Our present focus is on the polyester sector, says Madhu Sudhan Bhageria, Chairman and Managing Director, Filatex India, a pioneer in manufacturing synthetic filament yarns. Speaking on the global trend of shifting towards man-made fibres, he added, “In our assessment, the shift from cotton to polyester is gaining rapid momentum and present ratio of 60 per cent of cotton and 40 per cent polyester in textiles will change, like it has happened globally wherein polyester share in textiles as a fibre is around 60 per cent.”
Excerpts of the telephonic interview with ITJ Senior Sub Editor, Karthik Muthuveeran. For Filatex India, what do you think are the achievements since its inception? Take us through the journey over the years. We have been into trading of yarn before we started Filatex. My father was into the business of selling synthetic fabrics. We had a socks knitting plant for that. We used to make socks from nylon. We introduced nylon to the Indian market. Then polyester came in. We were selling for JK Synthetics, JCT Ltd, Modipon, to name a few.
We started Filatex in 1994. We set up first manufacturing facility in Noida. This facility manufactures 500 TPA specialty polyester, nylon, nylon 6, nylon-66, PBT, polypropylene mono filament yarns in technical collaboration with Reifenhauser GmbH of Germany. Reifenhauser GmbH is a pioneer in extrusion technology and has supplied mono filament plant and machinery to some of the leading world manufacturers like Du Pont, Hoechst, Bayer, to name a few.
In 1996, FIL diversified into high growth area of specialty polyester filament yarns by putting up its second manufacturing facility at Dadra & Nagar Haveli, Silvassa. This facility is a state-of-the-art plant that was imported from Barmag A.G., Germany.
From 1996 to 2010, we were growing in Dadra only. In 2008, FIL started producing polyester fully drawn yarn (FDY) using latest machines from Barmag. FDY is generally used for better quality fabric, and yields higher contribution as compared to the normal POY as the process of texturising is eliminated. It is also manufactured in about 70 shades. In Dadra, we used to buy polyester chips and convert it into yarn. In 1996, our capacity was around 15 tonnes per day and then we scaled it up to around 130 tonnes in 2010.
In 2009, FIL installed 167 state-of-the-art automatic needle looms for manufacture of narrow woven fabric with warping machines. It is mainly used in manufacture of carpets and mostly exported out of India.In 2012, we started the Dahej unit. It was a step towards backward integration where we use basic raw materials to produce polyester melt which is used directly for making chips or spinning yarn. FIL started its own poly-condensation plant of 600 MT/day and 260 MT/day of POY at Dahej Industrial Area, Gujarat. By putting up this unit, the company has joined the league of major POY manufacturers. From there 100 tons polyester chips were transferred to Dadra plant for making yarn.
We have done two brownfield projects in Dahej – first one was in 2016, wherein we added around 105 tonne of FDY and texturising for 200 per day. In 2018, we added bright polymer with a 300 MT/day along with we also added 190 MT/day of FDY and 25MT/day of POY with the latest state-of-the-art technology. Thus our product basket of POY, FDY and DTY covers full range of multi filament yarns in coarse and fine deniers with all options like bright, semi dull, black and all colour shades.
Today, we have a total capacity of 3,25,000 tonnes per annum. What are some of the challenges faced by the company?
In Dadra, we have around 10 acre of land, and in Dahej, we have around 65 acres. We needed big space for expansion and set up polymerisation unit and direct melt to yarn. Land acquisition was the biggest challenge back then and the Gujarat government allotted us this land.
Give details of its latest products & developments.
FIL also manufactures specialty polyester filament yarns, which have a high value addition as compared to the normal denier synthetic yarns. One of the specialty yarns, which FIL manufactures, is micro denier polyester filament yarns (MDPFY) and its demand is growing at a very rapid pace because of its inherent strengths. FIL also diversified their manufacturing of semi-dull to dope dyed yarn with a view of its wide use and higher contribution. More than 70 shades are in their range of production. These specialty yarns are used for high value-added fabrics like artificial silk, which are used for manufacturing high-quality sarees, shirting’s and other textile applications.
FIL’s polyester filament yarn project is located close to the major textile centers of the country, i.e., Surat and Mumbai. In 1998, FIL started production of polypropylene (PP) multi-filament dope dyed yarn, which is widely used in all types of socks, hosiery, panty hoses and seamless garments. PP is the best substitute for nylon/polyamide because of its superior characteristics.
At Filatex, we produce textile grade PET chips in semi-dull and bright luster. PET chips are used in textile industry and is known as fibre grade PET chips, filament grade PET chips or textile grade PET chips. Textile grade PET chips are used for making polyester filament yarn like POY and FDY used widely in the textile industry.How do you look at the potential of the Indian market for the segment your company is in?
We are into polyester filament yarn and the filament yarn market has been dominated by China for the last 15 years. However, the dominance is slowly declining now. The reason for this is that the labour cost in China has gone up and also availability of labour force of China is declining. I assume, they will not be able to put too many people in textile and yarn industry. This is because they are leading in each and every sector and textile is the sector where the labour is least paid. Their exports are falling too. And the demand, which is there in the Global market, [I think] India has the potential to meet those demands. There will be a lot of growth potential in India. And pricing wise, China has started pricing their products higher which will increase margin in India also.
The global trend is shifting towards man-made fibres (MMF). What steps do you think India should take to stay a globally significant player in the textile market five years from now?
Yes. I completely agree. There is a definite shift that I can see in the last 15 years. Natural fibres got no way to grow because it requires a lot of land and water, which is not easily available in India. The cost to polyester is 1:2 compared to natural fibres. If polyester yarn will cost Rs 100, then natural yarn will cost around Rs 200. And also cost manufacturing fabric out of natural fibres is more than that of polyester, making the final product even more costly.
Our present focus is on polyester segment. Polyester has established its supremacy over natural and other MMF. In our assessment, the shift from cotton to polyester is gaining rapid momentum and present ratio of 60 per cent of cotton and 40 per cent polyester in textiles in India will change, like it has happened globally wherein polyester share in textiles as a fibre is around 60 per cent.Currently the government has imposed 18 per cent GST on synthetic fibres. Do you view this as a hindrance to the growth of man-made fibre industry? How do you propose to circumvent this disadvantage?
Let me correct, it is only 12 per cent GST on yarn. A few a month’s back, the fabric which has 5 per cent GST where manufacturers were not able to get the refund because of duty structure. But now there is a government notification that refund has been allowed. Right now there is not much discrimination. Of course, the money gets locked up for some time. Even if they pay 12 per cent on yarn, whatever extra is fabric manufacturers are able to get it back. It is not a cost anymore to them.
The company plans to debottleneck its polymer capacity from 900 MT/day to 1050 MT/day at an estimated cost of around Rs 28 crore. Please share more information on this.Currently, we have two polymerisation streams. The first reactor is common for both. By providing separate reactor for both the plants will help us enhance our production capacity. In case of shutdowns also, one would be running and one would be closed. Initially when we did this, we did not see this opportunity. Now that we have made it separate, it will increase our overall capacity. These changes should be operational by this financial year. And then we would be adding more POY and texturising. By the end of this calendar year everything will be operational. We are adding around 170 tonnes per day of POY and 200 tonnes of DTY.What role is Filatex envisaged to play as textile major in ensuring the growth of the synthetic textile industry in India?
We are providing polyester filament yarn to many fabric manufacturers. We now are also planning to convert yarns to fabrics ourselves. However we are looking to make fabrics that at present are not being made in India. These are high-end fabrics, which are being imported. We are searching for suitable partners for this venture.
Any expansion plans?
We have plans to put up our own captive power plant in Dahej as our energy requirement has become substantial. The difference in cost of self generation verses grid power supply is more than Rs 2 per unit thus making it economically viable to put our own power plant. Also, we plan to go into fabrics. Whether it will come in Dahej or not, is not decided yet.