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If measured by annual GDP growth, the economies of the five major countries in Southeast Asia (Thailand, Malaysia, Vietnam, the Philippines, and Indonesia) all experienced declines in 2020. The coronavirus has had a devastating impact on key industries in these five countries, especially those that rely heavily on tourism. As in almost every country around the world, the new coronavirus has led to border closures, business shutdowns and a sharp rise in unemployment. Governments have been responding by significantly increasing economic stimulus and unemployment spending.

 

Despite uncertainties about the economic outlook for these regions in 2021, the overall outlook is positive. GDP growth will depend on the management of vaccines, the control of disease, and the management of exports and internal blockades. China's economic strength is expected to boost Asia's economic prospects and provide support for the five countries' exports to China.

Table 1 shows preliminary estimates of GDP growth in 2020 for these five major countries in Southeast Asia. Only Vietnam achieved positive GDP growth of 2.6 percent. Indonesia, the region's largest economy, recorded a decline of -2.4 per cent in 2020 after a 5 per cent annual growth rate since 2014.

In Malaysia, GDP fell by 5.2 percent after a weaker performance in 2019 compared to the previous period. In Thailand, GDP in 2020 was 6.4 percent lower than in 2019. The Philippines saw the largest decline in GDP, which fell by 9% in 2020. In assessing GDP changes in small economies, it is important to recognize that year-on-year changes in GDP are larger than in larger economies. Annual GDP growth, as measured by average annual percentage change, will weaken over time as countries' economic aggregates grow.

 

The impact of the new crown outbreak on the nonwovens industry in these five countries is far less than the impact on their overall economy. Due to the surge in demand for domestic and export protective products (protective clothing, masks), the production of non-woven fabrics has been promoted. Just like in other countries, consumer demand for disinfectant wipes and other wipes, as well as for sanitary products (diapers, etc.) are on the rise.

 

Driven by favorable demographics, economic conditions, growing market penetration, and strong local and export demand, Southeast Asia remains a promising region for the nonwoven industry. Despite the uncertainty created by the neo-crowning epidemic, the impact of the region's recent economic slowdown, as well as the relatively small impact on manufacturing investment and consumer spending, will be quickly addressed through the stimulus package.

 

In Southeast Asia and China (where market penetration is still low), the gradual increase in market penetration of disposable and durable nonwovens is a positive factor for the good growth of nonwovens demand in these major Asian markets and their exports. Over time, nonwovens producers in the five Southeast Asian countries are expected to benefit from strong demand in China, Japan and other countries within and outside the Asia-Pacific region. The largest end market for nonwovens will be sanitary products, followed by durable geotextiles and other markets.

 

Several global and regional disposable hygiene manufacturers have already established their presence in Southeast Asia, including Kimberley (Kimberly-Clark), Johnson & Johnson (Johnson & Johnson), Kao (Kao), Procter & Gamble (Procter & Gamble) and Eunice (Unicharm). The increased production capacity of sanitary products in Southeast Asia shows the growing demand in the region and proves that the region is increasingly becoming a manufacturing base for exports to other Asian regions.

 

In 2020, the production capacity of nonwovens in Southeast Asia mainly includes spunbond/spunmelt, staple fiber needle and/or thermal bonding, and polypropylene spunbond needle technology. There are also some small-scale hot air production lines that are also developing.

 

During the 2015-2020 period, the installed capacity of fine denier spunbond and spunmelt polypropylene nonwovens in the five countries/regions of Southeast Asia increased by an average of 6.6 per cent per year, from 185000 tons in 2015 to 255000 tons in 2020. Of the 70000 tonnes added during the period, CNC/Fitesa has 15000 tonnes in Thailand, 20000 tonnes each in Asahi (Thailand) and Toray (Indonesia) and 15000 tonnes in Fibertex (Malaysia).

 

CNC/Fitesa opened a new Reifenhauser 5 production line at the end of 2020, with an annual capacity of 33000 tons. Asahi will install a new production line with a capacity of 15000 tons in Thailand in the second half of 2021. During the same period, Fibertex will launch the Reifenhauser 5 production line in Malaysia with an annual capacity of 15000 tons. Both lines will be in production in 2022. Through these investments, the annual production capacity will increase by 63000 tons (24.7 per cent). These new capacities could lead to oversupply in the region.

 

In 2020, the annual production capacity of Southeast Asia's fine and medium denier spunbond/spunmelt polypropylene technology is 264000 tons, accounting for about 7% of the total global production capacity of this technology category.

Capacity for this technology is most concentrated in Thailand, where four producers currently account for 43% (114000 tonnes) of capacity. In Malaysia, the combined capacity of the two producers is 94000 tonnes, representing 36 per cent of the region's capacity. In Indonesia, the two producers have a capacity of 52000 tonnes, or 20 per cent of the region's capacity. The Philippines also has a small part of capacity.

 

In Southeast Asia, most of the large nonwovens manufacturers only use fine denier polypropylene spunbond/spunmelt technology, and supply a large number of sanitary products market. As of the end of 2020, Fibertex (Malaysia) is the largest nonwovens producer in Southeast Asia with a capacity of 85000 tons.

 

Asahi (Thailand) has a 40000 t fine denier spunbond capacity in early 2021. Fitesa/CNC (Thailand) has a fine denier spunbond capacity of 72000 tons in early 2021, and Mitsui (Thailand) has a capacity of 30000 tons.

 

Fine denier spunbond/spunmelt producers in Southeast Asia will continue to rely primarily on exports to achieve acceptable levels of capacity utilization. Although the demand for disposable nonwovens in Southeast Asia is growing, it is still small compared to the capacity of installed production lines in the region.

 

Unitika launched a 30000-ton polyester spunbond production line in Thailand in 2017, making it the sixth largest nonwovens producer in Southeast Asia. This series of products is used in carpet backing, geotextiles, roofing materials, automobiles and other industrial applications.

 

Airstream nonwoven producers in Southeast Asia include Ocean Cash in Malaysia, JNC in Thailand and Daiwabo in Indonesia. Nanliu announced that it will install new spunlace and airstream nonwovens production lines in India, and will also invest in new production lines in Vietnam. The specific details have not yet been announced.

 

If measured by annual GDP growth, the economies of the five major countries in Southeast Asia (Thailand, Malaysia, Vietnam, the Philippines, and Indonesia) all experienced declines in 2020. The coronavirus has had a devastating impact on key industries in these five countries, especially those that rely heavily on tourism. As in almost every country around the world, the new coronavirus has led to border closures, business shutdowns and a sharp rise in unemployment. Governments have been responding by significantly increasing economic stimulus and unemployment spending.

 

Despite uncertainties about the economic outlook for these regions in 2021, the overall outlook is positive. GDP growth will depend on the management of vaccines, the control of disease, and the management of exports and internal blockades. China's economic strength is expected to boost Asia's economic prospects and provide support for the five countries' exports to China.

Table 1: Annual GDP growth rates of the five major countries in Southeast Asia and China (2019-2021)

来源：OCD Development Center，2021年1月

Table 1 shows preliminary estimates of GDP growth in 2020 for these five major countries in Southeast Asia. Only Vietnam achieved positive GDP growth of 2.6 percent. Indonesia, the region's largest economy, recorded a decline of -2.4 per cent in 2020 after a 5 per cent annual growth rate since 2014.
In Malaysia, GDP fell by 5.2 percent after a weaker performance in 2019 compared to the previous period. In Thailand, GDP in 2020 was 6.4 percent lower than in 2019. The Philippines saw the largest decline in GDP, which fell by 9% in 2020. In assessing GDP changes in small economies, it is important to recognize that year-on-year changes in GDP are larger than in larger economies. Annual GDP growth, as measured by average annual percentage change, will weaken over time as countries' economic aggregates grow.

 

The impact of the new crown outbreak on the nonwovens industry in these five countries is far less than the impact on their overall economy. Due to the surge in demand for domestic and export protective products (protective clothing, masks), the production of non-woven fabrics has been promoted. Just like in other countries, consumer demand for disinfectant wipes and other wipes, as well as for sanitary products (diapers, etc.) are on the rise.

 

Driven by favorable demographics, economic conditions, growing market penetration, and strong local and export demand, Southeast Asia remains a promising region for the nonwoven industry. Despite the uncertainty created by the neo-crowning epidemic, the impact of the region's recent economic slowdown, as well as the relatively small impact on manufacturing investment and consumer spending, will be quickly addressed through the stimulus package.

 

In Southeast Asia and China (where market penetration is still low), the gradual increase in market penetration of disposable and durable nonwovens is a positive factor for the good growth of nonwovens demand in these major Asian markets and their exports. Over time, nonwovens producers in the five Southeast Asian countries are expected to benefit from strong demand in China, Japan and other countries within and outside the Asia-Pacific region. The largest end market for nonwovens will be sanitary products, followed by durable geotextiles and other markets.

 

Several global and regional disposable hygiene manufacturers have already established their presence in Southeast Asia, including Kimberley (Kimberly-Clark), Johnson & Johnson (Johnson & Johnson), Kao (Kao), Procter & Gamble (Procter & Gamble) and Eunice (Unicharm). The increased production capacity of sanitary products in Southeast Asia shows the growing demand in the region and proves that the region is increasingly becoming a manufacturing base for exports to other Asian regions.

 

In 2020, the production capacity of nonwovens in Southeast Asia mainly includes spunbond/spunmelt, staple fiber needle and/or thermal bonding, and polypropylene spunbond needle technology. There are also some small-scale hot air production lines that are also developing.

 

During the 2015-2020 period, the installed capacity of fine denier spunbond and spunmelt polypropylene nonwovens in the five countries/regions of Southeast Asia increased by an average of 6.6 per cent per year, from 185000 tons in 2015 to 255000 tons in 2020. Of the 70000 tonnes added during the period, CNC/Fitesa has 15000 tonnes in Thailand, 20000 tonnes each in Asahi (Thailand) and Toray (Indonesia) and 15000 tonnes in Fibertex (Malaysia).

 

CNC/Fitesa opened a new Reifenhauser 5 production line at the end of 2020, with an annual capacity of 33000 tons. Asahi will install a new production line with a capacity of 15000 tons in Thailand in the second half of 2021. During the same period, Fibertex will launch the Reifenhauser 5 production line in Malaysia with an annual capacity of 15000 tons. Both lines will be in production in 2022. Through these investments, the annual production capacity will increase by 63000 tons (24.7 per cent). These new capacities could lead to oversupply in the region.

 

In 2020, the annual production capacity of Southeast Asia's fine and medium denier spunbond/spunmelt polypropylene technology is 264000 tons, accounting for about 7% of the total global production capacity of this technology category.
Capacity for this technology is most concentrated in Thailand, where four producers currently account for 43% (114000 tonnes) of capacity. In Malaysia, the combined capacity of the two producers is 94000 tonnes, representing 36 per cent of the region's capacity. In Indonesia, the two producers have a capacity of 52000 tonnes, or 20 per cent of the region's capacity. The Philippines also has a small part of capacity.

 

In Southeast Asia, most of the large nonwovens manufacturers only use fine denier polypropylene spunbond/spunmelt technology, and supply a large number of sanitary products market. As of the end of 2020, Fibertex (Malaysia) is the largest nonwovens producer in Southeast Asia with a capacity of 85000 tons.

 

Asahi (Thailand) has a 40000 t fine denier spunbond capacity in early 2021. Fitesa/CNC (Thailand) has a fine denier spunbond capacity of 72000 tons in early 2021, and Mitsui (Thailand) has a capacity of 30000 tons.

 

Fine denier spunbond/spunmelt producers in Southeast Asia will continue to rely primarily on exports to achieve acceptable levels of capacity utilization. Although the demand for disposable nonwovens in Southeast Asia is growing, it is still small compared to the capacity of installed production lines in the region.

 

Unitika launched a 30000-ton polyester spunbond production line in Thailand in 2017, making it the sixth largest nonwovens producer in Southeast Asia. This series of products is used in carpet backing, geotextiles, roofing materials, automobiles and other industrial applications.

 

Airstream nonwoven producers in Southeast Asia include Ocean Cash in Malaysia, JNC in Thailand and Daiwabo in Indonesia. Nanliu announced that it will install new spunlace and airstream nonwovens production lines in India, and will also invest in new production lines in Vietnam. The specific details have not yet been announced.
 

Source: Jung-International Nonwovens Industry