The Benelux laundry and drycleaning sector is steadily developing despite the generally difficult economic situation in the region caused by the consequences of the energy crisis in Europe and overall geopolitical uncertainty.
As an important part of the EU manufacturing industry, the laundry and textile care sector plays a prominent role in the economy of the Benelux region. With the beginning of the energy crisis in the EU, the positive trend in the industry (which began at the end of an acute phase of the pandemic) has been counterweighted by the increase in production costs of operators and the decline of purchasing power of local customers. In addition, the current economic situation in the Benelux region leaves a lot to be desired.
In the case of Belgium, this year the country may face with the further growth ` budget deficit, which is mainly due to the country’s increased spendings on defence and an aging population in 2022. As for In The Netherlands, the latest data provided by CBS Business Cycle Tracer shows the economic climate in the country remains generally complex, while consumer confidence remains at low levels.
According to analysts, the current complex business environment in the Benelux region negatively affects the majority of sectors of local regional economics, including the segment of laundry and dry cleaning services, which traditionally remains very sensitive to the level of consumer activities.
The first part of 2022 became especially tough for the industry when the rise of energy prices, caused by escalation of Ukranian-Russian military conflict and associated with the imposition of unprecedented sanctions against Russia led to simultaneous increase of prices for soaps, detergents and the majority of other items, which was bad news for customers.
The new crisis began shortly after the end of the Covid-19 pandemic, which had a major negative impact on the Benelux laundry and dry cleaning sectors.
As Philip Rebry, president of the Federation of Belgian Textile Care earlier said, in an interview with the Belgium Bruzz business paper, “the sector already suffered greatly from Covid-19, especially for the catering laundries, which clean textiles for restaurants, hotels and party venues”.
According to Rebry, while the end of the pandemic has provided a cautious optimism for the industry and hopes to overcome the economic consequences of the coronavirus pandemic, the cost increases have dashed those hopes.
In recent years, the Benelux laundry and drycleaning sector has almost completely switched to gas instead of fuel oil due to the issues of sustainability.
However, the beginning of serious interruptions of its supplies from Russia (and their almost complete suspension) and the subsequent sharp rise in prices has forced the industry and its major players to think about alternative ways of energy supply.
Still, despite the existing problems, most global operators in ttextile care historically consider the Benelux region as one of the most promising markets for their growth in the EU, despite the maturity of this market and its generally low annual growth rates. Still, the majority of operators believe their more active development in the region will be complicated by the existing problems.
As Geert Braeckman, general manager of Jensen Benelux told LCNi, probably the biggest of these problems is related to energy prices, which continue to remain high, forcing laundries to make serious investments for the control of its consumption.
Braeckman comments: “Energy prices are the biggest concern. Laundries are now investing in state-of-the-art equipment to control their consumption. Fortunately, modern equipment and new approaches support laundries in recapturing energy.”
According to him, in 2008 Jensen, was the first company to introduce CleanTech equipment, with the objective to design machines and solutions that reduce the resources consumption.
“Major achievements are seen in tunnel washers, dryers, and ironers. The newest generation of laundry solutions are highly productive machines. With higher capacities and smart automation solutions, more tons of linen are processed per hour, and the machine consumes less energy per kilo of linen processed,” he says.
In the meantime, other interviewed operators remain more optimistic, regarding about their future prospects in the Benelux region.
Dr Reinhard Zinkann, executive director and co-proprietor of Miele, has expressed general satisfaction with the results shown by the company last year. As Zinkann tells LCNi, the good news is that the industry has almost returned to pre-Covid levels.
Zinkann says: “In year three after the outbreak of the pandemic, the extraordinary economic situation has clearly returned to normal in recent months. In addition, there has been a sharp drop in the general consumer climate in important markets. At the same time, however, the demand for high quality domestic appliances, especially in the built-in sector, remains high. It seems that many people are buying more consciously, for example, with regard to the longevity and energy efficiency of their appliances. As the industry’s leading premium brand, Miele benefits disproportionately from this. In this environment, Miele remains on track for growth after the first half of the business year. Another piece of good news is that our delivery times, which were mainly due to Corona and the shortage of semiconductors, are also returning to normal in big steps. In most product categories we are practically back to normal delivery times of just a few days.”
In general, particular hopes of interviewed operators are put on the tourism sector this year. In recent months the tourism industry has almost completely recovered from the pandemic and its consequences. Most of the analysts and operators interviewed believe that may provide additional opportunities for growth of the industry in 2023.
According to Geert Braeckman, the tourism sector has been very successful, and the industry was short of capacity in 2022, especially in summer, when the coast regions got many tourists.
As for Jensen, in order to cope with this growing demand, the company has been able to finalise a number of successful installations in the Benelux countries.
One example is the Sint-Jan laundry in Scherpenheuvel, a touristic hotspot in the center of Belgium serving hotels, B&Bs and restaurants in the area. Sint- Jan is a family-owned laundry run by the Willems family. Their washroom section was upgraded with a Futurail sorting and handling system on the soil side, a UniQ 36 tunnel washer, an ExQ 36 MD press, and four DT dryers.
Representatives of another leading local player Ecolab have also confirmed the negative impact of the ever rising energy prices on the Benelux business
As Reindert Baars, Ecolab director of marketing, textile care, told the author that has forced the company to continue looking for ways for the reduction of energy consumption.
According to Baars: “Benelux has been facing a huge impact from rising energy costs as Europe did. Together with our digital offering and water and energy solutions we were able bring value to the market and our customers by reducing the total energy consumption and CO2-footprint. As part of these efforts, during 2022 we have launched the low temperature Advacare Ultimate program for Healthcare laundries, which has a disinfection claim at 40C. Our low temperature offering for hospitality laundries OxyGuard40 has already been successfully launched in Benelux before, which was beneficial as the market volume recovered post-Covid.
“The current energy crisis combined with the macro economic projections are unclear, also in the Benelux region. “We see, however, more investments in low temperature processes, digital and energy recovery to offset these challenges, accelerating opportunities for efficiency improvement and overall energy and costs (TCO) reduction,” he says.
Most operators remain cautious regarding with the further prospects of the industry, particularly in 2023. According to them, it is uncertain what impact the current crisis will have on hospitals and nursing homes next year, and also on consumer behaviour when it comes to holidays and weekend breaks.
Much will depend on prices for raw materials and packaging, which could grow enormously and it is completely incalculable and which delivery bottlenecks will happen.
Operators believe the desire to travel will probably prevail, however with shorter stays. This actually creates more work for the laundries because of the more frequent room changes.
In addition, according to them, finding suitable staff remains a challenge for laundries, which is why investments in automated solutions are key.
Most interviewed operators also said amid the current complex times they expect more active support from regional textile treatment federations and the national governments. According to them, this should allow businesses to better deal with the consequences of the pandemic and energy crisis, as well as other problems, including those which could be classified as unforeseen.
