Background
Dyestuff industry plays an important role in the economicdevelopment of a country. The Indian Dyestuff industry, which was primarily started to cater to the needs of domestic textile industry, now not only meets morethan 95%requirement of the domestic market, but has gradually also made a dentin the global market. All ranges of dyes such as disperse; reactive, vats,pigments and leather dyes are now being manufactured in India. This industry forms an important link in the chain of other chemical industry such astextiles, leather, plastic, paper, packaging, printing inks, paints andpolymers etc. The textile industry is the major consumer of dyestuffs and about70% of the total production of dyes is consumed by this sector.
Global Scenario
The world market for dyes, pigments, and dye intermediatesis estimated to be around US $23 billion. Of this dyes and pigment marketcomprise 1.3 million tones valuing to be US$ 16 billion, and dye intermediatedcomprise US$ 7 billion. Though the overall growth of dyestuffs industry duringthe last 5 years has slowed down, the industry is still expected to maintain agrowth of about 2% per annum in the next decade.
China, Korea, India, Japan and Taiwan are the major players in this industry. Howeverin terms of market share, European countries have remained the largest producers because they have concentrated on specialty products. 'DyStar', the joint venturebetween Hoechst AG and Bayer AG, is the largest producer of dyestuffs with 15per cent market share in the world market. This is followed by 'BASF', whichhas a market share of 12 per cent.
World textile chemicals industry is valued to be around US$15 billion, and is growing 3-4% annually. According to a study on dyes &organic pigments, the worldwide demand for organic colourants (dyes and organicpigments) is projected to increase to $10.6 billion in 2008 with an averageannual increase of 4.9% from 2003. Generally, the dyestuff industry comprises three sub-segments, namely dyes, pigment and intermediates. These are important sourcesin major industries like textiles, plastics, paints, paper and printing inks, leather, packaging sector etc.
The impact of Global Meltdown on Indian Dyestuff Industry
In India, Dyestuff Industry supplies its majority of productionto the textile industries. Enormous amount of dyestuff products from India are exported to textile industries in Europe, South East Asia and Taiwan. India presently manufactures all kinds of synthetic dyestuffs and intermediates and has its stronghold in the natural dyestuff market. India is a one of the major globalproducers of dyestuffs and dye intermediates, principally for reactive, acid,vat and direct dyes. India has approximately 6 percent share in the world production of dyestuff products.
Indian dyes and textile chemicals industry is no moreinsulated from the global meltdown. Industry sources say that the exports ofIndian dyestuff is expected to go down in the second half as compared to thefirst half of this year due to global melt down and tough competition fromChina. Indian dyestuff industry faced less competition during the time ofOlympics because some of the Chinese companies were shutdown temporarily due tothe environmental laws introduced by China's Government. However the Chinesecompanies are back in business now, which is believed to probably affect theIndian exports. The dyestuff industry in India is mostly located in Gujarat and Maharashtra. Gujarat comprises of more than 1200 small scale industrial andfactory sector units.
In order to give a comprehensive understanding as to whatextent this meltdown will affect the textile chemical industry;
Commenting on the economic crisis and recessionary trends, Mr Mehta said, "The economic turmoil gripping the developed nations all over the world has also undoubtedly affected our industry very adversely. A lion's share of dyestuffs from our country is exported to US, EU and South Asian Countries. Slow down of economy and recessionary trends for the last few months mainly in US and Europe has cast a shadow on our exports to these regions both directly and indirectly. Consuming sectors including garments and textiles, leather, etc., have been hit most seriously.
As more than 60 percent of dyestuffs products are consumed by these industries
and coupled with the downtrend in the consuming industry, the impact has been
very severely felt by the dyestuffs industry and direct exports in particular
as well, as a consequence. As per available data, export growth has slipped to
almost 10 percent in September 2008 vis--vis a robust average of 27 percent
witnessed during the earlier months of the current fiscal."
Mr Mehta, commended the steps taken by the Government saying "No doubt infusion of liquidity by the recent Govt. measures like reduction in CRR and SLR, REPO rates etc. has brought in an additional Rs.100, 000 crores into the system and appreciation of the US dollar to almost Rs.49 in recent days has provided a much sought relief to our export fraternity although imports have become astronomically prohibitive."
But in a solemn voice he lamented that "Saddled with the high cost of inputs and accumulation of inventory on the one hand, exporters are facing the irony of cancellation of export orders in the changed scenario on the other hand. Drying up of orders mainly from countries like US, EU and Japan, we are afraid, is likely to hit our exporters harder in the next few months, if the present slow down in the global economy continues unabated."
Industry sources say that the year 2009 could be worse for the Dyes and Chemicals industry as compared with 2008. However, it is expected hopefully that the situation will be back in the normal stage and Indian Dyestuff industry will be recuperate its position in the world market.
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