From the Sector

The textile industry is constantly searching for new, sustainable, and circular materials. Following thorough research and testing, Spinnova and KT Trading have developed a natural leather fabric made from leather waste without harmful chemicals.

"Leather is an amazing high-quality material with unique properties. With this new textile, we have taken yet another step towards completing the circular economy for leather," says Kristian Geert Jensen, CEO of KT Trading, who now has a joint venture with Spinnova.

Spinnova CEO: Sustainable innovation
Together with KT Trading, ECCO’s key leather provider, Spinnova has established the Respin company - a new joint venture. The partners are already constructing a leather fibre production pilot plant in Finland.

ECCO’s Applied Research division and Spinnova have been in a R&D collaboration since 2018 and have made successful trials with spinning the protein biomass into fibre. Processing leather raw material does not require further technology development from Spinnova. The company already has proof of concept from using the method on wood-based raw material.

Ensuring Competitiveness Through Technology

Rieter has doubled down on its R&D efforts since the onset of the pandemic to accelerate the development of its suite of intelligent and automated machines and systems so customers can manufacture yarns more profitably, efficiently and sustainably. This also empowers mill owners to respond flexibly to fast-changing markets.

• Ring spinning with G 38 and ROBOspin sets new standards in automation
• COMPACTapron takes yarn strength to new heights
• ESSENTIAL offers new features with smarter insights for better decisions
• ROBOdoff automates doffing to save time and money
• SSM’s new winder NEO-YW delivers more efficiency and sustainability
• Graf’s new cylinder wire and flats enhance lifetime and quality

• PrimaLoft and Origin Materials have launched a program to develop high-performance, carbon-negative insulating fibers for diverse apparel applications, including for leading outdoor, fashion, and lifestyle brands, as well as home goods applications such as hypoallergenic insulated bedding.
• PrimaLoft, an advanced material technology company and a world leader in the development of high-performance insulations and fabrics, will develop the fibers with Origin Materials to address demand for sustainable, high-performance materials from its over 900 global brand partners. PrimaLoft iconic brand partners include Patagonia, Stone Island, L.L. Bean, Lululemon, adidas and Nike.
• The program will focus on carbon-negative PET and next-generation polymers produced by the Origin Materials patented technology platform, which turns sustainable wood residue into cost-advantaged, carbon-negative materials that reduce the need for fossil resources.

Origin Materials, Inc. (“Origin Materials”), a leading carbon negative materials company, and PrimaLoft, an advanced material technology company and a leader in the development of high-performance insulations and fabrics, announced a new program to develop carbon-negative, insulating, high-performance fibers. The fibers will be used across a diverse array of end products, including insulating fiber for leading outdoor, fashion, and lifestyle brands, as well as home goods applications such as hypoallergenic insulated bedding.

The companies will work to rapidly develop and commercialize new products derived from Origin Materials’ platform. The collaboration will leverage the leadership position of PrimaLoft as a specialty producer of insulating fibers and filaments with over 900 global brand partners, as well as a large global network of manufacturers that employ a wide array of textile processes to make its products, including extrusion, carding, spinning, finishing, weaving, knitting, dyeing, airlaid, meltblown, and other technologies.

The collaboration builds on PrimaLoft’s “Relentlessly Responsible™” mission to elevate both performance and sustainability, through innovation. The platform includes PrimaLoft® Bio™, which was developed and launched into the market in late 2018 as an effort to battle microplastics in the ocean; PrimaLoft® P.U.R.E.™, which provides materials manufactured with greater than 50% CO2 savings; and PrimaLoft’s post-consumer recycling initiative. The next frontier for the company is non-petroleum based raw materials, including products that biodegrade and other circular economy solutions.

National Council of Textiles Organization (NCTO) member Parkdale Mills hosted Senator Tim Kaine (D-VA) at the company’s Magnolia Manufacturing plant in Hillsville, Va. today to showcase the critical role the company and the industry has played in producing lifesaving personal protective equipment (PPE) to aid frontline health-care workers and the country during the pandemic.

Parkdale’s facility in Hillsville, Va. is a key yarn spinning hub contributing to a major face mask initiative bringing together several U.S. companies and more than 5,000 workers as part of the Biden administration’s pledge to provide 25 million reusable face masks to communities hit hard by the pandemic.

“Parkdale Mills thanks Senator Kaine for his leadership on policies that help bolster our company and the entire textile industry. We are proud to be part of an initiative that is bringing together American companies to produce 100% American-made masks for community health centers, soup kitchens and food banks across the country,” said Davis Warlick of Parkdale Mills. “With the support of our government and leaders like Senator Kaine, our industry is demonstrating its ability and capacity to make critical items here for the long term.”

Kim Glas, President and CEO of NCTO said: “We want to sincerely thank Senator Kaine for his leadership in supporting American manufacturers, which have played a vital role in our economy as well as the nationwide effort to produce critical PPE and medical textiles for a nation in crisis. We are grateful to the senator and the Biden administration for prioritizing domestic manufacturers and the U.S. workforce. The U.S. textile industry is a vital contributor to the U.S economy and policies that Senator Kaine supports help bolster the onshoring of PPE and critical items, which in turn spurs employment and investment in the American manufacturing base.”

• Major Monforts denim customers continue to pioneer new initiatives that are pushing the boundaries of sustainable production.

Recycling their cotton waste has become one way these companies can do more with less, and at the recent Kingpins24 Flash online event, Sedef Uncu Aki, director of Orta, headquartered in Istanbul, Turkey, announced a new partnership with leading recycling operation Gama Recycle.

Traceable
“Through this local partnership we will supply the waste from our spinning mills and return around 3,000 tons of premium quality cotton back to them,” she said. “We have established a truly controlled and traceable system and partnering with a domestic recycling centre is important because a lot the carbon emissions associated with recycling usually come from transportation.”

Orta’s ZeroMax range meanwhile uses no cotton at all, being based on Lenzing’s Tencel cellulosic fibre, while the company’s involvement in denim production for a recent launch by Levi Strauss, of jeans made with organic cotton and Circulose – a breakthrough material developed by re:newcell of Sweden and partners – was hailed as a further step forward.

To make Circulose, re:newcell repurposes discarded cotton textiles, such as worn-out denim jeans, through a process akin to recycling paper. The incoming waste fabrics are broken down using water. The colour is then stripped from these materials using an eco-friendly bleach and after any synthetic fibres are removed from the mix, the slurry-like mixture is dried and the excess water is extracted, leaving behind a sheet of Circulose. This sheet is then made into viscose fibre which is combined with cotton and woven into new fabrics.

Circular Park
Omer Ahmed, CEO of Artistic Milliners also announced plans for his company’s new 70,000 square-foot Circular Park in Karachi, Pakistan, at Kingpins24 Flash.

Once complete, this will add three million square metres of additional denim capacity a month to the company’s production and take its total recycled output to a monthly five million metres.
Ahmed observed that there is currently a lack of sustainable fibres that are readily available to use for denim production at scale.

“Organic cotton is too expensive, and in my opinion always will be,” he said. “Cottonised hemp is also not cheap and it’s hard to mix with cotton, while the new regenerated cellulose fibres that are now emerging are promising, but currently in short supply. Recycled polyester is meanwhile still based on petroleum resources which we want to move away from. As a consequence, there are only a few other options for us as a manufacturer and this new project will help us minimise our own waste while significantly lowering our carbon footprint.”

Other Monforts denim customers to introduce cotton fibre recycling operations at their plants recently include AGI Denim, Bossa and Soorty.

Vertical savings
Refresh is the name of the latest collection from AGI Denim – reflecting the company’s significant reduction in water consumption.

The company has just opened new fibre spinning and denim mills at its complex in Karachi, Pakistan.

“Over the years we’ve gone through a series of backward integration steps to become fully vertical,” said AGI Denim executive director Ahmed Javed, at Kingpins24 Flash. “In our latest expansion, we revisited every step of the production processes in order to make resource savings.”

Innovations have included the installation of proprietary robotics for garment finishing, but the most attention has been paid to water savings.

“Pakistan is one of the largest cotton-producing companies in the world and we’re fortunate that the type of cotton that is grown here is well suited to denim production and also helps us lower our carbon footprint, with everything done in close proximity,” Javed said. “In the lifecycle of a pair of denim jeans, however, cotton fibre production contributes 68% of water consumption. While we cannot control how much water cotton needs for it to grow, we can rethink the way we use it in our factory.”

Refresh-branded denims are washed from 100% recycled water as a result of the company’s new wastewater treatment plant, which puts production wastewater through a series of steps beginning with equalisation, followed by aeration and concluding with sedimentation. The water travels through filtration and ultrafiltration systems before being subjected to an activated carbon system and finally a reverse osmosis system to reduce any dissolved salts.

AGI now recycles 4.4 million gallons of water each month – enough to wash a million pairs of jeans.

Sustainable
Monforts has a leading position in the field of denim finishing with its well proven Thermex continuous dyeing systems, Montex stenter dryers and other lines for resource-efficient and economical processing.

“Our denim partners are constantly setting themselves new goals in respect of sustainable production – and more importantly, achieving them,” says Hans Wroblowski, Monforts Head of Denim. “We work closely with them with the aim of constantly optimising processing parameters and achieving further savings in energy, water and raw materials throughout the dyeing and finishing stages of production.”

The latest Monforts innovation for denim is the CYD yarn dyeing system. This technology is based on the effective and established dyeing process for denim fabrics that is now being applied for yarn dyeing. The CYD system integrates new functions and processes into the weaving preparation processes to increase quality, flexibility, economic viability and productivity. A full CYD line is now available for trials at the company’s Advanced Technology Centre in Mönchengladbach, Germany.”

In 2020, the number of GOTS certified facilities grew by 34% globally, to a new high of 10,388 from 7,765 in 2019. 16 GOTS Approved Certification Bodies report that over 3 million people in over 72 countries were working in GOTS certified facilities.

Significant increases are seen in all regions. Top 10 countries for certified facilities are India (2,994), Bangladesh (1,584), Turkey (1,107), China (961), Germany (684), Italy (585), Portugal (449), Pakistan (391), USA (167) and Sri Lanka (126).
GOTS approved chemical inputs now number 25,913, an increase of 13% in 2020. This confirms that these inputs are increasingly used as a risk management tool by wet processors to satisfy legal and commercial residue requirements.

“The exceptional increase in this unprecedented year shows that decision makers value GOTS as an important tool to drive sustainable transformation in a comprehensive way - from field to fashion. Using organic fibres and processing them under strict GOTS criteria definitely provides a credible and strong base for market players to be successful in the future” says GOTS Managing Director Claudia Kersten.

GOTS version 6.0, to be implemented from 1 March 2021, includes stricter social and environmental criteria. Certified Entities will now have to calculate the gap between wages paid to 'Living Wages'  and will be encouraged to work towards closing this gap. Specific references to OECD Due Diligence Guidance and Good Practice Guidance for Social Criteria and Risk Assessment as well as Ethical Business Practises have been explicitly included.

Order Intake Continued to Recover in the Fourth Quarter of 2020:

• Order intake increased to CHF 215.1 million in the fourth quarter of 2020 and reached a total of CHF 640.2 million in the 2020 financial year
• As expected, sales of CHF 573.0 million in the 2020 financial year were significantly down on the previous year
• EBIT margin of around -15% and net profit of around -16% of sales expected
• First half of 2021 still heavily impacted by the COVID-19 pandemic
• Change to the Group Executive Committee

Rieter posted a globally and broadly supported order intake of CHF 215.1 million in the fourth quarter of 2020. Thus, the recovery that began in the third quarter of 2020 after the slump in demand in the second quarter continued (order intake second quarter: CHF 45.7 million, third quarter: CHF 174.4 million). Overall, Rieter’s annual order intake for the 2020 financial year totaled CHF 640.2 million, which corresponds to a decrease of 31% compared to the previous year.

At the end of 2020, the company had an order backlog of about CHF 560 million (December 31, 2019: about CHF 500 million).

As expected, as a consequence of the economic effects of the COVID-19 pandemic, the Rieter Group closed the 2020 financial year with considerably lower sales than in the previous year. According to the first, as yet unaudited figures, total sales of CHF 573.0 million were achieved, which corresponds to a decrease of 25% compared to the previous year (2019: CHF 760.0 million).

Order Intake by Business Group
All three business groups were affected by the slump in demand in the second quarter of 2020 due to the COVID-19 pandemic. Despite the recovery in order intake in the third and fourth quarters of 2020, the weak second quarter was only partially offset.

The Business Group Machines & Systems was particularly hard hit by the effects of the pandemic, with a year-on-year decline of 35%. The Business Groups Components and After Sales each recorded a 24% reduction in order intake.*

Sales by Business Group
The exceptional market situation in 2020 gave rise to a significant decline in sales in all three business groups. Accordingly, reluctance to invest and deferred deliveries by customers caused sales in the Business Group Machines & Systems to decline by 24% compared to the previous year.

Due to COVID-19, a large number of spinning mills stopped production worldwide. This led to low demand for spare parts and wear parts, especially in the second and third quarters of 2020. Accordingly, compared to the previous year, sales in the Business Groups Components and After Sales fell by 24% and 27% respectively in the 2020 financial year.*

Sales by Region
With the exception of Turkey, all regions were affected by the low demand as a consequence of the COVID-19 pandemic.*

EBIT Margin and Net Profit
In the 2020 financial year, Rieter anticipates an EBIT margin of around -15% (2019: 11.2%) and net profit of around -16% of sales (2019: 6.9%). As of December 31, 2020, Rieter had liquid funds of exceeding CHF 280 million and unused credit lines in the mid three-digit million range.

First Half of 2021 Still Heavily Impacted by the COVID-19 Pandemic
Thanks to the improved capacity utilization, Rieter is planning short-time working in only a few areas in the first half of 2021. Nevertheless, Rieter expects sales in the first half of 2021 to be below the break-even point.*

Change to the Group Executive Committee
With effect from March 1, 2021, the Board of Directors of Rieter Holding Ltd. has appointed Roger Albrecht as Head of the Business Group Machines & Systems and a member of the Group Executive Committee.*

Annual General Meeting April 15, 2021
The 2021 Annual General Meeting of Rieter Holding Ltd. will take place in Winterthur on April 15, 2021.*

*See attached document for more information.

In early December, the chairman of the Walter Reiners Foundation of the VDMA Textile Machinery Association, Peter D. Dornier presented awards to six successful young engineers. Due to the Covid-19 pandemic, the award ceremony took place as a web conference for the first time.

Philippa Böhnke, ITM Dresden, and Juan Carlos Arañó Romero, ITA Aachen, were honoured with creativity awards for the cleverest bachelor or project work. The prizes are endowed with 3,000 euros each. Ms. Böhnke’s project dealt with composite implants for the repair and regeneration of bone defects. In his bachelor thesis, Mr. Arañó Romero has developed a spinning machine able to produce yarn with material from the moon. By this, the transport effort in space travel can be minimised, because insulating material for example necessary for a moon base can be produced on the moon directly.

Harry Lucas, TU Chemnitz, and Maximilian Speiser, Reutlingen University, were awarded two promotion prizes in the category master thesis with prize money of 3,500 euros each. The master thesis of Mr. Lucas deals with the development of a new knitting head for jacquard knitted fabrics, enabling a large variety of colours e.g. in the production of fan scarfs. Mr. Speiser showed in his master thesis a solution for increasing energy efficiency in the nonwovens process.

This year, two promotion prizes of the German Textile Machinery Industry in the dissertation category were awarded to Dr. Frederik Cloppenburg, ITA Aachen, and Dr. Annett Schmieder, TU Chemnitz. In his dissertation Mr. Cloppenburg developed a model for the optimisation of roller cards in the nonwovens process. Ms. Schmieder introduced in her dissertation a damage analysis system for fibre ropes. The system detects when a rope must be replaced e.g. in transport applications.

The award ceremony 2021 shall take place with physical presence again. It is scheduled for early May at the fair Techtextil in Frankfurt.

Finer adjustment of the yarn suction force, lower compressed air consumption for the same yarn tension, smooth, ergonomic compressed-air valve – all promises fulfilled by the modernized AS H 32 and AS H 38 yarn suction devices.

Also known as hand injectors, these yarn suction devices are standard components of all spinning positions. The AS H 32- and AS H 38-series are high-performance hand injectors with lower compressed air consumption for the same yarn tension. This is made possible due to the higher yarn suction forces, particularly in the case of the AS H 38 series. In addition to this, string-up without ‘ramp-up’ is possible in certain applications. Also new is a smoother, more ergonomic compressed-air valve, which makes deploying the yarn suction devices more comfortable for users. Furthermore, the required yarn suction force can be adjusted more finely.

The new ‘high-performance devices’ have been designed for applications that require a particularly high suction performance. For several months now, they have been successfully operating in pilot projects within the context of a BCF yarn application in Europe and a tape yarn system located in the US.

• Significant recovery in order intake in third quarter 2020
• Order intake of CHF 425.1 million after nine months
• COVID crisis management in place
• Continuous implementation of the strategy
• Outlook 2020

The market recovery, which Rieter reported in June 2020, has continued. This is reflected in capacity utilization at spinning mills worldwide, which Rieter monitors. In April 2020, the proportion of producing spinning mills was around 40% while at the end of September 2020 this was around 90%. Against this backdrop, the Rieter Group increased order intake in the third quarter of 2020 to CHF 174.4 million (2nd quarter 2020: CHF 45.7 million). In the first nine months of 2020, the Rieter Group achieved a cumulative order intake of CHF 425.1 million (2019: CHF 524.5 million). Compared to the previous year period, this represents a decline of 19%.

Order Intake by Business Group

Due to the positive development in the third quarter of 2020, order intake at the Business Group Machines & Systems reached a total of CHF 234.5 million in the first nine months. The reason for the relatively small decline of 8% compared to the previous year is that the new machinery business was already characterized by investment restraint in the first three quarters of the year 2019. The Business Group Components recorded a reduction of 33% to CHF 116.6 million while the Business Group After Sales posted an order intake of CHF 74.0 million, a decrease of 23%. This illustrates the effects of low capacity utilization at the spinning mills, especially in the second quarter of 2020 as a result of the COVID-19 pandemic. The order backlog as of September 30, 2020, was around CHF 515 million (September 30, 2019: CHF 285 million). Cancellations were in the normal range of around 5%.

COVID Crisis Management in Place

Rieter has quickly implemented comprehensive COVID crisis management. Priority is being given to protecting employees, fulfilling customer commitments and ensuring liquidity. The necessary measures to protect employees have been implemented worldwide and the order backlog is being processed largely as planned. Rieter has introduced 40% short-time working in Switzerland and Germany for the second half of 2020. Similar measures were implemented worldwide within the scope of the available legal options. As of September 30, 2020, Rieter had liquid funds of CHF 216.7 million and unused credit lines in the mid three-digit million range in order to ensure liquidity. At the end of September 2020, net debt of CHF 1.2 million was disclosed.

Continuous Implementation of the Strategy

In recent years, Rieter has consistently implemented the strategy with the focus on innovation leadership, strengthening the business on the installed base and optimization of the costs. The company intends to forge ahead with the strategy in the coming months in order to strengthen the market position for the time after the COVID-19 pandemic. The Rieter CAMPUS is an important element of Rieter’s innovation strategy. Depending on the business situation, construction work is due to begin in the first half of 2021.

Outlook 2020

As already announced, in terms of sales and profitability Rieter expects a stronger second half of the year compared to the first half of 2020. Nevertheless, due to the deferral of deliveries by customers, Rieter will also conclude the second half of the year − and thus the full year 2020 − with a net loss. Due to the existing uncertainties, it continues to be difficult to forecast sales and profitability for the second half of 2020. For this reason, Rieter refrains from providing more specific information for the full year 2020.