From the Sector

Latest trade data (January-September 2021) show a dramatic drop of imports and exports of textile goods between the EU and UK, with significant losses for companies on both sides. The situation is likely to get worse, as the full customs regime between UK and EU has entered into force on 1 January 2022. EURATEX calls on the European Union and the United Kingdom to effectively cooperate to remove the issues in the EU-UK Trade agreement that prevent smooth trade flows.  

All the sectors have been already suffering a significant loss in the past year and textiles has been no exception. Compared to the same period in 2020, between January and September the EU recorded a dramatic fall in imports (-44%, corresponding to almost € 2 billion) and in exports (-22%, corresponding to € 1.6 billion). The data show that the most impacted EU countries on the export side are Italy, Netherlands, Belgium and Germany while on the import side the most impacted countries are Germany, Ireland and France. Among the T&C sectors, clothing articles are facing the most severe drop in both imports and exports, corresponding to a total trade loss of more than € 3.4 billion over the 9 months period. Despite these alarming figures, the UK continues to be the most important export market for EU textiles and clothing.

Concerning the impact on the UK textiles sector, in May 2021 the UK Fashion and Textile Association’s (UKFT) surveyed 138 businesses, including leading UK fashion brands, UK textile manufacturers, wholesalers, fashion agencies, garment manufacturers and retailers.

The results of the survey showed that:

• 71% currently rely on imports from the EU
• 92% are experiencing increased freight costs  
• 83% are experiencing increased costs and bureaucracy for customs clearance
• 53% are experiencing cancelled orders as a result of how the EU-UK agreement is being implemented
• 41% had been hit by double duties  
• The vast majority of the surveyed companies declared they are looking to pass the increased costs on to consumer in the next  6-12 months

The above situation is expected to get worse. Since 1 January, full customs controls are being implemented. It means that export and import rules have become stricter: products should already have a valid declaration in place and have received customs clearance. Export from Britain to the EU must now have supplier declarations and the commodities codes changed.  

EURATEX calls on the European Union and the United Kingdom to effectively cooperate to address, solve and remove the issues in the EU-UK Trade agreement that currently prevent smooth trade flows between the two sides of the Channel. It is causing considerable losses for textile companies both in the EU as well as in the UK. 

For most textiles, finishing processes are not actually the last stage. Products often need an extra touch of expertise to make them perfectly ready for the customer. At this point in the value chain, that usually means manual tasks – but now there are technical solutions and intelligent systems which can handle complex operations better, while adding extra value and assured quality.
Automation brings reliability and efficiency, ultimately saving costs to produce the right quality every time. Swiss companies are specialized in many of these disciplines, with machinery for fabric inspection and presentation, labelling and tracking, folding and packaging. They have the technology to inspire a new vision at the post-production segment of the textile manufacturing processes. Optimization of workflows, with bottleneck management, is an obvious potential benefit. And it delivers measurable returns on investment. The wider picture with automation will prepare companies for the IoT and Industry 4.0.

New business models
The advantages of automation in mills with high-volume production are obvious: consistent quality, increased efficiency, waste reduction in some cases, as well as significant medium-term cost reductions in every case.
That description focuses on the aims of modern mills in low-cost markets. But producers in Europe and USA could reach out for more. For them, automation could be a game-changer, offering unique new opportunities.
Reshoring is a growing trend now. It shows great potential and is definitely driven by sustainability and changes in consumer mindsets. “We believe that the time is right – the machines and solutions certainly are – to push automation also to the very end of the production line, replacing intensive manual work and take the chance for reshoring. The current situation is kind of a transition time which is expected to last for a couple more years in the textile industry,” says Rueedi. He adds that any investments in these prime markets pay off much faster because of higher labour costs.
Innovation transformed through automation can do much more than simply replacing the nimble fingers of humans. It also enables new business models, guaranteeing prosperous future business, alongside greater job security.

Digital workflow and process control
The Swiss company Maag Brothers is a leading supplier of high-end machines for quality assurance in the final make-up processes, specifically fabric inspection, plating/folding, selvedge printing and packaging. Maag reports on a practical example from a mill in India which recognized the potential of automation.
An analysis at the customer’s mill identified the main goals as modernization of the workflow at quality control and packing processes. Maag’s new system covers tasks from fabric inspection to dispatch, and offers transparent and easily adjustable processes with real-time process control. It’s a digital solution, resulting in a slim organization, paperless, and the basis for further optimization towards Industry 4.0 to exploit its full potential. The customer’s own calculation showed a ROI for the installation at less than three years – along with a reduction in manpower and savings in fabric costs for shade samples.

Perfectly labelled, efficient data...
Smooth processes start with a label. Swiss company Norsel is an expert in grey fabric labelling systems, for piece tracking through all textile processes. High-quality label printing and proper sealing on all kind of fabrics ensure readability and sustainability after dyehouse processes such as mercerizing, high temperature dyeing and even hot calendering. No roll mix-up during dyeing, easy sorting of fabric rolls and rapid delivery make processes in the mill much more efficient. Using RFID codes lifts fabric inventory control to the highest level, with all information readily transferred to a database and integrated through any ERP software.
It’s a foolproof way to avoid the risk of human errors from hand-written notes on grey fabrics and article sheets, by opting for reliable, secure and forward-looking solutions.

Sample collections – the silent salesmen
First impressions count, so fabric producers like to present their collection perfectly – and that’s only possible with automated solutions. Swiss producer Polytex continuously refines its solutions, underlining its leading position in sample making equipment. Fully-automatic high-performance sample production lines are designed to satisfy the highest expectations. Fully-automatic lines or robotic machines set the standards for quality and performance. Even the most demanding clients can achieve their goals with impeccable samples, quickly and efficiently made, for flawless collections that are sure to impress.

Automation drives buying
First impressions are also the trigger for quick purchase decisions. The proof is there on every store shelf. Customers of Espritech are also well aware of it. They trust this Swiss producer of automated folding machinery to provide the final touch of class to home textiles and apparel products before they go on display. The folding systems are generally large mechatronic devices, loaded with latest technologies in mechanics, electronics, sensors and pneumatics. “Textile producers are amazed how folding machines solve the tricky task of reliably handling chaotically behaving materials. They see process optimization potential and the impact. We observe a slow but continuous change of mindset installing sophisticated technology even in the last steps of textile finishing,” says Philipp Rueedi, CFO at Espritech.

• Results of experiments conducted by the University of California’s prestigious Scripps Institution of Oceanography in San Diego provide further scientific proof that LENZING™ fibers offer an effective substitute to synthetic fibers that are part of the pressing problem of plastic pollution in our oceans.

Lenzing/San Diego – The Lenzing Group, a world-leading provider of wood-based specialty fibers, has received further scientific proof of the biodegradability of its fibers. In a study published in October 2021 , scientists from the prestigious academic research institute Scripps Institution of Oceanography (SIO) at the University of California, San Diego confirmed that wood-based cellulosic fibers biodegrade in the ocean within a short period of time at the end of their life cycle, making them a better alternative to fossil-based fibers. The research was the result of an independent project trying to understand the “end-of-life” scenarios for textiles and nonwovens discarded in the environment.

SIO has a global reputation for being one of the oldest, largest and most important marine research centers worldwide. In this study, SIO compared the degradation processes of nonwovens made from fossil-based synthetic materials such as polyester with those of cellulosic materials such as Lenzing’s wood-based lyocell, modal and viscose fibers in specific scenarios – under various real oceanic conditions and controlled aquaria conditions. The results of these experiments are striking: while wood-based cellulosic fibers fully biodegraded within 30 days, the fossil-based fibers tested were practically unchanged after more than 200 days.

The biodegradability of LENZING™ fibers was also tested in the laboratory of Organic Waste Systems (OWS) in Belgium – one of the world's leading companies in biodegradability and compostability testing – which showed data confirmed by those found with the real-life measurements at Scripps. The OWS assessment was conducted in accordance with applicable international standards and reflects relevant natural and artificial conditions in which biodegradation can occur. Certificates from the certification organization TÜV Austria show that LENZING™ fibers rapidly biodegrade in all test environments (soil, industrial composting, home composting, fresh water and marine water) within the time frames set by the applicable standards.

Lenzing also welcomes the EU’s targeted measures to combat plastic waste in general, such as those relating to the single-use plastic directive (EU) 2019/9043. In its recently adopted guidelines for implementing the directive, the EU Commission stipulates the specific products that fall under this category, which is a well-needed effort to provide clarity to the EU member states for their joint campaign against environmental pollution from plastic waste. Lenzing’s wood-based, biodegradable cellulosic fibers can be part of a sustainable and innovative solution to this man-made problem that will continue to grow. As of July 2021, the single-use plastic directive sets out standardized labelling requirements for certain products, either on packaging or on the products themselves, which include plastic-based feminine hygiene products and wet wipes for body care or household use. This is a start to tackle the problem: educate the consumer and offer alternative materials with better circularity.

European Textiles and Clothing (T&C) industry coming out of the Covid19-crisis, but facing new challenges ahead. This recovery may however be disrupted by the current supply chain and energy problems. Latest economic data on the European T&C industry confirm further recovery from the corona pandemic. The textile activity has now surpassed its pre-pandemic level from Q4 2019 (+3.6%); the clothing sector still remains 11.5% below, but continues to improve.

In quarter-on-quarter terms, the EU turnover showed signs of improvements across the sector. The textile turnover increased by +3.3% in Q2 2021, after slightly contracting in Q1 2021. Similarly, the business activity in the clothing sector expanded by +7% in Q2 2021, after increasing by +1% in the previous quarter.
 
In the 2nd quarter 2021, the EU-27 trade balance for T&C improved, resulting mostly from an increase of export sales across third markets and a drop of textile imports. T&C Extra-EU exports boomed by +49% as compared with the same quarter of the previous year. T&C Extra-EU imports went down by -26% as compared with the same quarter of the previous year, following a decrease of imports from some main supplier countries. EU imports from China and the UK collapsed due to a combination of Brexit and weaker demand in Europe.
 
During the second quarter of 2021, job creation was slowly stabilising in the textile industry (-0.2% q-o-q), while employment in the clothing sector continued to be affected by lower levels of production activity in industry during the first part of the year (-1.2%). When compared to its pre-pandemic level in Q4 2019, EU employment in Q2 2021 was still 4.4% down in textiles and 11.8% down in clothing.

However, this fragile recovery is hampered by higher shipping costs and prices’ increase in raw materials and energy. The cost of energy, in particular gas, has increased more than 3 times since the beginning of this year. Since the announcement of the EU’s “Fit for 55” package, we have seen CO2 prices rising above €60. This inevitably has an impact on the industry’s competitiveness, especially in a global context. The future recovery is also threatened by some factors limiting production, such as shortage of labour force and equipment, which are putting additional pressure on T&C industries.

Director General Dirk Vantyghem commented on these latest figures: “Our companies have shown great resilience during the pandemic, and their latest export performance is an encouraging sign of recovery. This recovery may however be disrupted by the current supply chain and energy problems. Once again, recent developments show that this transition towards more sustainable production can only work if organised in a global context, avoiding carbon leakage and with an effective level playing field. This must be considered in the upcoming EU Textiles Strategy.”

The recent ITMA Asia + CITME exhibition was marked by a strong showing from Swiss Textile Machinery members, in what was the sector’s first major face-to-face showcase since the pandemic restrictions.

With an attendance comprised of 99% visitors, the show still proved a satisfactory venture, the Swiss companies reported. There was real product innovation, and meaningful customer interest, prompting a genuine mood of optimism among exhibitors. The event was held from June 12-16 in Shanghai, with 18 Swiss exhibitors, of whom 13 were Swiss Textile Machinery member companies.

The Swiss Textile Machinery member firms exhibiting at ITMA Asia + CITME 2020 were:

• Bräcker
• Graf
• Hunziker
• Loepfe
• Luwa
• Polytex
• Rieter
• Santex Rimar
• Sedo Engineering
• SSM
• Stäubli
• Uster
• Willy Grob

Although affected by the Covid-19 pandemic, ITMA ASIA + CITME, which takes place mid-June in Shanghai, will see a convincing participation of VDMA member companies. 56 exhibitors from Germany will exhibit at this year’s edition of Asia’s major fair for textile machinery. Due to the pandemic and travel restrictions, this is much less than in 2018, when 99 exhibitors from Germany were present. The booked space of German companies has almost halved compared to 2018. Nevertheless, Germany is still the second largest exhibitor nation after China.

At a virtual VDMA press conference early June, these renowned VDMA member companies* presented their highlights for the Asian market:

• Oerlikon Polymer Processing Solutions Division
• Truetzschler Group
• Neuenhauser
• Saurer
• Karl Mayer
• Groz-Beckert
• Herzog
• Lenze
• Mahlo
• Sedo Treepoint
• Thies

Instead of visiting the show personally, the VDMA offers a virtual trip to Asia. The established "Textile Machinery Webtalk" series via the newsroom IndustryArena will focus on ITMA ASIA in the run-up to the fair: VDMA Webtalks meet ITMA ASIA.

*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.

• Energy efficiency will be the topic of VDMA’s next edition of Textile Machinery Webtalks on 27 August 2020 (2 pm - 4 pm CEST).  

Efficient energy management is of increasing importance in textile dyeing and finishing. Innovative machine designs with minimal water and energy consumption as well as the recovery and use of the heat energy produced in the processes represent valuable potential savings for any modern company.

The presenters at a glance:

• Ludger Sommer, Thies, will show how to manage heat energy in wetprocessing.
• Benjamin Schnabel, Brückner Textilmaschinen is going to demonstrate how to make one of the most energy consuming processes in textile manufacturing more sustainable, eco-friendly and cost effective.
• Fabian Buckenmayer, PLEVA Sensors and Controls will inform about the specific opportunities for an energy-efficient textile production via measuring and controlling process parameters.  

After the presentations, the experts will be available to answer the participants' questions. The webtalk series is very well received by the textile industry. During the first three webtalks, VDMA welcomed almost 900 registered participants from more than 50 countries. Registration is still possible.

Net result impacted by operating losses and high impairments in North America

In 2019, Autoneum grew organically by 2.5% and has thereby significantly outperformed the declining market. In Swiss francs, revenue rose slightly to CHF 2 297.4 million. However, as previously communicated, operational inefficiencies in North America and impairments on fixed assets in that region had a particularly strong impact on profitability and led to a net loss of CHF –77.7 million. The Board of Directors therefore proposes that no dividend bedistributed for the 2019 financial year. Based on the new turnaround program launched in North America at the beginning of this year, significant profitability increases are expected for 2020.

2019 was an extremely challenging year for the automobile industry. The continuing weakness of the global economy, ongoing trade disputes and the increasing regulation of mobility impacted vehicle demand negatively. But 2019 was also a year of change for Autoneum internally. An in-depth analysis carried out by the new Group Management in the fall showed a need to reevaluate the Group’s performance over the short- to medium-term. In Business Group North America, the operational and commercial problems have proven more extensive than originally assumed. As a result, the turnaround program launched in spring 2019 was replaced at the beginning of 2020 with a dedicated and far more comprehensive program for the North American sites.

Revenue growth despite a shrinking global market
As a result of weak demand, the number of light vehicles produced worldwide fell again sharply in 2019 compared to the previous year; whereby the decline of almost –6% was much steeper than in 2018. Thanks to numerous production ramp-ups and a favorable model portfolio, Autoneum generated organic revenue growth1 of 2.5%, despite the global market cooling. Revenue consolidated in Swiss francs rose by 0.7% from CHF 2 281.5 million to CHF 2 297.4 million.

Profitability2 impacted by operational inefficiencies and impairments
Operational inefficiencies in North America and impairments on fixed assets in this region were the main reason for the – first-ever – negative net result in 2019. In addition, the sharp drop in automobile production in Europe and China as well as associated lower utilization of production capacities in the affected Business Groups also burdened the Group’s profitability. EBITDA excluding IFRS 16 effects decreased to CHF 126.0 million (2018: CHF 197.2 million), which corresponds to an EBITDA margin of 5.5% (2018: 8.6%). One-time charges from impairments in the amount of CHF –68.0 million had a negative impact on EBIT, reducing it to CHF –32.9 million (2018: CHF 114.1 million). Without these one-time charges, EBIT amounted to CHF 35.0 million. The EBIT margin 1 Change in revenue in local currencies, adjusted for hyperinflation. 2 The figures for the 2019 financial year include IFRS 16 effects. Autoneum Management Ltd . Media Release . March 4, 2020 Page 2/5 excluding impairments was at 1.5% in 2019, and taking those into account the margin decreased to –1.4% (2018: 5.0%).

ITMA ASIA + CITME 2018, Asia’s foremost trade fair dedicated to textile machinery, is once again marked by a significant presence of German companies both in their number and in the quality of their technology. Visitors to the fair will have an opportunity to appreciate the high level of technology being proposed by more than 100 exhibitors from Germany, including more than 80 VDMA member companies. They cover nearly all different machinery chapters with a focus on spinning, nonwoven, weaving, knitting, warp knitting and finishing. The overall exhibition space occupied by German machinery manufacturers is more than 7,000 square meters, confirming Germany’s leading position among exhibiting foreign countries. The German exhibitors increased their booth space by approximately 15 % compared to 2016.

“Choose the original - Choose success" is the message of the VDMA Textile Machinery at this trade fair. On the occasion of the VDMA press conference on the opening day of ITMA ASIA, Ms Karin Christine Schmidt, Technical Director VDMA Textile Machinery, emphasised: “Copycat machines may look similar to the systems they are designed to emulate. But only originals do not simply follow but are pacesetters of technological progress.” Original technology is a keystone of innovation. It has the potential to successfully turn visions of entirely new possibilities in the textile production into reality.

This approach is visualised at the VDMA booth. The stand achieves attention and emotion through the picture motif: Neuschwanstein Castle. This world-famous tourist magnet is more than that: it is also a successful original. A vision, which could be successfully implemented in the long term through innovation and technology!

During the press conference, 18 spokespersons of renowned VDMA member companies showed how original technology can indeed play a major role in China’s and other Asian nation’s efforts to increase the resource efficiency of the textile industry and to interconnect information technology and manufacturing processes.  

Topics of the companies included automation, performance improvement, quality, sustainable solutions (raw material, energy, water saving), Industry 4.0 (in China called intelligent manufacturing), digital AR/VR services, platforms and software.

You are welcome to explore the speakers' statements in the atached PDF.