Background

Dyestuff industry plays an important role in the economic development of the country. The Indian Dyestuff Industry, which was primarily started to cater to the needs of domestic textile industry, now not only meets more than 95% requirement of the domestic market, but has gradually also made a dent in the global market. Today, India exports dyes and dye intermediate to the very same countries, on which it was dependant for imports till a decade ago. All ranges of dyes such as disperse, reactive, vats, pigments and leather dyes are now being manufactured in India. This industry is based on chemicals derived from coal tar and the petrochemical industry. This industry forms an important link in the chain of other chemical industry such as textiles, leather, plastic, paper, packaging, printing inks, paints and polymers etc. The textile industry is the major consumer of dyestuffs and about 70% of the total production is consumed by this sector. The basic raw materials used for the manufacture of dyestuff are Benzene, Toluene, Xylene and Naphthalene (BTXN). These raw materials are initially transformed into dye intermediates by nitration, sulphonation, amination, reduction and other chemical unit process. Further, the formulation and reaction of the intermediates viz. diazotition and coupling of the intermediates are carried out for the manufacture of a particular dyestuff. The technology employed by the dyes sector has been well received in the International market. Some of our units have established joint ventures abroad using their indigenous technology.

Global Scenario

The world market for dyes, pigments and dye intermediates is estimated at about US $ 23 billion consisting of dyes and pigment market of 1.3 million tonnes valued at US $ 16 billion and dye intermediates market of US$ 7 billion. Though the overall growth of dyestuffs industry during the last 5 years has slowed down, 23 the industry is still expected to maintain a growth of about 2% per annum in the next decade.

China, Korea, India, Japan and Taiwan are the major players in this industry. However in terms of market share, European countries have remained the largest producers because they have concentrated on speciality products. DyeStar, the joint venture between Hoechst AG and Bayer AG, is the largest producer of dyestuffs with 15 per cent market share in the world market. This is followed by BASF, which has a market share of 12 per cent. The market share of Ciba Specialty is around 11 per cent followed by Clariant AG capturing close to 7 per cent.

Globally, reactive dyes account for around 25 per cent while disperse dyes account for 20 per cent of total dyes production. These two dyes have a dominant share in all he regions of the world. On the other hand, market for direct vat dyes and others has remained more or less stagnant. In the Asian Region, China, Korea and Taiwan are strong players in disperse dyes while India leads in production of reactive dyes on account of easy availability of intermediates like vinyl sulphone in the country.

Chinese Scenario

There are 500 units who are engaged in the manufacture of dyes and dye intermediates. Their total installed capacity is 8 lakhs tonnes. These are operating at about 75 – 80% capacity utilisation, and producing about 6 lakhs tonnes of finished products. More than 40% of world's total production of dyes and dye intermediates is catered to by Chinese units. Their major dyes wise production is given below:

Growth of dyes and dye intermediates industry in India is basically a post independence phenomenon. With the availability of basic feedstock and selfreliance in intermediates over five decades, the industry has achieved selfsufficiency. In 1977, certain dyes were reserved for exclusive development in the small scale sector. With the 1978 Budget, excise concessions were introduced for this sector, which led to a very fast growth of the small-scale sector in dyes. This eventually led to fragmentation of the sector. At present there are about 50 units in the organized sector and 900 units in the small scale sector, with a total aggregate installed capacity of 1,50,000 tonnes per annum.Two Western States viz Maharashtra and Gujarat account for over 90% of the dyestuff production in the country. Several units, which were not complying with Pollution control norms have been shut down. The level of production achieved in the organized sector in the last 5 years is as under:

Research and Development

Due to Internal and external competition, the margin of profits in the Dyes industries is rapidly being squeezed. The consequence is that there is low expenditure incurred for R&D. Expenditure incurred by Industry on R & D is only to the extent of 1-2% of their total sales, as compared to 5% being spent by other developed countries. Virtually no research work is being carried out to recover or invent new types of dyes. Research is only being carried out to modify existing unit processes and to improve yields and quality of the finished products.

Demand of Dyestuffs

Textile sector is a major consumer of Dyestuffs. Reactive Dyes, Vat Dyes & Azo Dyes are mainly required for dyeing and printing of cotton fibres. Disperse Dyes are mainly consumed for dyeing synthetic fibers. Acid Dyes are consumed in leather and woolen products. Many Special Dyes & pigments are used in printing inks. Some also have multiple uses in different applications. The production of synthetic fibre achieved during the year 2004-2005 to the extent of 18.86 lakhs MT. The estimated demand of synthetic fibre by terminal year of 11th five year plan may increase to 37.75 lakh tonnes. The demand of cotton textile may also be to the order of 48.19 lakh MT by the end of 11th plan. The Government's policy to promote export of cotton goods and promote blend of polyester fibres with cotton/viscose locally is likely to result in continued high demand for disperse dyes.

Due to adverse conditions in the textile industry demand for vat dyes demand has been affected. However, as far as application and fastness criteria are concerned, there is no substitute for vat dyes. Thus demand for vat dyes is likely to remain steady in future. Disperse dyes will constitute the largest market with about 21% share followed by direct dyes and reactive dyes with 16% and 11% respectively. Among disperse dyes, maximum demand is likely to come from blue colour, followed by black and red colour. For reactive dyes, it is projected that maximum demand will be for yellow, followed by blue and red. By and large the dyes sector are likely to grow by 5% annually.

Exports of Dyestuffs

Exports of dyes is progressively showing an upward trend since the last two years. Major exports of dyes are to developed countries like Germany, U.K., U.S.A., Switzerland, Spain, Turkey, Singapore and Japan. Exports of Dyes to Latin American and African Countries have also started picking up. These are new emerging markets for theIndian exporters. The industry has prepared a future strategic action plan for dyes and dye intermediate and expects to achieve a target of export of dyes and dye intermediate from present Rs. 7000 crores to Rs. 12000 crores by the end of this decade. The industry also feels that an export growth of this magnitude can be achieved only if there is close coordination between the Govt., Industry, Financial and technical institutions so that a conducive atmosphere providing a level playing field is created. The industry needs to create a set up to monitor very regularly the growth in exports and take necessary corrective action along the route – to achieve the targets. In India, the per capita consumption of dyes is 50 gms., which is very low as compared to a world consumption of 425 gms., which indicates that there is a tremendous potential for growth of this sector in India.