TEXTILE INDUSTRY SEES GOOD RECOVERY IN 2022
Going by the optimistic sentiments in the textile industry, one can boldly say that the industry will do better in 2022. Hybrid editions of exhibitions and better performance in the last three months of 2021 have given new wings of optimism to the industry, driving out to a large extent the setbacks the industry suffered in 2020 & 2021.
The years 2020 and 2021 were a challenging time for the Indian textile industry. Production schedules slipped and products mix went for a toss. Unfazed by all the setbacks, overall, the industry weathered the storm and a cross-section of the industry that the Textile Value Chain interviewed and spoke to felt that good times are ahead in 2022.
The renewed enthusiasm and optimism came from many fronts. First, towards the 2021 end and the beginning of 2022 gave wings of hopes by way of exhibitions, which are both physical and also digital. The hybrid editions of Techtextil India, Gartex, and SITEX 22 kindled the optimistic strain in the minds of the visitors, who feel that the trend of this ‘Phygital’ (Physical + Digital) events are bound to continue in the months to follow. Some of the international exhibitions like the ITM in Turkey and the India-ITME are slated to open to the business in the rest of the year 2022.
Many of the chiefs of companies reflect what Mr. Ripple Patel, Managing Director, FiotexCotspinPvt. Ltd, says: “The Year 2021 was a full surprise year packed with fear and thrill. Year 2021 was good, Industry had good margins and entire textile value chain flourished positively and overall, it was a big boost to Indian Textile industries. We at Fiotex this year raised our one step to fulfil our 50% green energy needs from renewable energy and this year we achieved 30% of our needs with help of renewable energy installing 2.6 MW WTG. The Spinning Industry had seen a big sigh of relief after last year’s bloodshed market, we also focused on efficiency leading to profitability. Also, at the same time we saw a huge price hike in cotton at the end of the year which is a dangerous situation.”
On expectation & outlook for 2022, Mr Patel has a word of caution: “Year 2022 will be full of surprises, as Cotton Spinning Industries has seen a good year, but this year will be a bit tough, and Cotton Spinners will face challenges because of lower yield of cotton, this year at the end of this cotton season, we will be net importer of the cotton and this shortfall in crop may lead to disastrous situation. Overall margins will come under pressure. As domestic and international demands are changing, the dynamics also are changing. The textilevalue chain without China can face some challenges, overall, as a Cotton Spinners this year a lot will depend on domestic circumstances.”
Meanwhile, Consumer ratings business ICRA is confident that 2022 will see a stabilisation of India’s textile sector with cotton spinning and apparel export segments faring especially well. Cotton spinning and apparel exports could increase by 15% to 20% in the 2022 financial year, it said. Fabrics and domestic apparel segments could grow by between 30% to 35% and 35% to 40%, respectively. However, these segments are expected to have seen steeper declines in the 2021 financial year.
“As demand continues to normalise in domestic as well as export markets, we expect the textile sector performance to recover to pre-Covid levels in FY2022 at a broader level,” says a senior from the Corporate Sector Ratings, said. Thanks to vaccination rollouts and increased positive consumer sentiment, ICRA is confident that the worst of the pandemic is over. With economies opening up and a boost in domestic and export demand, the textile sector sees the positive sentiment of the recent third quarter of the 2021 financial year to continue in the upcoming quarters.
At the same time, the global textile machinery industry had its own problems in 2021.
Says Ms. Verena Ruckh – Head of Marketing & Advertising Dept, BRÜCKNER Textile Technologies GmbH & Co. KG, Germany: “In general 2021 was a very good year for our company. However, it was characterized by supply bottlenecks especially in the field of electronic components and extreme price increases for many raw materials. As a result, we were not always able to deliver or assemble our machines on time. In addition, the pandemic was still present throughout the year, making travelling difficult or even impossible. All this will continue to accompany us in the coming year. However, as we are very well positioned as a company in terms of both personnel and finances, I am very confident that we will continue to be a strong and reliable partner for our customers in the future.”
On herexpectation & outlook for 2022, Ms Ruckh says “Many of our customers held back or postponed investments during the pandemic. In the meantime, we see a clear need to catch up here, which in principle promises a good year for us. However, the shortage of raw materials is still present, as are the significantly increased prices, which we cannot simply pass on 100% to our customers. However, we see this as a great opportunity for us and the entire textile industry to develop new solutions and work on cost- and energy-saving technologies. We have already developed promising concepts that now need to be implemented.”
Says Alessandro Zucchi, Presi- dent of ACIMIT: “2022 will still be ayear of deep uncertainty for the global textile industry. We observed the resurgence of the Covid-19 pandemic in recent months. There are problems re- lated to our daily business due to the considerable increase in the
cost of raw materials and shipping, the lack of electronic components, etc. But I am optimistic. Over the years the Italian textile machinery manufacturers recovered from financial and economic crises. In 2022 the target of Italian companies is already ITMA 2023, which will take place in Milanfrom8to14June,2023.ITMAwillbeanopportunity to show the whole world our technologies. Already now our companies are working on technological innovations that international visitors to ITMA Milan will be able to ap- preciateintheItalianexhibitors’booths.”
Says Ms. Cornelia Buchwalder, Secretary General of SWISS- MEM, Swiss Textile Machinery Association: “Looking back to 2021, most of our members reported a very strong year. The business climate has re- covered faster and stronger than could be expected. De- spite this positive and rapid
recovery, there were some challenges to over- come. The still complicated and highly expensive transports, the scarcity and long delivery times of raw materials and the complexity of travel plan- ning. For Switzerland, there was also the addition- al challenge of the strengthening Swiss currency, mainly compared to the Euro. As an association, we had a very busy year too and were able to sup- port our companies in the legal area, but also, for example, in their virtual presentation.”
Ms Buchwalder adds: “ Also for 2022 companies stay cautiously optimistic, as it is not yet clear how sustainable this now very large catch-up effect of 2021 is. But it is clearly noticeable that companies are gradually planning again for the time after the pandemic. From both a company and an associa- tion perspective, the many exhibitions in 2022 are an important contribution to meeting customers and partners physically again. Swiss Textile Ma- chinery plans to participate in Techtextil in Frank- furt, CAITME in Tashkent, ITMA Asia + CITME in Shanghai and India ITME in Delhi, among others.”
Some of the companies went for new products and machinery. A lot of time was available for the R&D and most of the companies were engaged in research and tried out with reduced staff. Technical textile companies were quite optimistic about 2022.
Says Mr. Shujaul Rehman, CEO, Garware Technical Fibers Ltd: “The COVID pandemic did have some impact on the overall technical textile industry. As far as GTFL is concerned the impact we experienced due to COVID was relatively less compared to rest of the industry. This is because almost 50-60% of our solutions are directly or indirectly related to the food production sector. We were very happy to see that our customers continued to place their orders on us in these difficult times and trust us to deliver on their expectation. Moreover, those companies which had a flexible manufacturing set up were able to balance the shift in demand between different segments thereby ensuring better capacity utilization. In our case most of our manufacturing set up is fairly flexible and hence we benefitted from that inherent capability.”
Adds Mr Rehman: “As far as 2022 outlook is concerned, we are optimistic and feel that the demand would be stable and continue to increase. Since GTFL is largely focused on the areas of Agro-tech, Sport-tech, and Geo-tech within the broader field of technical textiles, each of them, on its own, offers a significant prospect for growth, both in terms of internal consumption and exports. We have made good progress in all of our major market segments, both internationally and in India, by delivering new and innovative solutions that have been well appreciated by customers. We envision the technical textile sector as a whole will continue to grow given the positive momentum due to various progressive schemes from the government and active collaboration with the industry partners.”
Says Mr. Mukesh Surana, CFO, Garware Technical Fibres Limited: “We understand that the upcoming budget is extremely crucial for the Indian economy because of the timing as country has now witnessed two long years of fight with Covid. Consumption and production have both taken a hit during this time, capex spends have been very low and inflation seems to be a soaring problem for everyone. We expect from the Honourable Finance Minister to rationalise and allocate more funds for appropriate export tax incentives and interest subventions particularly for identified, focused, potential and scalable industries such as man-made fibres and technical textiles, in order to boost manufacturing/ make in India and export. India’s manufacturing, export growth, foreign currency inward remittance, and employment prospects will all benefit considerably as a result of this.”
Mr Surana opines: “We also anticipate a continuous reduction in the country’s fiscal deficit, resulting in a healthier economy. The government can also look at taking forward its disinvestment strategy to boost the cash flow. Relaxation in personal income tax, high surcharges, and a lower GST shall also boost consumption, which can bring the economy back on track after the Covid-19 pandemic. Government should also look at rationalising the LTCG tax on equity along with the tax on dividends. Lastly, removing the cap of Rs.7.5 lakh contribution to PF and NPS can ensure that retirement benefits are well incentivised as per the global trends.”
Some companies used these two years on activities like digitalisation and pruning departments to make the company light and more efficient. India’s textile exports during April-December 2021 touched $29.8 billion, up 31% year-on-year.The Textile Ministry said that the textile sector has maintained trade surplus with exports higher than imports. In FY21, there was a deceleration in textile exports due to pandemic disrupting the supply chain and demand.
“During April-December, 2021 the total Textiles & Apparel including Handicrafts exports was $29.8 billion as compared to $21.2 billion for the same period last year. Growth signals an economic rebound,” as per the ministry’s statement.Overall, textile sector’s exports, comprising textile, apparel, and handicraft, rose 14.6% year-on-year during April-December. Cotton yarn, fabrics, made-ups and handloom products rose 43% on year during the period, and jute products exports increased 33%.
Centre has set a target of $44 billion worth of exports for the sector for this fiscal, and 67% of this target has been achieved. The industry is hopeful that export target will be met.India’s exports in December rose a record 37% year-on-year to $37.29 billion. This is the highest-ever monthly achievement of exports so far. Exports stood at more than $27.22 billion in December 2020. The exports growth in December is also a 37.55% jump over December 2019, when it stood at $27.11 billion.
The textile machinery and accessory segments also did somewhat better in 2021 though the capacity utilization of the industry declined from 49% to 46%. Globally, textile machinery industry has been doing well. The Italian industry is exhibiting at Colombiatex in January.
Start-up Valley by Cematex
CEMATEX, the European Committee of Textile Machinery Manufacturers, has launched a new initiative to support start-ups with new and innovative offerings, and to inspire innovation for the textile, garment and fashion industry.
The owner of ITMA and ITMA branded exhibitions, CEMATEX will provide selected young enterprises with solutions for the textile and garment industry with a grant to exhibit at the Start-Up Valley during ITMA 2023. The CEMATEX Start-Up Grant will cover the rental costs of a special design stand and fittings, as well as entitlements such as business matching.
CEMATEX president Mr Ernesto Maurer, said: “We are excited to launch this initiative to attract innovative start-ups to ITMA 2023. The Start-Up Valley will be a good complement to the ITMA Research & Innovation Lab”.
“As the largest textile technology exhibition attracting leading textile and garment manufacturers from around the world, ITMA offers young entrepreneurs a useful platform to put their innovations in front of a global audience, to find investors and collaborators and to leverage industry connections and professional networks.”
In addition to exhibiting at ITMA 2023, Start-Up Valley exhibitors can also take part in various onsite activities, including speaking at the Innovator Xchange and participating in the ITMA Sustainable Innovation Award and Innovation Video Showcase.
Eligibility and selection: To be eligible for the grant, start-ups must have a product or service that is within ITMA 2023’s exhibit profile. The company should also be incorporated for not more than 8 years, and has either generated revenue for at least a year or raised capital from investors or grants from other incubator programmes.
A key selection criterion is the environmental, economic and/or disruptive impact of the innovation, solution or product. Other criteria include the scalability of the innovation and its relevance to ITMA’s theme: Transforming the World of Textiles, and the four trending topics, namely advanced materials, automation and digital future, sustainability and circularity, and innovative technologies.
Applicants are also advised to share information such as reference partners to institutions, associations, or commercial partners and the innovative and intellectual content for their products, services, patents or applications, and if they have won any awards.
A panel of industry experts has been invited to form the selection committee to evaluate the start-ups. It comprises:
Mr Chris McHugh, Dry Fibre Development Manager, Advanced Manufacturing Research Centre (AMRC) with Boeing (United Kingdom); Ms Elin Larsson, Programme Manager, RISE Research Institutes (Sweden) andMr RuggeroFrezza, President, M31 Italia Srl (Italy).
Interested start-ups may apply for the CEMATEX grant by 30 June 2022. Successful applicants will be advised by 28 October 2022. ITMA 2023 will be held at Fiera Milano Rho, Milan, from 8 to 14 June 2023. The exhibit profile has been expanded to include a dedicated chapter on textile reinforcement structures for composites. The deadline for stand space application is 15 March 2022.
Meanwhile in India, Members of the Economic Advisory Council to the Prime Minister (EAC-PM) are optimistic about real and nominal growth prospects of India and feel that the real rate of growth may touch 7 to 7.5 per cent in 2022-23. Once capacity utilisation improves, private investments should also recover. “However, this should not mean that the Union Budget for 2022-23 should project unrealistically high tax revenue or tax buoyancy numbers,” the EAC-PM members said recently.
The Union Budget for 2021-22 was applauded because of reform measures, as well as transparency and realism in the numbers. EAC-PM members are of the view that these dimensions should be carried forward into the 2022-23 Budget too, signalling use of the extra revenue in the form of capital expenditure and human capital expenditure, since COVID-19 has led to a human capital deficit.“There should also be a clear road-map for privatisation and the growth orientation of last year’s Budget should also be maintained,” the release said.