German textile machinery industry explore new markets
by Dr. Noor Ahmed Memon

Despite the difficult economic situation, Germany has been able to defend its top position as the leading supplier of textile machinery for over forty years. The annual turnover now reaches  €3 to €4 billion covering about one-third of worldwide exports of textile machinery. German textile machinery is characterized by its high quality and customer-specific production.

In recent years, China has developed into the main textile market in the world. Nonetheless, the German export rate to China increased by shares in nearly all sectors of the textile chain. However, China was and still is the leading purchaser of German textile technology with an overall export value of €6.2 billion during 1997 to 2007.

The total exports of German textile machinery to the world reached €3.6 billion in 2006 and in 2007 the the export figures increased by 7.2% amounting to 3.9 billion Euro.

Spinning machinery remained the largest seller of German textile machinery industry with an export value of €1,407 million in 2006, though it was increasing at a slower pace from 2005. The growth of knitting and hosiery machinery was notable at 17.2%, to reach €1,217 million. Germany sold €737 million of finishing machinery and €290 million of weaving machinery.

Asia is the biggest market as it absorbed 54.9% of the German textile machinery exports in 2006. China is the single largest client in Asia. It alone purchased €953 million of the German textile machines in 2006, thus representing the largest export market for the industry.

The second popular German textile machines were for spinning as Chinese bought  €321 million.  The 10 largest export markets for German textile machines and accessories in 2006 were China (including Hong Kong), India, Turkey, the US, Italy, the Czech Republic, Brazil, Saudi Arabia and Pakistan.

According to VDMA figures, in 2007 export of German manufacturers of textile machinery and accessories increased by 7.2% to €€3.9 billion. With more than half of the exports, Asia was the main export market for textile machinery with the share worth of € 1.85 billion. More than 25% of the exports (€1 billion) were sold to China. The second strongest market is Turkey, where machines worth € 408 million were purchased.

The sales to India- rank 3rd – decreased to 18.2% to €301 million. Italy pushed the USA (-5.4%) from the rank of 4th and show a plus of 7.9%.

The biggest increases in 2007 were booked by the spinning machinery manufacturers with +17% up to €1.6 billion. The export of weaving machinery reached €351 million, the export of knitting and hosiery machines covered €1.2 billion .Only the export of finishing machinery included washing, bleaching and dyeing technologies declined by 3.2% to €684 million. Export of German textile machinery is given in Table-1 and major markets of German textile machinery are given in Table-2.

After the abolition of the quota system, India and Pakistan gains in importance for the European - and especially the German - textile market. As a consequence, the demand of quality machinery and related technology has risen and the interest in German high-tech technology has enlarged remarkably. 

The German trade body is seeking to step up efforts to enlarge the share for the Indian and Pakistan markets. The German textile machinery industry expects India to emerge the second largest buyer of German textile machinery after China in the near term. At present, India is the 3rd largest importer of German textile machinery. The body is seeking to step up efforts to enlarge the share for the Indian market, billed as the future potential market in the light of its importance as an alternative textile outsourcing point.

To further expand their markets around the world, the Textile Machinery Association at the VDMA (Verband Deutscher Maschinen- und Anlagenbau), or the German Engineering Federation organized two events for the textile industry in the Middle East: the two German textile technology symposia in Cairo, Egypt, and Damascus, Syria. Leading German textile machinery manufacturers reported about their latest developments and technical innovations, and explained how to improve the quality of textile products.  These events aimed to help enhance the position of the textile industries in Egypt and Syria on the world market.

In the event of ITMA ASIA+CITME to be held on July 27th to 31st 2008 in Shanghai/ China, some 130 German exhibitors will present their products and services.

Germany is not only known for high-quality machinery, but also for excellent after-sale service all around the globe. In Germany, universities and technical colleges conduct intensive research in the fields of mechanical and textile engineering. As a result, new practical solutions for more modern technologies are explored and implemented in new marketable machinery. Today, there is hardly any area of life without the use of textiles. Automation construction, landscaping and medicine are just a few examples of the various fields of textile applications. However, the requirements are infinitely different from one another. By creating the so-called “smart textile”, most of these demands could be fulfilled, and German textile technology contributes to a large extent to these developments.

Delivering their products to more than 150 countries, most German companies have already established local subsidiaries and manufacturing facilities in many foreign markets. Their main purpose is direct contact to their customers and flexibility to react faster to the ever-changing trends in the textile world. This proximity to the target markets guarantees the best preconditions for fast deliveries of tailor-made plants and flexible system solutions. This innovative character of production enables customers to produce competitive textiles to prevail in the market. 

Trade with Pakistan

Germany is third largest industrial country of the world and occupies and important place in global trade and finance. The development pace of the country can be gauged from the fact the per capita income has doubled in the 31 years, thereby creating demands for goods which the developing countries can export and earn precious foreign exchange. Germany is among 11 countries of the fifteen EU members, which joined the Euro Zone on January 1, 1999. Being the largest in size in Europe after Russia, the country is well poised to attract countries like Pakistan who are deficient in Forex Reserves and want to build economy on strong footing.

The German economy is heavily export oriented, with one-third of national output going to the external sector. As a result, exports traditionally have been a key element in German macro-economic expansion. Germany is a strong advocate of closer European economic integration, and its economic and commercial policies are increasingly determined by agreements among European Union (EU) members.

At present Germany is one of the most important trading partners of Pakistan. Despite some fluctuations, bilateral foreign trade has developed well. It is the 4th largest importer of Pakistani products and the 7th largest supplier of goods to Pakistan. Trade between Pakistan and Germany is conducted in freely convertible currency in terms of the Trade Agreement signed in 1957. The total trade volume was over US$ 1,634 billion between the two countries during the year 2006-2007.

In view of the importance of exports to Pakistan's economy, incentives continue to improve i.e. compensatory rebates, extension of concessional and liberal credits and liberal imports of raw materials to industrial concerns etc. These policies have helped maintain the rising trend in exports. During the past five year’s balance of trade remained in Germany’s favour.

Germany is a good market for Pakistani textile products specially readymade garments, bed wear and knitwear. The main items of exports included cotton fabrics, towels, synthetic textiles, cotton yarn, carpets, bed wear, cotton bags and other made-ups textiles Besides textile and clothing articles Germany also imports a variety of other products from Pakistan, which include, sports goods, leather clothing and surgical instruments. Export of textile items from Pakistan to Germany increased from US $477 million in 2005-2006 to US $507 million in 2006-2007. Export of textile (Major items) from Pakistan to Germany is given in Table-3.

The Government continued to improve and rationalize its import policy with a view to allowing liberal imports of industrial raw materials, capital goods and essential consumer goods. These included usually high imports of machinery, chemicals and other raw materials.

From 1999 through to 2007 with the combined efforts of private and public sector, the textile industry made a rapid development and became the catalyst for industrial growth. Total investment in textile industry is now being to $6 billion that has led to improvement in productivity, both in terms of quality and quantity, in yarn, fabrics, home textiles and garments. In the last two years, the textile operators imported more than Rs. 10.78 billion worth of machinery. Import of textile machinery in Pakistan is given in Table-4

The German trade body is seeking to step up efforts to enlarge the share for the Pakistan markets, billed as the future potential market in the light of its importance as an alternative textile outsourcing point.