Polyester Units

LETTERS TO THE EDITOR

I have been carefully following reports in the media regarding bleak prospects facing the polyester industry and the precarious state of players like Indo Rama. As a matter of fact, the reports carry enough substance to support a totally different view of the matter. There is no disputing the fact that polyester prices have dropped from Rs 95 per kg to Rs 40 per kg. But (the BS report did not mention this fact) it should also be kept in mind that this has been more than offset by the accompanying fall in PTA prices which have dropped from Rs 75 to Rs 19.

 

The demand for polyester has risen by 40 per cent over the past two years and will rise further, more so with the failure of the cotton crop this year. Industry projections expect the demand and supply for the fibre to match and stabilise at 1.2 million tonnes by March 1998. The ever-escalating cotton prices make polyester the only solution for the needs of a developing country like India and its demand is assured.

Therefore, the media should be concerned more for PTA manufacturers than for the polyester industry. The figures speak for themselves. PTA manufacturers have an excess capacity of 500,000 tonnes with increasing possibilities of dumping after the devaluation of Southeast Asian currencies. With no addition to polyester capacity envisaged, these figures are only going to balloon.