Filatex India Limited Logo Filatex India Limited

Filatex
Products
Polyester POY
Polyester Textured Yarn
Micro-Denier Yarns
Polypropylene Yarns
Monofilament Yarns
Fully Drawn Yarns

DEMAND & SUPPLY SCENARIO

Polyester Filament Yarn (PFY) industry comprises of both Partially Oriented Yarn (POY) and Fully Drawn Yarn (FDY). Presently, there are 43 manufacturers of PFY which includes major manufacturers like Reliance Group, Garden Silk Mills, JBF Industries, Indo Rama Synthetics, Sanghi Polyesters, Century Enka and FIL who account for 68.81% of total production capacity in India. It is also important to mention here that more than 50% of the domestic capacity is located in the western region due to the proximity of raw material suppliers and downstream weaving units at Surat and Bhiwandi. The total installed capacity of the industry stood at about 10,18,150 TPA in the years 2002-03. The domestic installed capacity grew at CAGR of 13.6% to reach 21,83,300 TPA during the year 2007-08.

PFY Demand in India
The domestic demand for PFY stood at 10,14,755 Tons during the year 2003. The demand for PFY grew at CAGR of 4.21% to reach an estimated 12,88,523 Tons by the years 2008.

PFY Supply in India
The Production grew from about 9,93,430 MT in 2003 to 14,20,043 MT in 2008 indicating a CAGR of 7.40% in the interval of 2003-2008.

PFY Imports in India
The Imports of PFY stood at 1,15,100 MT in the year 2003. The imports of PFY in India had declined at 2.7% during the period 2003-08 to reach 1,00,088 MT in the year 2008.

PFY Exports from India
The Exports of PFY from India had grown consistently during the period 2003-2008. The exports of PFY from India grew from at CAGR of 19.8% to reach 2,31,608 MT by the year 2008.

Major Milestones : Filatex India Limited   Expected improvement in the price competitiveness of POY / PFY
Prices of POY / PFY, cotton yarn and other blended yarns are expected to increase. However, the increase in POY / PFY prices is expected to be lower than that in the other competing yarns. The price competitiveness of POY / PFY could increase further if there is a reduction in the excise duty on raw material and POY. (The excise duty on POY is expected to decline from 28.60 per cent to 18.4 per cent by 2006-07. The reduction in the excise duty would result in an average decline of Rs.11 per kg in POY prices (and hence, PFY prices) in 2001-02). In 2001-02, the average price of PFY (80 denier) was around Rs.97 per kg, as compared with the ex-factory price of cotton yarn (60s count) at around Rs.127 per kg and nylon filament yarn (NFY) price of around Rs.169 per kg.

Major Milestones : Filatex India Limited   Low availability of domestic fibre/yarn
According to CRIS INFAC, during the 2001-02 to 2006-07 period, the increase in the supply of cotton, viscose staple fibre (VSF) and polyester staple fibre (PSF) is expected to be restricted as compared with the increase in domestic demand. The existing capacities have been operating at a capacity utilisation of around 90-95 per cent. In addition, no significant capacity additions have been planned. Cotton availability would be restricted, as the increase in cotton crop would largely be due to an improvement in the yield, and not an increase in the area under cultivation, as in the past.

Major Milestones : Filatex India Limited   Favourable changes in Government Policy
The POY / PFY industry started showing the first signs of an upturn towards the beginning of 2002. This recovery was on account of certain initiatives taken by the Government of India that resulted in the following amendments in the tax legislation:
-Reduction of custom duty on import of Polyester Chips from 38.50 % to 25 % and retention of custom duty on import of PFY/ POY at 20 % thereby correcting the anomaly in the custom duty structure to a large extent. (Budget 2001)
-Imposition of Anti-Dumping Duty by the Government of India (vide Notification No. 15/2002 – Customs dated 08/02/2002) on import of POY from Taiwan, Thailand, Indonesia, and Malaysia.

Major Milestones : Filatex India Limited   Lower per capita consumption
The average per capita consumption (PCC) of fabric in India is much lower than in its neighboring countries. India has a huge potential market, given that its PCC is as low as 1.4 kg as compared China (5 kgs), Pakistan (3 kgs) and Indonesia (5 kgs). India has the advantage of a large and growing domestic market, and a good GDP growth.

Major Milestones : Filatex India Limited   Rapid urbanization- higher spend on clothing
In India, out of the total population, about 70% is rural. Behavioral patterns suggest that most of the fabric demand in this segment is need-based. The urban demand, on the other hand, is also driven by fashion trends, and favours more sophisticated textiles, and variety in designs and colours. The average urban spend on apparel is higher than rural spend. However, over the years, the clothing pattern in India has shifted. Men’s clothing consumption has moved from the traditional cotton based wear to synthetic fabrics. Cotton dhotis are giving way to trousers (mostly made of polyester or polyester blends). Likewise, women are moving from cotton saris to synthetic saris/dresses.

Major Milestones : Filatex India Limited   Levy of Anti-dumping duty on imports
Levy of Anti dumping duty on imports of POY to lower threats of import leading to availability of better contribution to domestic manufacturers.

POLYESTER, NYLON & POLYPROPOLENE MONOFILAMENT YARNS

As regards MFY, the product finds good demand from the manufacturers of zippers, fishing nets, sports nets, industrial and other brushes, etc. New customers for this product are tapped by the marketing teams of FIL at Delhi, and Mumbai.
OVERALL MARKET ASSESSMENT

Keeping in view of the strong fundamentals mentioned above, CRISINFAC has projected a strong CAGR of 7.8% in POY industry in line with the growth in fabric production during the 2001-02 to 2007-08. FIL’s POY/PFY unit at Silvassa is in close proximity to the major polyester markets. Since the customers are closely located, the company is able to service their orders on a more frequent - small quantity basis. With more frequent servicing of orders, the company generally has 30-35 days of orders in hand on a regular basis.
 
 
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Manufacturing Process