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By Max W. Sung

DyStar maintains its independence and standards: The past two decades had seen a shift of the textile dyestuff production from Western Europe and the United States to Asia, a trend necessitated by the shift of textile manufacturing to Asia in general. The giants of textile dye innovation, Bayer and Hoechst in Germany, merged their textile dye operations to form DyStar in 1995, to be joined by BASF's in 2000. The mergers were born of necessity in the face of economic realities, and were anticipated to reduce costs and employee numbers, close down production sites in Europe while expanding production sites in Asia close to the textile manufacturing hubs. The Yorkshire Group, a major textile dye producer, went into receivership of its UK plant in 2004, and sold its US operations to DyStar. The Huntsman Corporation moved its headquarters from Switzerland to Singapore last year as part of its restructuring to serve selected global market segments with growth potential. It was therefore not surprising that DyStar filed for insolvency for its German operations last year. In December 2009, at the eleventh hour, an agreement was reached for Kiri Dyes & Chemicals Ltd (KDCL, Ahmedabad, India) to take over the operations of the DyStar Group and its German sites in Frankfurt/Main, Leverkusen, Ludwigshafen and Brunsbuettel, together with 36 international subsidiaries. The acquisition was executed through KDCL's SPV, the Kiri Holding Singapore Pvt Ltd. The Zhejiang Longsheng Group, with textile dyestuff production facilities headquarters in Shangyu, China, and with whom KDCL had a joint venture in two production facilities near Ahmedabad in India, was anticipated to own 18.75% of DyStar post-acquisition, adding to its 7.46% share of KDCL and 60% of the Kiri-Longsheng joint venture.

The question is, will the DyStar Group post-acquisition be subsumed under KDCL, or will it be maintained as an independently operating company? A press release from DyStar (February 4, 2010) had quoted KDCL's managing director Manish Kiri as saying that "DyStar will continue to operate as an independent company in the market." Two weeks later, Manish Kiri announced his senior management team for the DyStar Group. He himself will take on the position of chairman.

Steve Barron, previously vice president responsible for strategic marketing at DyStar, will become CEO; Bart VanKuijk, previously sales area manager for South Asia, was appointed chief marketing officer; Viktor Leendertz will continue his responsibilities as CFO in the new DyStar Group, while Harry Dobrowolski will take on the newly formed position of chief operations officer. Steve Barron, the new CEO, is a veteran of the dyestuff business having entered it in 1982 when he joined ICI Dyes Division. He has since joined BASF in 1996 and went on to DyStar in 2000 with the BASF merger. He was previously head of DyStar's "synthetics & wool" business, then vice president for marketing until appointed CEO. I had the opportunity to talk with Mr Barron about the changes at DyStar. The interview was conducted on April 28, 2010.

Max W. Sung: Mr Barron, congratulations on your appointment as CEO of DyStar. Can you tell us how the insolvency filing by DyStar of the German operations was resolved?

Steve Barron: Well, we were very pleased that a strategic investor has acquired the company after long negotiations and that now the new company is getting back on track. I am afraid I can't release any details of the purchase arrangements, I'm sure you would understand.

Sung: You have now a new executive management team at DyStar. Could you comment on the members of this team and their responsibilities?

Barron: The executive team of the wider senior management group encompasses not only the C level, but also the heads of technology and production and also what we call sales areas managers. These are people who are responsible for groups of countries around the world. So it is a very international group of people covering the whole world.

Sung: We have received your letter from March 8, and you mentioned that DyStar will be transitioning the production of many products to Asia. Can you comment on how this is different from the previous production patterns at DyStar and how it would change in the next one to two years?

Barron: I think it is well known that we will be stopping manufacture in two of our sites in Germany. And we will be transitioning more production into Asia, looking to work closer to our main customer base and also for more cost effective production options.

Sung: Which two production facilities are you closing?

Barron: This is the Leverkusen site and the site in Brunsbuettel as well. The indigo manufacturing site in Ludwigshafen will remain unaffected.

Sung: So, in terms of transitioning your products to Asia, in which country do you think most of your products will be manufactured?

Barron: Well, there is a variety of countries that is involved in that. We are looking into transitioning products into India, but also to Indonesia, Japan and China. As you are probably aware, we have manufacturing sites already in Indonesia, China, and Japan. We are also looking to move some of our production into Kiri sites in Ahmedabad, India.

Sung: You also have facilities in India which are part of the international group of production plants from DyStar. Will these production plants be competing with the facilities from Kiri or will production be relocating to the Kiri facilities in Ahmedabad?

Barron: The site we have in Ankleshwar really is complementary to what is going on at Kiri sites, so we do not plan to close our site in Ankleshwar.

Sung: And, will the production plants in other countries like China, Indonesia, South Africa, be producing at full capacity as in the past, or will there be any change in production?

Barron: No, we are continuing with our manufacturing sites in all those countries. You had mentioned specifically South Africa. The South Africa site makes textile and leather chemicals, not dyestuffs, so is only involved in non-colour chemicals.

Sung: There has been talk of dye production being more favorable in India than in other countries because of their export taxes, or lack thereof, compared with other countries. Do you agree with that?

Barron: I think India, regardless of the export tax VAT issue as with China, would anyway be a favourable site to make dyestuffs.

Sung: One question that I would like to ask is the involvement of the Longsheng Group. We understand that Kiri and Longsheng has a joint venture of production in India, and Longsheng has their own facilities in China. It seems that Longsheng had involvement in the transfer of DyStsar shares to Kiri.

Barron: Longsheng is a minority shareholder in Kiri Singapore Holding which is the acquisition company. And yes, Longsheng has a joint venture with Kiri in India as well.

Sung: Will the Longsheng group be participating in the executive team or in the management of DyStar?

Barron: DyStar is run as an independent company, independent from our shareholders. So DyStar really runs independently.

Sung: So, DyStar will be maintaining its own management independent from the shareholders?

Barron: That is absolutely correct, yes.

Sung: What management structure do you have that permits this independence? Is this through the senior management or the executive team?

Barron: We have obviously the four of us, that is me as the chief executive officer, my chief financial officer, my chief operating officer and also our chief marketing officer. And we work together very closely. Just a practical point, the wider executive management team operating worldwide can't meet frequently, but we have an effective network and regular conference calls.

Sung: You also mentioned in your letter about backwards integration. Would you like to comment on how you think this would affect the cost of dyestuff production?

Barron: I think it is more a question of being able to minimise some of the impact of speculative pricing in some of the reactive dye intermediates in recent years.

Sung: DyStar has currently 21% of the market share of dyestuffs production globally, and you had sales of 800 million euros in 2008. Do you anticipate sales increasing past one billion in the next one to two years?

Barron: Not in the next one to two years, but one billion euro sales or revenue line is our target.

Sung: Can you comment further on DyStar plans and the current situation at DyStar?

Barron: I just like to reemphasise that DyStar is running as an independent company, DyStar is not Kiri, not Longsheng. One of the things which is very important to us is maintaining the DyStar brand in the market. That brand image encompasses a number of things including: quality, both in terms in high quality and consistency; ecology; innovation; application expertise and integrity in our people and products. We have a very wide range of people throughout the world who really are experts in the wet processing area and are all around the world to serve our customers. That is one thing I would like to mention. The other thing that I would mention, which we did not touch on at all, is how we see ourselves not just as colour and effect chemicals suppliers but we also see us as part of the retail world as well. We know we can help retailers and mills take time out of the supply chain, by helping with colour communication, thereby minimising the process of resubmitting lab dips and getting colour approvals. Additionally through our econfidence program we are working closely with retailers to understand and help retailers meet their ecology needs.

Sung: It has been said that one of the ways of reducing the cost or dyestuff production is in areas where there are no such strict environmental laws. Do you think that production in places that do not have strict regulations regarding wastewater effluent will have a cost reduction advantage?

Barron: It is not something that DyStar would entertain, as we have global standards for our production in all respects, regarding waste water, etc.

Sung: Thank you. This has been most informative.

 

 

Special Reports

  • Debate on country of origin label to hot up in EU again: What purpose can geographic origin labelling for clothing, footwear or any other product serve except planting prejudices in consumers' mind? This is the question the European Commission that has been asked by the EU Parliament to make proposals on product labelling, needs to consider thoroughly.

    When Sweden and Finland joined the EU in 1995 they had to abolish laws that required clothing to show their geographic origin on their label because the EU prohibited laws that were prejudicial. Sweden had introduced geographic permanent origin labelling just a short time before its entry into the EU. It came as the answer to clothing manufacturers' request for alternative safeguard as a last protectionist ploy when Sweden implemented in 1991 its 1988 decision to give up the quota system. However, it proved to be really meaningless; consumers did not change their way of choosing clothes at all. Instead, as could be expected at a time of quota deregulation, those companies that competed with price and consequently imported a lot from China and other low cost production countries won market shares.

    Nonetheless, the European Parliament decided in mid-May with 528 yes votes against only 18 no votes and 108 abstentions to ask the EU Commission for a proposal "to help consumers make well informed choices" when buying clothes and possibly some other consumer goods like shoes and travel bags. This question was on the table 4-5 years ago when the EU Commission came up with a similar proposal, but it was flatly turned down then by a large majority of member states. The proposal that the EU Parliament now wants to tackle emanates in fact from industries in the EU that cannot face competition, now that quotas on textiles, clothing and shoes no longer exist.

    It is not true that EU parliamentarians want to help consumers make well-educated choices. For example, products made in the EU are supposed to be exempted from geographic origin marking; goods made in Switzerland, Norway and Island (EES-countries) as well as Turkey are also exempted from geographic origin marking; and finally only some consumer goods are supposed to be labelled. If it really was for the benefit of consumers all consumer products should of course be labelled. This is discrimination of the sort that WTO does not like at all, and, of course, does not serve the purpose of enlightening the consumer.

    By Åke Weyler, Stockholm

  • New strategies in coping with trade protectionism: A recent seminar in Hong Kong discussed how Hong Kong enterprises can stay clear of any trade restriction that might stem from disputes between China and its trading partners. Addressing the seminar the associate dean of the School of Law at City University of Hong Kong, Prof Gu Min-kang, said that Hong Kong enterprises could choose to invest in places other than mainland China in order to avoid falling victim to the anti-dumping duties and other regulatory measures that China's trading partners like the United States might resort to. Products that Hong Kong enterprises manufacture in their factories in mainland China, Prof Gu pointed out, are treated as Chinese products, hence they are subject to anti-dumping duties and restrictions applicable to products made by mainland enterprises. Hong Kong enterprises that have established factories on mainland China, or those planning to do so, could, therefore, consider investing in other countries that are not subject to the restraints of the importing countries, and take advantage of the rules of origin and their low cost of labour and other inputs, while avoing to risk any of the trade restriction that goods made in China might face. For example, investing in places like Vietnam, Prof Gu said, would help bring down production cost on the one hand, and on the other supply the products also to the Chinese market through the China-Asean FTA.

    By C.K. Chow

  • Global fibre output exceeded 70 million MT in 2009: The tenth edition of The Fiber Year which the Oerlikon Textile published this month says that global consumption of fibre has reached 70.5 million metric tons last year or 10.4 kg per head of the world population. Global fibre consumption went up by 4.2% last year-manmade fibre consumption up 4% to 44.1 million metric tons and natural fibres up 4.5% to 26.4 million metric tons.

  • World cotton stocks to remain tight in 2010-11: Cotton plantings in the northern hemisphere, which accounts for 90% of global production, are well under way. World cotton area, according to the International Cotton Advisory Committee, is expected to increase in 2010-11 for the first time in four seasons, to 32.9 million hectares. This expansion of 9% in cotton area is the direct result of a significant increase in cotton prices during 2009-10 and the coinciding declining prices of major competing crops (mainly grains and oilseeds). Cotton area will expand in most major producing countries, with the United States and India accounting for over half of the projected world increase. With such expansion in planting, global production of cotton in 2010-11 season is forecast to rise by 13% to 24.9 million tons.

ITMA ASIA + CITME Preview 3

  • A 5-day extravaganza of textile technology begins: Ten textile machinery manufacturers of Spain will team up under the umbrella of the Spanish Textile Machinery Manufacturers Association (AMEC-AMTEX) to display their products at the gala of textile production technology that ITMA ASIA + CITME will present in Shanghai this month. Their exhibits will cover a wide range from spinning, knitting, weaving, nonwoven and technical textiles, dyeing and finishing, and software. Spanish manufacturers have experienced a difficult period last year like others in other parts of Europe. However, they are now looking into the future with great optimism, expecting recovering in the second half of this year.

    Spain's textile and clothing machinery manufacturing sector comprises 84 companies. The defining character of the strategy the sector has chosen is to focus on high value added equipment. Thus, they give great importance to research and development that will go well in their niche market. And, last year, according to AMEC-AMTEX, the sector had a total turnover of 238 million euros, 80% of which, totalling 190 million euros, accruing from exports. Fifteen per cent of the export earnings last year came from Asia with Europe as the largest market accounting for 39% followed by Latin America with 21%. Behind Asia fell Middle East (10%), USA and Canada (7%), Maghreb countries (7%), and Africa (2%). The top ten individual country markets were: Russia, Portugal, the United States, Brazil, Iran, Turkey, Mexico, Mauritius, France and India By

    C.K. Chow and Alpana Shrestha

Exhibitions and Conferences

  • Meet only Original Designs: The Meet only Original Designs (MoOD) fair that was launched last year as the transformation of the long-running Decosit Brussels, will take place again at the Brussels Expo in Belgium from September 14 to 16 this year. This second edition, says its organiser, Textirama vzw, will focus on three product ranges: upholstery, window coverings and wall coverings. Textirama expects wholesalers, purchasers, department store executives, furniture manufacturers and interior designers from 85 countries to visit this event where some 250 exhibitors are expected to be present.

    The fair will be reduced to three days, from four days in the past, because many exhibitors think, according to the general manager of MoOD, Patrick Geysels, that the market no longer needs a longer show.

  • Texworld plans September show: Texworld, the biannual trade fair presenting everything from thread to fabrics and clothing, will take place again in Paris, at the Paris le Bourget exhibition centre on September 13-16, this year.

  • Textile machine fair in Qingdao: China's Qingdao International Textile Machinery Fair (QITMF) that marked its 10th anniversary last September will hold a three-day fair from September 15 to 17 this year at the International Convention Center in Qingdao, Shandong province.

  • Cashmere World in Beijing: A trade event called Cashmere World that will showcase the unique qualities that make cashmere stands out from other materials is to take place at the China National Convention Centre in Beijing on November 23-25 this year.

    This event will cover the entire supply chain of the cashmere industry, from raw material to manufacturing technology and standards, finished products and fashion. More significantly, it will be a meeting place for all concerned with the cashmere industry worldwide to share information and knowledge, foster collaboration and create an effective business platform for the cashmere industry.

  • Apparel and textile machinery show: The Asia Apparel and Textile Machinery Exhibition known as AAMA-TEX will hold its eighth edition at the Sands Expo and Convention Centre in Singapore from November 23 to 26 this year.

  • Sporting goods fair: ispo china, a leading sport equipment trade show for the Asian-Pacific region, will hold its next edition on February 23-25, 2011, at the China National Convention Center in Beijing

  • Textile machinery show in Mumbai: A four-day textile machinery exhibition and an Asian textile conference are to take place in Mumbai, India, from March 16 to 19, next year.

    The exhibition, texmac India, is in its second edition; its maiden event was in 2007 in the Indian capital, New Delhi, where some 200 exhibitors - many of whom from Germany, Italy, Great Britain, Turkey, Korea and China - presented a wide ranging display attracting 6,000 visitors

  • French and high-end: Made in France by Fatex (Haute-Façon), a trade fair for promoting high-end French ready-to-wear apparel, accessories and household linen, is being planned for early next year. At its latest edition held from March 31 to April 1 this year, leading brands like Balenciaga, Carven, Céline, Chanel, Chloé, Christian Louboutin, Elie Saab, Hermès, Jean-Paul Gaultier, Kenzo, Louis Vuitton, Olivier Lapidus, as well as others representing new couture, like Alexis Mabille, Eymeric François, Eric Tibusch and Lefranc-Ferrant presented their latest collections.

  • Apparel fabrics show and yarn expo: Intertextile Beijing Apparel Fabrics, China's international trade fair for apparel fabrics and accessories, is to be held at China International Exhibition Centre in Beijing next year, from March 30 to April 1.

  • Hong Kong Mode Lingerie: The next Hong Kong Mode Lingerie trade fair which is regarded as a leading sourcing platform for intimate apparel and beachwear has been scheduled for next March 30-31 at the Hong Kong Convention and Exhibition Centre.

  • Next IDEA in 2013: INDA, the Association of the Nonwoven Fabrics Industry that organises the international engineered fabrics conference and exposition called IDEA, has scheduled the next edition of IDEA for April 23-25, 2013. It will be held at the Miami Beach Convention Center in Miami Beach, Florida, USA.

Technical Features

  • Button securing on woven knitted fabrics: For years buttons had been traditionally hand sewn, a process that was slow and variable in attachment. Nowadays, in the readymade garment industry, hand sewing has been completely replaced by button sewing machines, which come in many different models and can produce a variety of functional designs.

    Experiments conducted for studying factors in securing buttons to fabrics show that the combination of heavy fabric with fine threads, medium size buttons medium size needles and medium number of stitches produced the highest button pull strength. There was no effect on pull strengths before and after washing.

    By U.J. Patil, C.D. Kane, S.N. Jawale and P. Sivakumar, all of DKTES's Textile and Engineering Institute ,Ichalkaranji , India

  • Thermo-physiological comfort of printed CoolMax fabrics: CoolMax is a new generation textile fibre developed to meet today's consumer needs through its unique combination of aesthetics, soft touch, comfort and performance. This study evaluates the influence on thermo-physiologic comfort of four printing paste types (synthetic, emulsion, semi-emulsion and basic) on Coolmax knitted materials. Longitudinal wicking, horizontal wetting, air permeability, heat loss as well as colour fastness were examined. Basic printing paste followed by semi-emulsion found to provide the optimum thermo-physiological comfort properties.

    By Bahira G. Gabr and Yasser M.E. Hassan, Apparel Design & Technology Department, Faculty of Applied Arts, Helwan University, Cairo, Egypt; and A. A. Salem, Textile Finishing, Dyeing Department & Printing, Faculty of Applied Arts, Helwan University, Cairo, Egypt.

Management

  • Fibre testing can help control spinning mill cost: Raw material, like cotton, accounts for the largest portion of the cost for producing yarn. Depending on the spinning system used and yarn counts/types spun, raw material cost can range from 40-80% of total cost. That being the reality, the rising price of cotton is a major concern for spinning mill owners and it makes testing and managing raw material quality and consistency ever more essential.
  • Cotton strategy for 21st century: The cotton industry in the United States has begun a nationwide compilation of cotton lifecycle inventory for an in-depth understanding of the fibre's lifecycle which is essential for the industry's continued growth in the 21st century. The data being gathered under an initiative "Vision 21" will serve as a foundation for global cotton lifecycle evaluation - ultimately providing a credible foundation for sustainable textile operations.

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