The Russian government has implemented a new national strategy aimed at the development of the domestic nonwovens industry with the hopes of becoming one of the most significant players in the European market by 2020.
Since 1990, the Russian nonwovens industry has been going through difficult times despite the ever growing consumption of nonwovens in Russia, mainly due to the fact that the Russian government has never considered nonwovens production one of the priority areas for its further economic development.
Among the main problems facing the industry are the lack of a clear tariff and customs policy, the ever-growing volume of imports from abroad, low quality of domestic raw materials and the high share of the shadow market.
The implementation of the new strategy, which was developed with the participation of experts of the Russian Scientific-Research Institute of Nonwovens, Russia’s leading company specialized in production and research activities in the field of nonwovens, is expected to not only solve these problems but also to create conditions for significant growth of domestic production of nonwovens, to continue technical re-equipment of the industry (where the share of manufacturing equipment with a service life of 10 years or more is about 70%) and to expand the production range of most of the domestic producers of nonwovens.
Total volume of investments in the project is estimated at 20 billion rubles ($600 million), of which 15 billion rubles would be invested in the upgrading of industry equipment and the adoption of new technologies.
The implementation of the new strategy is divided into three phases. According to state plans, by 2013-2014, several industry projects and programs are expected to be implemented on the basis of already existing scientific and technical reserves, which should improve the competitiveness of Russian-made nonwoven products and to allow domestic enterprises to strengthen their position in the domestic and foreign markets.
During the second stage, the influx of foreign and state investments into the industry is expected to provide the adoption of new, big projects including those to be implemented on the basis of public-private partnerships. This will be achieved through the establishment of a strong research base, which should help to implement new technologies in accordance with the future needs of the industry.
Finally, by 2020 the Russian government plans to create conditions for the reduction of the technological gap with the developing countries and to increase the contribution of nonwovens industry to the gross domestic product.
The implementation of the strategy will help increase the total volume of nonwovens production from the current level of 475.3 million square meters to 1213.3 million square meters in 2020. In addition, it will reduce imports, which are currently estimated at around 500-530 million square meters a year and further increase domestic consumption of nonwovens. So far, among the major importers of nonwovens to Russia are Germany, Italy, Poland, China, the U.S. and the Czech Republic.
Vladimir Shavkin, head of Russian Scientific-Research Institute of Nonwovens said, “Unlike the textile industry, the Russian nonwovens industry is steadily developing. Only during the last five years, 15 new production facilities were established, which is a good figure for a country like Russia. In addition, the demand for nonwovens has grown steadily and today nonwovens are even starting to displace textile products in some segments of Russian manufacturing.
The implementation of the strategy will not only help strengthen the position of Russian producers of nonwovens in the traditional segments of technical textiles but will also contribute in the rise of production of non-traditional areas for Russian-made nonwoven materials such as sanitary and household materials. The domestic consumption of nonwovens is steadily growing and currently it’s one of the most promising sectors of the Russian light industry.
“The government also plans to create conditions for attracting foreign investments into the industry, which may take place in the form of establishment of new enterprises with minority or even controlling interest of foreign capital. In addition, there is also a possibility of establishment of special industrial clusters and production zones (similar to already existing in textile industry), as well as the adoption of legal and administrative measures aimed at supporting domestic producers of nonwovens.”
The successful implementation of the project is expected to help solve the current problem of industry’ss consolidation. Despite the fact that at present the total number of nonwovens producers in Russia is estimated at 70-75 companies, the market continues to be consolidated—the five largest players account for up to 80% of the market.
Currently, the leading producers of nonwovens in Russia are Komitex, Sibur-Geotextiles, Nomateks, C-Airlaid and some others. Most of these enterprises have their own raw material supply base and usually have an opportunity to further use their products within their structures and businesses.
According to the Russian Institute of Nonwovens, the current mix of nonwoven material types being made by Russian enterprises was mainly formed during the Soviet period of time and were focused on the needs of the state-controlled economy.
So far, new types of nonwovens were usually replaced by fabrics, produced by outdated methods for the traditional (for Russia) segments of the market.
According to official statistics, most of the nonwovens, produced in Russia account for fabrics, which are used as the basis for polymer coating: linoleum, oilcloth, rolled roofing, wallpaper, plastic laminates. The share of this group in total production of nonwoven materials in Russia is estimated at 30%. Second place is occupied by geotextile and agrotextile fabrics, which account for 18-20%, while the share of nonwoven fabrics, which are used in the production of clothes and shoes, is estimated at about 20%. The remaining 30% of fabrics account for such products as filters, medical fabrics and packaging as well as other types of fabrics designed for short-term use, with the share of each segment no more than 1-3% of the total output of nonwovens produced in Russia.
Unlike Western countries, the production of fabrics for short-term use is still uncommon for most Russian enterprises, however the implementation of the strategy is expected to help solve this problem in the long-term and to create conditions for the expansion of the production range of the majority of the Russian enterprises.
So far, the lack of quality raw material, the irregularity of its supply and uncontrolled rise in prices has traditionally been considered another major problem in the Russian nonwovens industry.
Under the terms of the strategy, the establishment of its own fiber production could be considered one of the ways out of this situation for some nonwovens producers. Presently only the largest local players such as Komitex and Nomatex have the ability to make their own polypropylene fibers. This has enabled them to deal with raw material shortages and lower production costs. However, at the same time, most of the Russian producers of nonwovens are still using imported raw materials.
The situation is aggravated by the ever increasing prices for raw materials in recent years, which can be considered one of the major factors of the growth of production costs of the Russian producers and the reduction of their profitability.
In addition, lack of sufficient domestic resources leads to the use of inefficient tolling schemes in the industry.
Still, the Russian nonwovens industry is steadily developing. According to Tatiana Matveeva, director general of OOO Tornet-LTV, Russia’s well-known producer of nonwovens, if in the past most of the Russian enterprises used no more than one or two methods of production, in recent years the situation has changed.
Thermal bonding at present remains the most commonly used method of production, accounting for about 50% of all nonwovens produced within the country. Nearly 37% of materials are produced by mechanical and combined ways, while the adhesive method accounts for 10%. According to the expert, due to the low quality of domestic raw fibers and polymer binders, the share of the latter technology is expected to decline in the future.
Most of the experts forecast good prospects for the Russian nonwovens industry especially in the case of successful implementation of the strategy. Vast territory and the increasing automobile production is expected to stimulate the need for building new roads and reconstructing old ones, which should result in an increase in demand for nonwoven geotextiles products. In addition, further development of agriculture and the status of an agrarian country will contribute to increasing the volume of production of special types of nonwovens. At the same time, the growth of the local population and the ever-increasing welfare, should result in an increase in demand for disposable hygiene products and various household wiping cloths, while the ever-rising environmental concerns will boost demand for various filtering and absorption types of fabric.
In addition, the implementation of the strategy is expected to increase production of spunbond in Russia. Due to the high cost of equipment, spunbond is currently produced by only a few Russian enterprises, including Sibur-Geotextiles, Nomateks, hexyl. Additionally, Freudenberg Politex and Avgol both operate Russian sites. In fact, Freudenberg Politex just announced an expansion plan for its Russian site and Avgol is reportedly considering expansion there.
In this regard, most of the spunbond imported into Russia from abroad. The largest supplier of spunbond to the Russian market is the Belarusian Svetlogorsk Khimvolokno company. ❖