Unleashing Innovation in Synthetic Fibers Procurement Intelligence

The global synthetic fibers category is anticipated to grow at a CAGR of 7.4% from 2023 to 2030. The majority of the global textile market is made up of synthetic fibers because of their affordability and functional qualities. In 2023, owing to its performance advantage over natural textiles, synthetic fibers currently account for more than 60% of all fiber usage globally. In contrast to materials like cotton, silk, or wool that are derived directly from plants or animals, synthetics are made wholly of chemicals. The most popular kinds are petroleum-based and include nylon, polyester, rayon, acrylic, and spandex. By material type, polyester is the most popular one and dominates the category accounting for 48 - 52% of the total fiber production in 2023.

With an increasing focus on sustainability, one of the major trends has been the use of sustainable colorant solutions and functional additives (for chemicals, dyes, spin-dyeing, and finishes) for coloring and modification of the category in focus. The rising demand for synthetic fibers over natural fibers can be primarily attributed to their wide availability, and cost-effective prices, along with a wider range of applications across industries. Furthermore, the increasing demand for the product in many consumer goods, accessories, and apparel is driving the growth of the category.

One of the major drawbacks of synthetic fibers is that most of them are not biodegradable. As a result, these fibers contribute to landfill waste and plastic pollution. Some of the fibers release microplastics when washed. However, the manufacture of synthetic fibers is becoming more sustainable thanks to technological developments. Recycled and biobased synthetic fibers provide a viable substitute for traditional synthetic materials obtained from fossil fuels. University of California research studies in 2023 have found that synthetic textiles (made of compostable materials) including polylactic acid, and synthetic fibers in blended textiles did not show evidence of deterioration after a year, whereas natural and wood-based cellulose fabrics deteriorated within a month.

Order your copy of the Synthetic Fibers Procurement Intelligence Report, 2023 - 2030, published by Grand View Research, to get more details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis

One of the latest innovations, as of September 2023, is the creation of “spider silk” fibers in China. Researchers in the country have developed this eco-friendly synthetic substitute which is six times more durable than the Kevlar used in bulletproof vests. The silk is produced using genetically modified (transgenic) silkworms. The method can be applied to develop a commercial synthetic fiber that is less harmful than nylon. According to the researchers, this innovation needs further exploration for large-scale commercialization. This particular silk can be used in surgical sutures (which will help address the high demand for 300 million procedures annually in China), smart materials, military, and aerospace technology. Another innovation, as of April 2023, is the creation of a new synthetic fiber, 30% lighter than cotton, which mimics the structure of polar bear fur. Massachusetts Institute of Technology (MIT) researchers have developed this fabric using two materials - a synthetic polymer and a nanoscale fiber.

The synthetic fibers category is fragmented. Textile manufacturers are increasingly engaging with regional players to gauge consumer behavior/preference patterns and capture a wider domestic market. Large companies such as Indorama, Mitsubishi, and Sinopec have integrated in-house manufacturing facilities that can produce the fibers from start to finish. Hence, the bargaining power of such specialized large-scale suppliers is moderately high. Regionally, there are numerous players based on different types of polymers which add to increased fragmentation and reduces the bargaining power to low.

The key cost components include raw materials, energy, equipment and technology, labor, facilities, and marketing. Other costs can include legal and tax, indirect or overheads, repairs and maintenance of plants or facilities, transportation, etc. Synthetic fibers production needs a significant amount of crude oil and energy. Acrylonitrile is the key raw material for producing acrylic fabric. The synthetic insulating material known as fleece is made of polyethene terephthalate. Polyamides are needed to make nylon. Similarly, olefin is another material composed of fibers of polypropylene and polyethene. Hence, raw materials form a crucial cost component and any fluctuations in the cost of raw materials will dramatically impact the total cost of production.

Synthetic fibers and cotton prices witnessed a decline between April and August 2023 owing to low demand. Prices of most of the fibers decreased by 20% in 2023 compared to 2022. The increasing price difference between synthetic fibers and cotton caused cotton to be replaced by synthetics. Feedstock prices including dissolved wood pulp (used mainly in viscose rayon production) and PTA also decreased during the same period in 2023. In Q3 2023, polyester fiber prices decreased by USD 1 - 1.20 per kg. Polyester fiber prices dropped by 20% in 2023 compared to 2022. There was still a significant difference in domestic polyester fiber prices between China and the two South Asian denim manufacturers, India and Pakistan at the end of Q3 2023. In China and India, the average prices of “1.4 denier 38 MM staple fiber” reached USD 1.05 and 1.25 per kg, respectively at the end of September 2023.

Almost 60 - 70% of the category is produced in China. It is presently the world's largest producer and exporter of synthetic materials, accounting for the great majority of the category output. As of December 2023, globally, the top three exporters of this product are China (accounting for 606,297 shipments), Germany (accounting for 574,716 shipments), and Spain (accounting for 516,399 shipments). Although synthetic textiles and fibers are all composed of a kind of polymer, they are all valuable for different applications due to their distinct properties.

Hence, when selecting vendors, key features such as elasticity, tensile strength, density, temperature resistance, moisture absorption, etc. of the polymer should be identified in order to choose which polymer to employ in the final product. Other considerations include procuring raw materials from low-cost countries like India and China and negotiating with more than two vendors to gain higher margins. In the synthetic textiles sector, from the production of raw materials to the delivery of finished goods, India has established itself as a self-sufficient industry with significant value addition at every level of operation. Hence, it is considered as a major outsourcing hub. Low labor costs coupled with the availability of raw materials and high product selection make India an attractive nation for outsourcing activities. 

Browse through Grand View Research’s collection of procurement intelligence studies:

• Plasticizers Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

• Hydrochloric Acid Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Synthetic Fibers Procurement Intelligence Report Scope

• Synthetic Fibers Category Growth Rate: CAGR of 7.4% from 2023 to 2030

• Pricing Growth Outlook: 10% - 20% (Annually)

• Pricing Models: Volume-based, contract-based, and competitive pricing model

• Supplier Selection Scope: Cost and pricing, past engagements, productivity, geographical presence

• Supplier Selection Criteria: Production capacity, type of polymer, tensile strength, temperature resistance, moisture absorption, certifications, operational and functional capabilities, technology used, and others

• Report Coverage: Revenue forecast, supplier ranking, supplier positioning matrix, emerging technology, pricing models, cost structure, competitive landscape, growth factors, trends, engagement, and operating model

Key Companies

• Bombay Dyeing

• DuPont de Nemours, Inc.

• Indorama Corporation

• Lenzing AG

• Mitsubishi Chemical Corporation

• Sinopec Shanghai Petrochemical Co., Ltd

• Toray Chemical Korea Inc.

• Teijin Limited

• Reliance Industries Limited 

• Toyobo Co., Ltd

Brief about Pipeline by Grand View Research:

A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain, which helps in efficient procurement decisions.

Our services include (not limited to):

• Market Intelligence involving – market size and forecast, growth factors, and driving trends

• Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships

• Supplier Intelligence – rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing

• Sourcing / Procurement Intelligence – best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best suited countries for sourcing to minimize supply chain disruptions

HVAC Systems Procurement Intelligence: Key Insights

The global HVAC systems category is expected to grow at a CAGR of 6.3% from 2023 to 2030. Office buildings and high-rise structures are increasingly using HVAC systems to control the temperature within the buildings. As a result of growing environmental concerns, there is a rising trend for green buildings, which is in turn expected to drive category growth. In APAC and the Middle East region, the demand for HVAC systems for residential purposes is growing due to its hot climate conditions. The growing number of building permits and enhanced designs in construction are driving the demand for AC.

The shift of HVAC system maintenance from reactive to predictive maintenance is enabled by the use of IoT technology. Predictive maintenance lengthens the lifespan of the HVAC system while lowering labor and maintenance costs. The traditional Building Management System (BMS) is made up of various subsystems that are installed inside a building office. Only staff members who work in facility management or building management are given access to each organization's unique IT infrastructure. Whereas IoT technologies can be relatively cheaper to install in any type of building over traditional BMS systems. It can be accessible to other building assets such as lighting and security, which transform the facility management services. For instance, voice and light sensors in a meeting room can indicate when the conference is over, and cleaning is needed. The IoT software automatically creates a work order for cleaning, negating the need for human involvement. Facility managers can remotely check the status of these work orders from their desks or while traveling by using mobile applications.

Companies are continuously focusing on new acquisitions, product development, and service enhancement. For instance,

• In February 2023, Armstrong Fluid Technology, a Canada-based company, announced a partnership with Hydronic System Optimisation (officially known as Hysopt), a Belgium-based company, for HVAC digital twin modeling. This collaboration offers customers more reliable scientific simulation and verification of HVAC system energy and carbon savings by integrating Hysopt's advanced technology and Armstrong's vast installation capability.

• In April 2022, collaboration was announced between Carrier Global Corporation and ACI Mechanical and HVAC Sales company for a suite of applied equipment and variable refrigerant flow (VRF) HVAC systems. The applied products are consolidated with stringent energy codes in Washington. The stringent energy codes in Washington can offer an acceptable level of energy efficiency while permitting some flexibility in building design, construction, and heating equipment efficiency. This partnership will enhance ACI Mechanical and HVAC Sales company's solutions, which can provide high-performance HVAC systems and support sustainability.

Order your copy of the HVAC Systems Procurement Intelligence Report, 2023 - 2030, published by Grand View Research, to get more details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis

Global HVAC Systems Sourcing Intelligence Highlights

• The threat of new entrants in HVAC systems is low as the category is highly capital-intensive which requires substantial investment for various activities such as marketing, distribution, manufacturing, as well as for research and development purposes. In addition, leading players in this category tend to create difficulty for new firms to enter because major players benefit from intellectual property, economies of scale, and customer loyalty.

• The industry is highly fragmented and encompasses several major players such as Carrier Corporation; Daikin Industries, Ltd., Johnson Controls International plc, and Trane Technologies. This fragmentation is often driven by technological advancement focusing on energy-efficient, smart connected systems, smart homes, and sustainable HVAC systems.

• The category’s growth is boosted owing to the adoption of various innovative trends and advancements in technology such as smart HVAC technology, IoT, automation software to enhance operation, geothermal and ductless HVAC systems, zoning systems, and others.

• Operating cost, equipment cost, replacement cost, installation cost, and disposal cost are some of the cost components involved in HVAC systems. Other additional costs involved are insulation, asbestos removal, location of systems, SEER (seasonal energy efficiency ratings), AFUE (annual fuel utilization efficiency) rating, and permit cost. The operating cost consists of labor, maintenance, utility costs, cost of HVAC parts, and others.

Browse through Grand View Research’s collection of procurement intelligence studies:

• LDPE Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

• Methanol Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

List of Key Suppliers 

• Arkema Group

• Carrier Corporation

• Daikin Industries, Ltd.

• Emerson Electric Co.

• Hitachi Ltd.

• Honeywell International Inc.

• Johnson Controls International Plc

• Lennox International, Inc.

• Mitsubishi Electric Corporation

• Trane Technologies

Global HVAC Systems Procurement Intelligence Report Scope

• Global HVAC Systems Category Growth Rate: CAGR of 6.3% from 2023 to 2030

• Pricing Growth Outlook: 3% - 5% (Annually)

• Pricing Models: Flat-rate pricing

• Supplier Selection Scope: End-to-end service, cost and pricing, compliance, service reliability, and scalability

• Supplier Selection Criteria: Equipment, implementation, HVAC technology, certification, regulatory compliance, and others

• Report Coverage: Revenue forecast, supplier ranking, supplier positioning matrix, emerging technology, pricing models, cost structure, competitive landscape, growth factors, trends, engagement, and operating model

Brief about Pipeline by Grand View Research:

A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain, which helps in efficient procurement decisions.

Our services include (not limited to):

• Market Intelligence involving – market size and forecast, growth factors, and driving trends

• Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships

• Supplier Intelligence – rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing

• Sourcing / Procurement Intelligence – best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best suited countries for sourcing to minimize supply chain disruptions