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Consultants to the Industry since 1929

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Seite 1www.gherzi.com

Consultants to the Industry since 1929

Seite 2www.gherzi.com

Gherzi: integrated consulting since 1929Fiber OEM Textile Garmenting Brands/ Retail

Seite 3www.gherzi.com

Emerging Trends

Mega trends

A6

disruptivetechno-­logies

CB

Emerging Trends

Seite 4www.gherzi.com

Emerging trends

Japan

USA

Germany

UK

France

China

Italy

Canada

Spain

Brazil

2000 2010 2020 2030 2040 2050

India

China

USA

Indonesia

Nigeria

Brazil

Russia

Japan

Philippines

Turkey

Estimated moment of loss of competitiveness of the traditional textile industry

Source : IMF, citygroup, PWC

Top 10 economies by 2050;; India will enter the picture only 2050;; that still gives some time to the textile industry

Evolution of economy and textile competitiveness

Seite 5

Evolution of textile production capacity

Source: ITMF, The International Federation of Cotton and allied Textile Industries

45.553.7 56.0 58.7 57.1

49.036.9 29.6

9.7 3.5 1.7

24.9

32.0 35.4 36.9 40.539.8

39.7

33.3

32.528.9

24.717.7 12.0

19.5

28.031.5

35.5

30.9

26.4

23.3

19.9

19.617.1

9.8

3.3

2.6

2.6

2.7

3.3

3.5

3.64.8

8.0

5.4

35.9

2.0

2.1

2.0

3.5

4.77.1

9.0

9.1

9.3

1.53.1

3.8

5.6

7.5

8.2

9.1

7.3

9.2

10.1

9.5

10.814.7 15.3

9.0

2.4

3.5

4.6

4.3

4.0

9.6 13.9 25.6

38.0

46.5

4.9

6.1

6.4 7.1

8.7

9.5

9.7

10.5

13.9 17.9

21.1 26.637.7*

2.0

2.4 6.7

6.38.2

12.6

3.713.2

11.6

10.2 7.7 3.81.9

3.1

3.8 5.4 8.61.6 5.4

8.2

15.5 21.9 27.4

1.74.0

6.38.0 6.9

6.54.89.66.70.7

115

44*

1.110.7

36.2

5.3

0

50

100

150

200

1900 1910 1914 1920 1928 1933 1938 1950 1960 1970 1980 1990 2000 2010

Other Asian CountriesPakistanJapanIndiaChina

AfricaS. & N. American countriesBrazilUSA

RussiaTurkeyEU countriesGB

3.7

105

133

144145

165157

147

123126

137

158165 169

~ 240

[Mio. Spindeln]

* 2 mn were scrapped

Seite 6www.gherzi.com

8 ongoing changes

1.Stagnation of CO

2.Increase in filaments

3.Increasing blendedshort staple spun yarns

4.Nonwovens gainingshares

5. Increasingfunctionalisation

6. Sustainability

7. Changing retail

8. China +N

Seite 7www.gherzi.com

Global fiber consumption will continue to grow at 3% p.a. with greatershare of syntheticsCotton’s share of total fiber production is forecast to fall below 24%by 2030

Source: USDA, ICAC, CIRFSNote: *forecast

Productionother fibers

Cotton production

CAGR (1960-­2030)

4.5%

1.6%

74%

67%65%

55%

49%46%

51%

46% 47%

37% 37%33%

31%27%

24%22%

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

Other Fiber

Cotton production mn t

Cotton Share

mn t 137*

119*

102*

88*

74*66

53

4341

3430

242219

159

Growth of global fiber consumptionEmerging trends 11. Fibers: Cotton losing shares

Seite 8www.gherzi.com

2. Increasing filaments

Source: Golden Lady

Nerino G (Invista & Golden Lady).: hydrophilamide fiber (staple or filament) combining the best mechanical properties of MMF (PA 66) with the best characteristics of CO (softness & moisture management)

Seite 9www.gherzi.com

3. Increasing blends

Source: Gherzi Data

Total SSF-­Spun Yarns ~40‘000 t

2015 [´000 t and ´000 SE]

Total SE 290’000 SE~ 14’000 t~ 45’000 SE

~ 24’000 t~ 210’000 SE

1‘300 t36‘000 SE

4

100% CO carded

Blended CO carded / PES 5’400t30’000 SE

Blended CO carded / CV 800t – 5’000 SE

100% CO combed4’800t

48’000 SE

Blended CO combed/PES 4’300 t37’000 SE

Blended CO combed/CV 1’600t – 12’000 SE

100% Synthetic-­SSF Yarn 7’600 t75’000 SE

100% CV Yarn 1’500 t – 12’000 SEBlended PES/CV-­Yarn 2’000 t – 14’000 SE

18-­20 40 60 200

12’000t60’000 SE

Ne

9’200 2’800

2’700 2’700

300 500

200 5004’100

800 3’500

400 1’400

6’000 800800

1’500

2’000

Seite 10www.gherzi.com

4. Nonwovens gaining shares• Nonvowens can be produced faster and cheaper compared to wovens and knitted surfaces

• As of today, still limited replacement potential

• First Substitutions• Medtech: Spunbond nonwoven for surgical medical use• Protech: PPE (spunlace)• Signage• Mattress Ticking

Seite 11www.gherzi.com

5. Increasing functionalisation: e.g. Schoeller

the feelgood technology naturally self-­cleaning actively balances out temperature extremes the bionic climate membrane

Sun Reflector -­ UV Protector the ecological way to repel water and mud

The new energy recovery system for textiles Powerful Protection -­Real Comfort

Controls Bacteria. Sustains Freshness Only diamonds are harder. naturally warm Permanent Flame Protection

Seite 12

The World market for sports and fitness clothing is expected to grow by more than4,5% per year with Europe and North America representing 75% of the total

100,000

110,000

120,000

130,000

140,000

150,000

160,000

170,000

180,000

190,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

US$ million

Source: GIA, Inc.

World historical & perspective for sports & fitness clothing by geographic region/country in US$ million*

39%

5%38%

13%4% 1%

38%

5%38%

15%4%1%

38%

4%37%

17%4% 1%North America

Japan

Europe

Asia-­Pacific

Latin America

Rest of World

US$ 125 bn

US$ 142 bn

US$ 181 bn

*retail level

1Global trends5.Increasing Functionalisation: Active wear

Seite 13www.gherzi.com

6. Sustainability

The development of the sustainability movements in the global textile chain

THE PEOPLE

2012

THE PRODUCT

1990

THE PLANET

2011–2020

Business Social Compliance Initiative

Seite 14www.gherzi.com

7. Changing retailShopping mall

1880 20201900 1920 1940 1960 1980 2000

Suburban Shopping malls

DiscounterCategorykillers Online

Mobile

1. Alternative to digitalisation ? à Decreasing turn over until putting existence at risk

2. Who drives the digitalisation ? à Clearly the customer

3. Do we need e-­commerce ? à Do we need marketing ?

Professor Dr. Gerrit Heinemann Head ofeWeb Research Center of Hochschule Niederrhein

Seite 15www.gherzi.com

It took a decade for most countries to achieve the milestone of $ 5 bn of clothingexports.

Source: WTO,Gherzi analysis

Evolution of clothing exports(1990-­2014)

Evolution of clothing exports:trends

0 5 10 15 20 25 30

India

Indonesia

Bangladesh

Pakistan

Srilanka

Cambodia

Vietnam

Myanmar

2014 2012 2000 1990

6

13

24

2413

11

10

?

Circles show number of years to achieve first $ 5 bn of clothing exports with 1990 as a reference year

8.Future sourcing: “China + N”

Seite 16www.gherzi.com

6 Disruptive technologies

1. Alternative fabric joining techniques

2. Digital printing & finishing

3. Spinit, CORIZON

4. 3D Printer

5. IoT & IoE

6. Ai

Seite 17www.gherzi.com

1. Ultrasonic seaming(thermal bonding, laser enhanced bonding, adhesive bonding)

Ultrasonic seaming• Typical applications include protective garments, disposable hospital gowns and shoe covers, face masks, infants' nursery garments, filters, bags, curtains, sails, and web splicing

• Traditional sewing has some disadvantages, such as: the amount of time it takes to produce a garment sewn with needle and thread, the sewing thread deteriorating over time, and the needle and thread producing perforated seams that can allow harmful gases and fumes to pass through the seam

• Ultrasonic seaming is one of the many alternatives under consideration by apparel manufacturers

• Ultrasonic seaming uses thermoplastic polymer or fabrics that contain a great amount of thermoplastic fibers. This technique requires no needle, thread, adhesives such as glue, tape, or other bindingsubstances

DisruptionNo need of sewing thread anymore

Seite 18www.gherzi.com

2. Digital printing & finishing

DisruptionLess need of finishingmachines, Mass customization, single lot production

Seite 19www.gherzi.com

3. Spinit, Corizon

Spinit by Mayer & Cie. CORIZON by Terrot

DisruptionNo need of spinningmachine anymore

Seite 20www.gherzi.com

4. 3D PrinterWoven Lace Knits Nonwoven

all direction-­stretchable non-­woven fabrics based on the integration of elastomers and

textile fibers

Soft PLA material à flexibility

Not ideal (still too rough) but a good start

Lay-­Felt filament from inventor Kai Parthy used

in an FDM printer

DisruptionNo need of the textile chain anymore

Seite 21www.gherzi.com

+ +

OM OM OMSmart Shirt Smart Box Smart App

• Smart Textile: Conductive yarn and quick dry fabric ensures accurate readings no matter how much you move or sweat

• Compression Fit: Activates blood circulation, enhances performance and helps muscles recover faster

à Heart Rate, Breathing Rate, walking steps, calorie count etc

• The iPhone (launched June 2007) is a disruptive technology transforming many other industries (incl. manufacturing)

• Carrying technology;; we are starting to see new benefits in wearing it

• Beecham Research currently forecasts that the “wearable technology” market will achieve 2018 sales of ~3 bn $

• Technology enablers: Bluetooth Low Energy (BLE) and 5G

• Barriers: CAPEX, limited knowledge, constant innovation, talent

• Todays applications are related to health care, sportswear and military;; many more will follow

5. IoT & IoE

DisruptionNew Business models

Seite 22www.gherzi.com

6. Ai

The 4 Point System Automated online inspection Digital Eye

Automated inspection systems• Reduced dependence on human errors

• Saving of manpower and materials

• Quick response

• Reliability

DisruptionNew Business models

Seite 23www.gherzi.com

New business models

Source: Gherzi

Production 03Produce clean, local, with respect and efficiently

RetailHack the take-­away-­

waste model

04

Design 02Design for eternity

ConsumptionGo slow and take good

care05

End of lifeConsider every ending as a new

beginning06ResourcesMaterials matter

01

1. Increasing filaments2. Boosts in blends3. Nonwoven gaining shares4. Reuse and redesign waste

5. Design to last6. Design for rebirth7. Smart textiles

8. Spinit9. 3D printer for garment10.Digital printing and finishing11.Mass personalisation

12.E-­commerce13.New shopping experience14.Take-­back-­waste model15.New definition of ownership

16.Wise consumer17.New rules for shopping (online mobile)

18.Biodegrade organic textile19.Upcycle, reuse and recycle

07

Systems thinkingBe transparent and work together

20.Intelligent textile manufacturingsystems

21.CSR (Corporate Social Responsibility) is a must

22.Transparency23.Short chains

Seite 24www.gherzi.com

Consultants to the Industry since 1929

Thank you