Daiwabo Rayon

Stable Supply of High-- Quality Fibers

This year, three Japanese rayon fiber producers, namely Toyobo Co., Ltd., Fujibo Ehime Co., Ltd. and Toho Rayon Tokushima Co., Ltd., announced successively that they would stop production of rayon staple fibers. However, this Japanese viscose rayon staple fiber industry, Daiwabo Rayon Co., Ltd. has been continuing stable business performances. Its corporate strategy is the improvement of "non-price competitiveness."

Probably, Daiwabo Rayon should have anticipated that it would make up for the loss of these three former competitors. Hoevers, Daiwabo Rayon failed to register higher sales because these three withdrawing firms began to increase production for stockpiling.

It has been said that Daiwabo Rayon has offered the highest rayon staple fiber prices. This statement is true even today. The company maintains its high prices despite the weak overall tone of the shrinking demand for rayon staple fibers. This is probably because Daiwabo Rayon knows that lower unit prices would not ensure much volume in business. Furthermore, even at very low prices, acceptance is not given to rayon staple fibers for nonwoven fabric applications, the specialty of Daiwabo Rayon, unless they pass rigid quality requirements.

Nevertheless, Daiwabo Rayon cannot rest on its comfortable position because customers have begun to examine importing fibers for nonwoven fiber applications as well. According to Executive Director Yoshitsugu Hirata, Daiwabo Rayon has placed particular emphasis on "non-price competitiveness" in order to cope with imported fibers.

In order to accomplish this, Daiwabo Rayon will make its best endeavors to innovate the equipment and stabilize the quality. Even when fed to nonwoven fabric manufacturing equipment, rayon staple fibers tend to generate various troubles, including contamination by foreign matter. Whether the company can overcome these problems and supply high-quality fibers on a stable basis is essential in marketing for nonwoven fabric applications.

The marketing of diversified functional materials by means of the kneaded-in process is one possible for solution for domestically manufactured products. However, its concept seems to be the "strengthening of basics." It goes without saying that this concept is most critical for nonwoven fabrics with their deteriorating expansion of demands, especially, spunlaced nonwoven fabrics made principally from rayon staple fibers.

It appears that even Daiwabo Rayon, specializing in nonwoven fabric applications, is also affected in no small way by the sluggishness of consumption and falling unit prices as well.

Based on the assumption that the rayon staple fiber market has been considerably aggravated and the deflationary condition will continue for quite some time, Daiwabo Rayon is working on the reduction of its stocks. While squeezing fiber stocks from one month's demand to nearly 0.8 month's, the company is currently operating by cutting back production by 10-15%.

In the meantime, Daiwabo Rayon is going to improve its production systems, including new investments and the refurbishment of existing equipment despite a severe environment. This is based on its policy that the improvement of quality is the only and additionally the best way to maintain selling prices, along with thorough cost reductions, in order to cope with falling unit prices.

As for plant expansions announced last year, its intentions are: "We have started to build up our basics, but we have slowed our pace partly because of the weak market. We intend to implement plant expansions by the end of next year."

The rayon staple fiber market has become worse not only in Japan, but also overseas. The market condition of other fibers such as cotton and synthetic fibers are also in chaos. Especially, the fall in polyester staple fiber prices has influenced rayon staple fibers, which have to be sold at high prices.

Unlike synthetic fibers, however, rayon staple fibers are natural fibers. Rayon staple fiber is not the main material but an indispensable material. Rayon staple fiber is required for both nonwoven fabric manufacturers and spinners for apparel materials. In this sense, the role to be played by the company is important.