sector.”