Driving Growth: Man-Made Fiber Industry Insights in India & Globally

Atul Vaidya, a Production Engineer holding a master’s in Finance Management from JBINMS, boasts an extensive 32-year career. He has had successful stints with Godrej & Boyce Mfg Co. and Jayems Engineering Co. prior to joining Oerlikon in 1994. In a recent conversation with Thiruamuthan, correspondent at Industry Outlook, Atul shares his insights on the current man-made fiber industry in India and various aspects surrounding it. Below are the excerpts from the exclusive interview –

Enlighten us on the current status of the Indian man-made fiber (MMF) industry.

Currently, the Indian MMF industry comprises around 5-6 percent of the global market share. In terms of technology adoption, we are lagging behind by a long distance behind China, which currently holds the largest market share globally. Lately, there has been a growing awareness from the government that the textile industry is a prime sector in terms of employment generation in the country. As a result, the government is trying to support this industry and putting efforts into solving various challenges the industry is currently facing so that it can achieve rapid growth. One noteworthy initiative from the government is that the MMF industry is also included as one of the industries that will be receiving various incentives and benefits as part of the PLI scheme. The scheme covers products in 10 technical textile segments, 14 MMF products, and 40 MMF apparel. Manufacturers are incentivized by paying a 3-11% incentive on incremental production. The government is working on an updated version (PLI 2.0) dedicated to apparel and garments, with three investment thresholds and double turnover as the criteria for incentives between 8-10%. The industry personnel, too have now realized the immense potential that the industry promises for future growth. Due to this, there is a lot of backward integration that is happening among the players within the industry today. For instance, people who are just making/selling yarn are now setting up yarn manufacturing facilities.

"Between man-made fiber and natural fiber industries, the man-made fiber industry is the one that is mostly catering to the lower strata of the population, which mostly can't afford to buy cotton garments."

What is the role of the MMF industry in our country’s economy?

When we talk about the role of the MMF industry in India's economic growth, there are two aspects here - business potential and employment generation. Since the MMF sector is a part of the textile industry from a broader perspective, according to the Economic Survey of India, the textile and leather industries are the two sectors that have the highest potential for employment generation in the country. E.g. As of 2021, the textile industry in India was one of the largest sources of employment generation in the country, employing over 45 million people directly. This includes a significant number of women and individuals from rural areas.

Focusing specifically on the MMF industry, we see its unique role in providing clothing for the lower-income group. The majority of our country's population are middle-class, lower-middle-class, and poor people. Between man-made fiber and natural fiber industries, the man-made fiber industry is the one that is mostly catering to the lower strata of the population which mostly stays in rural areas and can't afford to buy cotton garments. Thus, it is safe to say that MMF or polyester is the material from which the clothes of the majority of people are made in India. However, the Indian tax structure favors more cotton garments. Which is counterproductive.

Tell us about a few major use cases of MMFs apart from just making clothes in the textile industries.  

MMFs such as polyester, polypropylene, and nylon have many other important use cases from just the textile industry. The most important among them is in the industrial applications such as tires used in automobiles, advertisement boards, tarpaulins, ropes & threads, airbags in automobiles, and many others. Another major area where MMFs are widely used today is in home textiles such as bed sheets, curtains, upholsteries, and many others. Although cotton fabric is also used for home textiles, the majority of households in India use products made using nylon or polyester mainly due to the cost-effective nature of these products. Non-woven is also a widely practiced use case of using polyester. Furthermore, sanitary pads and diapers are also another major area where MMFs are extensively used as raw materials.

Throw some light on the key challenges of the Indian MMF industry in terms of technology and global competition.

The Indian Man-Made Fiber (MMF) industry faces several key challenges, particularly in the realms of technology and global competition. These challenges are crucial for understanding the current state and future potential of this sector. Here's a look at these challenges: 1) Technology Upgradation and Innovation 2) Global Competition 3) Supply Chain and Infrastructure Issues 4) Environmental Concerns and Sustainability 5) Skilled Workforce 6) Market Diversification 7) Policy and Regulatory Framework

Addressing these challenges requires a concerted effort from both the industry and the government. This could involve investment in technology, enhancing skill development, improving infrastructure, focusing on sustainability, and creating favorable policy frameworks to support the growth and global competitiveness of the Indian MMF industry.