Archroma is a global leader in dyes and specialty chemicals, with 3000 employees in over 35 countries and 25 production plants worldwide. Alexander Wessels, CEO, Archroma joined the company six years ago, and in six years’ journey, Archroma has attained a healthy growth and acquired some of its peers such as the textile chemicals business of BASF or the German automotive dyes specialist M. Dohmen.
Recently he shared his thoughts and ideas with Textile Today Founder and CEO, Tareq Amin. Michel Zumstein, President Region Asia and Oliver Schmidt, Head of Sales, Brand & Performance Textile Specialties, South East Asia & Bangladesh, were also present.
Textile Today: From your background – being a Scientist – and Archroma being a global innovation leader, how do you see it, how do you position it in the global market?
Alexander Wessels: First of all, the purpose of Archroma from the very beginning was to become an industry leader by driving sustainability, innovation and industry consolidation.
Our goal is to support the global apparel and fashion industry, as well as technical textiles, carpet manufacturing, packaging and paper, construction, paints and adhesives, by perpetually developing innovations and system solutions aimed to serve textile manufacturers with optimized productivity and value creation in their markets.
As you know, the textile industry is the second most polluting industry in the world, and we saw a big opportunity by buying the Clariant platform and building an industry leader that would contribute in driving the industry in a much more sustainable economic and environmental direction.
That is what Archroma has been doing since, to challenge the status quo and make our industry truly sustainable. We call it “The Archroma Way: Safe, Efficient, Enhanced, it’s our nature.”
Archroma invests heavily in R&D and innovations to provide full support for the customers and textile manufacturers. Every stakeholder supplying in textile mills should prioritize R&D as putting money into research and development is putting money into knowledge. Innovation converts that knowledge into money.
Textile Today: What is your intake on the global pattern/trend of the chemical industry right now after having some major changes, and how long it may take down the line?
Alexander Wessels: We see a major growing global awareness on sustainability – from the governments also – and this will accelerate and increase proportionately. Everywhere like India, China, Europe, North America, or South Asia, the chemical industry has a critical role to play in the value chain for a sustainable process, which also drives more economic sustainability.
We have witnessed that sustainability was the key topic with brands at ITMA 2019 and became a sensitized topic. The brands and retailers issued restricted substance lists and certifications to push towards a sustainable direction. This is why we joined the ZDHC Foundation as a contributor, , jointly with other chemical industry players, after receiving their commitment to support the industry’s effort whilst working at eliminating duplicative approaches.
The global innovations are built around finding solutions that help the chemical industry using lesser natural resources, be it water, energy, or other material consumptions, as a consequence makings every square meter of textile cheaper while imparting the same quality.
Therefore a lot of our solutions are focused on reducing water and energy usage in the manufacturing process of our customers, making the said much more efficient, and more economically sustainable in the future.
Textile Today: If you look at the cost gamble for the manufacturers – particularly in Bangladesh – cost in dyes and chemicals, energy, management, etc. have gone up. Though you have mentioned about chemical cost reduction, but other costs are increasing. How do you mitigate that?
Alexander Wessels: I think in the total cost of apparel making, dyes and chemicals cost around on average 4 to 5 percent, and 40 to 50 percent cost is fiber, whilst energy costs have just gone up by 30%.
Whenever we can provide solutions that can reduce the energy consumption for manufacturers, ultimately it benefits them economically.
That is where the Archroma team in Bangladesh is focusing on, finding solutions to reduce cost. In Bangladesh we are consistently growing at a much faster rate than previous two-three years, which bears an ironclad proof that this team has is bringing the solutions needed for the local market, solutions that are economically beneficial for the apparel manufacturers, that are helping them to look at the total cost of production rather than just the dyes and chemicals cost.
Textile Today: Do you really think that you adopt such changes for textile and apparel factories to have a budget in innovations and R&D?
Alexander Wessels: Archroma invests heavily in R&D and innovations to provide full support for the customers and textile manufacturers. Every stakeholder supplying in textile mills should prioritize it as putting money into research and development is putting money into knowledge. Innovation converts that knowledge into money.
Textile Today: As an industry knowledge partner we have been urging the factories to become more vibrant, efficient and productive. Sad but true that the price they get do not allow them to invest more in innovations and R&D.
Alexander Wessels: As an industry leader we invest a lot in innovations and R&D. We provide top-notch solutions to our customers by adding value. A lot of Bangladeshi textile and apparel manufacturers are doing excellent in that area, providing value for brands and retailers.
If you can address this short fashion cycle more efficiently then Bangladeshi apparel manufacturers will get better profit returns for higher value-added products over other competitive apparel manufacturing countries.
And I do think that it is not only about looking at costs but also looking at creating products with a higher value. Then the brands will be agreeable to give better prices.
Oliver Schmidt: This is where I see Archroma Bangladesh as an important link between brands and the R&D departments of our customers. With our system solutions and innovations, we actively focus on helping and supporting the local teams of our customers, so that they can serve the brands in a more efficient way.
Textile Today: Archroma has introduced the ‘One Way’ model. How this model may help Bangladeshi companies?
Alexander Wessels: The ‘One Way’ process simulation system helps to quantify the benefits that the apparel manufacturers are creating for themselves and for their brands. ‘One Way’ makes the benefits very visible, which helps mills and brand owners to develop innovative textile solutions that are both more ecologically and economically sustainable. It also helps customers to drive their sustainability targets in a fast and reliable manner to increase the product value comprehensively rather than focusing on just a single product.
Textile Today: How would you position Archroma in the context of the current trade war?
Alexander Wessels: We are one of the few leading suppliers, who have manufacturing facilities in all continents and we are very close to our customers regardless it is in China, India, Bangladesh or any other country.
On the trade war topic, I do hope that it will not escalate to such a ferocious level that the continents become isolated, that at a certain point it calms down, as we all depend on one another. That said, we deal rather well with the situation thanks the fact that we have a slight advantage with our local supply circuits.
Textile Today: On the note of closer to the markets, if you consider Bangladesh as a manufacturing place, what will be the factors?
Alexander Wessels: Currently, we are supplying in the Bangladesh market from Singapore warehouse, Thailand, and Indonesian manufacturing operations, which are really close. I think one of the key factors for considering a manufacturing unit here would be lowered delivery cost, impact on water and efficiency.
Textile Today: How is the consumer trends, particularly in terms of choosing textiles? Do you see any changes?
Alexander Wessels: First of all I am not a specialist in this. Brands have complete departments to keep an eye on trends. But from my perspective, what we see is, of course, the vast demand in cotton that is surpassing the supply. As a consequence, a lot of the demand is on synthetic fiber rather than on cotton, which is been the trend for some time.
That said we also see a change in technology, as new technologies will drive older ones out. For example, digital printing will take its fastest share in the market, not only in this year but in the next 10 years. Some of the new technologies are coming into the market, but taking some time to getting widely accepted. Once of course the learning curve and the asset cost growth will go down, then they will be much more widely accepted, every one of them creating a new paradigm in the industry.
Textile Today: Will it replace the traditional dying?
Alexander Wessels: I would not say that digital printing will replace everything, but yes, I think it will replace part of the market. For example, we see some of the sportswear market – say swimwear – where digital printing has taken a big market share globally.
Textile Today: How do you see the impact of circular fashion and another recent trend – natural products?
Alexander Wessels: I think it is inevitable that we go to a more circular industry. With the world population growing and increasing the usage of textiles, it is inevitable, particularly for synthetic fiber.
The future of the efficient system of synthetic fiber is that, after usage, fibers get separated and are reused to make fibers again. The paper industry already works that way – a lot of the old paper gets recycled.
If we can imitate that approach of recycling with dyes, then the industry would get more circularity, like with the Archroma ‘EarthColors®’ range made from natural waste. These high-performance dyes are produced from non-edible agricultural or herbal industries waste such as leaves or nutshells. Thanks to smart technologies, EarthColors® dyes are fully traceable and that helps make the dyeing manufacturing more circular.
Textile Today: How do you see the future of this circular dying manufacturing?
Alexander Wessels: It is growing substantially but let’s be realistic. It does not work for synthetic fibers and secondly, it is also clear that if the whole world starts using natural dyes from waste, then the world also needs to produce a lot more waste!
So, there are always limitations, but I see a big part of the market where natural dyes are applicable, already converting. Some of the big brands already have a product range made from natural dyes.
Textile Today: In Bangladesh, we have a lot of textile waste, how the Bangladesh textile industry can make circular fashion?
Alexander Wessels: There are people who are working to reuse the cotton waste to make textiles and dyes. Also cotton waste is one of the key ingredients of EarthColors®, and it is fundamental if we really want to make the industry circular, and ultimately become beneficiary in the long term and economically.
We can see that the cost of waste removal, or its processing, is increasing perpetually. We have seen it in China already. In the past, water and waste did not come at a cost.
Whereas, at present, the whole economic equation is changed as the textile industry has to pay for both. It, therefore, makes sense that the whole Bangladesh textile industry should develop R&D and other innovations to make the process economically beneficial.
Textile Today: How Archroma is helping with this sustainability?
Alexander Wessels: Archroma is developing sustainable manufacturing on three levels. The level one is in our own operations, where we are painstakingly focused to become carbon neutral. Along with that, we are focused to become ‘zero liquid discharge’, and in some factories, we are already there.
Level two is transport, which is a major CO2 emission source. W e are working on systems to minimize that.
And the third level, of course, the process of our customers, where we focus on really driving their usage of resources down, be it water, energy, or be it waste. And when a textile manufacturer is strictly following that, it is creating a much more sustainable process.
Take our innovative ‘Advanced Denim’ process, where water consumption is reduced by up to 92%, up to 63% of the usual cotton waste can be avoided, and up to 30% can be saved in energy costs compared to traditional denim processes.
We are working in a lot of countries where water is spare; this is one of the reasons why everything we do is focused on ‘The Archroma Way’ – Safe, Efficient, Enhanced.
For instance, our own restricted substance list is stricter than some of the brands’. An example of that is aniline, which today is not a universally restricted substance, it is ‘only’ a suspect substance because of the danger of skin irritation especially for workers in the denim industry, and for aquatic life. Yet we brought aniline free indigo (indigo with aniline levels below limits of detection according to industry-standard test methods) the detection level –in the market,
Well, others might say: why don’t you start acting when aniline will be in the restricted list, but as dyes and chemical leaders, we want to be ahead of that.
Because we believe that if we can make a sustainable product that will help to preserve life on this planet, we should do so. If denim is made with aniline that ends up in the water, this has an immense negative impact on aquatic life. If we can use a safer alternative, then why not.
Textile Today: Bangladesh textile manufacturing is cotton-based, whereas as you have mentioned, the global fashion industry is shifting towards synthetic and other types of artificial fibers. What will be the course of action for the fiber manufacturers of Bangladesh?
Alexander Wessels: First let’s look at Bangladesh’s strength. Manufacturers in the textile and apparel industry have built an export miracle. The year on year growth is quite phenomenal. Yes, it is cotton-based, but clearly the industry is breathing textiles.
In the long term, textile manufacturers will have to start producing other varieties of fibers. In Vietnam for example, we see polyester and some other blends being produced, taking over from China. It would great to see Bangladeshi textile manufacturers start soon, by building infrastructure. This does not mean giving up on strengths, as the growth meter of cotton is still on the rise globally, whilst at the same time building competence simultaneously.
“Whenever we can provide solutions that can reduce the energy consumption for manufacturers, ultimately it benefits them economically. That is where the Archroma team in Bangladesh is focusing on, finding solutions to reduce cost.”
Additionally, the combination of natural and synthetic fiber is a growth booming sector, and a sector for the local manufacturers to focus on.
Textile Today: And what is your strategy in the Bangladesh market particularly?
Alexander Wessels: The Archroma Bangladesh team is doing really good under the current leadership and driving the market, and the proof is there in the market growth. The team will keep bringing innovations into this market to support the local industry in its upcoming opportunities and evolution.
Michel Zumstein: Bangladesh is clearly developing as a very innovative market. In the denim and fashion industries, this is one of the main strengths of Bangladesh. We help to fuel it further and work together with the textile and apparel manufacturers in an innovative way.
Textile Today: Yes, with the innovative products you are making, most of the brands feel positive that Bangladesh is the place for manufacturing.
Michel Zumstein: Brands and manufacturers are increasingly working with us as partners to develop textile products and garments made in Bangladesh where innovation and performance create value for all.
Alexander Wessels: One of the factors to decide to build a manufacturing plant is you need to have minimum skills. With the steady growth in the last couple of years, that skill is there to quickly go to the next gear.
Textile Today: If Archroma finds any company to acquire in Bangladesh, will you acquire it for manufacturing?
Alexander Wessels: I think that, in Bangladesh, with respect to the export market, there is a clear desire to work closely with people who are globally established. Also, to get bluesign® approval, textile and apparel manufacturers need to have their operation globally known. Bangladeshi manufacturers who are working with suppliers who have bluesign® certifications have a market advantage as it helps them to get quick approval from the brands.
If we come across an opportunity – manufacturing wise – in Bangladesh, we will certainly review it.
Textile Today: Do you have any such plans in India?
Alexander Wessels: No, we do not have any plans in India. We are in the process of buying a paper business in India and we have two manufacturing facilities there.