From the Sector

During the second quarter of 2023, the orders index for textile machinery, as compiled by the Economics Department of ACIMIT, the Association of Italian Textile Machinery Manufacturers, dropped significantly compared to 2022 April – June 2022 period (-30%). In absolute terms, the index stood at 85.1 points (basis 2015=100).

This drop is the result of a reduction in the collection of new orders recorded by manufacturers both domestically and on foreign markets. The decrease in orders in Italy amounted to 21%, whereas a 31% downtrend was observed abroad. The absolute value of the index on foreign markets settled at 81.9 points, while in Italy it stands at 117.2 points. New orders for the second quarter amounted to 4.1 months of guaranteed production. ACIMIT’s data also shows that the use of production capacity by Italian manufacturers was 70% for the first half of 2023. This percentage is expected to remain stable for the second half of the year.

ACIMIT president Marco Salvadè stated that, “The orders index for the second quarter elaborated by our Economics Department clearly shows a decline in new orders both in Italy and abroad compared to the previous year. The decline that usually precedes an event such as ITMA, the international textile machinery exhibition held last June in Milan, however, is part of a negative trend that has been going on for several quarters”.

Uncertainty appears to be weighing heavily especially on markets abroad, where foreign trade statistics updated to the first quarter of 2023 are marked by a slackening in Italian sales in some important reference markets, such as Turkey, China, the United States and Pakistan.

Salvadè added that, “Feedback from over 400 Italian companies that took part in ITMA is positive. It’s now necessary for the many contacts made during the event to materialize and for the demand for machinery in the main textile machinery markets to resume a path towards growth.”

PrimaLoft Inc., a leader in advanced material technology, announced the reorganization of its European sales management team. Effective June 1st, Leonardo Loro has promoted to the position of Sales Leader, Europe. Additionally, the company welcomes Mario Vlietinck as the new Territory Manager for France, Benelux & Denmark.

To further streamline operations and maximize opportunities, PrimaLoft is also implementing a territory reorganization to better align existing sales talent with market opportunities. These moves will strengthen the company’s sales strategy in the region.

Leonardo Loro will lead the European sales team and report directly to Chris Humphris, SVP, Global Sales. "With over a decade of experience as the sales and marketing manager for the southern European market, including France, Italy, Spain, and Portugal, Leonardo has demonstrated exceptional skills in building customer relationships and identifying new business opportunities. His invaluable contributions to our sales efforts make him the ideal candidate to lead and elevate our business in Europe", said Humphris. In his new leadership role, Loro will continue to manage brands in Italy and Spain, as well as military sales efforts in Europe.

Mario Vlietinck joins the PrimaLoft team and will be responsible for managing and developing business relationships with PrimaLoft brand partners in France, Benelux & Denmark. Vlietinck brings a wealth of knowledge in sales and the outdoor industry, previously serving as the head of Apparel & Footwear for Katoen Natie, as well as working for brands such as Reebok, Merrell, and Vannese. "Mario’s background in product development, business development, and international sales positions him as a great asset to our company goals,” said Humphris. Vlietinck will report to Leonardo Loro.

Sales Territory Reorganization
Wim Neels, VP of business development for fashion and lifestyle, will be responsible for all Fashion & Lifestyle brands across Europe, with the exception of Italy & Spain, which remain the responsibility of Leonardo Loro.

Bartosz Lassak will expand his territory responsibility to include outdoor performance brands in the United Kingdom, in addition to Eastern Europe and Turkey. He will also handle any opportunities from North Africa, as well as any brands located outside of other European coverage.

Valerie Raths Goesel will oversee the management of all outdoor performance brands in the Germany, Austria, and Switzerland region.

Mats Jengard will remain the territory manager for Scandinavia (Norway, Sweden, Finland & Iceland), focusing outdoor performance brands.

Source Fashion returns to London Olympia on 16-18th July, more than doubling in size and welcoming over 300 exhibitors from around the world.

Source Fashion offers a platform for decision-makers in buying, sourcing and procurement, with the reassurance of knowing that every exhibitor has been audited to ensure sustainability and transparency remains at the heart of their business model. The February launch show welcomed over 130 manufacturers from 20 countries including the UK, Peru, Cambodia, Pakistan, Turkey, China, India, Portugal, Hong Kong, Italy, and Greece, attracting nearly 5,000 visitors from leading retailers and brands including John Lewis, M&S, Sainsbury’s, Tesco, All Saints, Asos, Ted Baker, Bella Freud, FILA, Fred Perry, Matalan, Monsoon, Stitch Fix, Urban Outfitters, Very Group, and many more.

Suzanne Ellingham, Director of Sourcing of Source Fashion; “We couldn't have asked for a better first show. Leading retailers attended keen to source new, and crucially audited, producers and manufacturers. We champion responsibility, and sustainability isn’t just an addition to our show, it is our core value. We unite manufacturers practicing environmental, transparent, and fair-trade methods, with buyers looking to source sustainably.

“Our next show will be even bigger and better – we have already doubled the size of our floorplan for July and have been overwhelmed by the interest from both exhibitors and visitors. The global sustainability market is expected to grow by 24% annually in the next seven years according to Meta, which means now more than ever, brands are on the hunt for new sustainable manufacturers and suppliers to source from and the growth rate is staggering for Source Fashion. It is going to be firmly established as a significant platform for responsible sourcing by its second show.”

• Third edition of Texhibition Istanbul will take place from 8-10 March 2023 at the Istanbul Expo Center
• Organizers focus on growth: more than 25,000 international visitors are targeted for March 2023
• More than 400 exhibitors show fabrics, yarns and accessories at the Istanbul Expo Center
• Trend seminars and trend area with special focus on sustainability presents the trends for spring/summer 2024

The third edition of Texhibition Istanbul Fabric, Yarn and Textile Accessories Fair, 8-10 March 2023 builds on the successful editions of the fair last year. The fair is organized by the Istanbul Textile Exporters' Association (ITHIB) and with the support of the Istanbul Chamber of Commerce (ICOC).

More than 400 exhibitors from the areas of knitwear, woven fabrics, denim, yarns and accessories will present their 2024 spring-summer collections on 15,000 square meters in the Istanbul Expo Center. These include well-known names such as Kipaş, Bossa, Yünsa, Btd, Çalık, Hefa, İskur, Universal, Gülle, and Migiboy.

At the last event in September 2022, a total of 20,606 visitors took the opportunity to start business discussions and place orders. Among them international visitors from 97 countries, including the EU, UK, USA, North Africa and the Middle East. Over 25,000 visitors are expected at the upcoming Texhibition in March 2023 such as large clothing manufacturers, purchasing managers of international chain stores and department stores, managers of international brands and chains with their own brand collections, managers of online sales platforms, importers, wholesalers, distributors, designers, etc.

The trend area at Texhibition will show the spring-summer 2024 trends with a focus on sustainable aspects.

Texhibition Istanbul completes the IFCO, Istanbul Fashion Connection, which takes place from 8.-11. February 2023, also for the third time at the Istanbul Expo Center.

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.

From February 8th to 11th, 2023, the third edition of IFCO, Istanbul Fashion Connection will take place in the Istanbul Exhibition Center.

The fair with over 600 exhibitors in 9 halls gives an overview of the new collections in the areas of womenswear, menswear, kidswear, denim, shoes, leather & furs. Separate platforms at IFCO are LinExpo for lingerie and hosiery and FashionIST with a wide range of wedding dresses, evening wear and suits. IFCO Sourcing, a new area at IFCO, offers the opportunity to find numerous companies for sourcing capacities.

Also new is the partnership with Igedo Exhibitions, Düsseldorf, which is responsible for the EUROPEAN SELECTION area at IFCO. International fashion labels present themselves at the fair as part of this participation.

More than 25,000 visitors from over 100 nations from all sales channels, from department stores and boutiques to online platforms from Eastern Europe, the Central Asian markets and the Arabian Gulf region, alongside buyers from Türkiye are expected at the show.

The declared goal of the organizers is to offer a "one-stop shopping solution" with IFCO that shows the creativity of the Turkish fashion scene, enables access to new sales markets and at the same time establishes the connection to potential production partners for supply chain optimization. The competitive advantages of production in Türkiye are evident:
short delivery times, high production quality, young and well-trained employees, the possibility of small minimum order quantities, a vertical textile and clothing industry that allows "one-stop shopping".

The manufacturing sector is an important sector for the industry, with over 80% of companies in Türkiye engaged in this sector. Türkiye has the fastest economic growth among the G20 after Saudi Arabia at 7.6% year-on-year in the second quarter of 2022, according to the Turkish Statistics Authority. Export is one of the most important pillars of growth.

The trade fair concept is being supported by the government with several programs. These include the cooperation with IMA, Istanbul ModaAkademisi, which regularly produces design talents becoming an integral part of the international fashion scene. IMA was founded in 2007 by ITKIB / IHKIB with the help of the IPA I program ((IPA: Instrument for Pre Accession Funds, provided by the EU for the EU candidate countries). Young design talents are brought to the stage at IFCO in cooperation with the ‘’Koza Young Fashion Designers Contest’’.

• Growing geographic separation between cotton production and textile manufacturing since the 1990s

The United States Department of Agriculture (USDA) released a comprehensive study about Chinese cotton in August 2022. The authors, Fred Gale and Eric Davis, concentrate on textiles, imports and Xinjiang.

China is the world’s largest textile manufacturer and the largest cotton consumer, but changes in China’s economy are reshaping the geography of its cotton-textile sector. Nearly all of China’s cotton is produced in the Xinjiang Uyghur Autonomous Region (XUAR), also known more simply as Xinjiang.

Their study reviewed the regional patterns of China’s cotton textile industry development and identified growing geographic separation between cotton production and textile manufacturing since the 1990s using data from Chinese sources. The study investigated spatial patterns of demand for imported cotton by analyzing lists of Chinese companies applying for a share of the import quota from 2016 to 2022. Multiple regression analysis was used to control for potentially confounding influences when investigating whether companies in coastal provinces were more likely to use imported cotton than similarly sized companies in other regions.

Textile manufacturers — the main consumers of cotton — are concentrated in coastal and central regions where the share of China’s cotton production fell from over 50 percent to 10 percent during 2011–21. These geographic changes are a factor influencing global trade in cotton and textiles. Additionally, the use of forced labor in Xinjiang attracted more attention to the industry, prompting the United States and other countries to ban products produced in the region.

This study reviews the economic, geographic, and policy factors reshaping the industry and influencing the global trade of cotton and textile products. The study also examines data on Chinese companies applying for a share of China’s cotton import quota to gain insight about the demand for imported cotton.

China became the world’s largest producer, consumer, and importer of cotton soon after joining the World Trade Organization (WTO) in 2001. Despite adopting a tariff-rate quota (TRQ) system for cotton imports and issuing supplemental quotas in most years, the large number of cotton goods manufacturers that request shares of the quota suggests demand for imported cotton exceeds  the quota.

While the TRQ was intended to protect China’s cotton farmers, many farmers abandoned the labor-intensive crop as wages rose rapidly in many other industries and other crops produced higher returns. In response, officials encouraged cotton production in the relatively remote region of Xinjiang to prevent China from becoming reliant on imported cotton. Xinjiang growers receive a subsidy payment for cotton, and subsidies for machinery and seeds. A transportation subsidy induces textile manufacturers in eastern and central regions to purchase cotton from Xinjiang, which is about 2,200 to 2,900 miles from most of the country’s textile manufacturers. Financial support and other incentives encourage manufacturers to shift operations to Xinjiang.

Textile manufacturers in China are highly interested in importing cotton due to its lower price and quality. China imports about 20 percent of its cotton, and the United States is a chief exporter of cotton to China. While imported cotton is used in all provinces, manufacturers near the eastern seaboard show a greater propensity for imports. Nevertheless, in all regions, domestic cotton has the largest share of mill use.

Between 2016 and 2022, 1,581 companies applied for a share of the TRQ, and 265 companies applied in all 7 years. Most of these companies also applied for supplemental quotas issued with slightly higher tariffs. This large number of applicants suggests that imports could be even greater if quotas did not limit them. The operation of the quota application process is not public information, but data submitted by applicants suggests access to imported cotton is uneven. About 14 percent of applicants said imported cotton comprised over half of the cotton they used. Another 20 percent of companies requesting import quota did not use any imported cotton, suggesting that many applicants are unable to import. Textile manufacturers coped with limits on cotton imports by increasing their use of synthetic, chemical-based fibers or by importing cotton yarn. From 2000 to 2020, China’s yarn imports doubled from under 1 million metric tons to around 2 million metric tons with Vietnam supplying about 45 percent of that total in 2020.

The number of textile manufacturers in Xinjiang applying for a share of the cotton import quota rose from 37 to 68 between 2016 and 2022. However, imports constituted less than 2 percent of  the cotton Xinjiang applicants reported using—and 66 percent of them reported using no imported cotton—suggesting that applications from Xinjiang textile companies were often denied.
Analysis found that applicants in coastal provinces used more imported cotton than similarly sized applicants in other regions. Each location of a multi-plant company must apply separately for tariff-rate quotas. Textile manufacturers in Xinjiang that requested a share of the import quota included branches of some of China’s largest textile companies, but the analysis found that Xinjiang applicants used less imported cotton than similar manufacturing plants located in other regions. China’s role as a cotton importer appears to have peaked, while other countries are increasing their share of imports.

USDA baseline projections suggest that by 2030 Vietnam, Pakistan, Indonesia, Bangladesh, and Turkey will together account for 47 percent of the world’s cotton imports while China will only account for 24 percent. The study cam be downloaded from the USDA website.

• 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.

SHIMA SEIKI MFG. will participate in the ITM 2022 International Textile Machinery Exhibition in Istanbul, Turkey.

SHIMA SEIKI will exhibit a wide range of its products, including proposals in seam-free WHOLEGARMENT® knitting technology that offers an alternative to labor-intensive manufacturing in Turkey and other international markets. Featured is the flagship MACH2XS WHOLEGARMENT® knitting machine with original SlideNeedle™ on four needle beds and spring-loaded moveable sinkers with expanded patterning capability, the MACH2VS V-bed machine for producing WHOLEGARMENT® items using every other needle, as well as the compact SWG091N2 for producing smaller WHOLEGARMENT® items and accessories. A brand new proposal in V-bed WHOLEGARMENT® knitting will also be introduced in the form of the N.SVR183 machine. N.SVR123SP features a special loop presser bed that can produce hybrid inlay fabrics with both knit and weave characteristics. N.SVR123SP at ITM will feature the special i-Plating option, capable of alternating yarn colors in any pattern, producing jacquard-like designs using plain jersey stitch for even greater diversity in knit design. Meanwhile N.SSR112 offers industry-leading technology in an economical yet reliable package made in Japan. Also on display is the SFG20 glove knitting machine.

Demonstrations will be performed on SHIMA SEIKI’s SDS®-ONE APEX4 design system. At the core of the company’s “Total Fashion System” concept, SDS®-ONE APEX4 provides comprehensive support throughout the production supply chain, integrating production into one smooth and efficient workflow from yarn development, product planning and design, to production and even sales promotion. Especially effective is the way SDS®-ONE APEX4 improves on the design evaluation process with its ultra-realistic simulation capability, whereby virtual samples replace physical sampling, consequently reducing time, cost and material that otherwise go to waste. The same capability is present in APEXFiz™ subscription-based design software. Installed on personal computers, APEXFiz™ features the same functionality as SDS®-ONE APEX4, but with the added versatility to adapt to different work styles and business environments including teleworking and telecommuting. Digital prototyping using virtual samples on SDS®-ONE APEX4 and APEXFiz™ help to digitally transform the fashion supply chain for realizing sustainable manufacturing. APEXFiz™ will be shown along with SHIMA SEIKI’s yarnbank™ digital yarn web platform that further enhances the realism of virtual samples.

International textile producers meet again in Istanbul, Turkey, from June 14 – 18, 2022 on the occasion of the ITM + Hightex Exhibition. In Hall 9 (Hightex) the exhibitors will present the complete industry value chain from nonwovens raw materials, production machines and accessories to the endproduct. The related industries covered include hygiene, filtration, fabrics and apparel, medical, automotive, wipes, home furnishings and upholstery. DiloGroup offers tailor-made production systems from one supplier and will inform about its portfolio and the latest equipment developments from fibre opening to the finished felt.

DiloGroup will inform about complete lines as well as high speed needlelooms for spunbonds. A new, simplified elliptical needle beam drive makes Hyperpunch technology also attractive for standard application. Hyperpunch HαV allows a more uniform stitch distribution in the preneedling process especially in combination with the new needle pattern 6000X. In a complete needling line this felt homogenization process can be improved further. The new needle pattern 8000X is a milestone in the needle pattern development process and results in endproduct surfaces with low markings over a wide range of advances/stroke.

Another strong pillar of the sales program over decades has been fibre preparation and high speed webforming equipment for other nonwoven technologies. The further development of the high-speed layering principle “Hyperlayer” made progress for better CD strength through a combination of inline cards and crossline card with crosslapper. Particularly, carding machines in a working width above 3.5 m up to 5.1 m have been supplied by DiloSpinnbau as complete high speed carding systems, comprising two or even three cards in a line to directly feed the hydroentangling units of various suppliers. Together with DiloTemafa not only have high throughput rates been achieved in the fibre preparation section of the line but also dedusting filtering and air-conditioning systems have been successfully engineered and integrated.

Together with Sicam, Dilo has combined know-how for hydroentangling technology and therefore can provide complete lines as general contractor including equipment for cutting, winding and packaging.

Another interesting machine is the 3D-Lofter, first presented during ITMA 2019 in Barcelona, which offers a wider range of nonwovens applications by exploring the third dimension. A series of single web forming units which work according to the aerodynamic web forming principle deliver defined fibre masses in varied patterns on a base needlefelt. A stress oriented production of technical formed parts resulting in fibre savings or patterned DI-LOUR or DI-LOOP felts with or without repeat are two examples for this technology which explores new application areas for needlefelts.
The 3D-Lofter technology may also be used “inverted” as “IsoFeed” for filling up bad spots in web mats and thus achieves a better homogeneity of spunlace or airlay products.

The DiloLine 4.0 concept offer I4.0 modules which not only support the user but also facilitate quality control and maintenance by a maximum data transparency in production and control of operation. The Dilo solutions “Smart Start” for a fully automatic start of the production line or “DI-LOWATT” for energy savings are accompanied by Siemens solutions which can be selected via App or Data Cloud “MindSphere”.