Synthetic fiber world demand to increase

Zakki P. Hakim, The Jakarta Post/Jakarta

Chemical fiber producers in Asia see rising world demand for their products after the termination of the global quota system on textiles early next year.

Asian Chemical Fiber Industries Federation (ACFIF) chairman SP Lohia said on Wednesday that world demand for chemical fiber was projected to grow by around 8 percent per year during the next five years as a quota-free regime in textile trade would facilitate rapid growth of the industry, particularly in the region, which in turn would increase demand for chemical fiber, a raw material used in textile production.

Chemical fiber consumption in the world had increased from 21 million tons a year more than two decades ago to around 33 million tons a year over the last couple of years.

Lohia said that the quota system had left the world's textile industry stagnant, which eventually discouraged new investment.

"An expanding textile market means higher demand for raw materials, including synthetic fibers," said Lohia, who took over the chair of ACFIF after the federation held its 5th conference in Nusa Dua, Bali, last week.

The conference, hosted by the Indonesian Synthetic Fiber Makers Association (Apsyfi), was attended by members from China, Taiwan, India, Indonesia, Japan, South Korea, Malaysia, Pakistan and Thailand.

ACFIF members account for around 75 percent of the world production, with Indonesia contributing around 2.5 percent, said Lohia, who is also an Apsyfi's board member.

Each year, Indonesia produced up to 1.2 million tons of synthetic fiber, of which some 200,000 tons worth US$300 million was exported, with the rest being used to fulfill domestic demand.

There are 18 chemical fiber producers in Indonesia, employing around 40,000 people.

According to Lohia, chemical fiber makers would evaluate next year's textile market to see who would eventually become the major players on the global market.

Fiber makers would naturally approach the dominant market players, he said.

"Many people are very worried about the quota- free system, but actually none of them know exactly what will happen," said Lohia.

There have been rising fears among Indonesian textile makers that the termination of the quota system as required by the World Trade Organization (WTO) would allow textile and apparel makers from China to dominate key markets like the U.S. and Europe.

Elsewhere, Lohia said that current high oil prices were a major concern to the chemical fiber industry as they had increased production costs.

"However, we cannot pass on all the increased costs to our customers. Instead, we are having to squeeze margins," he said.