Cautious optimism as the region’s economy improves

The Benelux countries saw continued improvement in their economies last year. In February (2015), Statistics Netherlands released provisional figures that showed 1% growth, compared with 2013. Consumer spending on hotels and restaurants, recreation and culture increased substantially and businesses invested in machines and installations, while the number of hotel and restaurant jobs rose.
The situation is similar in Belgium. Quarterly figures published by the country's National Bank project 1% growth in GDP over 2014. In the first three quarters, household spending grew by 0.7%. Government spending fell by 0.4% but business investment rose by 10.6%.
Statec, Luxembourg's statistics agency, is projecting 3% GDP growth for 2014.
Marc Broers, general manager of Belgium-based textile rental company A&M Blanchisserie is optimistic and feels that "something positive is happening." He adds that the key to success will be the ability to adapt to whatever the political and/or economic environment brings. The economic constraints of the past five or six years have impacted on laundries and drycleaners because many were not prepared for the downturn.
His business was not affected and is still growing because "we were ready to move and adapt ourselves to a new economic situation." Broers says the company is always facing new challenges in dealing with dedicated products, new delivery times and new countries.
"The only way for us to face those new parameters is to keep investing in equipment every year so that we become more efficient, while maintaining or even improving the quality we deliver. Our traditional partners (Jensen and Christeyns) help us to be more efficient every day."
Geert Braeckman, general manager of Jensen Benelux, acknowledges the benefits of partnership. Jensen works with its customers, helping them to think "beyond machines" and using its systems to help customers optimise their linen flow to save time. Automation and materials handling are key.
Jensen recently worked with Broers to improve work flow and efficiency in A&M's laundry in Basse Meuse, fully automating production with the installation of its Jenrail 2000 Automatic decentralised buffer system. The programs allow linen to sorted, by customer, in the finishing line. As a result, A&M is optimally equipped for the growth in health centres and hotels.
Wim Opsomer, export manager for Laco Machinery, agrees that efficiency has become a priority for textile care businesses in the region. He says spontaneous purchases have not been as frequent as they were in the past, because customers are researching the market, looking for the machines that produce the best quality and will also last for a long time. They are prepared to pay for good equipment.
Automation has become the watchword for reducing labour and energy costs. "Customers prefer to pay more for an ironing machine with feeders and folders than buy an ironer on its own."
For the same reason, steam-heated equipment is being replaced by gas-heated machines. "Even coin laundries, where 90% have ironers, are moving to chest ironers," Opsomer adds. "They can make the difference between a successful coin shop and a standard one."
Opsomer says that generally his company is seeing growing demand for equipment that meets European hygiene standards and this is coming not just from healthcare institutions but also from prison laundries.
Ironers have not traditionally formed part of the compliance loop, Laco has brought out an ironer that has an RABC system that can produce a report to comply with EU norm, EN 14065 and he expects good sales of this machine in the Benelux countries.

Christophe Moerman, Ecolab's regional division manager for France and Benelux, also mentions efficiency as a driver for purchases in the region. He says that labour is one a laundry's main costs and so customers are increasingly focussed on productivity. They want to process more textiles in the same time , with less operator assistance. Specific software applications and monitoring systems are meeting this need.
This is particularly important with the reduction in consumer spending on tourism, hotels and restaurants as a result of the economic situation of the past few years. In addition, politicians are considering shifting tax from labour to consumption, particularly in Belgium, which is causing consumers to become even more cautious, concerned about how it will impact on their buying power. "The expectations are that, hopefully, 2015 and 2016 will be years of economic stabilisation, says Moerman.
In Belgium and to a certain extent in the Netherlands, there has been a decline in industrial activity, which has led to reduced volumes for workwear laundries.
"Belgium has still not completely recovered from the crisis and all industries are looking for ways to save on costs," says Henk Robers, sales manager, Benelux for Kannegiesser. This affects laundries and they have to look for ways of increasing turnover to make a profit while sales prices are lower. Competition is fierce when laundries tender for work with hospitals and/or nursing homes.
Braeckman at Jensen Benelux says that hospitals and nursing homes are, suffering from government budget cuts, so they form bigger groups to get better prices from their suppliers.

Care challenges
The care sector is facing particular challenges. A rapidly ageing population and spending cuts have led to further changes that are impacting on laundries. "Elderly people are living together on a smaller scale and are more self-sufficient than in the past," comments Erik te Winkel, sales director for Electrolux Professional Netherlands.
"This has increased the demand not only for smaller machines, but also for very large machines as a significant part of the laundry is being outsourced."
In the Netherlands, the demand for student housing on campus has also increased significantly over the past few years. Most have chosen to install an OPL but they also want a suitable payment system. As an example,
te Winkel cites the modern apartment house Campus Diemen Zuid. Electrolux equipped the laundry its Line 5000 machines and the installation is financed by Electrolux's Pay Per Wash. Both the students and the owners are very satisfied with this solution. The machines provide top quality washing and are integrated with the campus payment system. There is no initial, investment, as the residents pay for the with every wash they do."
With regard to the hotel and restaurant sector, te Winkel notes that businesses that used to have paper settings on their tables are again returning to linen cloths and napkins. He believes this trend is partly due to online reviews on sites such as Yelp and Tripadvisor, which are encouraging improved service. This is also likely to lead to a higher quality of bedlinen and towels bringing more opportunities for the OPL market.
Opsomer at Laco agrees. He has observed that an earlier shift to polyesters has stopped and customers in the Benelux region are returning to blends and 100% cotton.

Margin pressure
As in the healthcare sector, hotels are forming into larger groups and are putting pressure on laundries to reduce prices, while still asking for first class service. "Margins in the laundry business are extremely low, while the costs of water and energy are increasing," says Robers at Kannegiesser. "The main challenge is achieving the high productivity that ensures survival. More and more laundries are working 1.5 shifts instead of one shift."
He agrees that suppliers are now looking not only at machine performance but also at the workflow. "In the past year the laundries have increased their productivity by changing the logistics and also by lowering energy consumption by using new dryer software,"

Sustainability
Sustainability is often quoted as a major focus for laundries in general but Moerman at Ecolab feels this not always the case for his customers. "Although many confirm the importance of sustainable operations, only a few laundries have developed a programme around sustainability and live by it."
He explains that as long as there is no strong regulatory demand, or customer requirement, most laundries are not (yet) ready to invest in making operations more sustainable."
However te Winkel at Electrolux disagrees: "Environmental legislation is always one of the top priorities in the Benelux. A good example is the recently opened, Moderna commercial laundry in Hardenberg, the Netherlands. This uses geothermal and solar sources to become nearly self-sufficient in power. It recycles the water in its wash processes and has a state-of-the-art detergent management system. It is currently the most energy- and water-efficient commercial laundry in Europe."

The drycleaning future
A substantial proportion of drycleaning shops in the Benelux region have moved from perc to alternative solvents such as hydrocarbon, K4 and Green Earth.
Economic austerity has meant there has been little legislative change in recent years but Jeff Vanwaeyenberge, senior customer advisor at Mench Industry, the Belgian distributor for Pony and other textile care companies, predicts the situation could alter. Once the economy improves the government may tighten regulations to prove its environmental credentials to the electorate.
The drycleaning sector has rationalised over the past few years, with one new drycleaner opening for every eight that close, Vanwaeyenberge says. Although Belgians are good savers, they are cautious about spending so increased savings may not translate into expenditure. He says that at present sales are for replacements."
But the region is still doing better on the whole than many other areas of Europe, so although most are not expecting huge changes over the coming year, they are optimistic about the future.
Walter Cividini, managing director of finishing equipment manufacturer Fimas, part of the Macpi group, comments that the economic situation is definitely improving but he adds that consumers are becoming more critical and expect higher service levels.
Therefore drycleaning shops in the Benelux are looking for equipment that can improve what they offer. For example Macpi's tensioning machines provides strong blowing and stretching functions that can be adjusted to suit the fabric type and its humidity Macpi 379, 317 and 389.
Roland Fleischman, sales manager for Ghidini, agrees that drycleaners are looking for ways to extend the capacity of machines to make them more efficient. And, as in laundry, automation is a clear trend in the drycleaning sector.
Ghidini works mainly with small drycleaning shops in Belgium where there are still a lot of traditional machines such as standard drycleaning machines, steaming tables and form finishers. "In Belgium they're not ready to make a big investment," he says. "In the Netherlands there is more inclination to invest in professional machines with advanced technology."
As the small shops replace their machines, Ghidini says they are going for equipment that helps them to reduce energy consumption, replacing steaming tables for example with vacuum and blowing tables. Another definite trend in the drycleaning sector is the move to use wetcleaning as well as drycleaning and he expects this trend to increase over the next few years.
Marco Niccolini, General Sales and Marketing Manager for Renzacci, agrees: "Businesses used to specialise in either drycleaning or laundry services but now, with high fixed costs and high taxation levels, businesses in the Benelux are seeing an opportunity to provide a full, service to their customers by using both methods."
He says drycleaners in the region are also becoming more aware of the need to promote the new techniques they acquire when they renew their equipment. This includes the expanded services that they can offer when they change replace a perc machines with one uses alternative solvents (such as Renzacci's Nebula), a trend he says that is most advanced in the Netherlands.
"For the first time, we have an positive trend where drycleaners are thinking about the drycleaning service and are planning to renew their machines. They see that alternative solvents can help them expand their business," he adds.
As a result, the forecast for 2015 and beyond is beginning to look brighter.

ON CAMPUS: Demand for campus housing in the Netherlands is rising and most houses install an OPL. Electrolux has equipped this OPL on Campus Dien Zuid