Germany: The Premier League In Textile Machinery Production
VDMA Textile Machinery Association Chairman Fritz P. Mayer explains the success of the German textile machinery industry.
Jürg Rupp, Executive Editor
For decades, Germany has played the major role among the top textile manufacturers in Europe. In
terms of volume, the Association of Italian Textile Machinery Manufacturers (ACIMIT) may have more
members, but Germany has the largest turnover. In an exclusive interview with Textile World, Fritz
P. Mayer, Chairman of the Textile Machinery Association within the German Engineering Federation
(VDMA), explains the reasons why.
The foundation for VDMA was laid in 1890 with the founding of the Verein Rheinisch-Westfälischer Maschinenbauanstalt. Up to 1945, the association of textile machinery manufacturers was based in Saxonia, which at that time was the center of textile machinery manufacturing. In 1945, it merged in Frankfurt am Main with other machine building groups within VDMA.
VDMA, a private nonprofit organization, represents more than 3,000 member companies in the engineering industry, and is among the largest and most important industrial associations in Europe. The textile machinery association within VDMA has 120 member companies, which represent approximately 95 percent of Germany's total production volume in this field. Most of the member companies are medium-sized businesses.
TW: What are the main targets of the association?
Fritz P. Mayer: The main target is to represent the interests of these companies on both the national and international level. Current focal points of the representation work include:
- labor market and pay policy, and deregulation;
- education policy, attracting new generations;
- tax, research and technology policy;
- corporate financing and trade policy;
- environmental and energy policy; and
- trade fairs/trade and related policy.
TW: What are the association's achievements?
Mayer: The VDMA lends a powerful voice to the views of its members. It is hard for a single company to assert itself toward all the target groups linked with the topics mentioned above.
TW: What are the activities of the VDMA Textile Machinery Association?
Mayer: Since the textile machinery sector is an export-driven branch, sales support is a key activity. We are very active in organizing symposia and conferences in major textile markets. On the occasion of these conferences, German companies present their latest technologies to high-ranking technical experts and decision makers from the respective textile industry. The lectures are completed with business-to-business meetings and panel discussions on core topics — for example, sustainability or life-cycle costs.
The last VDMA conferences took place in China and Turkey in 2012 and Indonesia in April 2013. The next conference will be in Bangladesh. The VDMA member companies will address the specific tasks of Bangladeshi textile companies November 5-6 in Dhaka.
I would also like to mention the VDMA activities for attracting young professionals. With the Walter Reiners Foundation, the VDMA Textile Machinery Association is actively engaged in promoting junior engineers. Each year, the foundation provides an incentive for top performers by granting two promotion prizes for dissertations and master/diploma theses as well as one creativity prize for seminar papers. Students regularly gain an insight into practice via excursions to member companies and to the leading textile exhibition ITMA, which are financially supported by the foundation. Particularly high-performance students are supported by scholarships.
TW: How are these activities organized?
Mayer: All activities are organized in cooperation between the VDMA office staff in Frankfurt and the respective committees of the association. Today, the Textile Machinery Association has five regular committees. The Executive Board is the most important panel within the association. There are 15 managing directors on the Executive Board, representing each branch.
- The fair and marketing committee presently consists of 13 marketing and sales representatives from different member companies.
- The textile machinery industry is a technology-intensive sector. The Technology and Research Advisory Board advises member companies on technical matters as well as on research, legal regulations and standardization. Actually 21 managing directors, research and engineering managers of the member companies take part in the opinion making.
- The board of the Walter Reiners Foundation, consisting of five managing directors, is guiding the activities related to junior engineers.
- Three years ago, a China Management Meeting was created as a body of branch managers of German companies in China.
- Notably, the Textile Machinery Association does participate in the VDMA representative offices in China, India and Brazil, which are of great help in organizing trade fair participations or other events in the respective countries.
The Chairman's Focus
TW: What is the main focus of the chairman of the VDMA Textile Machinery Association?
Mayer: The main focus of the chairman is to represent the interests of the branch toward a variety of groups: trade fairs, customer industries, politics and administration, and others. Together with the colleagues from the Executive Board and the managing director of the association, the chairman guides the policies and activities of the association. The chairman is also a member of the European umbrella association CEMATEX [the European Committee of Textile Machinery Manufacturers].
TW: What instruments do you have in your organization to achieve these targets?
Mayer: Pragmatism! In an export-driven industry like our business is, most activities are on an international level, which means that you have to deal with so many different cultures, mentalities and, of course, interests. A good dose of pragmatism is of great help to achieve the targets.
TW: Why should a German textile machinery manufacturer be a member of VDMA?
Mayer: First of all, there is the networking aspect. VDMA offers exclusive platforms to network with colleagues from other machine manufacturing companies and even customer industries. The networking argument applies not only to CEOs and management topics, but also to different levels and various issues. It is always useful to exchange views with other companies and to learn how they are meeting challenges or taking advantage of opportunities.
TW: What are the main advantages of being a member of VDMA?
Mayer: Besides networking, it is noteworthy to mention the huge service portfolio and expertise VDMA offers exclusively for member companies. There are experts for law, economics, statistics, taxes, research and technology, just to mention a few. Not to forget data and market information — those are of great help for planning and doing business.
TW: Is there a technical textiles and nonwovens group in VDMA?
Mayer: Not for technical textiles and nonwovens in general. But VDMA founded the Composite Technology Forum in 2010. The forum seeks to be an interface between the skills of machinery manufacturers and the needs of industries using fiber composite materials. It aims to bring about cooperation and exchanges among associations, clusters and other customer industry organizations. The objective is to create a close network among the players.
TW: VDMA is one of the most active bodies of the European textile machinery industry in terms of participation, etc. What are the reasons for that?
Mayer: One reason, of course, is the size of the industry. But I think it has also to do with the corporate culture of VDMA. It is not a pure federation, but an association service provider.
TW: What advice do you have for an interested party or producer of this sector's products to make contact with its members?
Mayer: A helpful tool is definitely VDMA's internet portal for the customer industries: machines-for-textiles.com. The sourcing service on this website helps to find products and technologies for the textile industry. Visitors to the sourcing service are assisted by a broad range of search possibilities like free text search, company name or location search, hierarchical search for categories of textile machinery and accessories, as well as hierarchical search of textile products for which production technology is requested.
TW: How difficult is it for the chairman to integrate all individual group members?
Mayer: Of course, 120 member companies from different subsectors do not necessarily share the same view on every issue. On the Executive Board, all subsectors are represented: machinery for spinning, chemical fibers, nonwovens, weaving, knitting and hosiery; as well as for finishing including washing, bleaching and dyeing. We have regular board meetings, and one time a year, the so-called textile machinery forum with all CEOs of the branches. So there is a regular exchange among the chairman and the other entrepreneurs. We have a saying in Germany: You can't please everybody! However, due to the regular exchange, it is possible to defuse potential conflict and to develop strategies and policies that are shared by the vast majority.
TW: How would you describe the difference between textile machinery products manufactured in Germany and those from other countries?
Mayer: The experience of many German companies shows that textile mills are increasingly looking at the life-cycle costs of machines. The reason behind this is that the investment costs represent only about 10 to 50 percent of the overall costs that occur during the entire lifetime of an investment good, but as well for a shorter time. Therefore, mills are increasingly looking at the accumulating costs over the life cycle in a textile mill — and, there are many expense factors to examine: costs for acquisition, installation and startup. There are costs that are often not transparent at first glance: costs for maintenance, service and repair — but also for energy and operating, the influence on costs of raw materials like fibers and yarns and the production waste, environmental costs, costs for unscheduled repair, disposal, staff and so on. To put it in a nutshell: The initial price for a German machine pays off after a few years due to low maintenance costs and reliability in production. So far, only a few suppliers can compete with this superiority and advantage of German technology.
TW: Why do you think VDMA is the biggest association within CEMATEX?
Mayer: "Big" has several aspects: In terms of member companies. ACIMIT is the biggest association in CEMATEX. But in terms of production and export figures as well as market share, VDMA is the biggest association. The reason is simple: the German textile machinery industry is the only one in Europe that covers machinery for the whole textile chain from spinning preparation to finishing, while other associations cover just some sectors.
TW: How do you see the current market situation in general?
Mayer: In general, I'm satisfied with the current market situation. Germany still has a strong economy and is less affected by the sovereign debt crisis compared to other countries of the Eurozone. Until now, the crisis had no severe consequences for the member companies, as our industry predominantly exports its products outside the Eurozone.
TW: How do you see the current market situation for your member companies?
Mayer: Since the end of last year, the business climate has noticeably improved. The order income in the first two months of 2013 was 11 percent higher compared to the same period in 2012. In February, the increase was even bigger, with a plus of 29 percent. For the coming months, I see good business prospects.
TW: Where are currently the most significant markets for your member companies?
Mayer: The big five in 2012 have been China, with exports totaling 1 billion euros; Turkey, 350 million euros; India, 240 million euros; the United States, 170 million euros; and Indonesia, 120 million euros. The exports to Indonesia increased by 132 percent. Among the top ten, it's worth mentioning Bangladesh, with German exports worth 50 million euros in 2012.
In 2012, the total exports of German textile machinery reached 3.1 billion euros. That was a decrease of 5.5 percent year-on-year. The year 2012 was no record year, but, in general, business was on good level.
TW: Where do you put the main focus on VDMA's activities in 2013?
Mayer: As I already mentioned, sales support in major textile markets is an integral part of VDMA's activities. Another focus is sustainability. Sustainability has been a loosely used watchword in the past. But today, it is a competitive factor: Volatile prices for commodities and for energy are obviously worrisome signs for textile manufacturers in almost all countries. In the framework of the VDMA Blue Competence sustainability initiative, we will show textile manufacturers exactly how to realize substantial raw material and energy savings with the help of German technology. The success stories from member companies are themed "Sustainability Meets Profit."
TW: How important is the technical textiles market for your member companies?
Mayer: Nearly all member companies of the association have in their portfolio, among other products, machinery and/or components for the production of technical textiles. Some of them are doing a substantial part of their sales with these technologies. For others, the contribution of this machinery to overall sales is small at the moment, but for them, the objective is clear to increase this share. Other members are completely focused on the nonwovens machinery sector.
TW: Where do you see the most important markets for your member companies in the next few years for apparel, technical textiles and nonwovens?
Mayer: Very broadly speaking, today, the markets for apparel are mainly in Asia, while technical textiles and nonwovens are mainly produced in Europe and North America. For the garment sector, changes are already being noticed. Due to the increasing labor costs in China, the dominance of China in apparel production will decrease. Of course, the country will continue to play a major role in apparel production, but countries like Indonesia, Vietnam and Bangladesh will also get their pieces of the pie. For the years to come, I expect a growing production volume of technical textiles including nonwovens for industrial and medical purposes in China and India. Suppliers to the automotive industry or manufacturers of medical and hygiene textiles are important customer branches, and these sectors are growing in the two big Asian countries.
TW: The German suppliers are considered to be market leaders in some segments. Why is this, and what do you plan to do to keep them in this market position?
Mayer: Frankly speaking, it's the knowledge portfolio that preserves the technological leadership of German suppliers. Copycat machines may look very similar to the systems they are designed to emulate, and they are a price class cheaper. But all too often, they merely prove the truth of the German proverb "Buy cheap, buy twice." Only the original designers have the expertise and know-how to coax the last ounce of performance out of the system. Many batteries of tests are needed before the machines, components, sensor systems and electronic controllers are perfectly synchronized, so that the desired product quality is achieved all the time, even at maximum working speed. This insider knowledge is hard-won. The engineers gradually gain an understanding of the internal workings of a machine, how it responds to external stimuli, so that they can then implement new functions on it. This works because of the permanent high research and development expenditures of the German textile machinery companies as well as the quality of German universities. Renowned institutions like the Institute of Textile Technology at RWTH Aachen University (ITA Aachen), Institute of Textile Machinery and High Performance Material Technology at TU Dresden (ITM) or Institute of Textile Technology and Process Engineering (ITV) Denkendorf — among others -—have always produced highly qualified engineers who have the know-how that it takes to convert the results of scientific research into marketable textile machinery.
Click here to view Figure 1 in a new window
Click here to view Figure 2 in a new window
Click here to view Figure 3 in a new window
Click here to view Figure 4 in a new window
June 15, 2013