Spotlight on Germany

Fairly confident despite Eurozone uncertainties

16 January 2012



The Germany economy is still strong and the mood remains positive but the Eurozone restructuring and huge rises in raw material costs cause concern leading to greater competitiveness. The environment is a big influence on both laundry and drycleaning sectors. Kathleen Armstrong reports


Germany has one of the strongest economies in Europe but data from Markit Economics shows that in November 2011 the Purchasing Managers' Index for Germany fell from 50.3 to 49.4 (see footnote). This is the first time that the German market has contracted in two-and-a-half years.

“The economic prospects in Germany are largely positive, although discussions on the Euro are keeping tensions high,” comments Andreas Barduna, manager of Miele Professional International, based in Gütersloh. “Manufacturers must concentrate even more on their own strengths,” he adds.

Barduna says that 2011 was a good year for Miele in central and northern Europe, mainly thanks to the products that it launched during the year. These included additions to the Octoplus range of 8kg washers and dryers and three heat-pump dryers.

“We presume that the situation in 2012 will be similar to 2011 but much depends on how politicians manage to control and guide the suffering Euroland countries over the coming weeks and months,” says Barduna.

John Balman from Alliance International takes a similar view. “Our sales division in Germany was very successful in 2011. The sales managers reported double-digit increases when compared with 2010 figures.” He is confident the trend will continue in 2012 and says that Alliance is very strong in market segments where strict hygiene is mandatory – the health sector, nursing homes and hotels.

Balman adds that healthcare is the fastest growing sector of those that Alliance serves. He says that the company’s success has no limits as affordable hygienic laundry equipment is essential for healthcare institutions.

An additional opportunity has arisen in the sector as contract cleaners no longer send mops and other cleaning cloths to a central laundry. Instead these contractors are installing small washers on their customers’ sites. Alliance’s semi-professional products sell extremely well in Germany as they represent excellent value.

The Jensen Group, which concentrates on the heavy-duty laundry sector, also sees the situation as fairly positive.

Export figures are high, thanks to a weak Euro and Germany has gained in popularity, giving the country and its people a confidence boost that is reflected in the economic world. Consumer confidence has also had a boost but it is difficult to predict how this will develop. The government is still debating how to restructure healthcare funding given the tremendous cost explosion and many people fear painful increases in their insurance costs.

It was a good year for Lavatec?Laundry Technology, which is based in Heilbronn, despite uncertainty about the impact of the Eurozone crisis. However, Wolf-Peter Graeser, the company’s CEO , says that both customers and suppliers are being pressured to reduce prices. He adds that all suppliers are having to work more cost-effectively and be more eco-friendly.”

Graeser says that Lavatec’s customers cannot achieve the same prices that they did in the past and at the same time they are confronted with rising energy costs. So they require machines that have been produced more cheaply. Lavatec benefits from its success in improving the cost effectiveness of its machines by developing innovative technologies and lowering gas and water consumption.

Sustainability is one of the key issues in Germany, both to meet environmental regulations and to reduce costs, agrees Wim Demeyer, sales network manager for Lapauw. Water recovery, reducing water consumption and energy saving are key.

“The hot topic at the moment is energy consumption,” Demeyer says. “Lapauw has tackled this challenge with the introduction of its TurboFAN gas-heated ironer.” He explains that the turbo technology reduces gas consumption considerably.”

Jensen says that as a society Germans are very committed to sustainable environmentally friendly products and processes. Individuals are disciplined in their buying choices and in reducing, recycling or re-using the packaging. This has created a consumer mindset that has increased the pressure on companies to find alternative energy sources.

One of Jensen’s customers has installed a Senking CompactLine tunnel washer, which can achieve water use of 2.5 – 2.9litres/kg but even though this is impressively low, the customer has set targets for greater savings by optimising processes.

Girbau Deutschland is also focussing on sustainability. It provides the German market with machines that allow good productivity and are efficient in their use of water and energy, creating a “green laundry” without steam.

General manager Juan de Cruz Pujades says that customers will pay extra if machines can offer features that provide added value. Examples include Girbau’s automatic weighing systems and the Easy-Load functions on the company’s washers.

However, he says that many laundries and drycleaners are delaying further investment while they see how the Eurozone crisis develops – and what prices and technologies are offered at Texcare 2012, which will be held in Frankfurt in May.

The German manufacturer Stahl also sees the Texcare exhibition as the central focus for 2012. Uwe Stahl says the German economy is performing well at the moment with low unemployment and high demand for German-made goods.

During 2011 the company exhibited at international shows such as the Clean Show in Las Vegas and Texcare Asia in Beijing and was pleased with its success at these shows. Stahl sees the 2012 Texcare in Frankfurt as very important for the laundry industry.

He agrees that the environment will be one of the show’s main themes and the company will be demonstrating the improved wash performance of its Atoll washer-extractors and Divimat Barrier washers as well as high-power tumblers. It will also introduce a high-power ironer, Master 1610.

Charles Betteridge is the managing director central Europe for Christeyns, the specialist in chemicals and in resource management systems. He says that for his company, the first half of the year was fairly stagnant but business began to increase around April/May as optimism about the economy grew, before the Eurozone crisis. However, a number of laundries did go bankrupt in 2011. This was a result of overcapacity on the flatwork side, Betteridge says, and also because rising costs meant they could not make any money.

“There was a massive price rise in raw materials this year for us,” Betteridge comments. “But trying to pass on rises of 20 – 30% was difficult as laundries were unable to put their prices up. Income is two-thirds down on last year and we are facing prices rises of 10 – 15% next year, which we won’t be able to pass on.”

The company’s expertise in reducing water consumption has put it in a good position to advise customers on making their laundries more cost-effective and environmentally friendly.

Betteridge believes that workwear could prove an area where laundries could increase their business.

Complex hygiene and environmental regulations have resulted in a growing market for cleaning firefighters’ uniforms, reflective strips and other protective garments.

The nursing home market is also growing and he points out that these businesses need a disinfection service for residents’ clothing as well the laundering of linen and uniforms.

Jensen reports that the hospitality sector is continuing to increase its use of textile rental services rather than develop an in-house laundry service. Hotels are seeing an increase in bookings both from Germans holidaying at home and from tourists that are now re-discovering Germany as a holiday destination.

German consumers are also returning to a more stylish way of dining. Hotels and restaurants are again using high quality linen and china and abandoning the use of paper cloths and napkins even though these were quality linen-like products.

However, laundries are now having to process linen in smaller batches as white table linen no longer dominates. Hotels and restaurants want more individual styles and colours, even in the budget sector. So laundries have to be able to adapt to this trend and increase productivity so that these small batches can be handled quickly.

Customers want solutions and not just products says Sebastian Hupe, regional marketing manager, central Europe for Electrolux Professional.

Providing a fast-reacting and area-wide service is essential he says, adding that Electrolux Professional has more than 100 technicians and a 24/7 service hotline.

The company will be focussing on these aspects of its business at Texcare.

It will be talking about its barrier washer concept, which allows dirty linen to be loaded on one side and clean linen to be unloaded from another door opening into a separate room. This not only provides functional separation but also assists with risk analysis and biocontamination control (RABC).

Electrolux will also be showing its Lagoon wetcleaning system as an environmentally friendly alternative to drycleaning. “The Lagoon process uses water combined with biodegradable products and works without the use of standard drycleaning solvents,” Hupe comments. “Lagoon is the first and only system approved by Woolmark.”

Jörg Schwerdtfeger from the chemical supplier Büfa also thinks that wetcleaning is the “cleaning method of the future”. He says that the company will feature its wetcleaning range at Texcare. Perc is still the main drycleaning solvent in the German market but he believes its use is in decline and hydrocarbon and wetcleaning are taking its place.

“Here in Germany, prices for perc are on the move and we are all expecting higher prices in 2012,” he says. Such rises will affect the drycleaning sector which has suffered in the economic crisis. Schwerdtfeger predicts that the sector will stabilise in 2012, although the number of shops will continue to decline over the next few years.

The sector includes both large drycleaning chains and small, family-owned companies, all bound by strict emission regulations. “Here in Germany, we already have by far the toughest regulations concerning environmental issues and operating permits. The VOC regulations have been in force a long time and local authorities monitor operations on a regular basis,” Schwerdtfeger says.

At the same time, he adds, the number of pieces being cleaned is declining so drycleaners have to find more ways to attract customers.

“We have to persuade people to use the drycleaner because it is convenient, gives outstanding quality and will revive their garments. From our point of view, quality is the only real parameter for successful drycleaning.”

He continues: “With the FashionCare campaign, we are trying to improve the quality of every drycleaner. Businesses that can say they are a “certified drycleaner”, will find it possible to regain the trust of the population and revive the drycleaning industry.”

Marco Niccolini from Renzacci agrees that drycleaners in Germany will need to become better at marketing their businesses. He thinks that letting customers know about the benefits of solvents such as hydrocarbons could be the key to success. As a machine supplier, Renzacci sees a clear trend in the German market towards using “natural” solvents such as hydrocarbon. Most of the machines already installed use perc but Niccolini predicts that this situation will be reversed in the next two to three years.

However, he says that the main challenge will be to encourage drycleaners to pro-actively market the added value that the new solvents will provide. Renzacci did a short survey of its customers that use “natural” solvents and found that most just changed their machine without telling customers about the benefits. But he is confident that eventually these solvents will revitalise the drycleaning market, increasing volumes.

Frank Ziermann from Böwe Textile Cleaning also thinks that alternative solvents will be one of the main trends for the future. Böwe’s M-machines can all run on alternative solvents and it has developed a conversion kit that will allow a sixth-generation perc machine to use alternative solvents.

He too believes that drycleaners will need to be smarter about what they do. With financing difficult to obtain from banks, he says that machine suppliers need to invest in explaining the drycleaning market’s economics to both shop owners and staff.

As in the laundry sector, many customers are waiting to see the technological developments at Texcare. For Renzacci, the focus at the exhibition will be its range of hydrocarbon drycleaning machines.

Böwe will introduce a range of standard drycleaning machines that reduces energy use and produces less waste.

The drycleaning specialist, Kreussler has responded to the environmentally friendly solvent trend, both in Germany and internationally. It will be focussing on marketing its SystemK4, which is based on the alternative solvent SolvonK4.

The associations that are partners in Texcare?International also stress the exhibition’s environmental theme. “Texcare International 2012 will focus on sustainability,” says Elgar Straub, director general of VDMA Garment and Leather Technology. “Manufacturers are well aware of their social responsibility. In Europe, we anticipate an increase in demand as a result of investment in sustainable and cost-cutting technologies.”

He is not alone in his optimism. The German textile market may be nervously waiting to see how it will be effected by the Eurozone crisis but in general, the German industry seems to be positive. The market’s eventual direction will rely greatly on the political decisions taken by the European leaders.




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