Technical Textiles 2009

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Bernadette McDowell
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1 Technical Textiles 2009 State of the Industry William C. (Bill) Smith Industrial Textile Associates Greer, SC 29650, USA 1

2 What are technical/industrial textiles? A casual definition: "if we don t wear it as clothing (apparel), if we don t use it to decorate our homes (home furnishings), then it is industrial." While that may be a bit imprecise, and there is much overlap, it is functional enough to show perspective. And it is not too far removed from the "actual" definition -- as best we have been able to define it. 2

3 Textile Institute (Manchester, UK) says: Industrial Textiles are: "1) Textile materials and products intended for end uses other than clothing, household furnishing, and floor covering, where the fabric or fibrous component is selected principally, but not exclusively, for its performance and properties as opposed to aesthetic or decorative characteristics, and 2) A category of technical textiles used either as part of an industrial process or incorporated into final products." 3

4 Textile Institute (Manchester, UK) also says: Technical Textiles are: "Technical materials and products manufactured primarily for their technical performance and functional properties rather than their aesthetic or decorative characteristics, a nonexhaustive list of end uses include: aerospace, industrial, marine, medical, military, safety, transport textiles, and geotextiles." 4

5 Textile Institute (Manchester, UK) also says: Technical Textiles are: "Technical materials and products manufactured primarily for their technical performance and functional properties rather than their aesthetic or decorative characteristics, a non-exhaustive list of end uses include: aerospace, industrial, marine, medical, military, safety, transport textiles, and geotextiles. Sounds a lot like the definition of industrial textiles. A lot like the casual definition as well. Confusing? The industry is difficult to define as there are a lot of overlapping areas and collected data does not always agree as to what is counted where. 5

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7 Categories of Technical Textiles 1. Agrotech - Fabrics used in agricultural, farming, landscaping applications 2. Buildtech - Materials used in construction, civil engineering, temporary buildings, etc. 3. Clothtech -- Technical components of clothing, shoes, etc. 4. Geotech -- Geotextiles and geosynthetics -- materials for soil control, road reinforcement, landfill liners, etc. 5. Hometech -- Technical components of home furnishings 6. Indutech -- "Industrial" items not categorized elsewhere: filtration, mechanical rubber goods, sound absorption, etc. 7

8 7. Medtech Textiles for medical, hygiene, rescue use 8. Mobiltech - Automobile, truck, trains, buses, aerospace 9. Oekotech - Environmental fabrics; can be from many other segments, such as filtration, erosion fencing, and landfill lining. 10. Packtech -- Materials for packaging (i.e. lumber wrap), protective covering systems, sacks, bulk storage bags 11. Protech -- Protection of persons or property -- firemen's, chemical hazmat garments, clean room garments. 12. Sportech -- Sports and leisure active wear, outdoors and sports equipment, sports shoes. 8

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11 It depends on what you count not every study agrees. Pounds of fiber? Square yards of fabric? Dollars production, retail? 11

12 Approximately 25% of all fiber consumed in US for TT About 24 million tons of fiber worldwide Roughly $120 billion worldwide About $31 billion sales in US CAGR 3.8% 12

13 So Is Dilbert Right? Numbers are great to have and necessary to put things into perspective. It depends on what/how you count! 13

14 Market shares, by segment (% total TT fiber usage) Shown to provide perspective Source: David Rigby Associates, Manchester, UK; World Market Forecasts to

15 The state of the industry? It's down by some estimates 20-40%, depending on what industry you consider and what segment. The TT industry reaches into every facet of our economy, and follows it s up and down. So, what is happening? 15

16 Technical Textile 2009 State of the Industry A giant lack of confidence! People are scared, so they put off buying cars, houses, big ticket appliances, eating out, taking trips, even getting their hair cut, and it impacts the TT industry! 16

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18 Technical textiles get into many areas of products of our every day life. Most we never see or know. Using Automotive as an illustration, one can see the myriad of places where TT are used. While this is one example, one industry, similar things could be developed for most any of the markets in our previous pie chart. 18

19 The NA automotive industry represents the largest market for technical textiles, in dollars and by some estimates, the market accounts for about 23% of all technical textiles worldwide. 19

20 The NA automotive industry represents the largest market for technical textiles, in dollars and by some estimates, the market accounts for about 23% of all technical textiles worldwide. Global consumption of technical textile and nonwovens in mobiltech textiles used in transportation - is/was forecast to reach 3.34 million tons by BUT now it will obviously take a while longer! 20

Automotive Textile Applications & Content Sun Visor Facing and padding Headliner Scrim Backing Seatbelts Headliner Facing Sunroof Facing Seat Back Upholstery Package Tray Facings Rear Shelf

21 Automotive Textile Applications & Content Sun Visor Facing and padding Headliner Scrim Backing Seatbelts Headliner Facing Sunroof Facing Seat Back Upholstery Package Tray Facings Rear Shelf Insulation Door Insulation Trunk Liner Eco-friendly dash composites Air Intake Filter Battery Separators Muffler Wraps Oil and transmission Filters Belts and Hoses Gas tank filters Sound Proofing Floor Mats Wheel House Insulation Electronic and structural Composites Tire Reinforcement Cabin Air Filters Airbags Seat Bolster Upholstery Dash Insulation Carpets Carpet Backing Door Upholstery Seating Adapted from Freundenberg Vitek: Technical Textile 2009 State of the Industry

Automotive Textile Application Categories Facing Seat Back/Bolster Seating Headliner Carpet Trunk Door panel Package Tray Cargo facing Load Floor cover Pillar cover Structural Carpeting Carpet

22 Automotive Textile Application Categories Facing Seat Back/Bolster Seating Headliner Carpet Trunk Door panel Package Tray Cargo facing Load Floor cover Pillar cover Structural Carpeting Carpet backing Headliner Substrate Door panel Air bag Wheel House Trunk Trim Tires Seatbelts Composites (structural and electronic) Belts/Hoses Filter Engine Cabin Fuel Exhaust Transmission Oil Acoustic/Thermal Door panel Trunk Dash Insulator Seat Anti-Squeak Package Tray Floor Insulation Adapted from Freundenberg Vitek:2008

23 Each vehicle (cars and light trucks) uses, on the combined average, 33 square yards of textile materials in interior areas (including trunk), and approximately 21 kg of fibrous material. 23

24 Automotive textile according to current usage (average numbers) Application Weight(kg) Carpets, interiors 4.5 Upholstery 3.5 Belts, hoses 1.6 Tire cord 1.5 Seat belts 1.9 Airbags 1.2 Composites 4.5 Others 2.2 Total 20.9 kg Article: Upholstery in Automobiles; D. Gopalakrishnan, Arpita Nayak; 5/17/08 24

25 Technical Textiles2009 State of the Industry 16,000,000 cars = 528 million sq yds And that does not count many unseen working textiles hoses, tires, etc. 10,000,000 cars = 330 million sq yards to be used = Loss of 198 million square yards of fabric in 2009 if current economic situation continues 25

26 The United States is a country that depends on the motor vehicle for transportation, and many of those vehicles will be made in the US. The automotive industry will eventually continue to provide opportunities for economic development and jobs, and now is the time to plan and prepare for that bright future Until 1984 the automotive industry s presence in the south was minimal since then 32 plants and 42,500 jobs have resulted Center for Automotive Research, 3/27/09 26

27 Detroit is Facing a Scary New Normalcy Wall Street Journal January 12,

28 Detroit is Facing a Scary New Normalcy 2013 before back to normal 16 Mil car year Wall Street Journal January 12,

29 Millions Millions Technical Textiles 2009 State of the Industry Global Light Vehicle Production by Region Middle East/Africa C/E Europe Southeast Asia South America Greater China Growth Rate 8.8% Growth Rate 0.9% 10 0 Japan/Korea W. Europe North Am erica CSM Worldwide The Global Outlook for Automakers

30 A Wall Street Journal article in early 2009 stated that at the present rate of growth, the Chinese auto industry, with some 80 producers, would soon reach over 10 million units produced per year as well relegating the US to second place. In July 2009, this was realized with China surpassing the US in sales for 5 of 6 months with China up and the US car sales down. China has 25 cars per 1,000 people -- with a population of almost 1.4 billion, that s still a lot of cars (35 million) and potential! 30

Opportunities for Growth Cars per 1000 population 815 600 220 25 25 600 125 Little Growth

31 Opportunities for Growth Cars per 1000 population Little Growth Some to Moderate Growth Opportunities Great Potential 31 Data: Fredonia Group 2006 Figures

32 Housing is a major technical textiles application 32

33 Investment bank FMI forecasted nonresidential construction would plummet in 2008 and begin at least three years of contraction. The bottom, in terms of both dollar volume and percent decline, will not be until Residential construction is not expected to recover until Amidst all the economic doom and gloom, there are a few bright spots: Inflation has remained under control so far. Prices are down for most materials. The stimulus bill will help to mitigate some loss. There is still a large amount of construction being put in place. 33

34 Is everything down? Not quite - - A new report by the trade group IFAI shows Military fabrics to be up10% in 2009 Protective clothing will be up 5% Coated fabrics to be up 3% Geosynthetics up 5% 34 The report projects downturns of 4-5% in awnings, truck covers, and marine fabrics, while lightweight structures will be down 2%. Source: Industrial Fabric Association International 2009

35 The report says that with the exception of the military, many of these markets are heavily impacted by imports, not just from Asia, but a growing number of other low-wage areas, including India and Eastern bloc countries. Most is in finished products, not fabric (That. Obviously, affects SPESA companies) 35

36 The military has always been a major force in developing new technology and applying it and will continue to be. Example: Protective Clothing 36

37 Technical Textiles2009 State of the Industry The military has always been a major force in developing new technology and applying it. It s protective clothing developments have been instrumental in adopting new high performance fibers, and the fabrics are now being utilized by the civilian fire service and police, emergency service providers, and homeland security. 37

38 Technical Textiles2009 State of the Industry Military Fire Service Gelevenor Textiles Civilian Protective Clothing Offreay 38

39 The military has always been a major force in developing new technology and applying it. It s protective clothing developments have been instrumental in adopting new high performance fibers, and the fabrics are now being utilized by the civilian fire service and police, emergency service providers, and homeland security. As the situation winds down in Iraq and new emphasis on Afghanistan, and the overall concern to reduce the defense budget, it is difficult to determine the continued needs of the military. The Berry amendment (buy American) is a big help in US companies supplying the military and now Homeland Security. 39

40 Carbon Composites Ever expanding applications 40 Siource: Zoltek

41 Carbon composites in aerospace 41 Source: Paul Pendorf, AMTII for TTNAS 2009

42 Medical a growing dynamic in technical textiles 42

43 What to do? 43

44 The secret to prospering in the industry is to find the areas of opportunity and potential (and they are there), up and down the chain - and outward - line extension, and exploit them. Leading companies are doing this. 44

45 The secret to prospering in the industry is to find the areas of opportunity and potential (and they are there), up and down the chain - and outward - line extension, and exploit them. Companies must build on what they do best: use innovative and creative ideas and techniques, develop new applications, appropriately use new technology, add value, differentiate themselves from the competition 45

46 Technology? Nanotechnology Carbon nanotubes New variants of older fibers New fibers - electrospinning Smart/Intelligent materials Electronic integration Green applications Developing new technology is one thing how you apply and use it is the key. 46

47 Behold the inflatable car! XP Industries 47

48 XP Industries 48

49 Skeptical? 49 Think Zodiac boats! Think Outside the Box! XP Industries

50 Technical Textile 2009 State of the Industry Whether things good or bad may depend on where you are on the chain Fibers spinners knitters finishers chemicals Fabrics coaters, laminators weavers nonwovens Fabricator industrial producer, end products User Many/all areas interact consumer 50

51 Whether things good or bad may depend on where you are on the chain Fibers spinners knitters finishers Imports chemicals Fabrics coaters, laminators weavers nonwovens Fabricator industrial producer, end products User Many/all areas interact Domestic consumer 51

52 An important point: In virtually every sector, there are areas doing well, even if the segment as a whole is down. Example: Within the composites section, while fiberglass composites are down, certain segments of carbon reinforced composites are doing well. 52

53 Some Recent Headlines Technical Textiles 2009 State of the Industry Most economists see recession end in '09 AP 5/27/09 US Housing Starts Surge, Inflation Slower - 3/17/09 (April housing starts decline dramatically sales of previously owned home rose 2.9 percent in April -- it s a roller coaster ride) Worst Might be Over 3/26/09 Consumer Spending Increases for Second Straight Month 3/27/09 US consumer mood lifts Reuters - 5/26/09 Biggest 1 month jump in consumer confidence since April 2003 (US) economic recovery will be a long, slow slog, with a key manufacturing indicator (factory activity in the Mid-Atlantic region) showing only marginally less weakness and an outlook for rising unemployment even when growth resumes. Reuters 5/21/09 53

54 Conclusion: I have optimism for a Great Future, How about you? 54

55 The state of the industry? It's down yes, but it is amazingly resilient. The country needs/uses technical textiles in so many areas. As the economy improves, we'll emerge from this down time to be stronger than ever! We have before and we will do it again. 55

56 We control our own destiny! Change culture from reactive to proactive; textiles still have the ability to provide an environment that attracts the best people Your products are a commodity ONLY if you treat them so; low margins are only for those who accept them a a Innovation is not dead in the textile business; it must be driven by customer needs Look upstream and downstream for opportunity Dream, and excite your business like never before TTSNA a a a Rick Black, Performance Fibers, April 21, 2009 TTNAS

57 For further information about this presentation, contact: Bill Smith, ITA

An introduction in Technical Textiles

An introduction in Technical Textiles Sächsisches Textilforschungsinstitut e.v. (STFI) an der Technischen Universität Chemnitz Saxon Textile Research Institute at Chemnitz University of Technology Member of Textranet Annaberger Straße 240