US Is In Search Of New Markets For Its Technical Textiles, Nonwovens

Tech Textiles & Nonwovens

US Is In Search Of New Markets For Its Technical Textiles, Nonwovens

The US government's International Trade Administration, recently released a series of reports on technical textile markets of various countries, and opportunities for US exporters. With the Made In USA campaign gaining ground, technical textiles and nonwovens is one area that the US textile industry is focusing on, and looking for newer markets.

The North American market is strong and steady. Mexico and Canada are the two largest markets for US technical textiles, accounting for 55% of the total trade. In recent years, Mexico has seen a boom in its car manufacturing industry, which will directly impact its demand for industrial fabrics. As such, US producers need to maintain awareness of the increasing importance of the North American markets. The future of the industrial textile industry in North America will depend heavily on new technology and the application of that technology to solve problems. The North American industry is creative and innovative in finding new products and applications.

The Eastern and Western Europe technical textile sector continues to grow. Germany is widely regarded as Europe's market leader in technical textiles with around 50% of the country's textile output in such products. Germany is the fourth largest market for US?produced technical textiles. The only other European countries in the top 20 are Belgium and the Netherlands.

Asia Pacific is expected to be a major market in the years to come. The strong industrial base of the region has led to a significant rise in demand for a variety of technical textiles. The Asia?Pacific technical textile market accounted for a substantial share of the global technical textile market in 2015. Emerging markets, such as China, India and Vietnam, will continue to play a key role in the technical textiles market. The growth in this region is driven by the increasing population in the continent, improving economic conditions, such as rising GDP and disposable incomes, and booming manufacturing sectors. Additional key factors fueling the technical textile market are growth in the healthcare sector, increase in spending on public infrastructure development and rapid urbanisation.

The textile industry in Latin America is going through an interesting period. This region is beginning to assert its own identity in the quickly globalising world. Countries in this region can expect ample opportunities for growth and development. In particular, economies such as Brazil and Honduras can expect to witness growth in the technical textiles market and are thus presumed to lead their regions. Brazil, the seventh largest economy in the world, has however plunged into its worst recession in over two decades. With Brazil's contracting economy, rising inflation and unemployment, there is concern about the impact the Brazilian economic crisis will have on trade, as Brazil is one of the world's most important growth markets. Brazil, however, still leads this region in demand for US produced technical textiles.

The Middle East and Africa is the smallest market, but there is strong growth potential in this region. The United Arab Emirates is the third largest market for US produced protective apparel. Exports of protective apparel to the UAE grew at a compound annual growth rate (CAGR) of 17% between 2008 and 2015. Additionally the UAE is the largest market for technical textiles in the Africa and Middle East region, increasing 40% from 2013 to 2015.

India's low consumption makes it a challenging market for US

US exports of technical textiles to India have grown at a compound annual growth rate of 8% between 2008 and 2015. US exports of technical textiles are projected to be worth US$ 85 million by 2017, an increase of 18% from 2015. Currently, about 9% of the world's total consumption of technical textiles is made in India. India's market share in the technical textile sector is expected to grow from US$ 11.6 billion in 2013 to US$ 26 billion by 2017. Currently, India's technical textile industry is based on producing commodity products that are not very R&D intensive (i.e. tarpaulins), and therefore unlike conventional textiles, technical textiles is an import intensive industry. Many products, like disposable diapers, wipes, protective clothing, fabric for disposables and webbings, are imported to a large extent.

Challenges facing US suppliers of technical textiles who are interested in entering the Indian market include:

1. Exporters and foreign investors are wary of intellectual property rights protections laws in India

2. US exporters face competition from Chinese and European suppliers in the Indian market

3. Complex customs procedures

4. Various export and production subsidy programmes may lead to skewered competition in the market

Opportunities for US companies

Currently India's consumption of technical textiles only accounts for 3% of the total world consumption; however, demand for technical textiles is growing at a faster rate than it is in most developed countries. In 2015, the US exported US$ 35 million in specialty and industrial fabrics to India. This was a 31% increase from the US$ 27 million exported in 2008. Indian domestic demands for specialty and industrial fabric include:

a. Geogrids

b. Geomembranes

c. Umbrella fabric (used in sun umbrellas)

d. Sail cloth

e. Ballooning fabric

f. Hoarding Fabric

g. Airbag fabrics

Medical Textiles

In 2015, US exports of medical textiles to India totaled US$ 3.9 million. The medical textile sector is still largely dependent on imports due to the lack of domestic manufactures making these products. Ninety percent of all disposable hygiene and medical textiles that are available in India are imported.

Disposable hygiene and medical textiles in demand are:

a. Baby diapers

b. Adult incontinence diapers

c. Feminine hygiene Products

d. Surgical disposables (masks, scrubs, gowns, booties, head coverings)

e. Disposable wipes

f. Surgical Dressings

g. Artificial implants

Protective Apparel

In 2015, the US exported US$ 3.5 million in protective apparel to India. This is a 59% increase over the US$ 2.2 million the US exported in 2008. Here too, India is largely dependent on imports. US suppliers of protective clothing will find the most opportunities for items like high altitude clothing and high visibility and reflective clothing.

US exports to Vietnam record high growth

US exports of technical textiles to Vietnam grew by an impressive 539% to US$ 46.9 million between 2008 and 2015. In 2008, US exports of technical textiles to Vietnam accounted for about 21% of total US textile and apparel exports to Vietnam, and that number increased to 46% by 2015. US exports of niche products, such as specialty and industrial fabrics, increased markedly over the seven year period of 2008 to 2015 from US$ 3.6 million to US$ 22.3 million. As Vietnam moves up the production chain, up-and-coming manufacturing sectors, such as autos, marine and hospitality sectors will also offer market potential for US technical textiles.

Challenges and Barriers

One of the main challenges US exporters face is the long delays in customs procedures, viz, the automatic import licence (AIL), without which goods cannot be unloaded at Vietnamese ports. And obtaining AIL takes more than a week, and can be applied for by an importer only after he has the Bill of Lading.

Opportunities for US Companies

Vietnam has emerged as a hotbed of activity in nonwoven products, as US manufacturers continue to invest ambitiously in the region. In 2015, US exporters saw significant growth in the non-wovens sector, which accounted for roughly 48% of US technical textile exports to Vietnam.

Over the past seven years, non-woven exports to Vietnam from the United States have grown at annual rate of 38%. Overall, US exports of specialty and industrial fabrics in terms of volumes have grown 30% annually since 2008, but in dollars, the US export totals are low compared to other competing countries.

China's depends on techtex imports to meet its development needs

In 2013, the Chinese National Bureau of Statistics stated that exports of plastic coated fabrics, medical textiles, nonwovens, canvas textiles, bags and fiberglass were six categories of products whose value accounted for nearly 80% of the entire technical textile sector. Among them, the non-woven fabric export growth rate reached 21.2%. Conversely, coated fabric, non-woven fabric, glass fiber fabric, medical and health care textiles and paper textiles are the main imported products, accounting for 81.2% of the total imports. China mainly imports technical textiles from Japan, Taiwan, Korea and the United States.

Challenges and Barriers in Chinese Market

Foreign competition in China's technical textile industry is intense. Similar to that in Brazil, the stakes are raised by the fact that China can be a difficult market for US companies, especially SMEs, to navigate through complex governmental taxes and regulations. Additionally, in China, US companies face a complex and often opaque commercial environment, and Chinese government policies sometimes favour indigenous development and domestic companies.

Opportunities for US Companies

Major infrastructure projects, such as roads, railways, hydroelectric dams and airports, require large amounts of technical textiles beyond the ability of China's domestic industry. Due to high market demand for technical textiles in China, more and more foreign producers have planned to expand their production and to introduce new products in China. The high end technical textile market in China is dominated by foreign producers, especially those from the United States and Japan. Thus, there is a great potential market for US producers, especially those with advanced technologies and manufacturing methods.

Non-wovens

Ongoing economic advances in China and the rising income levels and standards of living are propelling demand for nonwovens such as filtration products, disposables, etc.

Specialty and Industrial Fabrics

Chinese specialty and industrial textiles have experienced steady economic growth. Since 2008, specialty and industrial fabric exports from the United States have grown at an annual rate of 5.5%. With China as a top automobile producer, there has been an increase in demand for automotive textiles. US exports of specialty and industrial fabrics are expected to increase to US$ 189 million in 2017 from US$ 169 million in 2015.

Medical Textiles

Medical textiles are a top growth sector for the Chinese technical textile market. China was the 13th largest export market for US products in this sector in 2008. The United States increased its exports to China, raising it to the 10th export market for US medical textile exports by 2014, and China is expected to move five spots higher to fifth by 2017. One of the major factors for this increase in demand of US inputs and the continued growth of China's medical textile sector is advancements by US producers in the manufacturing process for producing advanced fibres and the replacement of traditional materials with advanced textile materials for higher performance. This is a strength of the US industry.

Protective Apparel

Increasing industrialisation in markets like China coupled with the rising importance of safety in industries and the emergence of a manufacturing workforce are expected to remain key driving forces for the market.

The State Administration of Work Safety (the organization that governs industrial safety in China) has become actively involved in improving the workplace standards. Strict implementation of industrial safety regulations will provide US producers the opportunity to meet the increasing needs of China's protective apparel market.