IMPRESSIONS from a Cross-section

Acrylic fibre Industry worldwide has been declining in the past few years. The main reason for this has been higher price of acrylic as compared to polyester and cotton. Although products made from Acrylic Fibre are superior in quality, but due to high cost differential between Acrylic Fibre and Polyester/ Cotton, some part of Acrylic Fibre at the lower end of the market has been substituted by relatively low cost fibres. However, for high end needs in sweaters, blankets, the producer still use acrylic fibre. This is like what happened to wool 30 years back, lower end of the market was taken by acrylic and wool demand did not grow.

57% of the global acrylic fibre capacity is in Asian region, which was less than half just 5 years ago. The increase in capacities in Asia is due to lower costs and shift of garment manufacturing to Asia. The shift of garment manufacturing to Asia and particular to China has also led to reduction of production in USA and Europe. North America and West Europe together have less than 20% of global capacity, down from 35% in the year 2000. Within Asia, China accounts for 50% of the share. Almost 35% global capacity and two-third of Asia’s capacity is in China.

Acrylic fibre has inherent strength of bright colors, good color fastness, shrinkage properties which give bulkiness and warmth and it is a lighter in weight than polyester. The lack of awareness of these strengths at the consumer level is one of the main reasons for low growth in demand. Many times, the spinner/knitter decide use of fibre based on cost which fibre is to be used, this leads to consumer not getting the best properties in the garment. We feel, with focused efforts on creating awareness among consumers the Acrylic demand can be grown at a higher rate. The best case study of this is in Iran, where the users still prefer acrylic carpets as the consumers know the advantages of acrylic fibre.

(Contd.)

One of the key areas for a sustainable future in the acrylic industry is focus on specialty or the value-added products. The branded business brings more customer loyalty, drives the pull-strategy and makes the business insulated from the market fluctuations. The key in this approach is value creation for the customer. There has been a major thrust from the Acrylic Fibre Business of ABG to bring the value added products through innovations in product, organization culture, internalization and externalization of the brand concepts with a view to create better brand equity.

The value-added products complement the standard fibre offerings, and make a complete product basket for the customer. This is also an important factor determining the growth and sustainability of the business.

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