Viscose Staple Fibre (VSF) Manufacturing Plant Project Report 2024

The demand for viscose staple fiber (VSF) is significantly influenced by the growing adoption of sustainable textiles and the expansion of the apparel industry. As environmental consciousness rises, consumers are increasingly seeking eco-friendly options, with a notable shift towards nature-based fabrics like viscose rayon. In 2024, it was estimated that 92 million tons of textile waste will end up in landfills each year, highlighting the urgent need for biodegradable alternatives. Viscose fibers are derived from renewable sources such as wood pulp, which can be sustainably harvested. The global apparel market is experiencing robust growth, due to which the demand for viscose is also expected to grow by approximately 5% annually. Eco-conscious brands like Stella McCartney are actively sourcing their viscose from sustainability-certified forests. Additionally, innovations such as Lenzing’s EcoVero technology incorporate recycled textile waste into viscose production, which aligns with consumer preferences for circular fashion.

Other elements to consider while establishing a viscose staple fibre (VSF) plant include raw material sourcing, workforce planning, and packaging. The production of viscose staple fiber (VSF) relies on several key raw materials, with wood pulp being the primary component. In 2024, it is estimated that the global demand for wood pulp will reach approximately 200 million metric tons, driven by the increasing need for sustainable textiles. This cellulose-based fiber is typically derived from fast-growing trees like eucalyptus and acacia, ensuring a renewable supply. Companies such as Asia Pacific Rayon use 100% PEFC certified wood pulp, which enhances transparency in the production process.

In addition to wood pulp, cotton and cotton linters are also used; in 2023, global cotton production was around 25 million metric tons, with cotton linter contributing significantly to the soft texture of VSF. The manufacturing process involves various chemical agents, including approximately 1.5 million tons of sodium hydroxide used annually for mercerization, along with carbon disulfide and sulfuric acid for regenerating cellulose. These chemicals are crucial for transforming raw cellulose into a soluble form that can be spun into fibers. These raw materials are essential for producing high-quality VSF that is widely used in textiles, including apparel and home furnishings.

Moreover, to help stakeholders determine the economics of a viscose staple fibre (VSF) plant, project funding, capital investments, and operating expenses are analyzed. Projections for income and expenditure, along with a detailed breakdown of fixed and variable costs, direct and indirect expenses, profit and loss analysis, enable stakeholders to comprehend the financial health and sustainability of a business. These projections serve as a strategic tool for evaluating future profitability, assessing cash flow needs, and identifying potential financial risks.

However, challenges such as disruptions in raw material availability, primarily due to deforestation and unsustainable sourcing practices, may threaten supply stability for viscose staple fiber (VSF). The production of VSF heavily relies on wood pulp sourced from natural forests, with estimates indicating that over 200 million trees are logged annually for textile production, raising significant environmental concerns. This reliance not only impacts biodiversity but also poses risks to local communities dependent on these forests.

To combat these challenges, manufacturers of VSF can explore alternative sources for key ingredients, such as recycled fibers. For instance, recycled viscose can be produced by cutting down old fabrics and spinning the fibers into new yarns, creating a sustainable source that mitigates the need for virgin wood pulp. Additionally, investing in closed-loop production processes can help reduce dependency on fossil fuels and reduce environmental impact by decreasing water usage and chemical discharge.

About Viscose Staple Fibre (VSF)

Viscose Staple Fibre (VSF) is a biodegradable fibre derived from wood or cotton pulp, renowned for its softness and versatility, resembling cotton in texture. It is widely used in apparel, home textiles, and non-woven applications due to its lightness and breathability. VSF is increasingly recognised as a sustainable alternative to conventional fibres, making it popular in the textile industry. The development of viscose dates to the 1880s, with Sir Joseph Swan creating the first fabric from plant cellulose. In 1892, advancements by Charles F. Cross and colleagues led to the modern viscose process, establishing it as a significant type of rayon. Grasim Industries began producing VSF in India shortly after independence in 1947.

Properties of Viscose Staple Fibre (VSF)

Viscose Staple Fibre (VSF) has a diameter ranging from 1 to 20 micrometres and is soft with a moisture absorption rate of about 13% to 15%, surpassing cotton's 8% to 10%. VSF has a low tensile strength of approximately 20 to 30 grams per denier when dry and only about 10 to 15 grams per denier when wet. It typically has an elongation of 30% to 50% and low elasticity, usually under 3%. Chemically, VSF is sensitive to acids, with a pH range of 4 to 7, and is highly dyeable, allowing for vibrant colours. Additionally, it biodegrades within 2 to 5 years, making it an environmentally friendly textile choice.

Manufacturing Process of Viscose Staple Fibre (VSF)

The production of VSF begins with the preparation of wood pulp, which is treated with sodium hydroxide (NaOH) and steeped in an 18% NaOH solution to form alkali cellulose. The alkali cellulose is then shredded into a fluffy mass, aged for 3 to 72 hours to reduce chain length, and reacted with carbon disulfide to form cellulose xanthate. The xanthate solution is allowed to ripen, and a spinning solution containing water, zinc sulfate, sodium sulfate, glucose, and sulfuric acid is prepared. After filtration to remove undissolved materials, the ripened viscose is extruded through a spinneret into a spinning bath to form filaments, which are then washed and dried to produce the final VSF product.

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Making of Viscose Staple Fibre (VSF)

1. Preparation of Cellulose

• Raw Material: Wood pulp or cotton linters
• Chemical Treatment: Wood pulp is treated with sodium hydroxide (NaOH) to produce alkali cellulose.
• Reaction: Cellulose + NaOH→ Alkali Cellulose + H₂O

2. Xanthation

Alkali cellulose is then reacted with carbon disulfide (CS₂) to form cellulose xanthate.

Reaction: Alkali Cellulose + CS₂ → Cellulose Xanthate + Na₂S

3. Dissolution

The cellulose xanthate is dissolved in a dilute sodium hydroxide solution to produce viscose.

Reaction: Cellulose Xanthate+NaOH (dilute)→Viscose Solution+Na₂S

4. Filtration and Degassing

The viscose solution is filtered and degassed to remove impurities and trapped gases.

5. Spinning

The viscose solution is forced through spinnerets into an acidic coagulation bath (usually sulfuric acid).

Reaction: Viscose Solution+H₂SO₄→Regenerated Cellulose+Na₂SO₄+CO₂+H₂O

Applications and Drivers of Viscose Staple Fibre (VSF)

Viscose Staple Fibre (VSF) finds applications across various industries, with the textile sector being the largest consumer, accounting for majority of the market share. VSF is widely used in apparel, home textiles, and non-woven applications due to its softness, breathability, and moisture absorption properties. The booming textile industry in emerging economies like India and China is a prime driver. The automotive sector is another key application, with VSF used in car upholstery due to its wear resistance and low volatile organic compounds. Additionally, the growing healthcare industry and increasing demand for eco-friendly, biodegradable materials are fuelling the VSF market growth. The fluctuating prices of cotton and the rising awareness of sustainable fashion choices are also contributing to the market's growth, as VSF serves as a cost-effective and eco-friendly alternative to synthetic fabrics.

Key Features of the Viscose Staple Fibre (VSF) Production Cost Report

A detailed overview of production cost analysis that evaluates the manufacturing process of viscose staple fibre (VSF) is crucial for stakeholders considering entry into this sector. Furthermore, stakeholders can make informed decisions based on the latest economic data, technological innovations, regulatory landscape, production process, requirements of raw materials, utility and operating costs, capital investments by major players, pricing strategies, and profit margins. Recently, a Quality Control Order (QCO) on viscose staple fiber (VSF) in India has led to a 65% drop in VSF imports since its enforcement in April 2023. This order, which requires manufacturers and importers to obtain certification from the Bureau of Indian Standards (BIS), aims to regulate the influx of sub-quality imports and ensure consumers receive quality products. This order has significantly benefited stakeholders by ensuring that only high-quality fibers enter the Indian market, protecting local manufacturers from substandard competition. This reduction in imports allows domestic producers to increase sales volumes and market stability.

Below are the sections that further detail the comprehensive scope of the prefeasibility report for a viscose staple fibre (VSF) production plant:

Market Dynamics and Trends: Growth factors such as advancements in healthcare infrastructure significantly affect market conditions in the viscose staple fiber (VSF) sector. In 2024, the healthcare sector in India has attracted approximately USD 5.33 billion in investments. This increasing investment is driving demand for high-quality VSF products, particularly in applications like bed sheets and medical textiles, which require superior softness and absorbency. Major hospital construction projects globally, including the USD 800 million Techo Santepheap Treatment Center in Cambodia and the USD 1.76 billion Lok Ma Chau Emergency Hospital development in China, are expected to boost the demand for VSF. Understanding these factors helps businesses align their production plans with demands and trends in the viscose staple fibre (VSF) market.

Profiling of Key Industry Players: Leading manufacturers like Lenzing AG, Birla Cellulose, and Sateri are included in the viscose staple fiber (VSF) report. Recently, Birla Cellulose launched a new range of sustainably produced viscose fabrics for children's clothing by sourcing from eucalyptus trees certified by the Forest Stewardship Council (FSC). Lenzing AG announced the expansion of its production capabilities with a new facility in Thailand, projected to increase its annual output of TENCEL™ branded fibers by 20,000 tons. This facility will use advanced technology to reduce water usage and chemical discharge. Meanwhile, Sateri has also invested in a new production line in China that aims to produce 300,000 tons of sustainable viscose annually by 2025. These developments highlight the industry's shift towards more sustainable practices in response to growing consumer demand for eco-friendly textiles.

Additionally, players are focusing on improving their market presence by increasing their production capacities, engaging in mergers and acquisitions, and investing in technologies. In March 2024, researchers at Lund University in Sweden successfully manufactured 100% recycled viscose for the first time by using worn-out cotton sheets as the raw material. This innovative process reduces reliance on virgin wood pulp and on the use of toxic substances like carbon disulfide. It offers an eco-friendly alternative to traditional viscose production, addressing the urgent need for sustainable textile solutions.

Economic Analysis: Capital expenditure (CAPEX) analysis provides stakeholders the knowledge about required investments in advanced technologies, efficient machinery, and necessary infrastructure. Investing in high-capacity mixing equipment, such as a continuous mixer or high-shear mixer, can improve production efficiency by 20-30%. Investing in energy-efficient systems, such as combined heat and power (CHP) systems could reduce energy consumption by up to 30%, as these systems use waste heat from production processes to generate electricity and provide heating.

Historical, Current, and Forecasted Price Trends

Fluctuations in viscose staple fibre (VSF) prices are influenced by several key factors, particularly the costs of essential raw materials such as wood pulp and cotton linters. In 2024, the price of wood pulp is projected to rise by approximately 10-15%, driven by ongoing supply chain disruptions and increased demand from the textile sector. During the third quarter of 2024, VSF prices in the Asian market showed mixed trends, oscillating due to stable production operating below full capacity inventories, despite moderate demand from downstream cotton yarn factories. In North America, VSF prices initially experienced a decline but began to recover towards the end of September following interest rate cuts by the US Federal Reserve, which improved market conditions for textile exports. These price dynamics indicate that raw material costs and market conditions can shape VSF price trends throughout forecast period.

Financial Investment Overview for Viscose Staple Fibre (VSF) Manufacturing Facility

Establishing a viscose staple fibre (VSF) manufacturing facility requires a comprehensive financial investment that encompasses various elements critical to the project's success. The following sections detail these components:

• Utilities: Key utilities needed to produce viscose staple fibre (VSF), such as electricity, steam, and process water along with their cost assessments help investors to develop more accurate financial models and budget forecasts, ultimately enhancing profitability. In viscose staple fibre (VSF) market, energy costs are significant, typically representing around 10-15% of operating expenses. This includes electricity and water necessary for the manufacturing processes.
• Labour: Personnel costs must be factored in, covering wages for skilled and unskilled workers involved in production and administration.
• Packaging: Expenses related to packaging materials and processes are crucial, as they ensure the product is safely transported and presented to customers.
• Transportation: Costs analysis associated with the logistics of delivering raw materials to the facility and distributing finished products to markets enable investors to select suitable location for manufacturing facilities, improve supply chain strategies, and negotiate better terms with suppliers and distributors.
• Land Acquisition: The purchase or lease of land for the facility is a substantial upfront investment as it aids stakeholders identify areas with lower land acquisition costs and favourable zoning regulations, ultimately reducing initial capital expenditures.
• Construction: Building the manufacturing plant involves significant capital expenditure, including site preparation, construction materials, and labour.
• Machinery: Investment in specialized machinery for mixing, foaming, and curing processes is essential for efficient production.

Profit Margins and Pricing Strategies

Projected profit margins and effective product pricing strategies improve overall profitability. Manufacturers might target a profit margin of around 20-30%, achieved through strategic pricing based on raw material costs and prevailing market demand. Effective pricing strategies should consider fluctuations in raw material prices and competitive positioning within the market.

Regulatory Frameworks and Environmental Considerations

The establishment of a viscose staple fibre (VSF) manufacturing facility must comply with various regulatory frameworks that govern production standards and environmental impacts. In India, the Bureau of Indian Standards (BIS) mandates that all VSF manufacturers obtain certification to ensure their products meet safety and quality standards as outlined in IS 17266:2019. This certification process, which became mandatory on January 29, 2023, requires manufacturers to demonstrate compliance through rigorous inspections and ongoing surveillance audits by BIS.

Additionally, the Quality Control Order (QCO) implemented in March 2023 enforces that any variant of VSF sold in India must bear the Standard Mark, further ensuring adherence to quality standards. This regulatory framework aims to protect consumer interests and promote high-quality production practices within the textile industry. Compliance with these regulations not only ensures legal operation but also enhances product safety and marketability.

Key Questions Addressed:

• What are the detailed unit operations for viscose staple fibre (VSF) production?
• Who are major technology licensors with their process evaluation?
• How are raw materials or catchem procured and what are their cost implications?
• What utilities are essential for production and what will they cost?
• What are the labour requirements and how does this affect operational costs?
• What packaging solutions are optimal for cost and efficiency?
• What logistical arrangements are necessary for efficient product distribution?
• What are the estimated land and construction costs for a new viscose staple fibre (VSF) plant?
• How can profitability be maximised in the viscose staple fibre (VSF) market?
• What pricing strategy should be adopted for viscose staple fibre (VSF) to remain competitive?

This prefeasibility report aims to equip potential investors and existing manufacturers with crucial insights to make informed decisions in the viscose staple fibre (VSF) industry.