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Ms Cornelia Buchwalder, Secretary General of Swiss Textile Machinery Association, agreed that the industry faces ever-changing challenges – not least of which is inexorable globalisation of the textile business.

Mr Thomas Waldmann, Managing Director, VDMA Textile Machinery Association, Germany said that the future of the textile industry is “more and more determined by Industry 4.0”.

Mr Waldmann explained that Industry 4.0 has many dimensions and possible fields of applications. In three of them (Smart Services, Operations and Factory), key solutions are provided by the machinery industry. The other ones from smart textile products, marketing and sales, employees up to strategy and organization are specific know-how issues for textile mills.

In some countries, several initiatives have been launched by the local governments to deal with the challenges and support the industry’s development. For example, in recent years, the Italian authorities have implemented ad hoc measures aimed at introducing appropriate technologies in manufacturers’ production systems to digitalize their processes, according to ACIMIT (the Association of Italian Textile Machinery Manufacturers).

“These measures, along with timely tax breaks, have been adopted immediately by textile machine manufacturers to update technologies both in their production processes and products,” explained Mr Alessandro Zucchi, President of ACIMIT.

Market situation in 2018

To German machinery manufacturers, 2018 was not a completely bad year but was far from being a good one. “The general conditions were not ideal for our branch. The market situation in China and India was cooling down. The same was true for Turkey,” said Mr Waldmann.

However, the situation was opposite for the French machinery manufacturers as last year was “a near record year” for them. The French Association of Textile Machinery Manufacturers (UCMTF), which groups about 30 companies, recorded a total annual consolidated turnover of €1 billion (about US$1.2 billion).

“We export most of our machines. Geographically, there have been changes. For example, China, our most important market has been contracting, but the US market is booming. In Turkey, after a short-lived slowdown in 2016, orders have picked up in 2017 but slowed again in 2018. In India, some of our companies are doing extremely well but other think it is still a little slow,” explained Ms Evelyne Cholet, Secretary General of UCMTF.

In addition, Ms Cholet observed the changes in the type of products made with the French machinery. Sales of machines to produce traditional textiles (apparel) have slowed but sales of machines to produce technical textiles, carpeting or to recycle textiles have soared.

For the Swiss Textile Machinery manufacturers, 2018 was a very positive year. Some of the markets developed very well, namely the US, Italy, Uzbekistan and Vietnam. Most of the other export markets showed a stable sideways movement.

“With regards to the current year, our member companies are cautiously optimistic. Order intake is expected to remain stable or decline slightly. However, ITMA in the middle of the year, with many innovations shown, will most probably trigger an additional stimulation of orders,” said Ms Buchwalder.

For Italian machinery manufacturers, Asia is the primary destination for exports in the sector, followed by the European Union. Over the first eleven months of 2018, roughly 47% of the machines were exported to Asian markets, and 21% to the European Union.

“China, Turkey, India and Bangladesh are the first four export destinations for our textile machinery manufacturers. The Chinese market, in particular, absorbs 18% of Italian textile machinery sold abroad,” said Mr Zucchi.

From January to November 2018, the value of exports to China amounted to €323 million, which was a slight decrease of 2% compare to the previous period. The machinery exports to Turkey reached €199 million, which was an increase of 19% compare to the previous period.

Opportunities in emerging markets

To ACIMIT, the emerging countries are “those most recently affected by the delocalization of the global textile and garments industry”, which is known perennially on the lookout for low production costs.

The greatest potential is expressed by the areas of Sub-Saharan Africa (Ethiopia and Kenya) and Southeast Asia (Vietnam, Cambodia).

“There are numerous emerging markets in which German companies are already doing good business and that still offer potential for the future, like Bangladesh, Pakistan, Uzbekistan and Vietnam. Especially some South-East-Asian countries benefit from the rising costs in China,” said Mr Waldmann.

In Ms Cholet’s opinion, the textile market was mainly European 30 years ago, and then it went to North Africa and then Asia, mainly China.

Now, the other Asian countries, which have lower labor costs, attract producers. Some African countries like Ethiopia will also have a strong textile industry within a few years, according to Ms Cholet.

She added that the French manufacturers are not focusing on the mass product markets but aiming for high quality products for apparel, home textiles, carpeting and technical textiles.

Unstable global political situation

Talking about the unstable political situation in the world, Mr Zucchi said that the trade disputes have weakened the economies of the countries involved, affecting both businesses, which are forced to downsize investment plans, and end consumers, who more often than not passively suffer these tensions.

“As for the textile industry, it is among the most sensitive to changes in the structure of trade policies, whether in individual countries or entire geographical areas. As a result, the demand for textile machinery is also conditioned by these trade dynamics,” said Mr Zucchi.

Ms Cholet agreed that the uncertainties may have some effects on the investments decisions. There may be some postponements but the need to modernize the production process is still there to improve the production costs, to have more flexible processes and offer high quality products with zero defects.

“There may be macroeconomic turbulences but, on the ground, realities are much more stable than suggested by the international headlines,” noted Ms Cholet.

“Many things we took for granted in international relations have changed or are still changing. The trade disputes and protectionist tendencies are not for the benefit for a globalised industry like the textile sector. The policy frameworks have become more uncertain. But it is free trade that made our business globally successful. So, let’s stand together for free trade and against protectionist tendencies,” said Mr Waldmann.