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Nonwovens Potential And The Unique Indian Situation



future looks bright for disposables and durables in India



Published June 1, 2005
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Demographic Data
Population: 1.05 billion
Median age of population: 24.2 years
Population growth rate 1.47%
Birth rate: 23.28 out of 1000 population
GDP: $153 billion
PPP: $2.6 trillion
PPP/per capita: $2800


India is a unique blend of modern scientific talent and ancient world mysteries. The country has made the most super computers, providing cost-effective software solutions to the whole world and still has bullock carts on some of its roads. This special situation, combined with its large population (ranked second in the world), makes the country an exciting place for marketing and product development companies. The world giants in consumer products such as Kimberly-Clark and Procter & Gamble have all modified their strategies to suit Indian conditions prior to achieving any success. The potential for nonwovens usage in India is great and there are many reasons why it will form an important sector.

Population Factor
Nearly 48% of the Indian population falls within the 18-to-35 age group. This group of consumers is receptive to new products and is well exposed to international situations and practices. This population of nearly 500 million residing in urban and rural areas makes it a potential consumer for many disposable nonwoven products. This section of the population is also well educated and has high enough disposable income to afford nonwoven disposable products.

The strong Indian middle class of 250 million has purchasing power and living standards nearly equivalent to the middle class of developed countries. They tend to use the products based on availability and convenience. The children in these families are potential customers for all kinds of baby diapers, baby wipes, etc. The currently low penetration of these products provides an untapped market for new entrants to India. However, Indian customers are value-driven, hence only a product with a true value will succeed. The high birth rate also ensures a recurring huge demand for infant-related nonwoven products.

The GDP (Gross Domestic Product) of India is $153.3 billion. The Indian economy encompasses village farming, modern agriculture, a wide range of modern industries and a multitude of support services. Private industries have grown rapidly and privitization by the government has been quite quick in the last few years. The economy has grown at 6% on average in the last few years and is poised to grow at 8-10% in coming years. India has a trade surplus in the export markets, and import restrictions are being dismantled rapidly. The import duties are 5-25% for most of the goods.

Unique Indian Situation
India is the largest democracy in the world
India has the second largest pool of engineers and scientists
India is the second largest producer of cement in the world'100 million tons per year
The stock exchange has 6000 listed companies, which is next to the NYSE
India railway has the largest railway network at 63,518 kilometers
The highway road network in India is 3.4 million kilometers
India consumes one-fifth of the world's gold output
50% of India's population is younger than 25
Nine out of 10 diamonds sold in the world pass through India as it is the main center for cutting and polishing

The purchase power parity (PPP) of the Indian population is nearly $2.7 trillion, which is higher than the total PPP of the South American continent (Brazil, Chile, Argentina, Columbia, Venezuela and others put together).

The cost of living in India is much cheaper than in the U.S. or Europe. As the purchasing power increases, there is more income available to spend on consumer products. The average income is $2800 at present and has been rapidly increasing during the last few years.

The consumption of nonwovens is rising rapidly. This has been caused by increasing imports of disposable products in the country by private marketing companies and also established players such as K-C and P&G. It is well known that the per capita consumption of nonwovens will increase as the nation's per capita income rises. The per capita consumption of nonwovens in India is 0.001 kilograms, which can only rise given the industry's potential to grow by a thousand times during the next few years. The per capita consumption level is approximately 2.25 kilograms in developed countries. This makes India a nascent market in which the nonwovens industry worldwide can invest.

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Table 1
Converted Disposable Nonwoven Products-Sales Estimates
Category 2003 2009
Consumer 120 222
Medical 30 88
Industrial 20 30

Market Overview
The value of nonwovens consumed in India was estimated at $200 million in 2002. No previous study was made and the industry is very fragmented, with many manufacturers operating under different industry headings. A large quantity of disposable nonwovens is also imported as tissue and paper. The garment industry also imports substantial quantities of interlinings material, which accounts for nearly $75 million in additional imports. Geotextile applications have picked up under various world bank infrastructure projects and this has amounted to nearly $35 million in 2003. As there is no high quality producer of spunbond and thermal bonded materials, the disposable manufacturers such as K-C, Johnson & Johnson and P&G import substantial quantities of nonwovens. The nonwoven uses and the industry are growing rapidly. High value and performance filter fabrics made with Nomex, glass, Teflon and other fiber types are also in demand. With the economy poised for a rapid growth of more than 8% during the next five years, nonwovens production and consumption is expected to see rapid growth.

No accurate estimate is available on the exact quantity of disposable and durable nonwovens production. However, by discussions with various manufacturers and end users, we estimate that the total consumption of durable nonwovens is 60,000 tons and 38,000 for disposable nonwovens. A substantial portion of disposable nonwovens is currently imported for various reasons. By discussion with industry personnel and output figures from major companies, a realistic estimate of the sale of converted disposable nonwoven products is made in Table 1.

The disposable surplus is increasing rapidly and the disposables market in India is expected to grow at 10-15%.

The most important consumer disposable markets are hygiene and medical disposable products. J&J, K-C and P&G dominate the hygiene market. A considerable quantity of bleached cotton wool and woven bandages is still used in the medical market. As better products, such as spunlace, become available, this market is expected to rise rapidly. The substitution of traditional markets for nonwovens will be rapid due to tremendous economic and performance advantages.

The market penetration of feminine hygiene is only 15% and sales are mainly in the urban areas. When the price barrier is broken, this market will explode in a big way. Increasingly, small local manufacturers have arrived on the scene competing with large multinational companies. With more than 250 million eligible customers of hygiene products, India will be a huge market when penetration reaches 60%.

One can see that the consumer wipes market is negligible at present. The improvements in this market will come when spunlace is made locally. Premoistened baby wipes have been recently introduced and have become popular in urban settings. The market is expected to grow 10-15%.

The industrial disposable nonwovens market essentially revolves around packaging and insulation products. And, disposable wipes usage will pick up as resources increase, as labor is very cheap in India. Reusable cotton wipes and rags are still the most popular cleaning tools.

Most of the disposable gowns and surgical drapes are still imported as this type of spunbond, meltblown and spunlaced materials are not made in the country.

Among the disposable markets, the diaper market is still in its infancy in India. Diapers are still very expensive as they are mostly imported to or repackaged in the country. With the urban population increasing and the increasing trend of working women with higher earnings, the diaper market will grow rapidly in the next few years. Pampers and Huggies are already present in the market, but the pricing is at a level where it cannot stimulate demand.

The average life expectancy in India is only 65 years. This means the population over the age of 65 is not high. The problems of incontinence associated with old age are less of a concern in India so the adult diaper market at present and in the immediate future is not expected to be big. The diapers needed for surgical procedures will be in demand.

Table 2
Nonwoven Fabric Sales in Disposable End Uses
(tons)
Application 2002 2007
     
Absorbent Hygiene 323,000 56,490
Wipes 760 925
Medical 2280 3988
Domestic producers 380 462
Filter disposables 380 462
Other 1900 2585
Total 38,000 64,912

Raw Materials For Nonwovens
Reliance Industries in India is the second largest polyester producer in the world. However, most of the fibers available are commodity-type, which are suitable for use in textile and general nonwoven applications. The microfiber and specialty low shrinkage polyesters are still imported from beyond India. Located in India, Grasim is the second largest viscose fiber producer in the world, with more than a 30% marketshare. This bodes well for developing India as a base for absorbent nonwoven materials.

There is only one PP fiber producer making standard PP fibers for carpets, nonwovens and spun yarns. A new PP fiber producing line is currently under construction. Acrylic fiber is available and produced in large quantities.

Bleached cotton fiber is also available in large quantities. India is the third largest exporter of this product for surgical and other end uses. Unfortunately, there is no spunlace plant in the country to help the situation but several projects are rumored to be in the planning stages.

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Disposable Applications Market
It may be observed that feminine disposable hygiene is the biggest market in India. With the advent of medical insurance and improvement in the healthcare systems across the country, medical disposable markets are poised for rapid growth. The healthcare industry grew 23% in 2003.

The penetration of the market by sanitary napkins is hardly 15% of the theoretically available market. With the increased affluence and urbanization of India, this market is expected to grow very fast in the coming years. This fact is reinforced by the entry of many private label manufacturers in the last few years. K-C, P&G and J&J have a strong presence in the market. With the younger population ready for new products, this is an important market for nonwoven disposables. A typical potential estimate based on per capita consumption of 50 units per annum by the eligible population of nearly 300 million users (age group 15 to 40) will give a theoretical total market size of approximately 15 billion pieces. This could result in market sale value of $1.5 billion at 10 cents per piece.

Baby wipes is expected to grow rapidly among the urban population, whereas the general moistened wipes will take some more time for the concept to be accepted by the Indian population. Overall the Fast Moving Consumer Goods (FMCG) sector is growing more than 10% in most categories in India.

Infant diapers are expected to grow at the same rate as FMCG products through high niche market penetration. The incontinence products will have much slower growth. The low penetration level of diapers in the theoretically available market shows a huge potential in this segment.

Some 24 million babies are born in India every year. If we typically calculate that 25% of these infants in the period between birth and 24 months use at least 28 diapers a week, the theoretically available market for diapers is 8.7 billion pieces per year. This is a big number for any industry. With rising income levels, the consumption levels of this order is achievable in the near future, if the prices are kept right.

Training pants as a concept has not been introduced in the country.

Widespread penetration of wet wipes for household uses in the near future is not expected. India is the right place to introduce wet wipes as it could save a lot of water use for cleaning India has scarce water resources however, for reasons unknown wipes have not expanded in the country. As a concept, the wet wipes in the beginning can catch up only in restaurants and in travel situations. Carded chemical bonded and spunbond polypropylene is the most common wet wipe used in the country by airlines and other establishments. On the supermarket shelves, some local converters offer the wet wipes made from spunlace nonwovens.

Table 3
Disposable Products Market
Area Marketshare Growth Rate
     
Absorbent Hygiene 85% 15%
Wipes 2% 5%
Medical 6% 15%
Disposable Products 1% 5%
Filtration 1% 5%
Others 5% 8%

The medical products considered in the study include surgical gowns, packs, caps, masks, shoe covers, nonwovens used in surgical gauze, sponges, disposable pillow cases and sheetings are difficult to estimate individually. Cotton wool and woven gauzes are still popular in the country as spunlace material is not made locally and imports can be expensive. Doctors exposed to the new types of surgical disposables in the west and coming back to the country to set up specialty hospitals have created demand for nonwoven disposable products. Otherwise the health care industry is still using reusable caps, gowns and drapes. A significant portion of this market will remain with woven reusable material until necessary legislation for hygiene standards are introduced by the health authorizity in the government. However, a high growth rate and demand is foreseen in this segment in coming years due to proliferation of private hospitals in the country. The penetration of spunlace products into the traditional cotton wool and woven bandages will provide a strong demand for these products.

Table 4
Estimated Segment Sizes (tons)
  2003 2009
     
Automotives 10,000 23,414
Geotextiles 1500 3110
Coated/laminated fabrics/shoe linings 2500 3401
Carpets 3500 4354
Interlinings 6000 7298
Furnishings/bedding 1500 2196
Filters 4000 5243
Others 11000 14965
Total 40000 64878

The typical estimate of disposable products market in India in terms of percentage is shown in Table 3.

There are numerous other disposable applications, such as shopping bags, tablecloths, towelettes, airline head rests, pillow cases, sorbents, sponges, etc., which are made and marketed in a small way. These applications volume will grow proportionately to the rising income and is estimated to grow at 8%.

Durable Nonwoven Uses In Asia
Indian nonwovens consumption in 2003 was nearly 60,000 tons for durable applications, including 20,000 tons of fiberfill material. This market is expected to grow rapidly in coming years due to increased spending in infrastructure projects such as highways and overall higher industrial activity.

Table 5
Durable Market Segments
Automotives 10,000
Geotextiles 1500
Coated/laminated fabric 2500
Carpet 3500
Interlining & wadding 6000
Furnishing & bedding 1500
Filters 4000
Other durables 11,000
Total 40,000
Fiberfill products 20,000
Grand Total 60,000

A 25% growth in the automotives industry during the last year is expected to be maintained. This includes a sizable amount of interlinings, geotextiles and shoe felts that are imported regularly into the country. As the industry is extremely fragmented, only major applications can be analyzed and projected.

Automotives
In the last two years, the Indian automotive industry has grown rapidly at nearly 25% a year. About 1.1 million cars are currently produced in the country. The major producers are Suzuki, Hyundai, Tata, General Motors and Toyota. India also has a large transport truck production by Iveco, Leyland, Tata and Volvo. This is an important segment using nonwovens. Typically about nine square meters of nonwovens is used in the car for the headliners, trunk liners, seats, hood liners, trim insulation, etc. Needlepunched nonwovens are the most common material used in the country for this purpose. For many uses, the fabric is used in composite form. Including the trucking industry, about 10,000 tons of nonwovens are used in this industry. The industry is expected to maintain this momentum and grow 20% in the next five years. Colored polyester and polypropylene fibers are the predominant raw materials used in this industry. India has only one polypropylene fiber producer, limiting the competition and availability of a variety of fibers. Plans for a new polypropylene fiber plant are underway and this should help increase nonwoven consumption for automotive end uses.

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Geotextiles
This has become an important segment of the Indian nonwovens industry. The increasing investment in the infrastructure of industry, particularly new coastal roads connecting the major cities in the country has spurred demand for geotextiles. A large quantity of these geotextiles are imported as only one company has installed a wide-width needlepunching machine. As is the case elsewhere in the world, woven geotextiles compete with nonwovens in many applications. It is estimated that the nation consumed about 700 KM of geotextiles in highway projects. Indian railways use geotextiles extensively to reduce track maintenance costs. With more than 10,000 kilometers of coastal roads planned for the next five years, the market is expected to have exponential growth. Major players like DuPont and Amoco are present in the market. India is also implementing a project to connect all the rivers in the country; this would again use a large quantity of geotextiles. This market is expected to consume about 5000 tons of nonwovens every year based on current projects. Indian rural road projects are underway, which are also expected to consume large quantities of geotextiles.

Coated and Laminated Fabrics/Shoe Linings
The shoe lining segment is quite important in India as the country is the manufacturing base for many European brands. The lining for these shoes is made locally by needlepunch manufacturers. If any special product or performance is required, the felt is imported from Europe. The athletic shoe market uses needlepunched nonwovens coated with PVC/PU for shoe uppers. This is a growing segment and has very good potential in India. Increasingly spunlace material is being considered as backing fabric in place of knitted fabric. Indian exports in the shoe sector are growing and this market has good potential for nonwoven material.

The automotive segment consumes a substantial amount of fabric for seat backs, door panels, instrument panels, stick shaft covers, panel coverings, airbag covers, etc. The consumption in this market is proportional to market growth.

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Carpets
The hot and dusty weather conditions in most parts of the country restrict the use of carpets extensively. Carpets are used essentially in commercial buildings for noise suppression and insulation in air conditioned buildings. To a limited extent, they are used for aesthetic enhancement and to aid in interior decoration.

Needlepunched nonwovens are essentially used in commercial buildings and public places. The major producers of needlepunched nonwoven carpets are also supplying to the automotive markets. With increasing affluence, the carpet usage for domestic purposes is likely to increase; however, the lack of availability of colored PP fiber has restricted the growth of this market.

Interlinings and Waddings
India has a significant need for interlinings in its domestic market. There are a few established manufacturers of chemical bonded nonwovens and thermal bonded nonwovens. But, a large quantity of product is also imported as special colors and copolymer products are not made in the country. Many small-scale manufacturers have spray and dot paste coating conversion for interlining. The non-availability of special types of polyester fibers has restricted the expansion and export of these products. Essentially, interlinings are used in collars, pockets, fronts and dresses. Women's dressy articles also use interlinings in significant quantities.

Waddings for shoulder pads, thermal insulation, etc. are made by many manufacturers. Both chemical and thermal bonded products are made in the country. Waddings are also used in quilts in large quantities. The volume of wadding requirements is growing steadily as wadding has replaced the soaking mat in Desert Coolers, which is extensively used during dry summer days in most of the north and western states of India.

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Furnishings and Bedding
The beds used in India are very traditional and do not have the sophistication of springs, backings, dust covers, etc. The climatic conditions and traditions do not demand sophistication in beds. Only high-end hotels use the beds similar to those in European countries.

Table 6
Nonwovens Production By Process
Process Tons Percent
Spunbond 8000 14
Carded thermal bond 4000 7
Carded chemical bond 8000 14
Needlepunched 27000 47
Stitchbonded 2000 3
Others 2000 3
High Loft 7000 12
 
Total Nonwovens Made in the Country: 58,000 tons
Total Imports: 20,000 tons
Total Nonwovens Consumption: 78,000 tons

Dry filtration process is the main consumption area for nonwovens. Needlepunched polyester fiber-based filters are mainly used in industry. A few needlepunch fabric manufacturers cater to the basic requirements of industry's filtration needs. This segment is growing fast with increasing emphasis on pollution control and product recovery. India, being the second largest cement producer in the world, has a lot of bag house units. Mining, the mineral processing industry and power generation plants are significant users of nonwoven filters. The high-end filters from PTFE, P84, ceramics, etc. are not made in the country. Some efforts have been made to use Nomex successfully. The future for this industry is very bright in India. India still doesn't have the filter fabric classification rating such as BIA of Germany. Most of the membrane-laminated filters are imported. HVAC filter for air conditioning, automotive filters, cleanroom filters, etc. are made within the country using thermal bonded and chemical bonded nonwoven systems.

Wet filtration in the food processing industry imports the filters due to specific FDA requirements. The general requirements of the fertilizer and mineral process industries are met by local suppliers. Indian filter equipment manufacturers like FLakt, ABB, Door-Oliver are original equipment suppliers operating worldwide.

Other Applications
Agriculture and landscape application is limited to the size of the farms in India, which are small with farmers not educated in the use of the materials. The country's legislation is currently undergoing a change and corporate farming is being introduced. This will increase demand for nonwovens used in agriculture. Horticultural companies are already using some sort of films for mulch and weed control. Nonwovens, when available at the right price, can find use in the segment.

Bitumized roof linings in India is an established market for glass fiber nonwovens and jute woven material. The nonwoven substrates of needlepunch types are more expensive than the glass tissue, which appears to do the work. Spunbond polyester is not made or available in the country. The National Building Code in India is not very strict on the roof lining material; hence the use of nonwovens will be dictated by the economics rather than performance.

Battery separator and cable wrap are two important end uses. India has a large manufacturing capacity for both products. Nonwovens for the jelly-filled cable wrap with special treatment are imported from Europe and the battery separators are imported from Japan. No specific study was conducted to estimate the quantity, but these are high-value products and will be produced within India once the volumes increase to an economical level for production.

Papermaker felt nonwovens are made in India by two companies that have been established for many years. The paper industry in India has been very stagnant due to non-availability of local raw material; therefore the growth of these felt makers over the year is also limited.

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Consumption of Nonwovens By Process
Table 6 summarizes the products from different technologies consumed in the country. A small portion of others include spunlace for meltblown materials imported into the country for specific end uses.

The needlepunch area has grown steadily during the last three years due to increases in automotive, filtration and geotextile end uses. This technology is expected to grow rapidly as more applications are adapting to this technology.

Spunbond has seen a sudden growth in business both in domestic markets and exports. More capacity is planned and steady growth is predicted as two companies are already in the advanced stages of installing the technology in India. The product is already imported and is under test marketing. The response to these products has been good. There are very few converters in India to make the roll goods into a consumable product. This missing link in the business has delayed the development of many nonwovens projects in India.

Thermal bonded nonwoven manufacturers have a limited range of production and supply interlining and hygiene markets. Commodity polyester and polypropylene is available in the country. Most of the specialty, bicomponent andspecial finish fibers have to be imported. This has led to slow growth of this technology in the country. The four manufacturers present in this market have low width product set up and limited capability.

Chemical bonded nonwovens are essentially made with viscose fiber and viscose polyester blends. This is catering mainly to the interlinings market and to a small extent to the wipes market. Interestingly, a large quantity of chemical bonded nonwovens have been used as a substitute for paper for invitation cards and packaging material. About 10 machines are making these products in India.

More than 18 small- and medium-sized companies manufacture needlepunched nonwovens. Those catering to the automotive and filtration field have good equipment whereas the remaining companies make products with used equipment. The range of products made is quite wide considering the limited availability of raw materials. One plant with a more than five-meter-wide machine is now able to deliver goods to the geotextiles market.

There are five highloft material manufacturers using thermal bonded and chemical spray technology. This equipment is primitive but adequate to meet the none-too-critical requirements of the filter market, waddings and insulation. Increasing air conditioning markets is seen as a good avenue for these manufacturers.

Stitchbonding technology has been started successfully on a commercial scale by one manufacturer for shoe linings and mops. The progress is being watched keenly by many entrepreneurs.

Existing manufacturers are examining meltblown technology. The market for sorbents is small as of today. For further use, the establishment of a converting capability (for laminating with other substrates, calendaring, conversion to wipes and filters, composite technology, etc.) is the key to the use of such products.

Conclusion
India has a very small manufacturing base for nonwovens. Currently, the market for durable nonwovens is bigger than for disposables. Blessed with a large population of over one billion, the country is poised for high economic growth that will make it one of the largest consumer markets in the world during the next decade. Given the geographic and logistic complexity, there is an urgent need to create manufacturing and converting capacities within the country for disposable and durable nonwovens. The availability of raw materials, skilled personnel and environment for growth, make it the right time for India to establish a manufacturing base for nonwovens. The author sees a good market in India for nonwovens made using the spunbond, spunlace and needlepunched technologies.

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