Finding fresh ways to improve business

reen is the watchword for the textile care industry in the Benelux region these days. It is seen as the best way forward following the economic crisis, not just to meet legislative requirements but also to use as a marketing tool to attract more customers and to cut costs.

The economies of the three Benelux countries, Belgium, the Netherlands and Luxembourg, are improving. Unemployment is gradually decreasing and there is some growth. GDP growth for 2011 is estimated to reach 1.7% for Belgium and the Netherlands and 3.11% for Luxembourg but there is still some nervousness about what is going to happen and caution still reigns.

In Luxembourg, according to Statec, the national statistics agency, industrial output has grown for five quarters in a row since the second quarter of 2009, a trend visible in most of the manufacturing sectors. In addition, most non-financial market services showed a recovery, including commerce, transport, communications, hotel and catering and business services.

In Belgium, according to Maarten van Severen from the Belgian Federation of Textile Industries (FBT), while there has been a slight decrease in turnover in the laundry sector, the drycleaning sector has continued to decline more substantially. Some drycleaners and launderers are benefiting from the “Dienstencheque”, a voucher system that provides customers (who purchase vouchers for the services they want) with government-subsidised services through approved companies. These services include house cleaning, help with shopping, support for disabled people and, in the drycleaning and laundry sector, ironing services.

Large laundries

The laundry sector in Belgium is increasingly being dominated by the large laundries that primarily focus on textile rental.

Smaller independent laundries continue to survive but they are becoming “niche” businesses that specialise in a single sector such as workwear, healthcare or hotel linen and cater mainly to those customers that own the linen. Medium-sized independent laundries are most at risk of disappearing, says the FBT’s van Severen.

“Environmental legislation is becoming stricter,” he adds. Every year the government finds a new toxic agent and adds it to the list.”

FBT is currently working with 14 partners throughout Europe on a project to help identify, develop and implement sustainable technologies for water and energy savings and for CO2 reduction in European industrial laundries.

The project started in October 2008 and is due to bring out its report at the end of this year.

FBT is working on is the Clean4Safe programme, a collaboration between the textile care industry and suppliers of workwear and personal protective equipment (PPE). This provides a platform for the identification and resolution of problems with workwear and PPE on an industry-wide level.

Alex van Nieuwenhuyzen, from distributor Landuwasco, which handles Milnor equipment in the Netherlands, says that laundries are reluctant to invest and smaller laundries are disappearing. Those that have remained are mostly large businesses that are catering for the growing textile rental market.

Hospital laundries have disappeared as hospitals turn to rental. For dealers such as Landuwasco this has meant a decline in business as many of the larger companies are choosing to deal directly with the manufacturers rather than go through a distributor.

“Smaller companies are still doing business with dealers, however, as they need the extra advice and attention,” says van Nieuwenhuyzen, whose company acts for a range of brands in the Netherlands.

Gas is the predominant energy source in the Benelux region. “The future will be steamless,” comments Gerda Jank, head of marketing at Jensen.

“The reduction of CO2 is at the top of the environmental agenda. Price pressures along the value chain are also increasing so investing in sustainable equipment is key,” she adds.

Energy consumption, quality, service and productivity are the focus of decision making, as well as operational efficiency.

John Balman from Alliance Laundry Systems says that public sector budget cuts have put pressure on pricing and margins throughout the Benelux area.

He notes that laundries are trying to differentiate themselves by establishing their green credentials as the public sector is becoming sensitive to environmental matters.

This provides business opportunities for manufacturers, such as Alliance, that are helping laundries to save on water and other utility bills by using advanced controls and innovative machine technology.”Wolf-Peter Graeser from Lavatec Laundry Technology agrees that technological developments will play a bigger role in future in Benelux.

He says that those businesses that have introduced automation and have specialised in a specific sector are the ones that are still profitable.

“Laundries are looking to automation as a way of getting rid of manual labour in areas where employees come into contact with soiled linen,” he says.

He explains that efforts to reduce labour costs will increase in areas such the feeding of linen to the ironer lines. Quality control is also being automated with the introduction of scanning systems with additional functions such as correcting folding errors and label control.

The market value of the textile rental sector in the Netherlands was estimated at around €1.18bn in 2010, according to Cinet, the International Committee of Textile Care. Healthcare made up 48.5% of the market, closely followed by the commercial and industrial sectors at 38.8% and catering and leisure at 12.7%.

While the healthcare sector has grown steadily over the past few years and this is forecast to continue, the growth will be constrained by government-imposed budget cuts to address a structural deficit. Most hard hit by the economic crisis were the workwear and hospitality sectors and growth in both of these sectors is expected to be slow. Cinet says that the challenge to develop innovative business concepts in collaboration with specific groups and users is increasing.

Drycleaning

The FBT’s Maarten van Severen says that environmental legislation introduced in Belgium in 1995 has increased drycleaners’ costs. They are now required to clean up any chemical leakage into the soil, although they do receive some support from the Belgian government, which provides half the cost of soil cleaning.

This, along with increases in energy and other costs, has meant that more and more drycleaners are closing in the country.

Unlike many other countries, drycleaning in Belgium is dominated by small independents. There are virtually no franchises.

There is also a move away from perc and towards alternative solvents such as hydrocarbons and, in particular, van Severen says, Solvon K4. This solvent was introduced in Belgium in late 2010 and several drycleaners have already purchased K4 machines.

Another solvent on the market is Rynex. This ether alcohol-based solvent, is gaining more interest in the region, according to its European representative, Marty Brucato.

“Alcohols such as Rynex have interesting characteristics,” says Brucato. “They are much less toxic, more environmentally friendly and are generally safe to use.

Brucato believes that with the introduction of modified alcohols as alternatives solvents, the next three years will see enormous progress towards establishing the value of the drycleaning industry in the eyes of the public, regardless of the environmental concerns,” he says.

Van Severen agrees. He is confident that K4 and the other “green” alternatives can help turn the drycleaning market around, providing businesses with cleaning methods that they can market to the customer as being more environmentally friendly.

In the Netherlands, the drycleaning sector is affected by a drop in consumer spending.

This has affected smaller businesses, particularly those with an annual turnover of less than €115,000. However, larger companies, those with a turnover of over €460,000 are gradually claiming a greater percentage of the market.

Because of tightening customer budgets, fewer companies increased their prices this year than in previous years.

Consumers make up the majority of customers but as this sector continues to decline, many companies are thinking about switching their focus to other markets, such as industry or trade and commerce.

Perc remains the dominant solvent in the Netherlands. However, as in Belgium, this is expected to decline over the next few years.

Renzacci’s Marco Niccolini says that his company produces both perc and hydrocarbon machines but he has noticed a distinct trend toward the latter throughout the Benelux countries.

“Perc is not dead yet – on the contrary, EU legislation has confirmed that the use of VOCs is safe,” Niccolini says. “At the same time, hydrocarbon is becoming a substitute for perc because it has properties that properties which make it more beneficial.”

“Environmental issues will dominate part of the future calendar,” says Cinet.“Government policy and company awareness will trigger developments that lead to greater efficiency in the use of energy and materials.”

Cinet has also noticed a move to collaboration. Drycleaners are developing working partnerships with a laundry company or a clothing repair company. The association believes that co-operation will become a key in all textile care areas in the next few years.

At Expo Detergo in Milan, Cinet launched E-DryClean, a web-based educational tool for drycleaners. This provides examples of best practice as well as training in sustainable working methods, European legislation, alternative solvents and the management of environmental risks.

The website was developed with partners across Europe, including NETEX and TKT in the Netherlands and FBT and ECSA in Belgium.

Cinet also participates in the Fashion Care quality assurance system, which is managed by the European Association for Research in Innovative Textile Care (EFIT).

This initiative awards a certificate to those who provide high-quality cleaning services.

Cinet says that both laundry and drycleaning businesses will need to provide high-quality services and find innovative ways of working to survive in a challenging and uncertain market.

Technological innovation and “green” ways of working will put those that adopt them a step ahead of their competitors.

Cinet and FBT are hoping that they can support their members to adopt this approach.