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The Textile Magazine
August 2012
market development is expected to
continue in 2012. Due among other
reasons to uncertain economic poli-
cies in major national markets, it is
difficult to forecast textile machin-
ery industry developments for the
current year. Further trends depend
on various factors, including cur-
rency exchange rate development,
consumer sentiment in Europe and
North America, fiber consumption
growth in Asia, and raw material
prices.
Rieter currently reckons in the
second semester with a weaker
trend in sales compared to the
first semester as part of the order
backlog reaches into 2013. Ri-
eter expects operating profitability
(EBIT) in the second semester to
follow volume development and
the planned investment activity
in growth projects and process
improvements to further reduce
operating margin (EBIT) by around
three percentage points.
Investment program for
further growth
Rieter expects that global demand
for short staple fibers (natural fib-
ers / staple man-made fibers) will
grow by an average of 2.3 per cent
annually until 2030. The additional
spinning capacity this will require,
the replacement demand and the
trend toward greater automation,
especially in the Chinese and Indian
markets, will have a positive impact
on demand for spinning machinery
and components.
Against this background Rieter
is aiming for overall annual aver-
age growth of five per cent, half of
which should be organic. Rieter’s
strategic targets are to retain its
leadership in the premium segment
and also to expand its po-
sition in the local markets
in China and India.
In the implementation
Rieter is focusing on fur-
ther build-up of capacity
in China and India; air-jet
spinning, improvement of
yarn quality, productivity
and energy efficiency of
machinery and compo-
nents; and on operational
excellence, global stand-
ardization and IT support
of business processes.
In order to achieve rap-
id expansion in Asia and
drive product innovation,
Rieter is planning invest-
ments totalling some 90
million CHF in 2012 and
2013, somewhat more
than half of which will be complet-
ed in 2012. A total of some 50 mil-
lion CHF is foreseen for the further
improvement of global processes in
2012/2013, slightly more than half
of which is budgeted for the 2012
financial year. These investments
will be made in addition to regular
maintenance expenditures.
Investments in the growth
projects will reduce EBIT margin
by about one percentage point in
2012 and 2013. Investments in
process improvement projects will
reduce EBIT margin by about a fur-
ther two percentage points in these
two years. Through this invest-
ment program, Rieter is seeking to
achieve an EBIT margin of at least
nine per cent over the demand cycle
and greater than 12 per cent in peak
years.
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