Part two of a two-part series about the technical textiles industry.
By Stephen M. Warner
Smart textiles are the new exciting products everyone is talking about. They represent the next generation of textiles anticipated for use in apparel, home furnishings and technical textile applications. The vision of the smart textile is a material with added functionality.
There is a common misconception that smart textiles are the same as e-textiles. The fast definition is that e-textiles should be considered within the smart textiles market segment, but not all smart textiles are e-textiles. Besides the electronic component, smart textiles can be passive with the fiber, yarn or fabric as a whole reacting to physical changes such as moisture, temperature, physical force and light differences.
Commercial application success, especially in the e-textile segment, currently is most likely to be found in medical, sports and protection applications. At least in the near future, the fashion apparel market will be difficult for e-textiles to penetrate because of issues with laundering, lack of good conductive threads and ways of connecting to electronic equipment. A game-changer would be for a company to develop and introduce a viable yarn made using a conductive polymer.
Unlike market segments such as geosynthetics and airbags, the smart textile industry is still in the early developmental stages. There are many companies coming up with innovative products. Most of these companies are small start-ups, but there are some notable heavy hitters investing in smart textile technology including Microsoft and Google. There are a number of smart textile startups coming out of the Silicon Valley region.
The primary driver in smart textiles growth is how well textile technology can blend with the trends and current technology in the market it is trying to penetrate such as electronics, fashion and healthcare. Still, the market is extremely tempting. One market research company estimated that the global smart textiles market was valued at $795 million in 2014, and is expected to grow to $4.2 billion by 2020.
Infrastructure, Environmental Protection Opportunities
While the demand for geosynthetics globally has almost doubled in a decade from $3.2 billion to $6.1 billion, the U.S. market, particularly for roads and bridges, was slow in 2015. Growth increased only about 3 to 5 percent last year.
The passage in November of the Fixing America’s Surface Transportation (FAST) Act will provide $325 billion over the next six years to repair the nation’s crumbling roads and bridge infrastructure. FAST will be a boon for the geosynthetics industry, particular for those products used in road construction. On top of the Federal outlay of transportation funds, there are many states increasing their own funding.
The U.S. market for geomembranes has been helped by increased U.S. Environmental Protection Agency regulations for coal ash storage, gas fracking recovered polluted water storage, and the Water Resources and Development Act of 2014.
Thus, the market driver over the next few years for the geosynthetics industry will be focused on both government regulations and government funding.
Trade And Trade Agreements
One of President Barack Obama’s key legacy objectives was to increase U.S. exports. In 2010, President Obama announced the National Export Initiative (NEI), with the goal of doubling U.S. exports from December 2009 to December 2014, which would result in U.S. jobs and an overall boost to the economy. While it is debatable whether the doubling occurred, the NEI did lay the groundwork for trade agreements such as the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (T-TIP).
The dominant trade issue in 2015 was the passage of Trade Promotion Authority (TPA) and the conclusion of the TPP talks. The final version of the TPP was signed by all 12 participating countries in February 2016. It is still not a done deal because each nation must go back to its constituents for passage. In the United States, it is doubtful if the agreement will be discussed before the Congressional session after the national elections in November. Therefore, any impact of TPP will not be felt until 2017.
TPP likely will have little substantial impact on the technical textiles industry. The United States already has very low tariffs on coated fabric products involving many of the TPP nations. The TPP inclusion of the yarn forward rule of origin is good but the United States already has a strong domestic technical fabric yarn industry. The restrictions of the Berry Amendment have been preserved in TPP.
The greatest impact of TPP will be on exports to Malaysia and Japan where the United States is the second largest supplier of technical fabrics, behind only China. U.S. exports currently face tariffs of up to 8.2 percent in Japan and 20 percent in Malaysia. Under TPP, nearly all these tariffs will be eliminated immediately once the agreement is enacted.
Still under negotiation is T-TIP. The negotiations remained largely out of the headlines in the United States because of the TPP activity in 2015, but it potentially has a much more devastating impact on the U.S. domestic technical textiles industry. A stated objective of the European Union in the agreement is gaining access to the U.S. military and other government markets currently protected by the Berry Amendment and Buy America Act.
Government Research Initiatives
Perhaps the most exciting seed that was planted in 2015 for the technical textiles industry was the development of the government funded innovation institutes.
In March 2015, President Obama announced that the Department of Defense (DoD) would provide funding for the organization of a Revolutionary Fibers and Textiles Manufacturing Innovation Institute. The DoD launched a competition for leading manufacturers, universities, and non-profits to form a new manufacturing hub focused on fiber and textile technologies (See “Textile News,” TW, this issue). The DoD is providing an initial $75 million in funding over three years, with the expectation of a matching $75 million raised by state and local governments, and private industry.
Two other government initiatives also were announced in 2015 that are of interest to the technical textiles industry. The Flexible Hybrid Electronics Manufacturing Institute — for wearable smart products — is located in San Jose, Calif. It also is funded by the DoD. The Institute for Advanced Composites Manufacturing Innovation is located in Knoxville, Tenn., and is funded by the Department of Energy.
Forecast For 2016
In 2016, major market drivers for technical textiles include:
- Weather conditions for those supplying technical textiles for outdoor applications such as awnings, marine products, signage and outerwear;
- Government regulations and funding availability in major impact areas including military, environment, transportation and protection;
- Production costs including fuel, labor and equipment;
- Technology transfer such as the ability to adapt applications for technical textiles to exploit emerging market applications; and
- Trade agreements.
Overall, the technical textiles segments account for 37 percent of domestic textile manufacturing, a sharp transition from the 25 percent it accounted for in 1998. The domestic market growth for technical textiles in 2015 is estimated at 2.7 percent. The estimated U.S. market value of technical textiles in 2015 is $32.5 billion.
Editor’s note: Stephen M. Warner is publisher of BeaverLake6 Report, beaverlake6.com, a Web-based newsletter reporting on trends, data and issues that he feels influence the technical textiles industry. He also is former president and CEO of Industrial Fabrics Association International. The article is based on Warner’s presentation given at the 2015 Textile World Innovation Forum.
May/June 2016
