Premium Textile Components enhanced its offering for spinning mill customers with long-life components ensuring constant yarn production quality. Thanks to its broadly based regional anchorage, it was able to profit from Asia’s emerging markets such as Pakistan, Vietnam and Bangladesh. This business group is well positioned globally for rapid response in new markets involving the spinning industry.
Also in North and South America as well as Africa, Premium Textile Components won substantial orders during the year. By focusing in general on all countries with spinning industry, Premium is less dependent on the individual markets.
Expansion in Asia
Premium Textile Components aims to further expand its spinning mill business, which is less affected by market cycles than business with textile machinery manufacturers. Also in the growing domestic markets of China and India, spinning mills are modernizing in order to meet the growing demand for high-quality yarns. This constitutes a driving factor for Premium’s business.
In order to speed up customer deliveries, Premium invested globally during the year under review in expanding its distribution, production and logistics capacities, particularly in Asia. In this connection it set up a spinbox production line in Changzhou for R 923 semi-automatic rotor spinning machines. Furthermore, this business group has systematically expanded its supplier network with Chinese partners. And in order to further expedite business with Chinese spinning mills, Premium merged all related activities into its own Chinese company in July 2012.
With its Premium Textile Components business group, Rieter is one of the world’s largest suppliers of components for short-staple spinning mills. In 2012, new products meeting important customer needs were launched under all four brands of this business group. Premium innovations are launched to improve yarn properties and raw material utilization and to enable cost-efficient production in spinning mills.
The Suessen S 60 spinbox, a key component of the Rieter R 60 rotor spinning machine enables significantly greater productivity, thanks to fundamental technical innovations. It also ensures higher quality yarn properties and considerably reduces energy consumption. Innovative Graf brand products enable customers to increase their productivity with higher roving quality. The Novibra range of new spindles focuses mainly on lower energy consumption.
During the year Bräcker launched some attractive new spinning ring and traveller products.
During 2012 Premium Textile Components worked intensively and according to plan on standardizing business processes, particularly at locations in the Czech Republic and Germany, to ensure that customers worldwide can be served efficiently.
Apart from global marketing competence, the highly automated production of technology components to the greatest precision and in extremely large batches is a capability that constitutes the Premium Group’s decisive competitive advantage. In some cases the group companies develop their own machines for component production, using proprietary manufacturing technologies.
Their production plants excel with comprehensive manufacturing know-how and a highly qualified workforce of long-standing specialists. The decisive production processes are carried out in-house to ensure consistently first-class quality however large the batch size, process security and the optimal protection of valuable know-how.
For China and India Premium Textile Components develops products tailored to local market needs. These are largely manufactured in the highly specialized European production facilities.
The Premium Textile Components business group was confronted during the year with steeply declining demand in nearly all main markets. The group supplies machinery manufacturers, including Rieter, and spinning mills with technology components for staple fiber machines. Both market segments were affected in 2012 by weak demand, which was particularly evident among machine manufacturers in China and India.
Chinese spinning mills suffered above all from declining textile exports to Europe and the US, while the investment climate in India was affected by power supply problems and economic policy interventions in raw materials prices.
Premium Textile Components upheld its market positioning in this difficult environment. Its order intake declined in 2012 by 21 per cent to 144.7 million CHF (2011: 183.3 million CHF). Particularly significant was the lower volume of orders from textile machinery manufacturers and for spinning mill retrofits. Business with wearing parts for spinning mills developed more dynamically on the whole.
It also posted lower sales for the 2012 financial year: a 19 per cent decline to 160.9 million CHF (2011: 199.1 million CHF). Segment sales, including internal deliveries to Spun Yarn Systems, declined less by 12 per cent to 232.3 million CHF (2011: 263.9 million CHF). The business group’s operating result for 2012 was 16 million CHF, corresponding to a margin of 6.9 per cent of segment sales (2011: 35.1 million CHF or 13.3 per cent of segment sales).
Profitability declined mainly because of lower business volumes, the lower proportion of high-margin products, and to some extent due to strategic project costs.