There is a growing demand in polyester sector. The global supply constraints, substantial price increase and uncertain outlook for cotton availability is creating considerable substitution opportunities for polyester products like polyester filament yarn (PFY) and polyester staple fibre (PSF). "It is expected that polyester will capture around 80 per cent of incremental global fibre demand of around 2.9 million tonnes per annum over the medium to long term,"
The global economies are well on their way to recovery after seeing the recession in past couple of years. The India Polyester Segment is maintaining a Compounded Annual Growth Rate (CAGR) of more than 10% for the past two years.
Polyester Sector Outlook
The demand of Polyester has gone up due to growing domestic demand and polyester price competitiveness as compared to cotton. The recovery in economy improved the overall textile sentiments..
PBSL is the only Polyester yarn plant in the entire North east as well as West Bengal, Bihar, Orissa, UP and Punjab and thus it has a huge domestic market at its disposal. Being located in Assam, PBSL can explore the SAARC countries market like Bangladesh, Nepal, Bhutan and Sri Lanka which have huge demand for POY.
Further, SAFTA agreement makes the member countries extremely viable option for Exports and PBSL is expected to derive benefit from them due to its location in Assam. PBSL has also received a formal approval from Assam Industrial Development Corporation Limited to set up a Textile Park.
Challenges, Risk and Concerns
The yarn produced by PBSL is an intermediary product, and is dependent on other segments of industry in value chain. The other threats to the segment in which the Company operates are pricing of raw materials.
According to Goldman Sachs, India is expected to become the world third largest economy by 2035.
The various measures taken by the Government, huge domestic markets, opportunities of exports to SAARC countries are the key growth factors for PBSL.