That the synthetic fibre industry, groping in the dark till a few months ago, is showing signs of revival. The sudden rise in the polyster staple fibre and polyster filament yarns, over the last two months has fuelled hopes of a resurgence in the industry.

But the euphoria is unlikely to stay for a long time as the present trend is widely perceived to be a `correction'. The industry has a feeling that the prices will remain weak till next year, leading to a shakeout in the industry.

Of course, much has been talked about the impending shake out. But nobody could predict its timing. There is a general consensus that four major players -- Reliance Industries, Indo Rama, Raymond Synthetics and Century Enka -- will be the survivors by the year 2000 while other players will either be merged or acquired by thesegiants.

The signs are already becoming visible with Reliance Industries teaming up with RP-Goenka owned India Polyfibres as a co-promoter.

With rumours of Reliance training its sights on a host of other of players, the field is open for a takeover battle. Which are the companies vulnerable to takeover?. The companies with less than 35,000 tonnes of capacity will come under takeover ambit. With the players like, Haryana Petrochemicals, JK Synthetics, Nirlon have already been priced out, the targets will be Baroda Rayon, Nyrlon, Orkay apart from a host of smaller players with capacities of less than 5000 tonnes.

Baroda Rayon is the classic example of a company striving hard to meet both ends when everything seems to be going against their favour. With no takers for company's viscose filament yarn plant and huge outstandings, the possibility of the company weathering the storm appears to be remote.

Moreover, Reliance has already made known its intention clear that it won't bail out the company. Thecompany can survive only by providing greater thrust on nylone tyre cord business, the market for which is improving by leaps and bounds.

Sanghi Polyster and DCL Polyester is expected to survive for a few more years. This is because, they use continuous process technology, which is fairly advanced and their plants have capacities of over 35,000 tonnes. But the huge outstandings pending with the institutions will upset their future plans. The existence of JCT will depend on its deal with Indonesian major Polysindo. If the deal falls through, the company will try to rope in a strategic partner who will pick up a significant chunk of equity. But the chances of JCT's lon-term survival is remote.

By the year 2000, Reliance Industries will rule the industry like a colossus. The company is not vulnerable to fluctuations as it has huge capacities. The company has capacity of 255,000 tpa for polyster staple fibre (PSF) and 220,000 tpa for polyster filament yarn (PFY). This apart, it has the ability to adjust theprices in tandem with the market realities. The small loom owners, especially from Surat, which buys the good from Reliance is unlikely to change their loyalty for long time to come.

Indo Rama, the second largest player in the industry, will play an active part in the long-run due to its good quality plants and forward integration. But a high debt-equity ratio will pose problems for the company in the long-run.

The Raymond Synthetics and Century Enka will continue to play a dominat role due to their strong parental backing. Century Enka has expanded its capacity after Rajasree Polyfils got merged into it. These enhanced capacities will keep the company in good stead. The only way smaller players can survive is by selling off their unviable units and concentrating on core areas. For them nylon tyre cord business seems to be a better option as it is the only area which has not so far shown any signs of glut.