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| Issue date:27/05/2010 |
| ATA Journal for Asia on Textile & Apparel - May 2010 Issue |
| Source:Journal for Asia on Textile & Apparel |
| by Pony Liu |
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| Chinese users are major clients to Huntsman TE. Pictured is the company’s stand at China Interdye this April |
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Featured company: Huntsman Textile Effects
Through the implementation of investment and optimization measures, Huntsman Textile Effects has strengthened its cost competitiveness and minimized the impact of last year's global economic downturn on the company. And since the establishment of Huntsman Textile Effects (China) in 2006, it has successfully built up a solid foundation in the largest and fastest growing market for its products
Huntsman Textile Effects creates, markets and manufactures a broad range of chemical and dye products that enhance the performance properties and colors of finished textiles and materials. The business has a balanced global reach serving over 10,000 customers located in 110 countries and is a global supplier of comprehensive solutions for the textile industry. It has about 3,500 employees and operates 13 primary manufacturing facilities located in eight countries (Switzerland, Germany, France, USA, Mexico, China, Thailand, India and Indonesia).
Huntsman Textile Effects is a member of Huntsman Corporation built by Jon M. Huntsman, and the Huntsman family celebrates forty years in the chemical industry this year. Huntsman corporation serves a variety of end markets, the largest of which is consumer durables and non-durables, followed by paints and coatings, insulation and other construction materials, chemicals, energy and aeropsace. With more than 11,000 employees and operating from multiple locations worldwide, Huntsman Corporation had revenues of approximately US$8 billion in 2009.
Managing through economic turbulence
The global textile chemical industry had faced a slow growth even before the global economy receded last year. A US-based Freedonia research report in December 2008 projected the global demand for textile chemicals to increase by 2.8% per annum in following few years. After the outbreak of the financial crisis in the world, global textile chemical suppliers were under severe pressure, prompting them to readjust the business operations significantly.
Paul Hulme, president of Huntsman Textile Effects (TE), observed that some businesses faced financial distress and others restructured themselves to regain competitiveness or even look for takeover opportunities. "What the textile industry faced was unprecedented in the last three decades," he commented.
Huntsman TE, meanwhile, was early to notice the change of the industry. The company purchased Ciba Specialty Chemicals' textile effects business in 2006, which has been integrated into Huntsman TE and consequently returned to profitability
More importantly, the company noted that the biggest buyer of chemical and dyes was shifting from the West to the emerging markets of Asia. The acquisition of Ciba's textile unit was but part of the strategic move of Huntsman TE. In March 2009, Mr Hulme led his management team and moved Huntsman TE's headquarters from Basel (Switzerland) to the tropical city of Singapore.
Following this was a reorganization of the company's manufacturing facilities to optimize the production globally and an inflow of its investment to Asia in 2009 although the global market was relatively quiet.
Asia is the world's largest market for textile chemicals, according to Mr Hulme. By strategically shifting its focus to Asia, Huntsman TE has got closer to customers and is able to provide them services in a timely and efficient manner. In other words, it takes less time for the company to respond to market demands.
"Thanks to the investment and optimization measures undertaken, Huntsman TE managed to swim through the tough times in 2009. We have successfully strengthened our cost competitiveness. A reduction of operation cost in the business unit was approximately US$20 million from 2007 to 2009," he said, adding that optimizing operations was a significant achievement in the quiet market.
Innovating for tomorrow's market
In addition to strong market sense and prompt reaction to market changes, Huntsman TE considers its excellent innovation another core strength, according to Mr Hulme.
In 2009 alone, the company launched nearly 30 new products each with a focus on sustainability and low environmental impact. To further strengthen its research ability for local market requirements, the company has established research and development centers in Panyu (China) and last year in Mumbai (India).
He told ATA Journal that innovation was not confined to product only. When moving to Asia, the company has adopted an innovative model to make its operation fully customer-oriented. "We are currently divided into two global business units: apparel and home textiles, as well as specialty textiles, which directly serve their customers from all over the world."
The increasingly globalized world is demanding a faster supply chain, thus calling for time-sensitive supply chain management in many industrial sectors and market segments, including apparel retail. However, chemical industry is not known for a highly efficient supply chain.
For improving efficiency, Huntsman TE adopted the chemical-specific SAP system investing US$20 million in 2008, providing a real-time information management system that has enhanced the flow of information, products and materials with clients and within the company itself, as well as improved internal management.
Mr Hulme explained that the operation was significantly more efficient with updated, accurate and easy-to-access information. After receiving sales forecast from sales teams, managers at manufacturing sites can achieve better-managed production and material procurement. The SAP system also helps Huntsman TE offer individualized service to different clients. For instance, a brand owner can cooperate with Huntsman TE and specify distribution of certain chemicals and dyes it orders over a period of time.
Further improvement is planned in execution, but overall performance is encouraging, he said, adding that it is an opportunity for Huntsman TE in the future marketplace.
Capturing opportunity on the "green" route
To Mr Hulme, another opportunity lies in the widely discussed issue of greener manufacturing.
Paul Hulme |
The clothing and textiles sector is a significant part of the world's economy. As environmental awareness grows, green issues and sustainability are increasingly becoming part of the everyday thinking. The textile and fashion industry is under scrutiny by informed consumers about the efforts of manufacturers towards making sustainable fibers, use of clean dyeing processes, and brands embracing green design. The major environmental issues associated with the sector are: energy use in laundry; production of primary materials for man-made fibers and in yarn manufacturing; environmental impact of chemicals and their release in waste water in wet pre-treatment, dyeing, finishing and laundry; solid waste arising from yarn manufacturing; and finally, disposal of products at the end of their life, he said.
Hence, Huntsman TE continues to dedicate its textile competence towards researching and developing the optimised solutions for a more sustainable planet while retaining a clear focus on helping customers cut back on costs through ongoing process efficiency optimization.
"It is not only a corporate social responsibility, but also an opportunity for our further development." As a recent example, fine wool and the other fine animal fibers such as cashmere and alpaca have seen a strong revival in exclusive fashion items. Huntsman TE thus has been active in research and development (R&D) in this area, said Mr Hulme.
Chrome dyes are used for more than 100 years for dyeing wool. These dyes require the handling of the carcinogenic potassium dichromate by the workers in the dyehouse, mistakes in dosing can cause serious environmental problems and would also endanger the health of consumers. Over 10 years ago, Huntsman decided to move away from this outdated technique and offer a new range of metal-free reactive dyes for wool, and Lanasol CE was first introduced to the market. New and improved products have also been added to this range.
Huntsman TE currently spends about 5% of the total sales earnings for R&D. In the last two and half years, much of these R&D efforts centered round chemical products featuring environmental and economical benefits. These products are designed to help users reduce water and energy consumption by 30-40% during textile processing. They also help sellers of end apparel products to meet their consumers' expectation for a reduced environmental footprint.
Looking forward, Huntsman TE aims to further grow with Asia.
China and other Asian countries are important markets for the company. China is now the largest and fastest market growing for Huntsman TE. At the opening ceremony of Huntsman Textile Effects (China) back in 2006, Peter Huntsman, CEO of Huntsman Corporation, predicted that China would be the largest market for the company in five years. Now the estimation came true after just four years at the Textile Effects unit. Half of the total sales of Huntsman TE came from Asia, of which 50% was from China, said Mr Hulme. Revenue from the US contributes about 20% of the total sales earnings of Huntsman TE.
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| Copyright © Adsale Publishing Limited. Any party needs to reprint any part of the content should get the written approval from Adsale Publishing Ltd and quote the source "ATA Journal for Asia on Textile & Apparel", Adsale Textile English Website - www.AdsaleATA.com. We reserve the right to take legal action against any party who reprints any part of this article without acknowledgement. For enquiry, please contact Editorial Department. |
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| Copyright © Adsale Publishing Limited. Any party needs to reprint any part of the content should get the written approval from Adsale Publishing Ltd and quote the source "ATA Journal for Asia on Textile & Apparel", Adsale Textile English Website - www.AdsaleATA.com. We reserve the right to take legal action against any party who reprints any part of this article without acknowledgement. For enquiry, please contact Editorial Department. |
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