Russian nonwovens industry heading for big change
18th October 2012, Russia
Eugene Gerden reports from Moscow
The Russian nonwovens industry is on the verge of big changes, due national government plans to approve a state strategy for the industry’s further development until 2020.
Despite the unstable economic situation in Russia, nonwovens production has become one of the most promising segments in the national textile industry in recent years. This is reflected by the fact that the current rates of production and consumption of nonwovens are significantly higher than those of woven fabrics and knitted goods.
For example, the average growth rates of the Russian nonwovens industry at present are in the range of 15%-20%, compared to 5%-7% in case of fabrics. One of the major reasons of a stable demand for nonwovens in Russia is the country’s cold climate, as well as long traditions of their use.
However, despite favourable conditions for the industry’s development, until recently it has been prevented by a number of problems, the most important of which was lack of effective state policy for its development, as the nonwovens segment (along with the whole Russian textiles industry) was never included in the list of the priority areas of the national economy, approved by the government.
Lack of state policy resulted in the appearance of a number of problems in the industry, among which are the outdated equipment stock (where more than 70% of industry equipment has a lifetime of more than 15 years), the ever rising prices for raw materials, and high proportion of counterfeit goods.
Much can change
However there is a possibility that much can change in the near future, thanks to the forthcoming approval of the state strategy – ‘For the Development of Russian Nonwovens Industry’, which was designed by analysts at the Russian Ministry of Industry and Trade.
The new strategy involves the adoption of a set of measures, aimed at further developing and supporting of the industry, among which are the provision of tax benefits to domestic nonwovens producers, elimination of red tape, creating conditions for producers’ access to cheap credit, as well as a solution to the problem of illegal imports.
High dominance of bureaucracy currently remains one of the major problems of the industry. At present the activities of industry enterprises are regulated by more than 40 regulatory bodies, which always pose threats to the normal operation of producers.
Chemical fibres facilities
In addition to this, a poor raw materials base also prevents rapid development of the industry. This is mainly due to the fact that the quality of chemical fibres and yarns which are produced in Russia remains low.
At the same time the new strategy involves a solution to this problem, which is expected to be achieved through the establishment of facilities for the production of chemical fibres in different regions of the country, the largest of which will soon be established in Ivanovo region, the centre of Russia’s textiles and nonwovens production.
Expanding production ranges
In addition, the strategy also involves the expansion of the production ranges of the majority of the industry’s enterprises, which to date, has remained generally narrow. Generally speaking, the current product ranges of the majority of producers were mainly developed during the Soviet period and were mainly focused on the needs of the planned economy and military.
At present nonwoven fabrics, which can be used as a base for polymer coatings (including linoleum, rubber sheet, rolled roofing, wall paper, laminated plastics) accounts for the majority of production in the Russian nonwovens industry – its share is estimated at 30%.
The share of geotextile and agro-textile fabrics is estimated at 18-20%, as are nonwovens for heat and sound insulation and nonwovens for clothing and footwear. The remaining 10% of production goes into filtration, medical applications and packaging.
Among the largest domestic producers of nonwovens are such companies as OOO ‘Avgol Russia’, JSC ‘Komitex’ and Shchekino ‘Khimvolokno’.
According to state plans, by 2015-2016, the production of the following categories of nonwovens should be significantly increased – in the case of nonwovens for medical purposes, the volume of production is expected to increase to 200-250 million square metres per year, geotextile materials to 100-120 million square metres, insulation nonwovens to 170 million square metres, basis for polymer coatings up to 160 million square metres.
The total value of investments in the implementation of the strategy is estimated at 30 billion roubles (USD$1 billion), of which at least 10 billion roubles will be invested in the installation of new equipment and new technologies.
According to analysts of the Academy of Conjuncture of Industrial Markets (ACIM), successful implementation of the strategy will provide a massive impetus for the development of the national nonwovens industry in the coming years, with the sanitary nonwoven products segment expected to become the most promising, as demand for this kind of product is steadily growing.
So far, consumption of these products has been low, however, due to an increase of purchasing power of local consumers and their active promotion by leading global producers among the local consumers, the demand for them has significantly increased.
Still, this segment has the biggest room for further growth, which is reflected by the fact that sanitary nonwoven products are used by only half of Russian women and only 28% of Russian parents buy diapers for their babies.
Despite the existing problems, analysts at ACIM predict bright prospects for the Russian nonwovens market. In addition to the implementation of the strategy, the ever growing activities of foreign investors will contribute to further market development.
This is reflected by the recent announcements of a number of major projects in the industry, made by foreign producers.
For example, the Italian Freudenberg Politex Group recently announced its plans to invest 20 million Euros in the opening of the third stage of its nonwovens plant in the city of Zavolzhy (Nizhny Novgorod region).
The launch of the third phase will help to increase the volume of production of the plant by 1.54 times up to 20,000 tonnes per year.
In addition to Freudenberg Politex, an increase in Russian production capacity was recently announced by some of the world's largest manufacturers of nonwoven hygiene products, among which are Proctor & Gamble and Kimberley-Clark.
Author: Billy Hunter