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February 2001 - Volume 16 I Number 1 to Grow India’s Weak Nylon Market
Modipon Fibres Co., a pioneer manufacturer of specialty, high-value nylon and polyester products for the textile segment, has carved out a prominent position in India’s manmade fiber market by virtue of it’s leadership in nylon. With a total focus on developing and regularly introducing newer products, the company has earned a reputation among fashion designers for being able to create their visions. The company has the capabilities to produce a vast range of superior niche products — offering more than 50 items in various deniers, lustures, cross sections and colors in nylon filament yarn and polyesters - a range wide enough for customers to make premium fabrics varieties as the fashion needs change. The Beginning Modipon was established in 1965 with technical and financial collaboration with the Rohm & Haas Co. of Philadelphia, Pennsylvania USA. It started commercial production in 1968 with a capacity of 2000 tons per annum of nylon 6 filament yarn. With further capacity increases in 1991 and 1996, Modipon now has a total capacity of more than 18,000 tons per year — divided between nylon and polyester textile-grade filament yarns. They have regularly modernized and upgradet manufacturing facilities in technical collaboration with leading technology suppliers like Lurgi of Germany and Snia Fiber of Italy. The company’s manufacturing plant is situated at Modinagar, about 50 kms from India’s capital city Delhi. The unit employs about 1200 people. Modipon is the only ISO 9001 certified synthetic filament yarn manufacturer in India. Caprolactam, the raw material for nylon 6, is readily available in India and is sourced from local manufacturers such as GSFC Ltd., and FACT Ltd. The Modipon plant is a blend of earlier slow-speed LOY machines and newer high-speed spinning lines, but the key component is the plant’s versatility. The company has the ability to quickly modify its product mix as fast as customer and market trends dictate. “The skill lies in exploiting the resources available to the best of ability,” said Managing Director of Modipon Fibres Co., Mahendra K. Modi. Knowing that survival in the commodity business was going to be tough and expensive for a small player, Modipon steered clear of the mainstream, choosing instead to develop higher value niche markets. Modipon’s major specialties are in nylon and dope-dyed nylon monofilament yarns; dope-dyed flat and crimp multifilament yarns; bright trilobal multifilament yarns; and full-dull flat and crimp multifilament and microfilament yarns up to 1 dpf. Modipon enjoys domestic market leadership, owning about a 30% share of the Indian market for textile-grade nylon 6 filament yarn. It is also the country’s largest exporter of such yarns, with about 3% of its output destined for foreign markets. In India, nylon yarn is used primarily in women’s apparel applications. Only about 10-15% is used in hosiery and semi-industrial end uses. (See related story, page 24)
For its 1999-2000 fiscal year, Modipon posted sales of about $54.6 million, of which nylon sales accounted for approximately $36.6 million and polyester filament $18 million. But it was the polyester business that plunged the company into the red, accounting for all of the company’s loss of $6.2 million on the year. For the first six months of the company’s current fiscal year, Modipon posted a loss of nearly $2.4 million on sales of approximately $24 million — with polyester continuing to account for the poor results. Said CEO Dr. Umesh Kansal: “The profitability on nylon filament yarn is there, but the losses are on account of polyester. The worldwide slump and the South Asian crises, as well as the demand/supply imbalance in polyester, led to lower price realization. Also, niche products introduced by us slowly became semi-commodities as more manufacturers entered into the market fray – which reduced the margins and affected the bottom line.” Future is Value-added Given current market conditions, Modipon has no plans to expand capacity, but it does plan to develop new niche products and markets. The main focus will be on growing the nylon business and shifting some capacity away from polyester. “We are working very closely with our customers and other business associates for developing new end uses for nylon. In fact, some of these will open up new opportunities for the garment makers to introduce premium brands including exports,” said Modipon Marketing Vice President Ashok Kumar. Consumption of nylon yarn in India pales in comparison to polyester. In fact, India consumes much less textile-grade nylon than the world average, giving Modipon reason for hope for future growth. “Nobody can question that the potential for nylon filament yarn exists,” said Managing Director Mr. Modi. “It is a matter of exploiting the potential.” Nylon promotion Group To that end, Modipon has taken the initiative of forming an industry level group — the Nylon Promotion Group (India) — with the goal of promoting nylon yarn through consumer education, market research, and partnerships with others in the value chain, from fashion designers to retailers. With participation from other industry leaders and raw material suppliers – this group hopes to build a bigger and stronger domestic market for nylon yarn.  |
