Italy: Textile machinery manufacturers face challenges
by
Dr. Noor Ahmed Memon

Italian textile machinery manufacturers face challenges in the days ahead, including fluctuation in demand and increased competitive pressure. The gradual shifting of textile production to Asian countries has not only led to a corresponding change in the commercial flows of the textile machinery industry but has also led to the development of local machinery manufacturer industries. As a result, "second-level" competitors, such as China, Turkey and India, have taken market shares previously held by the traditional exporting countries.
Italy is one of the world's leading textiles producing nations and 3rd largest textile exporters are traditionally renowned for excellent quality of their textile production. There are several very large concerns with a sound know how in carrying out large-scale textile installations anywhere in the world.
The Italian economy has changed dramatically since the end of World War-II. From an agriculturally based economy, it has developed into an industrial state ranked as the world's fifth largest industrial economy. Italy belongs to the Group of Eight (G-8) industrialised nations. It is also a member of the European Union and the OECD.
The Italian textile machinery industry continued its remarkable growth in machinery sales all over the world, though 1996 recorded a certain fall in comparison to 1995 for all manufacturing countries. The Italian textile machinery industry increased its market share between 1995-2003 at the expense of its traditional competitors Germany, Japan and Switzerland.
At present Italy is the second biggest producer of textile machinery in the world and competitors themselves consider the technological level of its production of the highest standard. Production activity in Italy's textile industry during 2003 fell once again. Production of textile machinery decreased from 3.5 billion euro in 2001 to 3.2 billion euro in 2003 - the second consecutive negative performance in the last 10 years. About 16% of Italian manufacturing companies are found in textiles, apparel and related industries. The depressed state of manufacturing activity, coupled with strong international competition, continued to constrain price rises during 2003.
Global shipments of textile machinery retained a firm momentum in 2003 although declines were recorded in the long-staple spindle and circular knitting machinery. A survey by the Geneva-based International Textile Manufacturers Federation (ITMF), which questioned 120-textile machinery also showed, weaving machinery, enjoyed an extremely strong year with solid sales growth. The leading four manufacturer countries Germany, Italy, Japan and Switzerland account for 61% of world exports.
Accordingly to the Italian Association of Textile Machinery Producers (ACIMIT) production of Italian textile machinery amounted to 3.2 billion Euro in 2003. Foreign sales of Italian textile machines involved 130 countries and reached a value of 2.4 billion Euros, accounting 75% of the industry's total sales.
There are approximately 350 companies that produce textile machines and related accessories, employing more than 25,000 workers. They are located in areas and towns of ancient textile tradition, where a profitable exchange of experiences with the end-users is a stimulating contribution to the improvement of the machines. These areas are located in Northern and Central Italy, like Biella, Como, Milano, Bergamo, Prato, Vicenza. Production and export of Italian textile machinery is given in Table-1.

Region-wise export shows that in 2003, Asia share (38%), followed by Western Europe (21%), European Union (17%), Eastern Europe (9%), North America (7%) Central & South America (4%) and Africa (4%). Italian textile machines most demanded were spinning machines (21%), followed by finishing machines (23%), weaving machines (23%), knitting (23%) and others (9%). Category-wise export of Italian textile machinery is given in Table-2.

Italian textile machines are now available in countries where there are textiles produces, where the textile sector is a leading industry and driving force for the national economy. Asia is now a promising market for the Italian textile equipment industry. Exports to Asian market reached about 1.0 billion euro during the year 2003, an increase of 30% compared to the previous year. The main imports from Italy were spinning, weaving and finishing machinery. According to Italian Ambassador to Bangladesh Pietro Ballero Italian textile machinery exports to Bangladesh stood at 12 million euro in 2003.
Italian textile machinery manufacturers are further improving their sales techniques; in particular markets with require typical negotiations. Similarly, the small to medium size Italian companies, ensure personalised services, which cater to specific requirements of their customers, granting as practically "made to measure" service.
Italian machines are studied to process all natural fibres (wool, cotton, silk, flax, etc.) as well as man-made fibres (polyester, acrylic, polyamides, etc.) in order to give a correct answer to all the requests of a modern textile industry.
Representing the global textile machinery industry is the Italian Association of Textile Machinery Producers (ACIMIT), a vital link between Italian textile machinery producers and textile manufacturers seeking the latest in technology.
Italian textile machinery manufacturers have succeeded in implementing policies of differentiation based on product quality and continuous improvement through constant innovation. Italian business has also learned to pay more attention to customer service, and this has helped us escape from the restrictive logic of price-based competition.
Italian Trade Commission, in partnership with Italian machine manufacturer associations, has launched a multi-million dollar marketing campaign to promote Italian-built industrial machinery. The campaign marks the first time that a group of private, Italian machine manufacturer associations, representing 14 industry sectors (including textile sector) has joined forces with the Italian Trade Commission for a comprehensive, marketing initiative. The campaign being launched by Italy's Foreign Trade Institute to promote products that carries the 'Made in Italy' label in 50 countries.
Trade with Pakistan
Italy is one of the top eight trading partners of Pakistan. Over the years of friendly ties trade between Pakistan and Italy has increased significantly and other economic activities have also grown between the two countries.
During the past three years exports and imports between Pakistan and Italy has increased but the rise in exports has been faster than the imports. The balance of trade had remained in favour of Pakistan, which increased from US $50.2 million in 2000-2001 to US $83.4 million in 2002-2003.
Exports from Pakistan to Italy increased from US $229.7 million in 2000-2001 to US $341.2 million in 2002-2003, thus showing an increase of 63%. Cotton fabrics and yarn, readymade garments, towels, hosiery, bed-wear, carpet and rugs, cotton, leather, sports goods and surgical instruments are the major items exported from Pakistan to Italy. Export of textile and other items from Pakistan to Italy is given in Table-3.

Imports from Italy also increased from US$ 229.7 million in 2000-2001 to US$ 257.8 million in 2002-2003, thus showing an increase of 48%. Textile machinery, general industrial machinery, power generating machinery, petroleum products, transport vehicles, iron and steel, pharmaceuticals, acrylic fibre, chemicals and paper and paperboard are the main items imported from Italy.
Pakistan, an attractive market for textile machinery manufacturers all over the world, has become a focal point of the suppliers in view of the massive balancing, modernisation replacement (BMR) taking place under "Textile Vision 2005" programme. Since last three years, Pakistan textile industry has made significant investments in expansion and BMR and it is heartening to note that all the investment had been in production of value-added textile products for exports. Import of textile machinery from Italy to Pakistan increased from Rs. 1.4 billion in 2000-2001 to Rs. 2.2 billion in 2002-2003, thus showing an increase of 57%. Categories-wise import of textile machinery from Italy to Pakistan is given in Table-4

and details import of textile machinery during 2002-2003 is given in Table-5.

A number of Italian companies including SECA, FIAT, Ptggio, Ansaldo, GIE Sri and Fochi Energia are operating in Pakistan and contributing towards the development of various sectors of the economy.
Pakistan and Italian like-minded businessmen have formed Pak-Italian Association (PAKI) to foster economic and cultural initiatives between Pakistan and Italy. PAKI is involved in promoting trade between Pakistan and Italy and for this purpose a number of Italian companies have been invited to Pakistan to explore trade and investment possibilities.
Pakistani industrialists and businessmen have been very knowledgeable of Italy's technological developments, which contributed to the creation and maintenance of work and have assistance in capturing local as well as foreign markets.