Nylon Textile Filament Sustainability, Performance and Changing Business Patterns.

1. Nylon Textile Filament
Sustainability, Performance and
Changing Business Patterns
Paola Corbani
Senior Marketing Analyst – RadiciGroup
The Fibres and Raw Materials Conference.
Hong Hong, 3-4 November 2011
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2. Topics
 RadiciGroup Today
 Macrotrends
 Fibre Consumption Trends
 Nylon Textile Filament
 Global Overview
 Sustainability and Performance
 Summary and Conclusions
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3. RadiciGroup in the World
Range of products: chemicals, engineering plastics, textiles & fibers, textile
machinery, energy, hotel and real estate…
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Production Sites & Branch Offices: more than 50 worldwide

4. RadiciGroup Turnover in 2010
Consolidated
Sales
Millions of € 1.165
Personnel 3500
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5. Synergy and integration
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6. Synergy and integration
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7. OUR MARKETS AND
BRANDS
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8. Topics
 RadiciGroup Today
 Macrotrends
 Fibre Consumption Trends
 Nylon Textile Filament
 Global Overview
 Sustainability and Performance
 Summary and Conclusions
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9. Population Trends
 World Population growth: from 6.9 billion
in 2010 to 7.6 billion in 2020.
 Aging population in Western developed
countries: off consumption peak
 less volume consumption, but higher added- value
products, more service content, health, fitness and
functional products
 Less export opportunities for (Asian) export driven
economies, especially in commodity goods
 Fast growing young middle class in
emerging countries with increasing income
and request for sophisticated products.
 China to have the biggest population in
working age...But also a fast growing aging
population 9

10. Income shifting toward
emerging countries
Shift of GDP share and economic power to Asia
and emerging countries
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Source: Frost & Sullivan 2010

11. Sustainability Issues
As world population grows, global
sustainability issues gain importance
Competition on arable land of food/non
food/biofuel crops, use of chemicals, water
availability
Energy consumption, Greenhouse Gas
Emissions and climate change
Chemical feedstock versus bio-feedstocks
Recycling of industrial and post consumer waste
Increasing consumer demand for
environmentally responsible goods and services
Impact on Cotton vs manmade fibres, interfibre 11
competition

12. Topics
 RadiciGroup Today
 Macrotrends
 Fibre Consumption Trends
 Nylon Textile Filament
 Global Overview
 Sustainability and Performance
 Summary and Conclusions
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13. Cotton Role in the Fibre Industry
 Cotton: in 2015 forecast between 26 and 28 mio M
tonnes: in 2020 between 27 and 30 mio M tonnes
 Impact on on future manmade fibres demand
 Cotton Production capped below 28 mio M Tonnes in
ICAC scenario: Limited arable land availability not
compensated by strong growth in yields
Cotton Production
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Source: Terry Townsend, Icac Org. May 2011

14. World Fibre Mill Consumption 2010-20
110
99
(Millions of Metric Tonnes
100 90
90
77
80
66 tot fibres
70 61
60 51 cotton
50 man made fibres
40 30
25 28
30
20
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
PES IF FIL (incl SB)
2.7%
Source: Pci Fibres RB 2010
PES TF
PP Fil+ST
6.0% 2010
27.8%
Cellulosic
4.4% Nylon
Nylon IF Carpet fil
Acrylic Staple 1.5%
2.5% 1.0%
Nylon
Other Staple
PES staple 0.2%
4.7%
17.5%
Nylon Textile
filament
cotton 2.0%
32.9%
wool
1.5% 14

15. Topics
 RadiciGroup Today
 Macrotrends
 Fibre Consumption Trends
 Nylon Textile Filament
 Global Overview
 Sustainability and Performance
 Summary and Conclusions
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16. Nylon TF Global trends
 Volumes forecast to keep above 1.5 mio Metric
tonnes over the next 4 years and long term
 Actual volumes have been higher than forecast
over the last few years. Average yearly growth
var var
2010/00 2020/10
 Mainly due to China
America -5.9% -0.1%
Europe, M East & Africa -6.4% -0.2%
China (with Hong Kong) 10.7% 2.9%
perfomance Other Asia
World
-6.5%
-0.5%
-4.1%
1.0%
RB 2010 RB 2005 RB 2007 RB 2009
1800
1700
1600
('000 Metric tonnes)
1500
1400 Past Pci forecast
1300
1200
1100
1000
1990 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015 2020
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Source: PCI Fibres

17. Regional Trends Nylon TF
Nylon Textile filament mainstream volumes
to stay in Asia
 Following textile migration pattern of made up articles
 Fabrics and yarns integration
 China getting the biggest share
 But increasing Chinese costs opening opportunities to
emerging Asian Countries: Vietnam, Pakistan,
Bangladesh
100% 1471 1517 1673
90%
80%
70%
60% Other Asia
50% China (with Hong Kong)
40%
Europe, Middle East & Africa
30%
20% America
10% TOTAL
0%
2005 2010 2015
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Thousands of Metric Tonnes Source: PCI Fibres

18. Nylon TF Forecast Patterns
Nylon TF main historical forecast
based on:
 Competition with polyester ...due to
higher raw material cost of nylon in
mainstream applications
 Static Apparel consumption in core
nylon market Europe and in advanced
countries
 Slow development of nylon core
apparel demand in emerging countries
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19. Nylon TF at a turning point
In 2010, volumes at 1.5 mio metric tonnes
at a peak since 2001
 Taking advantage of cotton shortage and high
pricing reflecting also on polyester availability and
pricing
 Fast developments in advanced nylon garment
demand (lingerie, hosiery, sportswear, industrial
uses) from middle class population in emerging
countries... A continuing trend
 Some recovery in European demand on limited
volumes: stable prospects for functional textiles
Medium term: Growing overall fiber consumption,
Cotton loss of market share and partial shift to
higher ends of the market
A positive contribution to Nylon TF in the future 19

20. More Regional Demand to come
 Asian suppliers increasingly focused on
fast growing domestic demand
 Rising textile costs (esp. labour) and
freight rates in China and other Asian
Countries.
 Partial return to regional sourcing by
European retailers: security of supply,
financial and currency risk management,
new products targeted to specific needs in
reduced time lags, sustainability.
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21. Overall Industry Balance
Europe: Supply more balanced with demand
after extensive restructuring
China: PA6 nylon TF capacity surge
China Nylon TF Capacity vs production
 Domestic demand
2000
trends vs capacity
 Utilization rates to
(thousands of Metric tonnes)
1500
remain below 60%
1000
over the next 5 to
500 10 years
 Shrinking export
0
2010 2015 2020
opportunities to
capacity production Western countries
Global Raw material availability and high price an
open issue 21

22. Key Issues for the Future
Nylon role as a specialist fibre:
Work on best performance to deliver value:
 comfort, softness, thermal regulation, moisture
management, strength, lightweight, stretch, durability
 Innovation and product development - from polymer
chemistry to yarn and fabric construction- to cater for
diversified needs
Tackle the sustainability issue:
 Focus on environmental performance, clarify and
communicate industry efforts
 Functionalize approach to Sustainability
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23. Sustainability in
Nylon Textile Filament
 Nylon Environmental performance perceived as
worse than other fibres (esp. PES) in terms of
energy use, GHG Emissions, water consumption
 Nylon recognized as a specialized fibre but
focus on sustainability set to tighten
 Functional approach to Sustainability: work on
environmental performance relative to delivered
technical features
 Nylon Industrial waste recycling a reality ...
increasing focus on post consumer.
 Recycling of limited percentages started from post
consumer carpet waste, some textile filament, but
no ready source like post consumer PET bottle. 23

24. The Recycling Options in
Nylon Sustainability
Nylon recycling:
 back into spinning: mainly in carpet, textile filament
still technically difficult
 down the value chain into the plastics business
Both solutions are technically feasible but:
The spinning process requires more energy and
the CO2eq. emissions are higher.
 Recycled-yarns have some limitations on Recycled
content, dyebility, Mechanical performances
The plastics solution requires less energy and
emits less CO2 equivalent.
 Recycled plastics retains: Good mechanical
performances, Good mouldability; the recycled
content could be up to 100% 24

25. Pros and cons of recycling in Nylon Filaments and in
plastics Both solutions are technically feasible but:
 e Up to 100%
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26. RadiciGroup for Sustainability
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27. RadiciGroup: Nylon
Sustainability & Performance
Balance of Energy requirements relative to
performance
Ger/Average Textile Strength
(MJ/MPa)
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
PA66 Radici PA6 PETa PP HDPE
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28. Topics
 RadiciGroup Today
 Macrotrends
 Fibre Consumption Trends
 Nylon Textile Filament
 Global Overview
 Sustainability and Performance
 Summary and Conclusions
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29. Summary
 Limited growth expected with demand to keep
above 1.5 millions MT
 Commodity business: competition with
polyester continuing
 Cost and availability of raw materials open
issue for the whole business
 Positive trend of demand of core nylon
products in emerging countries, stability in
Western countries.
 More regional demand: cultivate growing
Asian markets, More regional sourcing in
Europe, less commodity export opportunities to
Western countries. 29

30. Conclusions
 Functional approach to market development
 Build on Nylon TF best features
 Environmental performance in relation to
functionality deployed.
 Recycling into the plastics business
 Eco-design to enhance recyclability
REQUIRE
Closer cooperation along the polyamide chain
between chemical & polymer producers,
spinners and textile /apparel customers and
retailers
to foster technology/product innovation and
application development targeted to
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specificity of local markets and customers.

31. Thank You !
www.radicigroup.com
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