Eugene Gerden, Contributing Writer12.04.13
The Russian nonwovens industry is growing, reflected by the increasing volume of domestic production as well as the launch of new investment projects.
During the period of 2007-2012 the volume of nonwovens production in Russia increased by 7.6% to 2.4 billion square meters. The production figures for the 10 months of the current year have not been announced, however, according to predictions of local analysts, this year the market continues to grow and is expected to reach 2.6 billion square meters. At the same time there is also a possibility that by 2017-2018 the market could reach three billion square meters.
In recent years, Russian nonwovens production has become competitive not only in the domestic, but also global market, with some Russian products becoming best sellers in some market segments. For example, currently Russian companies are among the world leaders in narrow technical fabrics, which are used in the manufacture of car seat belts, as well as lifting, hiking and climbing belts.
In terms of structure of production, the majority of production accounts for nonwovens used as a base for polymer coatings including linoleum, table oil cloths, rolled roofing material, wallpaper and cleaning materials among others.
Second place is occupied by geotextiles and agrotextiles while sitting in third position are heat and noise insulation materials for cars, pipelines, industrial facilities and residential buildings.
Finally, the share of filtering, medical and sanitary products is estimated at only 10% of the market. The production of nonwovens for medical use remains small and uncommon in Russia. This is reflected by the fact that at present Russia has only one producer of such products and in particular Kondrovskaya paper mill, which is located in the Kaluga region and specializes in the manufacture of disposable medical clothes and accessories, based on three-layer nonwoven fabric.
According to Alexander Markov, CEO of Regent Nonwoven Materials, one of Russia’s leading producers of nonwovens, in terms of consumption, about 29% of all nonwovens produced in Russia, are consumed by local construction industry; 24% by the country’s agricultural sector; 22% by the industry of sanitary and hygiene products; 16% by industrial production; and 9% by the Russian medical industry.
Markov’s prediction is that during the next several years the market will continue to grow, with the biggest growth expected to come from women’s and children’s hygiene products.
However, despite big prospects, certain problems will prevent rapid development of the market. Noncompetitive prices for raw materials and in particular for polypropylene is expected to be one of them.
This will result in the underutilization of many existing production lines, and even those operated by foreign investors. Despite the existing production capacities in Russia, many foreign players prefer to launch production abroad with further imports to Russia. This strategy is considered more profitable by some investors due to Russia’s recent WTO accession, import duties on imports of many industries finished products, and a significant decline in raw materials production.
At present custom duty on the imports of finished products to Russia and in particular for baby diapers and sanitary products is set at 5%. At the same time import duties on the basic raw materials are at the level of 9.1%, which creates conditions more favorable for a steady flow of imports to the country.
According to Markov, many Russian nonwovens producers are experiencing serious losses due to the high cost of raw materials. He says the raw material situation in Russia makes it difficult to remain profitable due to high cost of polypropylene, which is currently estimated at 40,000 - 50,000 rubles per ton (US$1330-1666).
At the same time among the other industry problems is also the dependence on the imports of cotton, as well as the lack of domestic production of viscose, chemical fibers and new generations of man-made yarns.
Due to this, many of Russia’s leading producers of nonwovens have repeatedly appealed to the Russian government to impose restrictions on the exports of fine-wooled merino and raw hide to the country, as well as to design a set of measures aimed at developing a raw materials base for the national textile industry, mainly through the provision of cheap loans for the purchase of domestic raw materials.
Dmitry Finer is commercial director of Edelweiss, one of the leading manufacturers of nonwoven polyester materials in the market of former Soviet states.
“We find it difficult to compete with foreign rivals in terms of price, although the quality of our products is not inferior to the quality of its foreign analogues, produced by German or Chinese companies,” he says. “Due to the fact that Chinese manufacturers receive state aid they can offer lower prices for their products.”
In the meantime, local producers also believe that state aid can be provided not only through direct subsidies and financial support, but also through the development of cooperation among the producers and consumers as well as state promotion using the same model as in some EU countries and in particular Germany.
Despite the existence of numerous problems, in recent years the investment attractiveness of the Russian nonwovens industry has significantly increased, as seen by a number of large-scale investments scheduled for implementation by domestic and foreign investors in Russia in coming years.
One of these projects will be officially launched by the end of the current year and involves the commissioning of a new plant for the production of nonwovens in the Troitsky District of Moscow. The project is implemented by Russia’s Regent Nonwoven Materials and involves building a plant on the total area of 7400 square meters. The new plant will specialize in the production of synthetic spunbond nonwovens.
The new plant will have the capacity to produce 1500 tons of nonwoven materials per year and is expected to be one of the largest of its kind in Russia.
Russia’s petrochemical giant Nizhnekamskneftekhim has announced plans to increase production of nonwovens. On April 3, 2013 became the owner of 100% of the shares of CJSC Polymatiz, a Russian producer of nonwovens. Currently the enterprise produces 700 tons of nonwoven materials per year, however there is a possibility that during the next several years its capacities will be significantly increased.
Finally, a new large plant for the production of polyester fiber and a new generation of nonwovens will be built in Russia this year by the local company CJSC Kotovsky Nonwovens Plant, one of Russia’s largest producers of nonwovens.
The new plant is expected to be built in Russia’s Tambov region and will require a total volume of investments of more than 2 billion rubles (US$60 million).
The capacity of the plant will be 210,000 tons of polyester fiber per year as well as 20,000 tons of new generation multi-layer nonwoven materials.
The plant is expected to be operating by 2015. The company says there plans are to focus on the production of innovative nonwoven products for the medical field and include materials based on layers obtained by spunbond and meltblown technologies.
During the period of 2007-2012 the volume of nonwovens production in Russia increased by 7.6% to 2.4 billion square meters. The production figures for the 10 months of the current year have not been announced, however, according to predictions of local analysts, this year the market continues to grow and is expected to reach 2.6 billion square meters. At the same time there is also a possibility that by 2017-2018 the market could reach three billion square meters.
In recent years, Russian nonwovens production has become competitive not only in the domestic, but also global market, with some Russian products becoming best sellers in some market segments. For example, currently Russian companies are among the world leaders in narrow technical fabrics, which are used in the manufacture of car seat belts, as well as lifting, hiking and climbing belts.
In terms of structure of production, the majority of production accounts for nonwovens used as a base for polymer coatings including linoleum, table oil cloths, rolled roofing material, wallpaper and cleaning materials among others.
Second place is occupied by geotextiles and agrotextiles while sitting in third position are heat and noise insulation materials for cars, pipelines, industrial facilities and residential buildings.
Finally, the share of filtering, medical and sanitary products is estimated at only 10% of the market. The production of nonwovens for medical use remains small and uncommon in Russia. This is reflected by the fact that at present Russia has only one producer of such products and in particular Kondrovskaya paper mill, which is located in the Kaluga region and specializes in the manufacture of disposable medical clothes and accessories, based on three-layer nonwoven fabric.
According to Alexander Markov, CEO of Regent Nonwoven Materials, one of Russia’s leading producers of nonwovens, in terms of consumption, about 29% of all nonwovens produced in Russia, are consumed by local construction industry; 24% by the country’s agricultural sector; 22% by the industry of sanitary and hygiene products; 16% by industrial production; and 9% by the Russian medical industry.
Markov’s prediction is that during the next several years the market will continue to grow, with the biggest growth expected to come from women’s and children’s hygiene products.
However, despite big prospects, certain problems will prevent rapid development of the market. Noncompetitive prices for raw materials and in particular for polypropylene is expected to be one of them.
This will result in the underutilization of many existing production lines, and even those operated by foreign investors. Despite the existing production capacities in Russia, many foreign players prefer to launch production abroad with further imports to Russia. This strategy is considered more profitable by some investors due to Russia’s recent WTO accession, import duties on imports of many industries finished products, and a significant decline in raw materials production.
At present custom duty on the imports of finished products to Russia and in particular for baby diapers and sanitary products is set at 5%. At the same time import duties on the basic raw materials are at the level of 9.1%, which creates conditions more favorable for a steady flow of imports to the country.
According to Markov, many Russian nonwovens producers are experiencing serious losses due to the high cost of raw materials. He says the raw material situation in Russia makes it difficult to remain profitable due to high cost of polypropylene, which is currently estimated at 40,000 - 50,000 rubles per ton (US$1330-1666).
At the same time among the other industry problems is also the dependence on the imports of cotton, as well as the lack of domestic production of viscose, chemical fibers and new generations of man-made yarns.
Due to this, many of Russia’s leading producers of nonwovens have repeatedly appealed to the Russian government to impose restrictions on the exports of fine-wooled merino and raw hide to the country, as well as to design a set of measures aimed at developing a raw materials base for the national textile industry, mainly through the provision of cheap loans for the purchase of domestic raw materials.
Dmitry Finer is commercial director of Edelweiss, one of the leading manufacturers of nonwoven polyester materials in the market of former Soviet states.
“We find it difficult to compete with foreign rivals in terms of price, although the quality of our products is not inferior to the quality of its foreign analogues, produced by German or Chinese companies,” he says. “Due to the fact that Chinese manufacturers receive state aid they can offer lower prices for their products.”
In the meantime, local producers also believe that state aid can be provided not only through direct subsidies and financial support, but also through the development of cooperation among the producers and consumers as well as state promotion using the same model as in some EU countries and in particular Germany.
Despite the existence of numerous problems, in recent years the investment attractiveness of the Russian nonwovens industry has significantly increased, as seen by a number of large-scale investments scheduled for implementation by domestic and foreign investors in Russia in coming years.
One of these projects will be officially launched by the end of the current year and involves the commissioning of a new plant for the production of nonwovens in the Troitsky District of Moscow. The project is implemented by Russia’s Regent Nonwoven Materials and involves building a plant on the total area of 7400 square meters. The new plant will specialize in the production of synthetic spunbond nonwovens.
The new plant will have the capacity to produce 1500 tons of nonwoven materials per year and is expected to be one of the largest of its kind in Russia.
Russia’s petrochemical giant Nizhnekamskneftekhim has announced plans to increase production of nonwovens. On April 3, 2013 became the owner of 100% of the shares of CJSC Polymatiz, a Russian producer of nonwovens. Currently the enterprise produces 700 tons of nonwoven materials per year, however there is a possibility that during the next several years its capacities will be significantly increased.
Finally, a new large plant for the production of polyester fiber and a new generation of nonwovens will be built in Russia this year by the local company CJSC Kotovsky Nonwovens Plant, one of Russia’s largest producers of nonwovens.
The new plant is expected to be built in Russia’s Tambov region and will require a total volume of investments of more than 2 billion rubles (US$60 million).
The capacity of the plant will be 210,000 tons of polyester fiber per year as well as 20,000 tons of new generation multi-layer nonwoven materials.
The plant is expected to be operating by 2015. The company says there plans are to focus on the production of innovative nonwoven products for the medical field and include materials based on layers obtained by spunbond and meltblown technologies.
