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| Paul Hulme, President of Huntsman Textile Effects |
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Alps Industries signed a strategic partnership with Huntsman Textile Effects (TE) in January, with which Huntsman TE will exclusively supply chemical materials for Alps' eight production facilities in India. Alok Industries in India have also named Huntsman TE as their preferred supplier. In a recent phone interview, Paul Hulme, President of Huntsman Textile Effects told AdsaleATA.com the latest development of Hunstman TE and market trends in the industry at large.
AdsaleATA: AdsaleATA.com
Mr Hulme: Paul Hulme, President of Huntsman Textile Effects
AdsaleATA: How far was Huntsman TE impacted by the global economic downturn in 2009?
Mr Hulme: 2009 was a difficult year for many in the industry. To Huntsman TE, it was an exciting year as the company continued investing into the business, especially in Asia.
Moving the headquarters from Basel (Switzerland) to Singapore is a very important strategic move in terms of managing and growing the business. We also completed a strategic acquisition of Baroda in the month of June (in 2009). It is a very important manufacturing facility producing intermediates and dyes and some products for technical textile applications.
We continued investment in our research and development. We opened and expanded research capacity in our facility situated in Mumbai, India, which not just helps us grow in Asia, but also supports our global business.
In addition to the research facility, we established a very important link with universities in Mumbai to actively work in the research programs involving our people in Mumbai as well as researchers in Switzerland.
AdsaleATA: Anticipating pick-ups in 2010, which markets are crucial to Huntsman TE?
Mr Hulme: Positive signs indicating economic recovery were observed in the second half of 2009. Especially in China and India, we saw increased demand driven not by exports, but by the domestic economies that have continued to grow today. As we move on to 2010, textile exports in India and China will begin to recover as (the markets) in the US and Europe begin to recover. India, China and the ASEAN will be supportive to our business.
It is without doubt that the world's largest population, about 4 billion or 60% of the world's total, are in Asia. It is the number one market and some recent articles support such view. The deputy chairman of the Government of Singapore Investment Corporation described that the next decade is the golden age of Asia, and I think he is absolutely right. The next decade or perhaps beyond truly belongs to Asia.
If you are not established or positioned in the market, particularly, India and China, I think it is going to be difficult to be a successful business going forward. We have restructured and repositioned the business and we are confident that we'll enjoy the benefits available in the golden age for Asia.
According to some recent speculations, India will be the third largest economy in the world by 2012, overtaking Japan, behind only the USA and China. By 2020, India might grow faster than China (note: partly because India has a younger population). The textile sector is India's second largest employer and an important industry as it is in China. We intend to make sure that we enjoy the ever-increasing market.
We recognize that the most important markets are in Asia, where we will see the greatest growths in the next decade. Our most important customers in the industry have migrated over the past decade from West Europe and North America to the East. Therefore, it is crucial that we are close to our customers and the growth markets.
Moving to Asia allows us to better understand the dynamics of our customers and the industry (including both Asian and international players of the chemicals industry), and to respond quickly and be very nimble in our responses.
In addition our ongoing businesses in Europe and North America, Southeast and other areas of Asia are also an important market such as Bangladesh, Pakistan, Taiwan and Vietnam.
About 50% of sales turnover of the company is originated from Asia while 25% from Europe and 20% from the United States. Market-wise, products targeting apparel applications offer 60% of revenue of the company, and the rest from applications of technical textiles. We are the number one player in the global technical textile arena, and the strongest supplier of the (technical textile) segments in India.
AdsaleATA: There is consolidation in the industry these years and some merged players may try to secure a market position through larger production scale. How do you see the industry ahead?
Mr Hulme: The chemical industry will continue to consolidate and see further investment being made within the textile industry...In our business, we focus on chemical applications on apparel and technical textiles. Mergers increase the production scale of some players in the market. Meanwhile, our focus is being on reducing our cost base in manufacturing where we can be competitive. And that's what we've already done.
Rather than worrying too much about in terms of competitive reaction...We focus on our own control and destiny, driven by what we believe we can differentiate in particularly with the Asian competitors.
One of the tools is innovation. I often describe innovation as the backbone of our business to excel. We are by far the market leader in terms of bringing innovative solutions to our customers. In 2009 alone, we introduced 30 new products, including several of them involving brand-new chemistry with new molecules.
Another focus is green technologies. Changes in environment are observed in key markets of China and India, where the authorities have increasingly enforced the related regulation and standard on companies (e.g. effluent disposal). Our environmentally friendly and biodegradable products provide solutions to our customers, helping them become compliant in their operations and reduce process costs. A recent example is AlbaFlow Conti, which penetrate into fabrics very quickly reducing process time and costs, while ensuring excellent dye quality.
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