Rieter focus on market-specific products to boost demand

 

The Rieter Group had to hold its own in a challenging market environment worldwide in the 2012 financial year. Orders received totalled 839.7 million CHF, representing a reduction of 12 per cent for the year as a whole, but order intake was higher in the second half of the year than in the first six months. As expected, sales were lower than in 2011, declining by 16 per cent to 888.5 million CHF. Rieter had a backlog of orders in hand of some 550 million CHF at the end of 2012.

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Uncertainty was the characteristic feature of all major economic regions of the world in 2012. Suppliers of textile machinery and components faced additional industry and country-specific challenges in their main markets of China and India. Spinning mills in India continued to struggle with the consequences of the distortions in raw material prices in the first half of the year, but a recovery in demand became apparent in the second half, especially in the north of the country. In China, spinning mills suffered as a result of government-regulated raw material prices.

Overall, Rieter’s spinning mill customers reported a more stable trend of business in the second half of the year and operated profitably. However, the business environment in yarn customers’ markets remained volatile and banks’ attitude to financing projects remained cautious.

In this unfavorable environment it was clearly apparent in 2012 that Rieter is well positioned with its existing product range and that its innovation and expansion strategy with its focus on Asia is in the right direction. The company is considerably better structured with market-specific products today than during the economic slump in 2008-09.

Rieter reinforced its overall market position in 2012. Machinery and components offering higher productivity and quality with lower energy consumption, also with a higher degree of automation, are in greater demand than ever in the major markets of China and India.

Orders received

In the year under review, the Rieter Group received orders amounting to 839.7 million CHF, marking a decline of 12 per cent. This figure includes cancellations of orders totalling some 60 million CHF. Order intake nevertheless increased by eight per cent to 435.6 million CHF in the second half of the year compared to the first six months. This positive trend was due mainly to the revival of the market in India and a slight increase in demand in Turkey and in countries in South-East Asia as well as North and South America.

In China, Rieter recorded a good level of order intake despite a more challenging environment. A number of substantial orders for machines not due to be delivered until the 2013 financial year were also received during this period.

Order intake was lower at both business groups, but the decline was less pronounced at Spun Yarn Systems (the new machinery business) than at Premium Textile Components (the components supply business).

The Spun Yarn Systems Business Group posted new orders of 695 million CHF, equivalent to a decline of 10 per cent. At the Premium Textile Components Business Group this figure was 21 per cent lower than a year earlier, totalling 144.7 million CHF. This trend was due mainly to weaker demand from Chinese and Indian machinery manufacturers, whereas the trend of business with spinning mills was more dynamic. Rieter had a backlog of orders in hand of some 550 million CHF at year-end.

Sales

Rieter’s sales of 888.5 million CHF were 16 per cent lower than in the previous year. The downturn became more pronounced in the second half of the year in particular: as a result of the weak order intake at the beginning of the year, orders postponed by customers until the 2013 financial year and the weaker components supply business, sales in the second half were 18 per cent lower than in the first six months.

Sales of 727.6 million CHF by the Spun Yarn Systems Business Group were 16 per cent lower during the year, although this business group posted a substantial increase in sales in China compared to the previous year. Sales of 160.9 million CHF by Premium Textile Components were 19 per cent lower.

Rieter is a leading supplier on the world market for textile machinery and components used in short staple fiber spinning. Based in Winterthur (Switzerland), the company develops and manufactures systems, machinery and technology components used to convert natural and man-made fibers and their blends into yarns.

Rieter is the only supplier worldwide to cover spinning preparation processes as well as all four final spinning processes currently established on the market. With 18 manufacturing locations in nine countries, the company employs a global workforce of some 4,700, 27 per cent of whom are based in Switzerland.