Indian Polyesters: Way to Go

Presented by

Gunjan Sharma

Business Head, Polyester Staple Business

Agenda

Global Trends in Textile Industry

• Growth Engines

• Future Pointers

Indian Perspective

• Current scenario

• On Right Track?

RIL Polyester

• Unflinching support

• Focussed innovationrs

Conclusion

Global Trends in Textile Industry

Economies and Consumption

40 kg

20 kg

10 kg

5 kg

3 kg

N. America

Pe

r C

apit

a Fi

be

r C

on

sum

pti

on

W. Europe

Japan

Taiwan/ S. Korea

China

Turkey

India

South Asia

E. Europe

Africa & Mid. East

5.2 Billion People

Latin America

2000

200005000 40000100002500500GDP per Capita in USD (on PPP)

IndiaE. Europe Latin America

7.1 Billion People

China

N. America

W. Europe

Japan

Taiwan/ S. Korea

2014

Source: Reliance Population boom fuelling incremental fibre requirement

Avg: 8.7 kg/capita

Avg: 12.5 kg/capita

40 kg

20 kg

10 kg

5 kg

3 kg

Source: Reliance Analysis

Fibre Consumption Trends

MMF fibres, notably polyester, to occupy 75% of future fibre consumption increment

20 25 25 28 34

19

3749

55

66

2

4

6

7

9

11

10

10

11

12

0

20

40

60

80

100

120

140

2000 2010 2015 2020 2030

Cotton Polyester Cellulose Others

Segment From toCarpet Polyamide/PP Filament PFYNonwovens Cotton PSF/Cellulosic/PP StapleApparel Cotton PSF/CellulosicAir bags (Side curtains) Polyamide Filament PFYTailored clothing Wool Polyester

mmt

Source: PCI, Tecnon

53

75

90101

120

Fibre Consumption Ratios

Developing nations to drive MMF demand

kg Cotton:MMF Total Fiber MMF Polyester

World 28:72 13 9 6

China 18:82 16 13 11

India 54:46 5 3 3

Comparison in per capita consumption of textile raw material

Share of Man Made Fibre

Developing

Developed

Source: PCI

Apparel vs Non-apparel

Apparel

Home

Technical

Source: PCI

Indian consumption heavily skewed towards apparel

Global India

53%

27%

20%

67%

6%

27%

Home

Technical

Apparel

Source: PCI, Technopak

Apparel Dominance

Chindia: Change in per

capita spend (US $)

Per capita spend in 2025: China $377, India $138

Apparel continues to grow both in volume and in value

0

20

40

60

80

100

120

140

160

180

200

2000 2005 2011 2016 2021

Global Apparel Growth

(est. 3%)

Bn pcs

Source: Technopak

Natural21%

Synthetics79%

Natural18%

Synthetics82%

Natural23%

Synthetics77%

Emergence of Technical Textiles

• Current size $145 Bn

• Volume growth: 2x Global GDP

• Multiple Technologies & Raw Materials

• Niche, highly knowledge-intensive products for specialist niches

• Sustaining double digit margin

Source: DRA Report Technical Textile to ride on multifunctionalties of Polyester

1995 2005 2014

Natural Fibres18%

Polyester25%

PP24%

Nylon6%

Others27%

Natural Fibres Polyester PP Nylon Others

Fiber Consumption: 29 MMTSource: Reliance Analysis

Trend towards Smarter Fibres

• Multifunctional: Combining various functions into one affordable fibre.

• Examples are (DD+AMF+FR), (LP+AMF), (DD+UV), Fibres with Microchips

Commodity Fibre

Last DecadeFunctional Fibre

This DecadeSmart Fibre

Next Decade

Population Growth

Urbanization Volatility/Availability of

Cotton

Better Infrastructu

re

Rising Living

Standards

Lifestyle Changes

Eco-friendly/Sustainability

MEGA

TRENDS

Innovation in polyesters to address evolving needs

Bridging the Gap: Indian Perspective

India: Fastest Growing Democracy

Source: ICIC Bank ,Exchange RateUSD : Rs 39.8Indian GDP to cross two trillion dollar mark

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

China India Taiwan US S Korea UK EU

GDP Growth Rates

Population 1237 Mn

Middle Class 300 Mn

Teenagers 150 Mn

Urban Workers 120 Mn

Million plus Cities 23

Small Retailers 2.3 Mn

GDP $ 1842 Bn

PPP $ 5138

Source: Reliance Analysis

Indian Textile Industry: A Snapshot

Installed capacity of 48 mnspindles (~20% of world’s installed capacity)

Second largest in the world

14% of industrial production6% of GDP17% of export earnings

$110 Bn Industry, exports: $40 Bn

Projected growth @ 9.5% CAGR $220 Bn by 2020; Exports: $80 Bn by 2020

Employs 35 million people directly and 55 million people in allied activities, ~12 Mn more jobs by 2020

0.8 mn rotors2.2 mn powerlooms50,000 shuttle less looms

Technical textile market: Rs 66000 CrsGrowing at 11%

Spun yarn prod: 4700 mn kg Fabric prod: 61761 mn sqm

Rich

Middle Class

Lower Middle Class

Fiber usage Pyramid for Apparel Segment

Cotton /VSF Based FabricFunctional Polyester Fabric

Blended Fabric:Polyester & Cotton /VSF Blended

Polyester Rich Fabric

Burgeoning middle class will prefer polyester based fabrics

India to play Catch-up

Item India Est. Growth Rate

World Req. Rate to match World by 2020

Per capita fibreconsumption

5 4% 13 15%

Per capita MMF consumption

3 6% 9 18%

Is the growth good enough?

Need the right stimulus to achieve global average

Higher focus needed on home and tech textile

RatioIndian %

Est. GrowthIndian

Ratio Global %

Req. Growth Rate to match Global by 2020

Apparel 67% 9% 53% 9%

Non-apparel 33% 10% 47% 33%

Source: PCI, Technopak

Vision 2020

Poised for high growth

• Indian share • In world's textiles/clothing exports: 2009: 3.98%, 2011: 4.11%• In Global trade is projected to reach 8% by 2020

• Govt policies to boost Indian trade• TUFS• Scheme for Integrated Textiles Park• Special focus on tech tex etc.

Source: TexMin, Reliance Analysis, WTO Secretariat

6.7

Key Execution Points

• Higher Regulatory support– Duty/fiscal parity among all fibres to

ensure all-round development

– Accurate HNS coding for tech textiles

– Incentivize purchase of expensive

technology

• Improving availability of skilled

manpower and flexible labour laws

• Investment in downstream and

finishing

Propelling to higher growth trajectories

5 year investment share (Rs Crs) Global China India

Spindleage 58% 57% 89%

Weaving 30% 29% 10%

Knitting 12% 14% 1%

Source: ITMF

• Higher emphasis on performance

driven textiles– Same textiles that can do more

eg. Shirts that can regulate

temperature, curtains that prevent fire

spreading

– Constant focus on innovation to

deliver more

• Improving the infrastructure :– Better power situation, more efficient

and modern ports, smoother and well-

constructed roads to improve bottom-

line and reduce time to serve

customers

Reliance: Leading the Way

Significant contribution to India's economic growth

• 14% of India’s exports

• 4.8% of Indian Govt. indirect tax

• 4% of total Indian market cap

• 8.6% Weightage in BSE; 7.0% Weightage in NSE

Growing importance across the globe

Reliance: The Growth Architect

Reliance living the Growth is Life motto

Product Position

Polyester Fibre/Yarn 1

PX 5

PP 5

MEG 8

PTA 9

Changing dynamics in polyester

1982: RIL commissioned first polyester plant of 10 KTA

1980 2000 2010

Shift in Polyester hubs from the West to China & India

US, EU, Japan Taiwan, Korea China, India

Source: PCI/Reliance

Producer KTA

DuPont 841

Celanese 605

Hoechst 395

AKZO 316

Eastman 302

Rhone Poulenc 248

Teijin 219

Toray 172

ICI 155

Monsanto 146

Producer KTA

Nan Ya 1035

Reliance 779

KoSa 700

Teijin 698

SamYang/SS(Huvis)

658

Hualon 575

Far Eastern 604

DuPont 583

Tuntex 561

Producer KTA

Reliance 1950

Sinopec 1143

Indorama (S Asia) 967

Nan Ya 956

Sanfangxiang 840

Tongkun 800

Rongsheng 740

Yuandong 720

Hengli 680

Shenghong 675

Verticals

Plastics(PE, PP, PVC, PET)

Textiles

Petrochemicals(LAB, EO)

Oil and GasExploration

PetroleumRetailing

Oil and GasProduction

Polyester(Fiber, Filament)

FiberIntermediates

(PX, PTA & MEG)

Olefins and Aromatics

PetroleumRefining

2000s

1990s

1980s

1970s

Post 2000

Vertical Integration as a model of growth

Co

st L

ead

ers

hip

Mar

ket

Lead

ers

hip

Glo

bal

Acc

ep

tan

ce

Inn

ova

tio

n L

ead

ers

hip

Reliance Polyester Vision: Pillars of Success

“To continuously grow on a sustainable basis and be the largest, the most innovative and the most admired polyester producer in the world”

• Captive availability of PX, PTA & MEG

• R&D: Product / Technology Leadership

• Green Field Expansions/Acquisitions

• Best Practices: Six Sigma, ISO 9001, 14000, Focus on Sustainability

Reliance Polyester: Who are we?

World largest & most innovative Polyester supplier

Global Position

Capacity

Product Capability

Product Mix

Market Mix

Market Share

Sites

Manufacturing

Environment

Largest Polyester Fiber (Filament & Staple) producer

2.3 MMT : Filament 1.5 MMT , Polyester Staple 0.8 MMT

Largest differentiated Polyester producers for all segments

Complete Filament (POY,FDY,PTY,IDY) and Staple Range (PSF,NW,SC)

Domestic: 80%, Export 20%

Global market share: 5%, Largest Supplier to domestic industry

9 Large Sites: India 7 Sites .Malaysia 2 Sites

World class manufacturing: Global Awards in Quality (including Demings)

ISO 140001, Oekotex, REACH Compliant, Footprint in Recycling

Reliance Technology Centre, PG, Mumbai• 80 Scientists/Technologists working round the clock• Bringing Customized products, Process Innovations and

New solutions to textile industry• More than 28 patents registered

World Class Fiber Application Centre, PG, Mumbai• Latest generation of Down stream m/c & testing facilities • Checking fiber performance through stringent paremeters

Reliance Testing Centre, Coimbatore• Supporting down stream customers for their testing

needs

World-class R&D & Application Support

Product and application innovations to cater to global textile chain

Design

DevelopmentMaterials

Textile Wheel: Huge Potential

Source: The Department of Textile Technology, UNSW

Endeavour to serve all possible segments

• To serve all high-growth technical textiles segments, RIL strives to offer the best functional polyester for various applications

Recron® Flame Retardant

Recron® Pre Coloured

Recron® Feel Fresh

Recron® Green

for soft feel applications

for high resilience pillow/cushions

Recosilk®

for stretch yarns

for better fire protection

for lasting freshness (antimicrobial)

for easy dyeing and bright colors

ecofriendly fibre for apparel/home textiles

Recron® Sorona

for easy dyeing and bright colors

Recron® Conjugate

Recoflex®

Wide Gamut of High Performance Polyesters

Solutions for High Performance Apparel

Supporting all high performance applications

Stretch Yarn

Micro Yarn

Super Micro Yarn

Moisture Management Yarn

Bi component

Staple for thermal insulation

Antimicrobial Fiber

Super Micro Fibers

Moisture Management Fiber

Ecofriendly products

PFY

PSF

Offerings for Buidltech and Hometech

Fiber Process Product

NW PSF Non Woven Wadding for Roofing, Acoustics Insulation

Recron 3s Mixing with Cement

Reinforcement of concrete

Wet laid Decorative wall paper

Flame Retardant PTY

& PSF

Woven & Nonwoven

Flame Resistant Upholstery

Carpet Fiber Spinning, Tufting

Wall to Wall Carpeting

Functional Polyester Fiber becoming more important for Builtech & Hometech

Polyesters for Mobitech

Fiber Process Uses

Dope Dyed PTY Woven, Knitting Head Liners, Seat Covers, Floor Mat

Non -Woven PSF, Carpet Fiber

Non Woven/Woven tuftingFloor Carpet,Head liners, Insulation

Catering to stringent automotive demands

Seat Fabric

Carpet

Headliners

Polyester mainly used in

Polyester Innovations for Geotech

• Construction: 2nd largest sector in India• Contributing 11% of total GDP• Employing ~35 million people. • Size of $126 million in 2013-14• Responsible for the second most FDI

inflows (11%)

• Vast scope for growth in construction: • Better road density and overall

qualitative road development• New air corridors for Tier II cities;

upgradation of current facilities. • Railways: Estimated investment of $86.5

mn required, for modernization, port connectivity projects and development of metro networks.

Indian Geotech market to reach Rs 2400 Crs by 2015

Fiber Process Product

NW PSF Non Woven Soil reinforcement & Filtration in Road, Railways

Recron 3s Mixing with Cement

Reinforcement of concrete Road

Nonwovens for Medtech Applications

Source : Asian Textile Journal

Special non woven products for Medtech segments

Use of Polyester StapleFiber Process Product

Spunlace PSF

Hydro entanglement

Surgical Gowns, Diapers, Wipes

Recron 3s Wet laid Wrapping Paper for surgical instruments /Tea Bag

Hollow PSF Thermal Bonding

Diapers, Adult/Feminine Hygiene Products

Segments of Nonwoven

Hygiene41%

Wipes13%

Geotech7%

Upholstery& Coating

12%

Filtration5%

Garments etc7%

Medicals3%

Others12%

Proactive Capacity Addition

MMTPresent Capacity

Expansion Post-Expansion

PX 2.0 2.3 4.3

PTA 2.0 2.3 4.3

MEG 0.7 0.7 1.4

PFY 1.0 0.4 1.4

PTY 0.3 0.14 0.44

PSF 0.8 0.3 1.1

PET 0.5 0.65 1.15

Helping serve growing demand in both domestic and exports markets

RIL: Responsible Role

33

• Undertaking vast expansion throughout the

polyester chain

• Adding capacity ahead of demand to spur

growth

• Reliance Technology Group (RTG) providing

innovations for high performance

• Sustainability initiatives

• Technical support for downstream industry

• End to end solution provider to the textile

industry

What is good for India is good for Reliance

Conclusion

Conclusion

Textile demand will continue to grow at healthy rates

Non-apparel fueled by MMF to outgrow apparel; India needs to grow non-apparel base faster

Trends towards smarter and high performance products endless opportunities

Higher govt. support required to catch up with global consumption levels

Need for greater investments in downstream

Polyesters continue to be the main growth driver

Reliance – Supporting growth all the way

Thank you for your attention!

Disclaimer: This presentation is exclusive and confidential to RIL PSF Business. It contains views of RIL PSF Business which are based on market information,assumptions and projections and hence fitness of data cannot be guaranteed. Publishing/reproduction of any data herein cannot be done without the expresspermission of RIL PSF Business.