Production Capacity And Demand Development Of Nonwovens In Southeast Asia

If measured by the annual GDP growth rate, the economies of the five major countries in Southeast Asia (Thailand, Malaysia, Vietnam, the Philippines and Indonesia) will all decline in 2020. The new coronavirus has had a devastating impact on key industries in these five countries, especially those heavily dependent on tourism. Like almost every country in the world, the new coronavirus has led to border closures, business closures and a sharp rise in unemployment. The government's response is to substantially increase economic stimulus and unemployment spending.

Although the economic outlook for these regions in 2021 is uncertain, the overall outlook is optimistic. GDP growth will depend on vaccine management, disease control, and export and internal blockade management. China's economic strength is expected to boost Asia's economic prospects and support the export of these five countries to China.

Table 1 shows preliminary estimates of GDP growth in 2020 for the five major countries in Southeast Asia. Only Vietnam achieved positive GDP growth of 2.6%. Indonesia, the region's largest economy, has recorded an annual growth rate of 5% since 2014, and then recorded a decline of - 2.4% in 2020.

In Malaysia, GDP fell by 5.2%, after a weaker performance in 2019 than in the previous period. In Thailand, GDP in 2020 is 6.4% lower than that in 2019. The Philippines has seen the largest decline in GDP, with GDP falling by 9% in 2020. In assessing GDP changes in small economies, it is important to recognize that GDP has a greater year-on-year change compared to larger economies. With the growth of national economic aggregate, the annual GDP growth measured by annual percentage change will weaken over time.

The impact of the new crown epidemic on the nonwovens industry in these five countries is far less than the impact on their overall economy. As the demand for protective products (protective clothing and masks) for domestic and export use is increasing rapidly, the production of nonwovens coil is promoted. As in other countries, consumer demand for disinfectant wipes and other wipes, as well as for sanitary products (diapers, etc.) is on the rise.

Driven by favorable demographic structure, economic conditions, growing market penetration and strong local and export demand, Southeast Asia is still a promising region for the nonwovens industry. Despite the uncertainty brought about by the outbreak, the impact of the recent economic slowdown in the region, as well as the relatively small impact on manufacturing investment and consumer spending, will be addressed quickly through the economic stimulus package.

In Southeast Asia and China (the market penetration rate is still low), the gradual increase of disposable and durable nonwovens market penetration is a positive factor for the good growth of nonwovens demand and exports in these major Asian markets. Over time, nonwovens producers in the five Southeast Asian countries are expected to benefit from strong demand from China, Japan and other countries within and outside the Asia Pacific region. The largest end market for nonwovens will be hygiene products, followed by durable geotextiles and other markets.

Several global and regional manufacturers of disposable hygiene products are already in Southeast Asia, including Kimberly Clark, Johnson & Johnson, Kao, Procter & Gamble and unicharm. The increase in the production capacity of health products in Southeast Asia is a sign of growing demand in the region and also evidence that the region is increasingly becoming a manufacturing base for exports to other Asian regions.

In 2020, the production capacity of Nonwovens in Southeast Asia mainly includes spunbonded / spun melt, staple fiber needle punched and / or thermal bonded, and polypropylene spunbonded needle punched technology. There are also some small-scale hot air production lines are also developing.

During 2015-2020, the production capacity of fine denier spunbonded and spun melt polypropylene nonwovens installed in five Southeast Asian countries / regions will increase by 6.6% annually, from 185000 tons in 2015 to 255000 tons in 2020. Of the 70000 tons of new production capacity during this period, including 15000 tons of CNC / FITESA in Thailand, 20000 tons in Asahi (Thailand) and Toray (Indonesia), and 15000 tons in fibertex (Malaysia).

CNC / FITESA launched a new reifenhauser 5 production line at the end of 2020 with an annual capacity of 33000 tons. Asahi will install a new 15000 ton production line in Thailand in the second half of 2021. In the same period, fibertex will launch the reifenhauser 5 production line in Malaysia with an annual capacity of 15000 tons. Both production lines will be put into operation in 2022. Through these investments, the annual production capacity will increase by 63000 tons (24.7%). These new capacity could lead to oversupply in the region.

In 2020, the annual production capacity of Southeast Asia fine denier and Zhongdan spunbonded / spunbonded melt polypropylene technology will be 264000 tons, accounting for about 7% of the global capacity of this technology category.

The production capacity of this technology is mainly concentrated in Thailand, with four manufacturers occupying 43% (114000 tons) of production capacity. In Malaysia, the total capacity of the two producers is 94000 tons, accounting for 36% of the region's capacity. In Indonesia, the capacity of the two producers is 52000 tons, accounting for 20% of the region's capacity. The Philippines also has a small amount of capacity.

In Southeast Asia, most large nonwovens manufacturers only use fine denier polypropylene spunbonded / spun melt technology, and supply a large number of sanitary products market. As of the end of 2020, fibertex (Malaysia) is the largest nonwovens producer in Southeast Asia with a capacity of 85000 tons.

Asahi (Thailand) has 40000 tons of fine denier spunbonded capacity in early 2021. FITESA / CNC (Thailand) has 72000 tons of fine denier spunbonded capacity in early 2021, while Mitsui (Thailand) has a capacity of 30000 tons.

Fine denier spunbonded / melt producers in Southeast Asia will continue to rely mainly on exports to achieve acceptable capacity utilization levels. Although demand for disposable nonwovens is growing in Southeast Asia, it is still small compared to the installed production lines in the region.

Unitika launched a 30000 ton polyester spunbonded line in Thailand in 2017, making it the sixth largest nonwovens producer in Southeast Asia. The products are used in carpet backing, geotextiles, roofing materials, automotive and other industrial applications.

Southeast Asian producers of airflow nonwovens include ocean cash in Malaysia, JNC in Thailand and daiwabo in Indonesia. Nanliuze has announced that it will install new Spunlaced and airflow nonwovens production lines in India, and will invest in new production lines in Vietnam, details of which have not yet been announced.

If measured by the annual GDP growth rate, the economies of the five major countries in Southeast Asia (Thailand, Malaysia, Vietnam, the Philippines and Indonesia) will all decline in 2020. The new coronavirus has had a devastating impact on key industries in these five countries, especially those heavily dependent on tourism. Like almost every country in the world, the new coronavirus has led to border closures, business closures and a sharp rise in unemployment. The government's response is to substantially increase economic stimulus and unemployment spending.

Although the economic outlook for these regions in 2021 is uncertain, the overall outlook is optimistic. GDP growth will depend on vaccine management, disease control, and export and internal blockade management. China's economic strength is expected to boost Asia's economic prospects and support the export of these five countries to China.

In Malaysia, GDP fell by 5.2%, after a weaker performance in 2019 than in the previous period. In Thailand, GDP in 2020 is 6.4% lower than that in 2019. The Philippines has seen the largest decline in GDP, with GDP falling by 9% in 2020. In assessing GDP changes in small economies, it is important to recognize that GDP has a greater year-on-year change compared to larger economies. With the growth of national economic aggregate, the annual GDP growth measured by annual percentage change will weaken over time.

The impact of the new crown epidemic on the nonwovens industry in these five countries is far less than the impact on their overall economy. As the demand for protective products (protective clothing and masks) for domestic and export use is increasing rapidly, the production of nonwovens coil is promoted. As in other countries, consumer demand for disinfectant wipes and other wipes, as well as for sanitary products (diapers, etc.) is on the rise.

Driven by favorable demographic structure, economic conditions, growing market penetration and strong local and export demand, Southeast Asia is still a promising region for the nonwovens industry. Despite the uncertainty brought about by the outbreak, the impact of the recent economic slowdown in the region, as well as the relatively small impact on manufacturing investment and consumer spending, will be addressed quickly through the economic stimulus package.

In Southeast Asia and China (the market penetration rate is still low), the gradual increase of disposable and durable nonwovens market penetration is a positive factor for the good growth of nonwovens demand and exports in these major Asian markets. Over time, nonwovens producers in the five Southeast Asian countries are expected to benefit from strong demand from China, Japan and other countries within and outside the Asia Pacific region. The largest end market for nonwovens will be hygiene products, followed by durable geotextiles and other markets.

Several global and regional manufacturers of disposable hygiene products are already in Southeast Asia, including Kimberly Clark, Johnson & Johnson, Kao, Procter & Gamble and unicharm. The increase in the production capacity of health products in Southeast Asia is a sign of growing demand in the region and also evidence that the region is increasingly becoming a manufacturing base for exports to other Asian regions.

In 2020, the production capacity of Nonwovens in Southeast Asia mainly includes spunbonded / spun melt, staple fiber needle punched and / or thermal bonded, and polypropylene spunbonded needle punched technology. There are also some small-scale hot air production lines are also developing.

During 2015-2020, the production capacity of fine denier spunbonded and spun melt polypropylene nonwovens installed in five Southeast Asian countries / regions will increase by 6.6% annually, from 185000 tons in 2015 to 255000 tons in 2020. Of the 70000 tons of new production capacity during this period, including 15000 tons of CNC / FITESA in Thailand, 20000 tons in Asahi (Thailand) and Toray (Indonesia), and 15000 tons in fibertex (Malaysia).

CNC / FITESA launched a new reifenhauser 5 production line at the end of 2020 with an annual capacity of 33000 tons. Asahi will install a new 15000 ton production line in Thailand in the second half of 2021. In the same period, fibertex will launch the reifenhauser 5 production line in Malaysia with an annual capacity of 15000 tons. Both production lines will be put into operation in 2022. Through these investments, the annual production capacity will increase by 63000 tons (24.7%). These new capacity could lead to oversupply in the region.

In 2020, the annual production capacity of Southeast Asia fine denier and Zhongdan spunbonded / spunbonded melt polypropylene technology will be 264000 tons, accounting for about 7% of the global capacity of this technology category.

The production capacity of this technology is mainly concentrated in Thailand, with four manufacturers occupying 43% (114000 tons) of production capacity. In Malaysia, the total capacity of the two producers is 94000 tons, accounting for 36% of the region's capacity. In Indonesia, the capacity of the two producers is 52000 tons, accounting for 20% of the region's capacity. The Philippines also has a small amount of capacity.

In Southeast Asia, most large nonwovens manufacturers only use fine denier polypropylene spunbonded / spun melt technology, and supply a large number of sanitary products market. As of the end of 2020, fibertex (Malaysia) is the largest nonwovens producer in Southeast Asia with a capacity of 85000 tons.

Asahi (Thailand) has 40000 tons of fine denier spunbonded capacity in early 2021. FITESA / CNC (Thailand) has 72000 tons of fine denier spunbonded capacity in early 2021, while Mitsui (Thailand) has a capacity of 30000 tons.

Fine denier spunbonded / melt producers in Southeast Asia will continue to rely mainly on exports to achieve acceptable capacity utilization levels. Although demand for disposable nonwovens is growing in Southeast Asia, it is still small compared to the installed production lines in the region.

Unitika launched a 30000 ton polyester spunbonded line in Thailand in 2017, making it the sixth largest nonwovens producer in Southeast Asia. The products are used in carpet backing, geotextiles, roofing materials, automotive and other industrial applications.

Southeast Asian producers of airflow nonwovens include ocean cash in Malaysia, JNC in Thailand and daiwabo in Indonesia. Nanliuze has announced that it will install new Spunlaced and airflow nonwovens production lines in India, and will invest in new production lines in Vietnam, details of which have not yet been announced.