From the Sector

Fabtex Georgia 2024 International Textile Industry Fair has concluded with remarkable success, bringing together over 1,050 professional visitors from 11 countries, including Georgia, Russia, Armenia, India, China, Ukraine, Germany, Iran, Turkey, Poland, and Pakistan.

This year’s exhibition featured 52 exhibitors from Georgia, Turkey, Azerbaijan, the UAE, Uzbekistan, and China, underscoring the event's international significance.

The exhibition's exhibitor profile primarily focuses on knitted fabrics, woven fabrics, fabrics for workwear and uniforms, various accessories, garment and sewing machinery, and ready-to-wear items.

Georgia has a long-standing tradition in the textile sector, dating back to Soviet times, and is currently home to production for international brands such as Tommy Hilfiger, Zara, Moncler, and Puma.

Georgia’s strategic location at the crossroads of Western Asia and Eastern Europe, coupled with its rich textile history, makes it an ideal hub for textile manufacturing and investment. The country boasts several Free Trade Agreements (FTAs) with Turkey and CIS nations, as well as a Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU, providing access to a market of approximately 900 million people without customs duties.

From 14 to 16 August, Intertextile Shanghai Home Textiles hosted 946 exhibitors from 15 countries and regions, who engaged with more than 35,000 visitors from 108 countries and regions across the four-hall, 100,000 sqm exhibition space. Visitor numbers increased by 10% overall compared to the previous edition, with 13% of the total made up of overseas buyers, further highlighting the show’s internationality. Global industry players across the event, from suppliers and buyers to fringe speakers, noted their satisfaction relating to positive business exchange, the prevalence of sustainable products and design inspiration, and more.

With the support of Messe Frankfurt’s network across the global industry, Intertextile Shanghai Home Textiles has become a business platform that connects industry players from the East and West. Comprising the Türkiye Pavilion, Uzbekistan Pavilion, Belgium Zone and various individual overseas exhibitors, the stage was set for suppliers seeking business connections in the leading textile production hub.

International and domestic exhibitors covering sub-sectors such as bedding, editors, curtains, and carpets, presented their latest designs and innovations in Halls 5.1, 5.2, 6.1, and 6.2. Highlighted exhibitors included 3M China Limited, HAINING QIANBAIHUI WEAVING CO LTD, Weavers Tekstil San Ve Tic A S, Zhejiang Maya Fabric Co Ltd, Zhejiang Xiaoxuanchuang Household Co Ltd and more.

17 buyer delegations from 16 countries and regions pre-registered and visited the sourcing platform, including manufacturers, designers, buying houses, distributors, chain stores and retailers from Algeria, India, Indonesia, Japan, Malaysia, Moldova, Morocco, Myanmar, Philippines, Russia, Thailand, Vietnam and more. Not to mention, VIP buyers from all over the world utilised the platform to meet annual sourcing targets.

Every year, the platform aims to reflect market trends, and has identified green progress as one of its major focuses going forward. As such, this edition’s comprehensive fringe programme highlighted a series of sustainablity events: Bridging Borders: A Designer x Producer Talk on Sustainability; About Healing; Sustainable Fibre Forum in Home Textiles; product presentations from fibre producers such as 3M , Advansa, and Indorama; as well as a special session to explain the Econogy concept that represents sustainability activities in the company’s Texpertise Network. The show welcomed designers and guest speakers from Europe and the Middle East to add overseas perspectives to the discussions.

From September 11 to 14, 2024, the Trützschler Group will present its latest innovations at CAITME in Tashkent, Uzbekistan - featuring machines and technologies in spinning, card clothing and nonwovens.

Trützschler Spinning
A highlight will be Trützschler’s next generation card, the TC 30i. In recent customer trials, the TC 30i has achieved up to 40 % higher productivity while reducing energy consumption by up to -18 %. In addition, the team will share insights about the Integrated Draw Frame IDF 3, which enables shortened processes that save resources, energy and production space. Visitors will also have the opportunity to discover the TCO 21XL, a 12-head comber. This comber makes it possible to increase productivity by 50 %, while requiring 25 % less space.

Visitors will also get the chance to learn about Trützschler’s new brand for textile recycling, TRUECYCLED. The company enables its customers to produce high quality tapes while turning waste into value.

Trützschler Card Clothing
Trützschler Card Clothing (TCC) will present a range of technologies from its card clothing portfolio, covering the full spectrum of applications in the spinning and nonwovens markets. A key feature will be the Flexible Bend Control (FBC), which ensures flat setting for all card models within a few seconds and guarantees optimum quality.

Trützschler Nonwovens
Trützschler Nonwovens will focus on solutions for the production of cotton nonwovens for wipes, pads and medical products from virgin fibers, comber noils or blends. In addition, the team will provide insights into T-SUPREMA needle-punching lines and show its solutions for the specific requirements of high-potential markets such as geotextiles, filter media, automotive textiles or other durable products.

At the upcoming edition of CAITME, to be held in Tashkent, Uzbekistan from September 11 to September 14, 2024, 16 Italian textile machinery manufacturers will exhibit in the common area set up by the Italian Trade Agency and ACIMIT.

All these companies are ACIMIT’s associated members: Bonino, Brazzoli, Carù, Erhardt+Leimer, Guarneri Technology, Ima, Laip. Lgl, Martex, Mei, Mesdan, Pinter Caipo Italia, Pugi Group, Sicam, Stalam, Ugolini.

Uzbekistan is one of the largest producers and exporters of cotton and its textile industry is a relevant driver for the national economy. Thanks to the raw material’s availability and low production costs the business conditions are favourable for the development of the local industry. The upgrading of installed equipment is considered a step to achieve this goal.

Italian textile technology is well known by the Uzbek textile companies. In 2023, Italian sales in Uzbekistan amounted to 21 million euro. Among the Italian machines most in demand by Uzbek textile companies are weaving machines (32% of total 2023 Italian exports), followed by finishing machines (30%), spinning machines (17%), knitting machines (14%) and accessories (7%). At CAITME Italian exhibitors will show the most advanced technology applied to the textile sector, offering proper solutions in terms of efficiency, costs saving and sustainability.

This year’s edition of ITMA ASIA + CITME proved to be a success for the exhibiting VDMA member companies. Measured by booked square metres, Germany had the largest contingent, among the foreign exhibitors. More than 40 VDMA member companies were exhibiting their innovative products in Shanghai.

Dr. Janpeter Horn, chairman of the VDMA Textile Machinery Association noted: “Although facing a difficult market situation, this year’s edition of ITMA ASIA + CITME has exceeded the expectations, both in terms of the number of visitors and the quality of the talks. The significant number of foreign visitors to the fair was particularly pleasing.”

Solutions were demonstrated for more sustainable textile productions by most of the exhibitors, and here the VDMA members presented their technologies for saving water, energy and raw materials under the heading “Smart technologies for green textile production.”  

Dr. Uwe Rondé, CEO, Saurer Intelligent Technology AG explained: “Saurer is satisfied with both the number of visitors and the quality of the discussions. Our booth was full from morning to evening with customers focused on latest technologies within the three mega trends: recycling, automation and digitalisation. Although machine utilisation in the spinning mills is still well below average, people are already gathering information and thinking about what to invest in once the market recovers.”

Benjamin Reiners, owner of Reiners + Fürst stated: „This year’s ITMA ASIA + CITME has exceeded our expectations by far. Especially the first day - a Sunday - has brought many high-quality customers and exclusively decision makers to our booth. We estimate about 20% international customers mainly from Bangladesh, Egypt, India, Iran, Pakistan, Uzbekistan and Vietnam. All customers agreed that the market situation at the moment is difficult, capacity usage is between 50-75% in the ring spinning sector and improvement is expected not before the 2nd half of 2024. Nevertheless the general spirit is very positive.“

“This ITMA ASIA was a great success for Trützschler. We welcomed a large number of Chinese visitors to our booth, as well as a significant number of interested international visitors”, said Dr. Bettina Temath, Head of Global Marketing Trützschler Group SE.

Georg Stausberg, CEO of the polymer processing solutions division and chief sustainability officer of the Oerlikon Group stated: „We can look back on a successful show where we were able to meet many of our customers not only from China, but also from Pakistan, India and Indonesia, for example.”

“A very well-attended trade fair, with interesting discussions, great innovative topics, in line with the modern and rapidly developing China" noted Wolfgang Schöffl, head of product line weaving machines and member of the extended management, Lindauer Dornier.

The VDMA Textile Machinery Association and VDMA China were present at the fair, to support the members e.g. with regard to IPR. With the help of a VDMA expert and a contracted law firm, the member company Sahm submitted a complaint application for patent infringement disputes during the exhibition to the onsite IPR office. Both parties, Sahm, and the Chinese company, that used patented design without permission reached an agreement: The Chinese company had to stop displaying functions and designs involving patent infringement on site which meant the removal of some structural parts and the covering of key components protected by patent protection.

Dr. Harald Weber, managing director of VDMA Textile Machinery concluded: “Asia, and China in particular, represent the primary foreign markets for the VDMA member companies in the sector. The Chinese market is the main destination for their exports. Other major export destinations in Asia include India, Pakistan, Bangladesh and Uzbekistan. ITMA ASIA + CITME provides a unique platform to showcase technologies for customers directly in Asia. The VDMA member companies are looking forward to the coming edition of the fair from 14 to 18 October 2024 in Shanghai.”

The latest survey of VDMA members' subsidiaries in China gives reason to hope that the economic situation in the Chinese textile industry could also improve significantly in the second half of the year. In addition, European textile machinery manufacturers are urged to be present on the most important market and at the trade fair and to offer Asian customers most advanced technology for their demanding challenges.

Source Home & Gift came to a successful conclusion after four days of innovation, networking, and collaboration. The global showcase provided a hub for manufacturers, designers, buyers, and distributors to engage in meaningful conversations, explore emerging trends, establish invaluable business connections, and foster global trade relationships.

From the 3rd - 6th September, the second edition of Source Home & Gift which has tripled in size since its inaugural show in February, brought together brands and retailers including Oh Deer, Sainsburys, Dunelm, Haskins Garden Centre, Indico, Blue Diamond, Funky Pigeon, M&M, Matalan, Disney, Morrisons, M&S, Next, Costcutter, AIS, Alzheimers Society, Amazon, B&Q, Card Factory, Ridleys Games, and more.

Hundreds of accredited manufacturers, producers, and artisans from 14 countries including Bangladesh, China, Germany, Ghana, Hong Kong, India, Nepal, Pakistan, Palestine, Philippines, Sri Lanka, Uganda, UK, Uzbekistan, and the first dedicated Egyptian Pavilion organised by Egypt Expo & Convention Authority (EECA) told their stories and showcased their products and manufacturing capabilities across product categories including homewares, furniture, gifts, stationery and greetings, toys, textiles, household and pet supplies, and packaging.

The next show takes place on the 4th – 7th February 2024.

The international fashion sourcing platform Source Fashion, taking place from 12th – 14th February at Olympia London, has announced a compelling line-up of country pavilions and over 150 audited, quality manufacturers from around the world including Peru, India, China, Pakistan, Italy, Spain, Greece, North Macedonia,  the UAE, Madagascar, Jordan, Uzbekistan, Turkey, the UK and many more who will join the inaugural show, which runs parallel to Pure London.

Bringing a textile pavilion to the UK for the first time, the Peru Pavilion will showcase six manufacturers specialising in high-quality alpaca wool from the raw material right through to garment production, as well as cotton and other natural mixtures.

The main Indian Pavilion at this year’s Source Fashion, in collaboration with the Wool and Woollens Export Promotion Council, will showcase 20 established garment and textile exporters specialising in wool, woollen and acrylic fibres. The exhibitors will be showing full garments including men’s, women’s and kidswear as well as a selection of fabrics and raw materials. These exhibitors are regular export partners to the UK retail industry and already work with some big retailers in white label production.

The China Pavilion will present a selection of high-quality Chinese manufacturers ranging from full garment manufacturing through to raw materials, fabrics, cashmere and components.

Other producers and manufacturers attending Source Fashion from across Europe and the UK include:

• Mivania - an Italian knitwear manufacturer producing garments in 100% cashmere and cashmere blends.
• SATCoL (Salvation Army Trading Company) - a charity-owned textiles collector in the UK, actively working with retailers to reduce their carbon footprints.
• Kusilas - a Spanish company monitoring all the stages of the production process.
• Prime Casual - based in Leicester, UK, they specialise in the design and manufacture of ladies clothing from fast fashion, wholesale to bespoke tailoring.
• Athos Pallas - a fashion and textile agency located in Thessaloniki, Greece.

• Sales of CHF 366.8 million in the third quarter, CHF 987.4 million after nine months
• Order intake of CHF 226.4 million in the third quarter, CHF 1 095.8 million after nine months
• Order backlog of around CHF 2 000 million as of September 30, 2022
• Precautionary measures taken against potential energy crisis in Europe
• Financing of a Professorship for Artificial Intelligence
• Rieter site sales process on schedule
• Outlook 2022

Rieter recorded a significant increase in sales in the third quarter of 2022, reaching a level of CHF 366.8 million (2021: CHF 257.3 million). The measures introduced to increase sales and profitability in the second half of 2022 are taking effect and will continue to be implemented in a systematic manner. These include a close cooperation with key suppliers, the development of alternative solutions to eliminate material shortages, the enforcement of price increases, and the improvement of the margin quality of the order backlog.

The order intake of CHF 226.4 million in the third quarter of 2022 reflects the expected normalization of demand for new equipment compared to the record year of 2021, which was characterized by catch-up effects and the regional shift in demand. In addition, the well-known uncertainties and risks and the continuing extremely long delivery times at key manufacturers had a dampening effect on demand. Due to the slowdown in capacity utilization in the spinning mills, demand for consumables, wear & tear and spare parts also declined in the third quarter of 2022. Major orders continued to be recorded from Turkey, Uzbekistan, and China.

Rieter has a high order backlog of around CHF 2 000 million as of September 30, 2022 (September 30, 2021: CHF 1 562 million), which will guarantee capacity utilization in all three business groups until well into 2023 or rather 2024. The cancellation rate in the reporting period was around 5% of the order backlog.

Outlook 2022
Rieter anticipates weakened demand for new systems in the coming months. The demand for consumables, wear & tear and spare parts will depend on the capacity utilization of spinning mills in the months ahead.

For the full year 2022, Rieter expects sales of around CHF 1 400 million. The realization of sales revenue from the order backlog continues to be associated with risks in relation to the well-known uncertainties.

Despite significantly higher sales compared to the prior-year period, Rieter expects EBIT and net result for 2022 to be below the previous year’s level. This is due to the considerable increases in the cost of materials and logistics, additional costs for compensation of material shortages as well as expenses in connection with the acquisition in the years 2021/2022.

• Order intake of CHF 869.4 million, order backlog of more than CHF 2 100 million
• Sales of CHF 620.6 million, preproduced deliveries in the three-digit million range had to be postponed until the second half of 2022
• EBIT of CHF -10.2 million, net result of CHF -25.2 million due to significant cost increases, additional costs, and acquisition-related expenses
• Action plan to increase sales and profitability
• Rieter site Winterthur
• Outlook

Rieter continued to be successful in the market in the first half of 2022. Based on the company’s technology leadership, innovative product portfolio and the completion of the ring- and compact-spinning system, a high order intake and a significant increase in sales were generated. The increase in sales was achieved even though preproduced deliveries in the three-digit million range had to be postponed until the second half of 2022. The order backlog is at a record level. Despite higher sales, the significant increase in material and logistics costs, additional costs for compensation of the material shortages and the expenditure incurred for the acquisition in the years 2021/2022 resulted in a loss. Rieter is implementing an action plan to increase sales and profitability. The sales process for the remaining land owned by Rieter was initiated.

Order Intake and Order Backlog
Rieter posted an order intake of CHF 869.4 million, which included CHF 176.6 million from the businesses acquired in the years 2021/2022. As expected, demand has thus returned to normal compared with the exceptionally high figure for the prior-year period, but remains well above the average figure for the last five years of around CHF 570 million (first half 2021: CHF 975.3 million, first half 2022 excluding acquisition effect CHF 692.8 million).

The regional shift in demand with investments in additional spinning capacity outside China along with investments in the competitiveness of Chinese spinning mills continues. Rieter benefits from its technology leadership, the innovative product portfolio and the completion of the ring- and compact-spinning system through the acquisition of the automatic winding machine business. The largest order intakes came from India, Turkey, China, Uzbekistan, and Pakistan.

On June 30, 2022, the company had an order backlog of more than CHF 2 100 million (June 30, 2021: CHF 1 135 million). Cancellations in the reporting period amounted to around 5% of the order backlog.

Sales
The Rieter Group posted sales of CHF 620.6 million, which included CHF 68.9 million from the businesses acquired in the years 2021/2022 (first half 2021: CHF 400.5 million).

As a result, sales were significantly higher than in the prior-year period, although preproduced deliveries, which mainly affected the Business Group Machines & Systems, in the three-digit million range had to be postponed until the second half of 2022. The reasons for the postponements were the COVID lockdown in China and supply chain bottlenecks.

EBIT, Net Result and Free Cash Flow
Rieter posted a loss of CHF -10.2 million at the EBIT level in the first half of 2022.

Earnings were impacted by significantly higher material and logistics costs. The price increases already implemented are having a delayed effect, mainly in the Business Group Machines & Systems, and were therefore unable to compensate for the high increase in costs. In addition, costs in connection with material shortages negatively impacted profitability. The result also includes acquisition-related expenses of CHF -11.2 million.

The loss at the net result level was CHF -25.2 million, of which CHF -17.6 million was due to the acquisition.

Free cash flow was CHF -57.1 million, attributable to the build-up of inventories in connection with the high order backlog and postponed deliveries.

Action Plan to Increase Sales and Profitability
Rieter is implementing a comprehensive package of measures with the aim of increasing sales and profitability in the second half of 2022.

The package focuses on two main priorities: Firstly, Rieter is continuing to systematically implement price increases while working to improve the quality of margins of the order backlog, so as to compensate for cost increases in materials and logistics.
Secondly, Rieter is working closely with key suppliers and is developing alternative solutions to eliminate material bottlenecks, as far as possible, in order to safeguard deliveries.

Rieter Site Winterthur
The Board of Directors has decided to begin the process for the sale of the remaining land at the Rieter site in Winterthur (Switzerland). In total, around 75 000 m2 of land will be sold.

Outlook
As already reported, Rieter expects demand for new systems to normalize further in the coming months. Due to the capacity utilization at spinning mills, the company anticipates that demand for consumables, wear & tear and spare parts will remain at a good level.

For the full year 2022, due to the high order backlog and the consolidation of the businesses acquired from Saurer, Rieter expects sales of around CHF 1 400 million (2021: CHF 969.2 million). The reduced sales forecast compared to early 2022 (March 2022: CHF 1 500 million) reflects the impact of global supply bottlenecks. The realization of sales revenue from the order backlog continues to be associated with risks in relation to the well-known challenges.

Despite significantly higher sales, Rieter expects EBIT and net result for 2022 to be below the previous year’s level. This is due to the considerable increases in the cost of materials and logistics, additional costs for compensation of material shortages as well expenses in connection with the acquisition in the years 2021/2022. Despite the price increases already implemented, global cost increases continue to pose a risk to the growth of profitability.

• Order Intake of CHF 2 225.7 Million in Financial Year 2021
• Sales of CHF 969.2 million in financial year 2021
• Implementation of the acquisition of the three Saurer businesses on schedule
• EBIT margin of 4.5% to 5% of sales expected in financial year 2021

Due to the continuing high demand for new installations, components and services, Rieter posted an order intake of CHF 551.8 million in the fourth quarter of 2021. As a result, Rieter achieved a total order intake of CHF 2 225.7 million in the 2021 financial year (2020: CHF 640.2 million).

The exceptionally high order intake is broadly supported at the global level. As reported previously, this is based on a catch-up effect from the two prior years and a regional shift in demand. Rieter believes that a major reason for this shift in demand is the development of costs in China. The orders came primarily from Turkey, India, Latin America, Uzbekistan, China and Pakistan. At the end of 2021, the company had an order backlog of around CHF 1 840 million (December 31, 2020: around CHF 560 million). Despite bottlenecks in material supplies and freight capacities, sales performance up to the end of the year was better than expected. The Rieter Group closed the 2021 financial year with sales of CHF 969.2 million (2020: CHF 573.0 million).

Implementation of the Acquisition of the Three Saurer Businesses
Effective from December 1, 2021, Rieter is consolidating the components businesses Accotex and Temco acquired from Saurer. With the acquisition of Accotex (elastomer components for spinning machines) and Temco (bearing solutions for filament machines), Rieter is strengthening the market position in the components business. The figures from the two businesses have been incorporated into the results for the 2021 financial year as follows: the 2021 order intake includes CHF 2.1 million and the 2021 sales includes CHF 3.3 million. The two businesses contributed a total of around CHF 27 million to the order backlog at the end of 2021. The acquisition of Saurer’s third business (automatic winder) leads to a significant increase in the attractiveness of Rieter’s ring and compact-spinning systems and is expected to be completed in the first half of 2022. Accordingly, order intake and sales are not included in the figures for the 2021 financial year.

EBIT Margin
Rieter anticipates an EBIT margin of 4.5% to 5% of sales in the 2021 financial year (2020: -14.7%).
Rieter will publish the full annual financial statements and the 2021 Annual Report on March 9, 2022.

Order Intake by Business Group
Thanks to the company’s innovative product portfolio and global positioning, all three Business Groups benefited from the high level of demand.
The Business Group Machines & Systems posted an order intake of CHF 1 708.6 million (2020: CHF 363.9 million). The main focus of demand was on ring and compact-spinning systems.
The order intake of the Business Group Components was CHF 296.0 million, an increase of 75% compared to the previous year (2020: CHF 169.1 million). The Business Group After Sales recorded an order intake of CHF 221.1 million, 106% higher than the previous year (2020: CHF 107.2 million). The main reason for the positive order intake in both Business Groups is the continuing increased demand for spare and wear parts in spinning mills, which are operating at high capacity.

Sales by Business Group
Despite the challenges in the supply chain announced earlier, the Business Group Machines & Systems achieved sales of CHF 590.3 million, double the previous year’s figure (2020: CHF 295.8 million). Sales of the Business Group Components increased to CHF 231.5 million (2020: CHF 174.3 million). The Business Group After Sales achieved sales of CHF 147.4 million (2020: CHF 102.9 million).

Sales by Region
Sales increased in all regions, with the exception of the region Africa. The highest year-on-year growth of 148% was achieved in India, followed by North and South America (+126%) and the Asian countries (+72%), excluding China, India and Turkey.

Rieter will issue an outlook for the 2022 financial year at the Results Press Conference on March 9, 2022.