To reduce the complexity and cost bluesign® and ZDHC should work jointly to agree on same standards. Currently, the ZDHC gateway is not connected with the bluesign® system, on the other hand, the acceptance level of ZDHC gateway is not unquestionable. In this regard, many people do not understand the necessity of this gateway. The gateway needs to be managed differently.
Bangladesh’s textile industry is a big market for dyes and chemicals as it consumes textile dyes and chemicals worth of about 800 million USD every year. And the consumption of dyes and chemicals is increasing day by day. The DyStar Group, a leading dyestuff and chemical manufacturer and solution provider, offering customers across the globe a broad portfolio of colorants, specialty chemicals, and services, is a major player in Bangladesh’s dyes and chemicals market.
With a heritage of more than a century in product development and innovation for the textile industry, it has set the company up to consistently grow their business and also venture out into new markets and industries. Recently in an interview with Textile Today Eric Hopmann, CEO, Head of Global Sales & Marketing, DyStar Group shared their business portfolio, development and new approach for the customers and many other aspects.
Textile Today: Can you explain DyStar groups’ latest business portfolio and what is the development and new approach for your customers?
Eric Hopmann: First, let me state that I am very pleased with the developments in Bangladesh. Yesterday, I was reviewing the progress of the Bangladesh textile market and found that industries here have made a huge progress! DyStar is also very happy with the steps taken and to be a major player in Bangladesh with new opportunities coming up every day.
Demand in Bangladesh is increasing but also the focus on sustainability is rising rapidly requiring new technologies and products to be introduced in the market place. Important as well for the industry is to follow closely the developments in China as China is changing and these changes will have a major long-term impact on the global Textile but also Chemical supply chain.
Also Read: Cadira®- a new initiative of DyStar to reduce water, waste and energy consumption
At DyStar we are also moving and growing further globally, also in 2019. What are some of the new strategies and steps taken:
First, DyStar acquired the American Emerald Specialities Business Group, involved in the manufacture and marketing of Consumer Products, Food chemicals and Food dyes as well as performance chemicals. We have been very busy integrating this company into DyStar and setting up the business on a global footprint as the former Emerald business was mainly focused on America.
On the product development front, we have of course a lot to talk about. But overall our focus has been to develop new concepts to serve the industry better. For example, our Cadira® concept which we were presenting to the Industry in Bangladesh in our seminar. We have developed Cadira® concepts, for the cotton industry to save energy, water and other resources, but we also developed a concept for efficient dyeing and printing of polyester, for wool, and other fibres and dyes classes, overall 8 Cadira® concepts with the focus on saving energies and optimizing dyeing processes.
In addition, for the denim sector we have the most sustainable Denim package combining the cleanest Indigo available in the market place together with our organic reducing agent Sera Con C-RDA. This helps the industry avoiding the usage of hydrosulphite in production of more sustainable Denim fabrics.
Another important news is that we have registered a new company named BluWin in Europe. This company will incorporate all services of DyStar like Texanlab, Sustainable Textile Solution (STS) and Colour Solutions International (CSI). With this new formation we want to emphasize the focus of our teams on servicing the Textile Industry better, help this business to become also more independent and develop business in new industry segments.
You probably know as well that Texanlab Laboratories Private Limited is going to set up soon a new state-of-the-art laboratory here in Dhaka, because we believe that the testing services nowadays are key for making sure the exports of textiles also meet the requirements of retailers, especially of course eco requirements.
Besides this we are also continuing to expand our production in India for our auxiliary business which will not only support the demand for more sophisticated products in India but in the whole subcontinent.
This is in a nutshell what is new but of course we could spend a lot more time talking in detail about the features and performance of the many new products we have launched since our last meeting.
Textile Today: Sustainability issues are raised a lot in brands, manufacturers and retailers. We also see that manufacturers’ profitability is a great issue. Their profitability went down and at the same time they need to continue investing in environmental and social aspects. So how DyStar solutions can help them for becoming more efficient and increase their profitability as if they can become more sustainable?
Eric Hopmann: That is a very big and complicated question. So let’s try to look at the different aspects. I think DyStar has strong chemical and technical expertise to help the industry to be as efficient as possible and as mentioned earlier to reduce cost of dyeing by using energy and resource efficient chemistries etc.
In DyStar we have developed a unique program called econfidence® since many years. econfidence® is a program of DyStar with which we trace all raw materials we use in our production process. We therefore clearly know first how to meet the legal requirements of all countries (which are very different and not easy to comply with).
We trace all the chemicals, especially the banned chemicals, to take them out from our supply chain right from the beginning. But with econfidence® we also go way beyond the legal steps to meet the requirements of the retailers. And that’s where it gets very complicated. Today every retailer has different standards, different RSL’s (Restricted Substance Lists). Therefore, we need to propose products with different abilities to meet different sets of requirements.
Read More: DyStar releases 2017-18 sustainability report
Let me give you an example: you have a retailer who wants to have Cradle to Cradle™ as accreditation for its textiles and garments. That means, if we want to do business with the supply chain of this retailer, that we need to register our products by Cradle to Cradle™. But other retailers may use different accreditation programs like GOTS or bluesign® or Oeko-tex® and this means we also must register our chemicals with these programs.
This also means that textile mills need to use different kind of chemicals to produce textiles for these retailers and get their fabrics tested to comply with all different accreditation programs if they want to supply these retailers. In other words, this makes the whole supply chain extremely complicated and in particular costlier for all players, chemical suppliers, textile manufacturers but also retailers without any real benefits for the industry.
DyStar together with some key players from the industry has started recently an initiative to engage with the retailing industry and more particular with ZDHC on how the chemical industry can help streamlining these standards and agree on one standard for the industry. That will help everybody to become more efficient, cut a lot of cost in the supply chain.
This is not a single company’s efforts, this is an effort that needs to be taken by the whole industry. It will certainly take some time to achieve this goal, but we are confident that through open communication and exchange as well as some understanding among key players and perhaps some courage we will achieve our goal.
Textile Today: That is very interesting issue what you are saying. A few days back we organized a seminar with ZDHC about the implementation of their project. ZDHC also give their roadmap and also introduced their gateway. But still the textile manufacturers are not finding the right chemicals on the gateway to comply with the various RSL’s from retailers. How do you see the situation?
Eric Hopmann: We know how difficult this process is, believe me, DyStar is spending a lot of efforts, time resources and money ultimately to be able to offer a full range of products complying with these requirements, so we can meet all requirements of almost all retailers. The question is, does it make the end product, the garment better? Does it help to raise efficiency in production and reduce costs and ultimately does it give a more sustainable product to the end user.
I have serious doubts on that point. But to meet the retailer’s individual requirements the Textile producers in Bangladesh need to carefully select their dyes and chemicals, check carefully what products can meet which RSL and of course test the fabrics at the end of the process to make sure the expected quality and eco profiles are met.
At DyStar we have launched eliot®, an internet program grouping all information on our products meeting various individual RSL from various retailers. This selection is very complex and believe that this free of charge tool is helping the industry in Bangladesh (https://www.dystar.com/eliot-2/)
The industry knows and is informed that products available on the Gateway of ZDHC do not meet all requirements of the retailers they represent, and this is certainly one of the issues our Global Chemical Industry Group is trying to address openly with ZDHC (See Open Letter to Stitching ZDHC Foundation dated 07.05.2018)
We as an industry are prepared to engage with ZDHC but certain issues need to be changed. In a first step we should perhaps define a pyramid principle with different levels of accreditation, Level 0,1,2,3 as an example. Although one could ask if ‘Level zero’ – i.e no legal compliance – is acceptable to the industry, ‘Level one’ could be a starting point moving upwards step by step to meet the best available level according to us which as of today would be the bluesign® accreditation. One could also include at that level some of the products from The List of Inditex.
And ultimately, we could try to work hand in hand to develop in future a level 4?
There is no doubt for us that ZDHC is a good platform with many well-known retailers to work with, a good partner to discuss important topics like this.
So, it is a complex issue and all the players of this industry need come to the table and define together what is best for the industry and find the right solution! DyStar will support to its best this initiative, but alone this will not work! This has to be a joint effort and I am convinced that other players from our Industry are also prepared to join and support the initiative.
Again, if we ultimately all work on setting up one standard it will benefit all players without damaging the fashion industry but in contrary allow the supply chain to improve much faster its sustainability footprint!
Please give me one argument why this should not be feasible?
Textile Today: And on top of that, the happenings in China is affecting supplies of dyestuff and other chemicals how these things are affecting the industry?
Eric Hopmann: Okay, let’s talk about the Chinese textile industry and the chemical industry. The textile industry of China has grown exponentially when China joined WTO from 2002 to 2014 and if we see some statistics in 2016-2017 the world textile and garment exports reached close to 800 billion dollar and China represents approx. 45% of that. But in the last 2-3 years their textile export started to slow down, mainly because of two reasons:
- The costs in China have increased rapidly in the last couple of years and the Garment industry has started to move towards cheaper regions, especially Vietnam and Bangladesh
- the government of China had to take serious measures to crack down on pollution
The problem in China is the speed of implementation! Change have to come overnight, and this creates a lot of problems. That’s why the textile industry is moving out of China but also the Chemical industry and other industries for sure. Now let’s make no mistake. Big players in the textile and chemical field will stay, but they must be clean, profitable and be innovative if they want to stay!
And therefore, I believe that small and medium companies will have no other choice but to shut down as the costs of becoming clean are too high as well as access to new technologies might not be possible.
Because of the higher costs of manpower and complying with new stringent policies, big chunks of the industry have started to move. This will give a lot of opportunities to the Industry in Bangladesh, for garment manufacturing as a starting point but also of course in dyeing and finishing. In fact, I am very impressed with some of the investments that have been done since my last visit!
But to come back to what we call the ‘China impact,’ many chemical industries are being shut down as we speak, and I cannot tell you when this will end. Last week we have seen in the news that the Chinese authority announced, that they will shut down about 1000 chemical companies over next three years in Jiangsu province. 1000 of inspectors have been hired by the central government to implement the new laws, which are very stringent! Perhaps you may think you are safe if you are not manufacturing in China, but the problem is that a Chinese company that supplies raw material to your company may be shut down and your supply chain will be interrupted.
This is one of the reasons for extremely volatile prices in our industry. But besides price increase we all must understand, textile manufacturers as well as retailers, that there will be major changes in the supply chain. There will be interruption, and there may be products which will need to be cancelled, chemistries stopped to be supplied in future.
Of course, there are alternatives available and DyStar is working hard on making such recommendations and helping its customers to find alternatives, but the process itself cannot be stopped and avoided. It’s a very complex situation and its not to be a short-term situation, this must be clear. The current situation is not like the supply problems we have seen during the Olympic games in Beijing in 2008, this is severe and permanent, everybody has to realize this.
Textile Today: So, what is the DyStar strategy in this aspect?
Eric Hopmann: DyStar is very lucky to have shareholders who are backward integrated, especially in the case of Longshen, our major shareholder, they have already some years ago invested into state-of-the-art wastewater treatment facilities, into new technologies and have been a very stable supplier of raw materials and intermediates to DyStar.
This is no doubt of great support for us. But we also have no other choice but to accept cost increases to make sure we can maintain our supply to our customers. There is no way to avoid this at present. And we do understand that some customers are not happy with price increases but at this stage most important is to be able to continue supplying our products.
We are discussing this situation openly with our customers but also with retailers we are meeting regularly and in fact with the whole supply chain we are engaging with.
Textile Today: Considering these global happenings is there any positive issue for Bangladesh? Also, what are you thinking from DyStar for the current situation of Bangladesh?
Eric Hopmann: From our point of view, Bangladesh is progressing very rapidly because of its focus on the Textile business, the skilled and competitive labour force, the speed of service to retailers but also the investments into new and sophisticated technologies. I have seen some latest dyeing and finishing equipment being installed and even digital printing is growing!
These are important factors for the exports of textiles which have in the meantime grown already over 30 billion dollars and I would not be surprised if Bangladesh will reach higher levels soon! The energy supply in Bangladesh needs to continue being worked on, though quite some improvements have taken place as I have been told, but I hope of course that the Bangladesh government will continue supporting the efforts from the Industry!
Many Bangladeshi factories have in the meantime become more sustainable, no doubts about this and my true impression is that Bangladesh is getting more professional day by day. Yet there will be more opportunities for Bangladesh to grow up their industries because of its competitive situation and the expertise available.
But let’s not forget that there are also a lot of competitors in India or Pakistan etc. which are also very capable in the production of Textile fabrics, like in Denim.
Textile Today: So you already tell about the fabric demand of Bangladesh. So what do you think about establishing a factory of dyestuff and other chemicals in Bangladesh or close to Bangladesh?
Eric Hopmann: First of all, to establish a factory in Bangladesh is not a simple process and an easy investment! We have already many factories in different countries from where we export our products globally.
But we provide a good local technical support in Bangladesh and are working on increasing our service and technical expertise as I mentioned earlier. We do support our local management team, Ridha Najar and Majaharul Sumon, through our regional team based in India and which is managed by Jayant Khera, our regional Vice President who is also here today.
We also send when needed experts from our global team based in Germany, two of which are with us this week and coming very regularly to Bangladesh! We are trying to help our customers here to understand better the requirements of the global retailers and using the most advanced processes.
Hence the investment in technologies in Bangladesh is very important for us. But overall, I do not wish the textile industry in Bangladesh to grow as big and as fast as the one in China did, because ultimately it was not sustainable. This country needs to make sure sustainable effluent and waste management is set up properly and whenever new factories come on stream. Otherwise the country may face one day a similar situation like China today.
Read More: Newly Opened DyStar Liaison Office in Bangladesh
Textile Today: So you have many services like Texanlab, STS, CSI etc. So what are the packages of products you want to offer Bangladeshi industries?
Eric Hopmann: Yes, there are many services we offer to our customers. First of all, in CSI we offer colour standards to our retailers. In this regard, we arrange many programs where we offer different colours to various important retailers, NIKE, Adidas but also Gap or Walmart to name a few. This is a service we offer to enhance the colour communication between retailers and mills, to help developing colours faster and better meeting best available technologies in terms of dyes and chemicals.
Sustainable Textile Solution (STS), is a platform offering not only very special services in the auditing of textile mills but also many kinds of training to the whole industry, i.e. on sustainability issues or RSL’s or i.e. Higg Index etc… Here we try to help building up industrial awareness and understanding of the key issues of the industry throughout the industry.
Texanlab is a testing laboratory for both chemicals and textiles with its headquarter in Mumbai. We are expanding this business in India with our laboratories in Mumbai, Tirupur and Delhi offering a wide range of testing services to the textile industry but also outside of the textile industry i.e. testing food chemicals, or wood etc. We definitely want to expand this business now in Bangladesh and at a later stage in Vietnam and Turkey. Again, this business needs to be developed step by step and proper guidance is also needed in this sector.
Textile Today: I think the industries are facing lots of challenge and one of them is increasing of cost and this will give a huge impact on Bangladesh. But cost of chemicals and dyestuff are not big compared to the total costs of garments. Can you explain what are the cost drivers for chemicals and why you expect those to rise?
Eric Hopmann: If you ask me the improvements in chemistry can be lead through many aspects like fastness, sustainability and performance, this does not necessarily lead ultimately to increasing costs, I mean total cost of processing. There are many different concepts that can be used in production. Sometimes you also have such type of products, which are more expensive because the overall manufacturing process in synthetizing a dyestuff takes longer. We do have some dyes in our product range that take over 6 months to be produced! But the most important when looking at costs is not the individual product costs, but the total process costs.
This is the key nowadays with modern equipment! If you can reduce the production time by half, reduce water and energy, this will make your company more competitive and more profitable! A price per kg should not be the decision-making argument for selecting dyes and chemicals!! Important to know is that in the chemical industry, if you produce and treat your waste properly this comes with costs.
This may not have been the case in the past years in some countries, like in China f.e., leading some factories to be polluting air, soil and water. With the new policies being implemented now in China I have no doubt that this will stop in future and hence we expect costs for dyes and chemicals to increase. There is no way out even if this will take some time. I do have actually to spend quite some time to review and explain the situation and changes of the industry to customers but also retailers.
Textile Today: So if companies like ZDHC, bluesign® etc.. cannot convince the brand to pay more for sustainable products and consumers are only prepared to pay a little bit more to get the best products, will sustainable products really make a great impact?
Eric Hopmann: I think young people are more and more concerned about sustainability issues, using internet and social networks specially to voice their ideas. They are really concerned about environmental issues, how much waste we are creating, about the future of this planet. As such they will also have a big influence on this industry, through their behaviours, the way they purchase their garments, the type of garments they purchase, and how!
These are some of the new challenges for our industry. But please allow me once again to mention: using clean chemistries do not need to be linked to higher costs! How to improve our industry, how to preserve better our environment and resources, these are the challenges of the whole textile industry. Solutions are available, initiatives started, we need now the courage and the willingness to be wanting to move together and to make this industry better and cleaner!
