Manmade textile industry is on the cusp of turnaround with a revival in its demand in the last few weeks following producers’ ability to fix prices of their products in the wake of stabilising crude oil prices.
Sensing this opportunity, leading manmade fiber and yarn players have chalked out massive investment plans to expand their capacity and grab large share in the world market. Filatex India, for example, has envisaged Rs 275 crore (US$ 39.24 million) expansion plan to raise their production capacity of yarn and power to reduce its production cost and improve its EBIDTA margins for this year.
Trading at $85.10 a barrel in the world market, crude oil price gradually slipped to the level of $49.79 a barrel towards the end of December and gradually picked up again to trade currently at $65.05 a barrel. Most importantly, crude oil price is holding above $60 a barrel since February 1 which allowed synthetic yarn, fabric and textile manufacturers to fix their product prices for long term. Prices of synthetic yarn and fabric moved in tandem with crude oil prices, being the latter the sole raw material of the former.
