Market Challenges And Opportunities

Global Textile Chemicals Market Drivers:

Growing fabric and apparel industry

The fabric and apparel industry has been witnessing rapid expansion in recent years due to rising disposable incomes, changing fashion trends, and a growing population. This growth in the textiles sector has led to a significant increase in the demand for various textile chemicals that are used at different stages of textile processing and production.

Textile chemicals such as dyestuffs, finishing agents, surfactants, and softening agents play a vital role in determining the quality, feel, and appearance of fabrics. They are required right from the preprocessing of textile fibers and yarns to the final stages of manufacturing garments and home textiles. With the textile industry scaling to meet massive consumption needs, the use of textile chemicals has also multiplied exponentially.

According to the World Trade Organization, world textile and apparel exports surged by 24% in 2021 compared to pre-pandemic levels. The strong momentum has continued in 2022, with Asian countries especially maintaining their dominance in the global textile supply chain. Higher textile trade flows correspond to greater application of textile chemicals for products destined for both domestic and international markets.

Increasing demand for functional textiles

The growing demand for technical textiles with enhanced functionality is fueling the expansion of the global textile chemicals market. Functional textiles are fabrics that are engineered to perform specific non-aesthetic purposes apart from simply covering the body. They are designed to have special properties such as moisture wicking, UV protection, wrinkle resistance, etc.

The use of functional textiles has increased enormously in various industries like healthcare, sportswear, personal protective equipment, automotive, and home furnishings in the last few years. This trend is expected to accelerate further, driven by greater health and environmental consciousness among consumers. For example, the demand for medical textiles grew by 10% between 2020 and 2021, according to the World Health Organization data. They are extensively used in products like surgical gowns, masks, drapes, etc. to control infections in medical facilities. Similarly, apparel brands manufacturing technical athleisure and activewear have increased considerably given the boom in the sports and fitness industries.

Increasing per capita income

With rapidly increasing incomes in developing nations, consumer spending on clothing and textiles is rising significantly. This is fueling the global textile chemicals market. As per capita incomes have doubled or tripled over the last decade in major economies like India, Indonesia, and Brazil, consumers in these countries now have greater disposable funds to invest in better quality, longer lasting-clothing and household textiles. This rising consumer demand is prompting textile manufacturers to use superior textile chemicals that improve the performance, durability and appearance of their products. Chemicals providing attributes like wrinkle resistance, stain release, moisture wicking, and UV protection are becoming increasingly popular. Their usage allows manufacturers to produce fabrics that fulfill evolving consumer needs for convenience, comfort, and style even after multiple washes. Chemical firms are innovating new product formulations that comply with stringent regulations while delivering these enhanced functionalities.

Global Textile Chemicals Market Opportunities:

Development of bio-based and green chemicals

The development of bio-based and green chemicals presents a huge opportunity for growth in the textile chemicals industry in the coming years. With growing consumer awareness about sustainability and the environmental impact of conventional chemicals, there is a rising demand for eco-friendly and natural textile processing solutions. Biodegradable and bio-sourced chemicals extracted from plants offer an alternative to petroleum-derived synthetic options and allow textile manufacturers to produce ethically sourced fabrics. Their renewability and compatibility with natural fibers give them an advantage over regular chemical varieties.

Many major textile producers are now actively pursuing the use of bio-based chemicals in their manufacturing processes. For example, according to the India Brand Equity Foundation, between 2020 and 2022, over 100 denim manufacturers in India have partnered with biotech firms to introduce enzymatic stone washing techniques using bio-detergents, doing away with use of pumice stones and harmful chemicals. This shift helps reduce environmental pollution and allows brands to offer sustainably produced denim products. With growing regulation against toxic chemicals and increasing importance given to low carbon manufacturing under international agreements like the Paris Accord, the outlook for bio-based textile chemicals looks very promising over the long term.

Innovation in textile chemicals:

Innovation in textile chemicals could be a tremendous opportunity in the global textile chemicals market. Textile is a rapidly evolving industry with growing consumer demand for sustainable and eco-friendly products. Developing innovative chemicals that help textile manufacturers lower their environmental footprint will become critical for business success in the coming years.

Many leading companies are investing heavily in R&D to create textile chemicals from renewable resources like plants and biomaterials. For example, some firms are developing bio-based alternatives to harmful chlorine-based bleaching agents. They are extracting active agents from plants that can whiten fabrics more effectively with less environmental impact. Transitioning to bio-based chemicals made from agricultural waste would significantly reduce dependence on non-renewable fossil fuels and lower carbon emissions over the product lifecycle. It offers a win-win for both manufacturers and consumers.

Global Textile Chemicals Market Restraints:

Stringent environmental regulations

Stringent environmental regulations are significantly restraining the growth of the global textile chemicals market. Governments across the world are strengthening norms to reduce environmental pollution and promote sustainability. Various hazardous chemicals used in textile processing, such as azo dyes, formaldehydes, volatile organic compounds (VOCs), heavy metals, etc., are being strictly monitored and restricted. Manufacturers are facing challenges in using certain classes of chemicals that do not meet the prescribed standards for environmental safety. This is forcing them to invest heavily in upgrading production facilities with greener technologies and switching to safer alternative chemicals. The implementation of regulations like REACH in Europe has been particularly disruptive. Under REACH, the use of chemicals like aromatic amines, phthalates, and alkyl phenols has been either restricted or banned. Textile units need to get every chemical they use properly registered and replace substances of very high concern (SVHCs).

Counter Balance: To overcome the restraint, companies are focusing on developing products that comply with these regulations. The adoption of sustainable chemicals in textile manufacturing is seen as an opportunity in the face of these regulations.

Competition from alternatives

The global textile chemicals market is facing significant challenges from expanding alternative options that are restraining its growth potential. Competing fibers, such as synthetics and man-made cellulosic fibers that offer advantages over traditional textile materials are becoming increasingly popular. These alternative synthetic fibers, such as polyester, nylon, and acrylic, are easily available at lower costs and have superior performance characteristics compared to natural fibers like cotton. They provide advantages like wrinkle resistance, shape retention, crease recovery and easy care properties, which are lacking in natural fibers. This has increased their preference among manufacturers as well as consumers. According to data from The Fiber Year 2020, the use of synthetic fibers has outpaced natural fibers in the global fiber market in recent years. In 2019, the total production of synthetic fibers was over 110 million metric tons, growing at over 2% annually, while natural fiber production was only around 81 million metric tons. Polyester alone accounted for over 50% of the total fiber demand, replacing cotton as the world's most used clothing fiber. Its low cost of production, versatility, and easy-care properties have allowed polyester to penetrate all end-use applications from apparel to home furnishing. The increasing availability and adoption of synthetic and man-made hybrid fibers in apparel, home and industrial textiles has reduced the overall market for fiber-processing chemicals needed for natural materials like cotton.

Counterbalance: The adoption of sustainable chemicals in textile manufacturing is seen as an opportunity to counterbalance the competition from alternatives in the global textile chemicals market.