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Viscose industry's future
!!Lenzing, Sateri, Tangshan Sanyou, Birla

2019-05-22 18:18:36
Lenzing, Sateri, Tangshan Sanyou, Birla talk on the topic of Viscose industry's future 

1. The future of the viscose industry 
Mr. Qian: 
Mr. Qian succinctly summarizes that the future development of the viscose industry is focusing on the sustainability of raw materials, the upgrading of production processes, and energy saving and emission reduction - achieving the true environmental friendly viscose fiber. 
Mr. Liu: 
First of all, Mr. Liu introduced that the current production capacity of cellulose fiber of Sateri is around 1.40 million tons/year. The philosophy of Sateri is technological innovation, environmental protection, and Sateri has focused on the production sustainability, and continuously developing new products. 
In terms of partnership, Sateri has carried out vertical integration with downstream yarn, fabric, home textiles, etc. to timely understand the changes in downstream demand, and make more targeted technological innovation. 
In addition, Mr. Liu stresses that it is necessary to increase the concern about the changes in downstream demand. Nowadays, as the younger generation has become the main force of consumption, consuming habits and preferences will inevitably change. Sateli will pay more attention to the transformation of various household groups, and serve the customers better. 
Mr. Yu: Mr. Yu has participated in innovation and development of viscose fiber, and has participated in the debugging of both the 20kt/year plant and the 120kt/year plant. He knows the product and the production. 
The operation of viscose fiber has met a trough, but future of it is optimistic. Sanyou is a cross-industry enterprise, and it takes viscose as the major business and the next major focus. "The current environmental requirements require us to make sustainable changes for viscose. Our peers are also vocalizing and we are also communicating with our consumers." Mr. Yu says. 
Viscose fiber is a kind of high-quality cellulose fiber. The proportion of clothing is increasing. We can see viscose fiber everywhere, so we stay optimistic for the future of viscose fiber. But it does not mean that we can be over optimistic. At present, the turning point of the industry has come. We can not wait for the industry to transform from a valley to the future, but should make changes together, pay attention to environmental issues, solve sustainable development innovation together, and promote environmental protection together. 
Murugan: more than 30 years of experiences with footprints across Southeast Asia 
Birla deals with metal, finance and viscose. Viscose now sees negative growth. The growth of viscose industry was good after 2000, but then there was a turning point as China's participation altered the supply situation while demand did not increase much. For example, sustainability is the main factor in the business of the viscose industry. Viscosity has increased by more than 6%. There was a similar case in 2014 when the price dropped below 20000yuan/mt due to overcapacity. 
Sustainability is required by law, and also important in the future. As a group, it is more demanding than the industry. Their group uses block chain technology. A new modal plant to come a month later, as well as the lyocell plant in India, targets to sell most products to the Chinese market. In July, there will be a plant in China to promote their own brands, and the nano products will be promoted to the Chinese market as well. It hopes to manufacture more sustainable products in China. 

2. Question: 
Manager Yu: 
Q: The impact of the escalation of China-US trade war on the industry. 
A: According to the report of the chemical fiber industry, China's viscose production capacity accounts for 70% of the global total. The escalation of the trade war will break the balance of current world trade and re-adjust the current trade pattern. In addition, even if there is no China-US trade war, the viscose industry chain itself is undergoing a process of rebalancing. The China-US trade war only further aggravates the rebalancing of the viscose industry trade. At present, a large amount of production capacity is transferred to Southeast Asia, but the transfer of capacity also requires the support of viscose fiber raw materials. Therefore, the impact of the trade war is only temporary, and the viscose industry chain will have a better development prospect in the medium and long term.  
Manager Liu: 
Q: What will be the impact of escalating Sino-US trade war on enterprises and decisions of big companies? 
A: Cellulose industry is in the equilibrium phase in China, so the impact is positive from this perspective. Whether it is the trade war or the problem of rebalancing of the industrial chain itself, it is a positive issue in medium and long term. Because this is an inevitable adjustment in product cycle, the excellent new products replace the inferior eliminated products, which in a necessary pattern of sustainable development. 
For Sateri, the strategic planning target of expanding global cellulose capacity to 2,000kt by 2023 is clear. The planned capacity expansion in the previous years has been completed step by step, and I hope to continue to make efforts in the future, including our acquisition development in Malaysia and other places. More opportunities are seen, so the medium-to-long-term market is optimistic. Sateri is 100% confident to provide more products with high quality, environmental protection and sustainability in the future, because we have the strength! 
Manager Qian: 
Q: What is the most important thing for a brand? 
A: Sustainable development and innovation. Sustainable development is the most important, which is also one of the core strategies for the development of Lenzing. Manager Qian says that industries that pollute environment are lifeless. As for innovation, Lenzing invested 42 million euros in innovation research and development. Innovation can create differentiated products, which comes from the feedback of customer demand, developing and researching some products with orientation according to the understanding of companies for consumer mentality and market trend. 
At last, Manager Qian cites technology, fashion and green as the core and foundation of the brand. 
Q: At present, which part of viscose industry can be improved? 
A: The topic of energy conservation and emission reduction has changed from last year to this year. This year, the emphasis is not only the sustainablity of raw materials but also the upgrading and transformission of production process as well as the entire industrial chain for sustainable production. Raw materials are only the source, and the production process is the key to reduce production pollution emissions. Therefore, the production process should be transformated for environmental protection. 
Manager Liu: 
Q: how do you see the consumption rate in the future 5-10 years? 
A: in view of the global fiber consumption, just as mentioned in today's report, the growth of VSF is expected to be 1-2% in the future 2-3 years, which is with recognition. It is within consolidation period. Overall fiber growth rate is anticipated to be around 6-7% in the future 5-10 years, and the growth rate of VSF may be slightly higher than this level (Insiders will continue investing environmental protection products to replace nondegradable ones and cotton etc.). The growth of envronmental protection, sustainable and green fiber products is supposed to drive the high growth rate of fiber for textiles, which is a consolidation direction in medium-to-long run. 
Q: what about the proportion of VSF in the future 5 years? 
A: leaders of CCFA onced mentioned that they hope mainstream VSF suppliers can visit big cotton textile provinces to have technological communication. By this way, companies can enjoy higher foresightedness, make active plans and do better in sustainable development. In summary, the replacement of green and envirionmental protection fiber to cotton is a tendency, and the output of green and envirionmental protection fiber is anticipated to be higher than that of cotton. 
Manager Yu: 
Q: Tangshan Sanyou has done very well, and how will you improve next? 
A: The CV alliance has declared clearly to the industrial chain and interested party on what China VSF industry will do next in the morning. Companies work hard in silence, while the environmental protection regulation of China is very strict now, which is very prominent in recent 3 years. The emission standard of water and air and the discharge standard of eobat to VSF can be basically met, and the standard in China is all international! CV alliance is improving the 2025 standard, which will further improve water consumption and the emission standard of waste air. 
Q: What is the most valuable of differential products? 
Mr. Liu: it is the dope dyed fiber, according to current China textile situation. 
Mr. Qian: Refibra? technology has developed by Lenzing, and based on this, Lyocell is produced from the wastes caused by apparels. Lenzing has a mature technology in the production of Lyocell. ECOVERO? has great advantage in the circular economy. 
Q: What is the influence of the development of Lyocell on viscose? 
Mr. Liu: In the short and medium term, cellulose fiber and lyocell are complementary. To see its characteristics and applications, Lyocell is not a ubiquitous, nor a variety that is applicable everywhere. Cellulose fiber has already a solid foundation in the conventional application, and there is a great room for further improvement and innovation. The lyocell and the conventional cellulose fiber are competitive, but they are complementary, which can meet downstream demand. 

3. Question-and-answer session 
Q: Just mentioned before, in the circular economy, to recycle leftover of cloth to produce lyocell, is this limited to 100% viscose? What if it is other chemical fiber? How to deal with the leftover of cloth with color? 
A: The recycled fabric is cotton fabric, and If the fabric is with color, there are special techniques to process it into a pulp. 
Q: Will lyocell pose a threat to viscose fiber? 
Murugan from Birla: 
From the Indian point of view, the proportion of cotton and viscose fiber is different from that of China. The Indian market has its own particularities including the demand for color. The growth of lyocell in India is not as fast as in China. Globally, the annual growth rate of lyocell is about 14%, while that in India is only 3%, and India's population growth is also 1-2%, so the impact is not significant. 
At present, the production of lyocell fiber is around 2,500 tons, and more capacity will be put into production in the future. In general, Murugan believes that lyocell fiber is not a big competitor for viscose. 
Q: The future growth trend of Modal fiber in the next 5-10 years? 
Mr. Qian: Modal has a very special performance. Underwear with Modal is soft and comfortable. The annual demand has more than double-digit growth, DNA Modal has a lot of technical restrictions, although Lenzin Group has expanded production, the current capacity is still not very large. 
Murugan: The two challenges on the supply side of Modal fiber are capital investment and technical issues. Birla fiber has already overcome some technical issues. In July, Birla will build a plant in Indonesia to expand Modal fiber capacity. 
Mr. Yu: Modal fiber is especially suitable for the application in the field of underwear. In addition, some non-personal clothing has also been used in large quantities. Sanyou Group has added an industrial chain. At present, there are two chains producing Modal fiber. Therefore, the expected output will continue to grwo in the future.

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