Since the time of invention of the first synthetic andorganic dyes in the 19th century till today, textile world is muchaware of the possible perils of dyes on humans and environment. Researchinstitutes engaged in the process of investigating about the effects of dyescame up with the fact that; not all, but some dyes are potentiallycarcinogenic. Many countries, especially Germany and Europe have taken specialinitiatives to enact regulations prohibiting the usage, manufacture andhandling of such harmful dyes.
Current Chinese Market Scenario:
The chemical industry of China is fragmented, and theirdomestic companies contribute to 40% share of the global market. The first halfof 2008, saw some hurdles in the Chinese dyestuff industry like their own Governmentpolicies, abrupt increase in production costs, RMB appreciation, and naturalcalamities like earthquake and heavy snow fall. Environmental pressures were also prevalent in the industry due to Olympic and global economic uncertainties. Costof many chemicals used as raw material in the dyeing industry has increasedrecently. This is because the Chinese Government has decided to shut down some ofits chemical units in Beijing and many other provinces to control industrialpollution for a few months. These shut downs have resulted in the acuteshortage of chemicals for the dyestuff industry. As many as 1000 dyeing and printing factories have been shut down in Zhejiang Province alone; while many others in Hebei, Henan and Shandong Province have been asked to stop production till the 2008 BeijingOlympic Games.
Total dyestuff output registered a growth of 10.8% in 2007,which has declined by 1.3 % in the first half of the current year. Many Indiandyes and textile chemical companies' source intermediates from China but rising prices and shortage of supply have caused an uncertainty in the market.However, with the abolition of export rebates and elevation of export prices, pricesof Chinese dyestuff in the international market are now at par with the prices ofother Asian countries.
'REACH' Regulations for EU:
The pre-registration work under the REACH (regulationconcerning the Registration, Evaluation, Authorization and Restriction ofChemicals) of the European Union started on June 1st, 2008.
- The substances that are to be released, and
- Whether the substances released are harmful to human health and environment.
The exporters are required to prove the safety of theirproducts, or else they will not be allowed to enter EU market. Experts believethat REACH is undoubtedly the most rigid and complicated non-tariff rule atpresent, affecting the Chinese textile industry in a massive way. Severalleading Chinese enterprises have set up a special department to take care ofthe REACH rules. However, many SMEs are facing serious problems, especially dueto lack of adequate knowledge and finance. These domestic enterprises areunable to follow REACH regulations, forcing many of them to consider giving upexporting to EU.
India - A Potential Substitute:
As an alternative to the meticulous regulations of EU, some Chinese chemical companies are planning to invest in India. Zhejiang Lonsen Group Co Ltd, a dyestuff manufacturer of China has recently joined hands with Kiri Dyes and Chemicals Ltd (KDCL), an Ahmedabad based manufacturer and supplier of quality dyes and intermediates in the dyestuff industry. The project is proposed to be set up in Baroda, with an initial investment of US $10 million. The firm will manufacture dyes as finished products, with an initial output capacity of 20,000 metric ton per annum (MTPA) and extend it up to 50,000 MTPA later.
Currently, China is the second largest consumer of chemical products in the world. It is more reliant of chemical imports, and demand for chemicals in China is expected to double by 2015. Industry experts forecast a growth from $195 billion USD to $205 billion USD in 2008. China has bright opportunities in the global market, after its entry into the World Trade Organization. Currently, increasing environmental awareness has made the consumers to become more and more concerned about health hazards, industrial pollution, and environmental impact on the dispose and usage of chemical products. Significantly this places a pressure on the industries forcing them to adopt environmentally safe chemicals.
References:
- http://www.smartchinasourcing.com/
- http://www.echinachem.com/
- http://chinabizintel.com/
- "Emerging Global Regulatory Environment Impacting Dye Industry", Dr. Pankaj Desai, Head of R&D, Colourtex.
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