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Quality demand for future

A recent study conducted recently by LEK Consulting GmbH on the global market for testing and monitoring equipment has observed that there will be significant increase in demand for textile testing and monitoring (T&M) equipment in most of the developing countries in the post-MFA regime following phasing out of quota as also growing competition in export markets. According to the German firm, spinning mills in developing countries like India, China and Pakistan will expect a growth in demand for textiles and T&M equipment resulting from an increase in exports. The study has projected a growth of 3-6 per cent in T&M equipment demand in the changed trade order. It also says that there will be significant rise in the volume of high quality yarn from developing countries to countries like the US and Europe. There will be intense competition following growing demand for quality textiles at lower prices. The study has observed close correlation between the purchasing cycles for textile machinery and online monitoring equipment. However, no such correlation has been found for lab equipment. Most importantly, the second hand market appears to be little significant in case of T&M equipment. All these observations are quite critical for the industry which is gradually moving into a totally different regime of operation. One thing is very much clear that quality is likely to play a very crucial role in future. We have already witnessed that there has been a gradual move from the commodity-based production base to high-value speciality production. This move is towards reaching a critical mass which has a judicial mix of commodity as well as speciality products. The study has also observed that Asia has the largest installed base for spinning machinery and also shows significant replacement need due to the high average age of machinery in the region. Asia excluding China has the largest spinning capacity at around 78 million spindles followed by China, South America, Eastern Europe, North America and Africa. This observation assumes significance at a time when the domestic as well as the global textile machinery sector is under tremendous pressure due to weak demand. Replacement demand is expected to generate huge demand for first hand machinery.

As per the study, exports of apparel from Asia and South America to Europe and North America have increased significantly in recent years. It has also been observed that global textile industry is currently at the bottom of the cycle. It is known that the textile industry is highly cyclical with average cycle length of around 3-4 years and at present the industry is at the bottom of a cycle. This particular finding should go a long way in boosting the industry sentiment which has been at a low ebb for quite some time now. The industry should realise now that worst is over and from here the situation will only look up. It is high time that the industry comes out of its general inertia and start looking forward to the future demand.