The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 10 JULY, 2015

NATIONAL

INTERNATIONAL

 

Textile Raw Material Price 2015-07-09

Item

Price

Unit

Fluctuation

Date

PSF

1193.67

USD/Ton

0%

7/9/2015

VSF

2095.45

USD/Ton

0.78%

7/9/2015

ASF

2478.66

USD/Ton

0%

7/9/2015

Polyester POY

1174.10

USD/Ton

-0.28%

7/9/2015

Nylon FDY

3016.80

USD/Ton

-0.54%

7/9/2015

40D Spandex

6196.66

USD/Ton

0%

7/9/2015

Nylon DTY

2625.43

USD/Ton

0%

7/9/2015

Viscose Long Filament

1377.94

USD/Ton

-0.59%

7/9/2015

Polyester DTY

3261.40

USD/Ton

0%

7/9/2015

Nylon POY

6009.13

USD/Ton

0.27%

7/9/2015

Acrylic Top 3D

1443.17

USD/Ton

-0.56%

7/9/2015

Polyester FDY

2845.57

USD/Ton

-0.29%

7/9/2015

30S Spun Rayon Yarn

2723.27

USD/Ton

0%

7/9/2015

32S Polyester Yarn

1907.92

USD/Ton

-0.85%

7/9/2015

45S T/C Yarn

2967.87

USD/Ton

0%

7/9/2015

45S Polyester Yarn

2690.66

USD/Ton

0%

7/9/2015

T/C Yarn 65/35 32S

2103.60

USD/Ton

0%

7/9/2015

40S Rayon Yarn

2494.97

USD/Ton

0%

7/9/2015

T/R Yarn 65/35 32S

2886.34

USD/Ton

0%

7/9/2015

10S Denim Fabric

1.14

USD/Meter

0%

7/9/2015

32S Twill Fabric

0.96

USD/Meter

0%

7/9/2015

40S Combed Poplin

1.34

USD/Meter

0%

7/9/2015

30S Rayon Fabric

0.77

USD/Meter

0%

7/9/2015

45S T/C Fabric

0.78

USD/Meter

0%

7/9/2015

 

Source : Global Textiles

 

Note: The above prices are Chinese Price (1 CNY = 0.16307 USD dtd 09/07/2015)

The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

Indian synthetic yarn industry reels under Chinese gloom

With the Chinese economy dwindling further, export potential for synthetic yarn in the Indian industry has fallen sharply again. China, which imports synthetic yarn from India to convert it into fabric and garment, has seen production being cut drastically.  "The recent market crash in China has a lot to do with bleak outlook of domestic production in almost all sectors, including textiles.  Units in China have been cutting down on production due to decline in the world's buying capacity for textiles. This has resulted in synthetic yarn exports, especially that of texturised yarn, falling steeply," said Jayesh Pathak of Bombay Yarn Traders Association.

So much so, that analysts and industry experts have predicted a negative outlook for the synthetic textile sector for FY 2015-16, which had been impacted in the recent past due to decline in the Chinese demand.   However, apart from China, the sector could also see an impact from lower export competitiveness of Indian synthetic yarn due to continued import and central excise duty continue on man-made fibres.  According to a recent report by India Ratings & Research, a Fitch Group company, the industry also estimates price of polyester fibres to decline due to oversupply of cotton and cotton yarn over FY'16, coupled with lower crude prices. Revising its outlook for the synthetic textile sector to negative for FY'16, the report stated, "Unfavourable cotton-polyester staple fibre (PSF) spreads have hurt domestic synthetic yarn demand. Lower export competitiveness of Indian synthetic yarn also contributes to the subdued outlook as import and central excise duty continue on man-made fibres."

According to industry sources, global demand for synthetic yarn in recent times has fallen by 60 per cent. "China had already begun reducing its import from India. But the scenario has aggravated to such an extent that Indian synthetic units have cut production by almost 40 per cent," Pathak added.  However, as a counter view, OP Lohia, chairman of Indo Rama Synthetics (India) Limited, stated that given the synthetic yarn's competition to cotton, the latter's loss could result in the former's gain in near future.  "We can only improve from here since we have already hit the rock bottom.  There may be an immediate impact of China's economic decline on the synthetic textiles industry in India but in the long run, we will grow on the back of reduced competitiveness of cotton," Lohia said.  According to Lohia, the synthetic yarn's competitiveness against cotton is improving day-by-day since cotton prices have been rising and are expected to rise further in near future.  "As compared to that, synthetic yarn prices have fallen by 30 per cent in the last one year," Lohia added.

Prices of major raw materials like purified terephthalic acid (PTA) and mono-ethylene glycol (MEG) have also touched multi-year lows on account of lower crude prices, with PTA falling 19 per cent q-o-q to $ 628 per MT and MEG falling 5 per cent q-o-q to $ 783 per MT in the quarter ended March 2015, the India Ratings & Research report stated.

Source : Global Textiles

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India's 7.5% growth spurt in 2015 & 2016 to surpass China's

The International Monetary Fund (IMF) on Thursday reaffirmed its growth forecast for India in its latest World Economic Outlook (WEO), pegging growth at 7.5 per cent in both 2015 and 2016. Earlier, the World Bank too had projected India to grow at 7.5 per cent in 2015. With China expected to slow down considerably, the IMF pegs its growth at 6.8 per cent in 2015 and 6.3 per cent in 2016, the gap between the two countries is likely to widen to 1.2 percentage points by 2016.  In its latest WEO, the IMF lowered its forecast for global growth, indicating the fragile state of the world economy. It has pegged global GDP growth at 3.3 per cent in 2015, lower than its April outlook of 3.5 per cent. Though in 2016, it expects growth to bounce back to 3.8 per cent.

Outlining its thinking on these growth projections, the IMF said that the “projected pickup in global growth, while still expected, has not yet firmly materialised,” adding that, “raising actual and potential output through a combination of demand support and structural reforms continues to be the economic policy priority.” Growth in advanced economies is estimated to increase from 2.1 per cent in 2015 to 2.4 per cent in 2016. The IMF notes that this gradual pickup in advanced economies is largely due to the unexpected weakness in North America. But, making a case for a stronger bounce back, it said that the “underlying drivers for acceleration in consumption and investment in the United States — wage growth, labour market conditions, easy financial conditions, lower fuel prices, and a strengthening housing market  — remain intact.”

On the uncertainty in the Euro zone, the IMF is surprisingly sanguine. It has revised its growth projections upwards for many euro area economies, noting that “developments in Greece have not till now resulted in any significant contagion.” Although, it adds that recent developments in Greece could weigh down heavily on the economy.   But the downside risks to growth remain; principal among them being a quick reversal of capital flows from emerging economies. The IMF notes that “disruptive asset price shifts and a further increase in financial market volatility remain an important downside risk,” adding that, “such asset price shifts also bear risks of capital flow reversals in emerging market economies.”

During times of turmoil, capital tends to flow towards safe havens such as US treasuries, thereby strengthening the dollar. Given the uncertainty over Greece, the ongoing stock market shakeup in China and the possibility of an interest rate hike in the US, capital could quickly flow out of emerging economies like India. This, as the IMF notes, “poses risks of balance sheet and funding risks for dollar debtors, especially in some emerging market economies.” As reported in Business Standard, aggregate debt of India Inc stood at Rs 28.7 lakh crore in 2013-14, of which Rs 4.5 lakh crore was dollar denominated. A substantial chunk of this dollar denominated remains unhedged. Thus, a quick reversal of capital flows could affect these companies. On the whole, the IMF expects emerging markets and developing economies to slow down from 4.6 per cent in 2014 to 4.2 per cent in 2015.

Source : Business Standards

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Asian PTA slips from lower upstream prices on July 8

PTA prices slipped in Asia on Wednesday (July 8) as buying was poor and driven by lower upstream product prices. Lower prices of other polyester feedstock too supported the price fall.

In FE Asia, prices were assessed at US$ 655/ton, lower by US$ 30/ton or 4.38 per cent as compared to prices on Tuesday.  In SE Asia, prices were spotted at US$ 675/ton, down by US$ 30/ton or 4.26 per cent as against prices on Tuesday.

In India, prices were offered at US$ 685/ton, also lower by US$ 30/ton or 4.20 per cent from prices on Tuesday.

Source : Fibre2fashion

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Government support boosts geotextiles market

The geotextiles market is predicted to reach US$8,632.83 million by 2019, growing with a compound annual growth rate (CAGR) of 10.59% from 2014 to 2019, concludes a report from Research and Markets.   Asia-Pacific dominated the global geotextiles market in 2013, in terms of value. The global geotextiles market is growing as a result of government policies and environmental norms supporting the commercial usage, states the report.

Globally, governments in developed countries are making significant investments to secure long-term future, and their attitude towards socio-economic benefits is supporting the growth of the geotextiles market. In India, the government aims to invest US$1 trillion in infrastructure during its 12th five-year plan (2012-2017). Asia Pacific is anticipated to be the fastest growing market for geotextiles in the coming years. The demand for geotextiles is likely to increase in Asia Pacific due to growing infrastructure activities.

Though the global geotextiles market is highly fragmented, major players are said to be located in the developed countries. Demand from the emerging markets is likely to remain robust in the coming five years, due to rising awareness about the benefits of geotextiles. Notable advantages include their consistent performance, their versatility, and cost-effective ground modification materials. They have seen rapid expansion in the fields of civil engineering and agricultural enhancement in recent years. According to a recent infographic from nonwovens trade association EDANA, around 750 sqms of geotextile nonwovens are manufactured and sold every year; 60% of these are used in the construction of roads. Major players have prominent presence in the developing countries. The dominant players in the geotextiles market are Royal TenCate NV (The Netherlands), Gundle/ SLT Environmental Inc. (GSE) (U.S.), Low & Bonar PLC (U.K.) and Fibertex Nonwoven A/S (Denmark). For example, Royal TenCate’s Polyfelt TS – a mechanically bonded filter geotextile for civil engineering – was developed to guarantee resistance to installation damage, and to provide hydraulic properties and long-term performance. It also offers high permeability to water and retains fine soil particles. Acquired in 2005, this technology resulted in a 50% sales leap for TenCate’s Geosynthetics & Grass division.

While Gundle / SLT Environmental (GSE) is a global manufacturer of geosynthetic lining solutions used in the containment and management of solids, liquids and gases for organisations engaged in waste management, mining, water and wastewater treatment. Last year, the US-headquartered company opened a new factory in Suzhou, China, that is said to be capable of manufacturing every geomembrane in the company’s line. Upon reaching full manufacturing, the plant is expected to produce 20,000 metric tonnes each year for the Asia Pacific market.

Source : WTin Daily News

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Crude oil slump to cut subsidies by Rs 35k cr

Modi govt likely to see windfall gains in April-June quarter; more room to spend on public infra. With oil price at below $60 a barrel and benefits of decontrolled diesel and petrol fully realised, the Narendra Modi-led government is likely to see windfall savings of between Rs 30,000-35,000 crore on combined major subsidies in April-June quarter of 2015-16, Business Standard has learnt. The outgo for major subsides, which includes fuel, food, and fertiliser subsidies, is traditionally the highest in the first quarter (April-June) of any given financial year, as it includes pending payments and outlays for carried over subsidy demands. With subsidy numbers for April and May already available for the fiscal planners, senior government sources seem confident that the trends for the first quarter, and indeed the whole financial year, in terms of year-on-year (y-o-y) reduction in the subsidy bill, look promising. Sources say the total combined major subsidies for the first two months of the current financial year was around Rs 49,557 crore. That is a whole Rs 21,693 crore or around 30 per cent less than Rs 71,250 crore in major subsidy outlays for April and May of 2014-15.

The biggest reason for this reduction is that compared to Rs 23,931 crore in fuel subsidy payments in the first two months of the last financial year, there were no payments at all for April and May this year. Simply put, fuel subsidy burden in the first 61 days of 2015-16 financial year was zero, primarily because unlike other years, there were no rolled-over subsidy demands from January-March 2014-15 quarter.  “There are no under-recoveries in diesel and petrol, as they are market-linked. As of this year, LPG subsidy payments will only be through direct benefit transfers (DBTs). That leaves kerosene, and the Centre and states are working on a solution for that as well. The trends look good for this year, and going by what the first two months show, one could see savings of Rs 30,000-35,000 crore in the first quarter of the year,” a senior official said.

There was also a slight reduction in subsidy for decontrolled fertilisers for April and May, but it was more than offset by an increase in subsidies for food and indigenous fertilisers. For the full financial year, combined major subsidies are budgeted at Rs 2.27 lakh crore, with Rs 1.24 lakh crore for food, Rs 72,968.56 crore for fertilisers, and Rs 30,000 crore for oil subsidies. This compares with Rs 2.54 lakh crore revised estimates for 2014-15, with Rs 60,270 crore for oil, Rs 70,967 for fertiliser and Rs 1.23 lakh crore for food subsidies. “For the rest of the year, we will see further savings realised as the public distribution scheme (PDS) for food, and the direct benefit transfer for LPG start to show benefits,” said a second government official. As reported earlier, the government is set to save a little over Rs 10,000 crore in petroleum subsidy - a third of the budgeted amount - in the current financial year, thanks to the successful nationwide rollout DBT scheme. The scheme has already eliminated around 40 million ghost connections. The savings in major subsidy heads will give the Centre extra room to spend on crucial public infrastructure, which has become one of the post-poll promises of this government, as it looks to boost growth in a period of slowdown in private sector investment in infrastructure.

The Centre’s capital expenditure in the first half of the current financial is likely to rise a little more than 25 per cent over the year-ago period, to Rs 1.25 lakh crore. In 2014-15, capital expenditure in the April-September period was Rs 99,100 crore, a rise of only 2.3 per cent over the corresponding period the previous year.

Source : Business Standard

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Global crude oil price of Indian Basket was US$ 57.48 per bbl on 09.07.2015

The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 57.48 per barrel (bbl) on 09.07.2015. This was higher than the price of US$ 55.62 per bbl on previous publishing day of 08.07.2015.

In rupee terms, the price of Indian Basket increased to Rs 3650.55 per bbl on 09.07.2015 as compared to Rs 3535.76 per bbl on 08.07.2015. Rupee closed stronger at Rs 63.51 per US$ on 09.07.2015 as against Rs 63.57 per US$ on 08.07.2015. The table below gives details in this regard:

Particulars

Unit

Price on July 09, 2015 (Previous trading day i.e. 08.07.2015)

Pricing Fortnight for 01.07.2015

(June 12 to June 26, 2015)

Crude Oil (Indian Basket)

($/bbl)

57.48            (55.62)

61.66

(Rs/bbl

3650.55        (3535.76)

3935.76

Exchange Rate

(Rs/$)

63.51            (63.57)

63.83

Source : Ministry of textiles

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Japan’s MMF output dips in May

The volume of production of man-made fibres in Japan declined by 3.4 per cent in May this year to 83,254 tons, compared to the same month of 2014, the Japan Chemical Fibres Association said. Among man-made fibres, the production of synthetic fibres was 68,080 tons, down 4.1 per cent year-on-year.However, after a fall for seven consecutive months, acrylic staple fibre output rose by 7 per cent to 13,530 tons.

On the other hand, the output of polyester staple fibre fell for the seventh consecutive month to 12,243 tons, showing a drop of 5.1 per cent, while polyester filament production dropped 9.4 per cent to 10,870 tons, down for the sixth month in a row.

 Nylon filament output too dropped for the fifth consecutive month to 7,120 tons, down 14.7 per cent, the data showed.

Source : Fibre2fashion

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Vietnam now top market for Taiwanese textiles

Vietnam has overtaken China to become the biggest market for Taiwanese textiles and apparel, according to the data from the Taiwan Textile Federation (TTF). As per TTF statistics, Vietnam imported $926.195 million worth of textiles and garments from Taiwan during the period from January 4, 2015 to May 4, 2015, showing a growth rate of 10.25 per cent year-on-year.

On the other hand, Taiwan’s exports to China fell by 10.42 per cent to $882.254 million during the same period, mainly due to the impact of the China-South Korea free trade agreement. During the period, Taiwan’s overall textiles and apparel exports stood at $4.702 billion, registering a decrease of 2.51 per cent year-on-year, according to the TTF data. The 28-nation European Union imported $210.127 million worth of textiles and garments, accounting for 4.47 per cent share of all textile and clothing exports made by Taiwan during the period, while the US imported goods valued at $352.759 million, contributing 7.5 per cent to Taiwanese exports.

However, the bulk of Taiwanese textile and garment exports were destined to the neighbouring Asean region, which imported $1.712 billion worth of products, accounting for 36.41 per cent share in all Taiwanese exports. Taiwan exported $379.815 million worth of fibres during the five-month period, which accounted for 8.08 per cent of all textile exports from the country. Yarn exports earned $710.785 million for Taiwan, while fabric exports fetched $3.195 billion, accounting for 15.12 per cent and 67.95 per cent share in all Taiwanese textile and apparel exports during the period under review. Apparel exports from Taiwan were valued at $268.354 million, whereas made-ups accounted for $147.966 million.  Meanwhile, Taiwan’s textile and clothing imports stood at $1.391 billion, registering an increase of 5.06 per cent year-on-year during the period under review.

 Around 48 per cent or $666.629 million worth of imports belonged to the apparel category, whereas fibre imports accounted for $235.456 million, yarn $173.141 million, fabric $191.403 million, and made-ups $124.662 million.

Source : Fibre2fashion

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European textile and clothing industry struggles in 2014

Europe’s textile and clothing industry suffered in 2014 as early promise failed to be sustained for the rest of the year, according to the latest figures from Euratex – the European Apparel and Textile Confederation.  Overall, 2014 was as an unprofitable year, especially for businesses and for jobs. In 2014, the economic recovery was still elusive, although confidence in the domestic market was slowly returning and consumption picked up gradually.

However, the latter was a moot point since purchasing was geared towards essential items which are inexpensive for most consumers. Although textile and clothing production eased in the second half of 2014, on the year it rose very slightly. Additionally, its relative change on the year differed across the industries - positive for textiles and negative for clothing. This situation was reflected in the following changes: EU-28 textile and clothing exports outside the EU by value: +3.9%, EU-28 textile and clothing exports outside the EU by volume: +1.9%.

 In 2014, EU-28 exports outside the EU were again affected by the continuing adverse euro/$ exchange rate, despite the beginning of a change during December. Unfortunately, this reversal in the euro/$ rate will only be felt in future contracts in 2015, paired with the negative repercussions on imported raw material buying prices. This situation was most noticeable in the clothing industry for which exports outside the EU were at lower unit costs (-2.1%), in spite of the fact that they increased both in value and volume terms. The same issues faced the textile industry also, however, textile firms managed to keep their unit costs up 1.6% due to the inclusion of new technical products (+0.7% without these goods). According to industry, extra-EU exports for the EU-28 in 2014 produced the following results: 2.3% growth in textiles exports - excluding technical products - up €21.2bn by value (+1.5% by volume). Including technical products, there was a 3.1% growth in textile exports, up €24.7bn by value (+1.5% by volume).

Clothing exports grew by 4.7% at €21.7bn by value (+6.9% in volume). The added value and image enjoyed by European clothing were increasingly sought-after, but continued as a high-end prerogative accessible to just a few more well-off populations and also some developing countries. Although addition of the new technical textile products to reporting has improved results, extra-EU exports of textiles and clothing in 2014 were affected by the decline in specific markets, especially to the east of the EU-28, such as Russia and the Ukraine where political events and local currencies in freefall against the euro led to significant losses, said Euratex.

Source : WTIN Daily News

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Bangladesh-IFC to give $50m loan for RMG factory safety works

The International Finance Corporation of the World Bank group on Wednesday announced it would provide US$ 50 million financing for the local banks for making loans available for the garments factories for remediation.The IFC will provide US$ 10 million each in financing to five Bangladeshi banks which will allow them to increase lending to garment factories to improve their structural, electrical and fire safety infrastructure, said a press release issued by the corporation on the day. The IFC also signed separate cooperation agreements with North American retailers’ group Alliance and the European group Accord to assist garment factories to undertake the SEF upgrades and monitor compliance.

 ‘Broad, innovative partnerships are necessary to improve the safety of workers in this critical industry,’ said IFC chief executive officer Jin-Yong Cai. ‘Banks, international buyers, and manufacturers have a shared interest in this issue because it’s indispensable to making Bangladeshi garment factories more competitive and sustainable,’ he said.

 Prime Bank Limited has already signed up to the initiative, and four other banks are expected to follow in the coming weeks.  Ellen Tauscher, the chairman of Alliance for Bangladesh Workers Safety said, ‘Alliance is focused on ensuring workers in the garment sector have a safe and secure working environment. Providing long-term loans to factory owners to undertake and implement remediation is an ongoing effort and this joint initiative will allow for a wider group of factory owners to have access to financing.’  Rob Wayss, executive director of the Accord on Fire and Building Safety in Bangladesh, said, ‘The aim of Accord is to make the RMG sector in Bangladesh safe and sustainable. Accord signatory companies have invested considerable financial and technical
resources to meet this aim.  The IFC remediation financing program is an important contribution to the Accord’s ongoing efforts to ensure necessary remediation at inspected factories and meets an express request of local industry.’

Source : Global Textiles

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Pakistan-Cotton prices fall on slack demand

The cotton prices moved lower for the second consecutive day on Wednesday due to lack of interest by both ginners and spinners. The Karachi Cotton Association (KCS) reduced its sport rate by Rs100, to Rs4,850.  Floor brokers said ginners were least interested to enter in new deals as they sought to clear the advance deals they had entered in high prices as compared to the prevailing prices. They said arrivals of phutti (seed cotton) have increased and farmers are forced to sell their crop at low prices as they need money for Eid-related expenses. Only ginners are getting the benefit of the situation as they are purchasing the crop on low prices and are reluctant to enter in new deals with spinners. Prices of new phutti in various cities were: Chor Jamali Rs2275, Karen Rs2300, Badin Rs2250, Umer Kot Rs2200, Kunri Rs2225, Tando Allah Yar Rs2325, Mirpur Khas Rs2285, Hala Rs2325 and Sanghar Rs2350.

 Major deals finalised on ready counter included: 1600 bales Shahdadpur at Rs4650/4700, 1400 bales Hyderabad at Rs4650/4700, 2000 bales Sanghar at Rs4675/4700, 1000 bales Mirpur Khas at Rs4675/4700, 600 bales Kotri at Rs4675/4700, 200 bales Gularchi at Rs4670, 400 bales Khando at Rs4700, 600 bales Nooriabad at Rs4675/4725, and 600 bales Hala at Rs4700.

Source : Global Textiles

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BP officially starts up world’s largest PTA unit at Zhuhai

 

BP Zhuhai, in which BP and Zhuhai Port Co. hold an 85 percent and 15 percent stake respectively, is the leading Sino-foreign joint venture producing and marketing PTA in China has officially started up its Phase 3 PTA unit at Zhuhai enhancing its position in the purified terephthalic acid (PTA) market and its long term commitment in China.  With a design capacity of 1.25m t/y, Zhuhai’s Phase 3 is said to be the world’s largest single PTA train unit. Also, the Chinese site is the first to use BP’s latest version of its proprietary process. Compared with conventional PTA technology, the group said that Zhuhai 3 is highly energy efficient, delivering 95% lower solid waste, 65% lower greenhouse gas emissions and 75% lower water discharge. The bulk of output will supply growing demand from China’s polyester textile industry.

Built at a cost of CNY 4.1 bn (about EUR 606m) and engineered by French contractor Technip, the new facility for the polyester feedstock complements two projects already completed by BP at the site, lifting local output to more than 2.7m t/y and the British group’s global PTA capability to 8.25m t/y. Edward Yang, president of BP China, said that the Zhuhai investment is a good example of their long-term commitment in Guangdong province, which accounts for a large proportion of our investment in China. They look forward to playing a greater and more active role in the progression of the Green Guangdong Agenda by providing their significant experience and expertise in clean energy and energy efficiency.

Erginbilgic, Chief Executive of BP Downstream, at the opening ceremony said that this is a milestone for both BP and BP Zhuhai. At BP, they are committed to becoming the leading downstream business. The safe completion and successful commissioning of Phase 3 is an important part of their intent to keep their petrochemical business competitive globally. According to Nick Elmslie, Chief Executive of BP’s Petrochemical Business, technology is one of the key drivers for BP’s success. And this latest unit employs BP’s most advanced PTA manufacturing technology that will enable them to deliver high-quality products to their customers with higher operational efficiency and environmental performance.

PTA is the essential raw material for making polyesters extensively used in producing textiles, packaging and film products.

Source : Yarn and fibre

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ZITMA demands complete ban on polyester knitted fabric and finished blankets

The Zimbabwe Textile Manufacturers Association (ZITMA) demands complete ban on polyester knitted fabric and finished blankets entering the country. The moves comes to protect the local textile industry from collapsing as cheap imports, mainly from China are flooding the market. Industry players told the Parliamentary Portfolio Committee on Industry and Commerce that cheaper imports made local products uncompetitive.

The association urged the Committee yesterday that with immediate effect the tariff codes that carry duty of 10% should be aligned with the tariffs codes that carry duty of 40% plus $2.50 per kg or a complete ban on polyester knitted fabric and finished blankets entering Zimbabwe.  This will enable the manufacturers to create more employment for Zimbabweans and these manufacturers have the capacity to do so, but they are unable to compete with imports flooding the markets as this has a negative impact on industry. The committee was on a mission to see the state of the sector.

The chief executive officer of Tanzi Zimbabwe (Private) Limited Derek Beauchamp told legislators that the main challenges are cheaper imported materials coming into the country through traders where they got large amounts of overheads in the business. They employ 160 people in Twine and Cordage and this product is affecting their jobs, their existence, and the business as a whole.  Waverly Blankets chief executive officer Victor Cohen said that the influx of cheap products has resulted in employment reduction from 54000 in 2008 to 3000 in the sector. They are having the worst blanket season in the history of Waverly. All imported products are coming in from China and they are having difficulty competing with them.

Kingfisher Prints told the committee that cheap imports from China have been allowed to flood the market making it impossible for the local industry to compete as they were being sold at prices which were sometimes below the local cost. This has seen the closure of many textile companies as most people now prefer to import rather than to support the local industry.  Chinese manufacturers are in a position to produce goods at cost or slightly above and still retain profitability as China gives 14 percent to 20 percent export incentives. Committee chairman Edmund Mhere agreeing that imports are flooding the country has proposed that there must be control at the borders. The committee would go through their findings and present them before the next parliamentary meeting.

Source : Yarn and fibre

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