From strength to strength

The German economy continues to be one of the strongest in the European Union. According to the country’s statistics agency Destatis, GDP grew 0.7% in the first quarter of 2016, compared to the previous quarter and seasonally adjusted, up from 0.3% in third and fourth quarters of 2015. At the same time, household consumption rose 0.4% and government consumption was up 0.5% on the previous quarter. But when Q1 2016’s results are compared to the first quarter of 2015, growth was even more evident with GDP up 1.3%.

“The laundry and drycleaning sector is profiting from several positive developments on the customer side,” says Daniel Dalkowski, communications director for the Deutscher Textilreinigungs-Verband (DTV), the trade association for the textile care sector. “The employment rate is at an all-time high – a situation that benefits the textile service industry. Hotels are enjoying a growing number of visitors and the hospital and elderly care sector is profiting from an ageing population.”

Certainly, the hotel sector has seen steady growth. According to Destatis, 2015 finished with a record number of overnight stays, with 4% more overnights from foreign guests and 2% more from domestic guests than the previous year and the numbers have continued to grow this year. “Due to the booming tourism sector in Germany, the demand for hotel linen has also grown,” says Lars Blechschmidt, group director of sales and marketing at Kannegiesser. “Moreover, the declining number of in-house laundries within the hotel sector is very beneficial for the textile services industry.”

In the hospital sector, in-house laundries are also very rare, he adds. “The process of outsourcing textile services is well advanced which means there is only a small number of real in-house laundries left within hospitals.”

Dalskowski says hospitals are experiencing two developments. Firstly, the total number of patients is increasing (19 million in 2014 compared to 16.8 million in 2004), while the average number of beds and the length of stays has decreased. The other development is the growing number of large hospital groups, which puts more pressure on laundries during price negotiations.

Textile rental

Dr Andreas Marek, managing director of WIRTEX, the trade association for the German textile services sector, describes how the country’s textile services market has been growing for the past few years: in 2013, it grew 2.1%, and the market continued to expand in 2014, growing 2.7% to reach a value of €3.24 million. Marek predicts that turnover in 2015 grew by around the same amount, based on the organisation’s last survey, conducted in spring 2016. Those figures will be published in WIRTEX’s annual report in September.

“Workwear is our strongest area, comprising garments for the food industry, trades and services (€1.41 million), followed by the healthcare market, including elderly care (€735 million), and hotel, restaurant and catering (€541 million),” Marek says. “The rest is distributed among various services like washroom services (including cotton towel rolls), dust mats, industrial cleaning clothes, cleanroom, etc.”

The majority of laundries are regionally based, medium-sized family-run businesses. “These regional suppliers focus strongly on customer loyalty and serving niche markets by providing special services to succeed in a highly competitive market,” says Stefan Vautrin, product manager laundry Technology for Christeyns. However, he adds that there has been a growing number of mergers and acquisitions in the market, which has added to the power of the largest laundry groups.

“Though earnings in the laundry sector are sufficient, predatory pricing is observed throughout the industry with an increasing impact on suppliers,” he comments.

Vautrin says extending textile lifespan allows for the biggest leverage on textile cost reduction and, as a result, the chemicals company received a lot of interest at Texcare in its Cool Chemistry low temperature system. “Cool Chemistry is now also available for workwear and is now also registered with an EU Ecolabel for hospitality,” he adds.

Sustainability

“There is growing demand for sustainable solutions and resource efficient programs,” says Frank Everts, European training and safety manager for Ecolab, which launched new low temperature EU Ecolabel programs for the hospitality market (OxyGuard 40) and workwear sector (Performance Industrial) at Texcare. “The products we sell most of in Europe are highly structured concentrated liquids (Emulsion) whose rinsing properties facilitate low water consumption; bleaching and disinfection solutions based on peracids; and low temperature solutions for reduced energy consumption,” Everts says.

The company is also working with trade associations, such as WIRTEX and ETSA, to help promote sustainable working in the industry.Since 2013-14, WIRTEX has had a code of conduct for members, the Principles of the German Textile Service, which details its member commitment to social responsibility. In addition, it conducts regular research to support and benefit the industry. It is currently performing lifecycle assessments for cotton towel rolls in order to demonstrate the good ecological impact of their use.

In 2015, DTV and WIRTEX launched a ‘sustainability alliance’. The aim is to promote the textile service industry’s activities in sustainability, such as saving resources and the sustainable procurement of textiles, Dalkowski says. A voluntary reporting scheme based on the GRI (Global Reporting Initiative) sustainability indicators will also be introduced.

In June 2015, the DTV has also launched an eco-benchmark tool – Ökobench – which allows laundries, textile service companies and drycleaners to compare their resource use with comparable companies that process similar volumes, developed as part of the German Federal Environmental Foundation (DBU) project in collaboration with iConsulting.

Hygiene is another key area of focus for the sector. “Germany is a country with very strict hygiene regulations and regular audits of laundries,” explains Blechschmidt. “ Hygiene is a particularly important factor for hospital processing applications. But the focus on hygiene in the hotel sector is also a key priority and becoming more and more important.”

Legislative changes

Personal protection equipment (PPE) has also come under the spotlight with the approval in March 2016 of revised EU PPE regulations, EU Regulation 2016/425. According to WIRTEX, the new legislation will create more reliability.

“Our garment suppliers do, of course, have more work in correctly labelling and documenting the PPE’s properties and in obtaining regular certificates,” Marek says. “Nevertheless, in a protection area where the health of the workforce depends on the good standard of the equipment, it is mandatory to implement a clear and reliable regulation to avoid products which have the appearance of being safe but do not provide such protection.”

Other legislation that has impacted on parts of the industry and increasing labour costs over the past year was the introduction of a minimum wage in 2015, which has expanded in scope so it now covers smaller laundries and drycleaners who did not fall under the previous legislation when it in 2009. As a result, Dalkowski explains, the industry has seen price changes as well as a few of the small enterprises shutting down.

“Not only are rising labour costs a concern for laundry managers but there is also a continuous decrease in money paid by the health insurance companies for these services,” says Blechschmidt. “This also affects decisions on investment in machine technology.”

Investment in technology

With interest rates still very low, finance is available for companies wanting to invest in new equipment, although smaller laundries with low financial resources may still face difficulty in convincing banks to lend to them. However, Dalkowski says that a recent study by the Zentralverband des Deutschen Handwerks (ZDH), of which DTV is a member, indicated that finance is generally available for medium-sized companies.

“Limiting costs for energy and resources as well as adapting the services to ‘industry 4.0’ are the main concerns our members mentioned in a recent survey,” Dalkowski adds. “Another concern is finding qualified staff – we think that it will be one of the most limiting factors for the industry in the next few years (including young people who want to start three-year vocational training). As the training and education of new staff is getting more and more important, DTV is developing new training and education and working to improve the industry’s image as an employer.”

Uwe Stahl, general director of Stahl Wäschereimaschinen, says companies are mainly investing in machines that reduce energy usage. “This is evident in our washing machines – for example, with added heat insulation – in our dryers which are equipped with a plate heat exchanger and our ironers with a direct drive,” he says.

The focus at Texcare, he adds, was on the networking of machines. “All the machines we presented at the fair had our FREEpro microprocessor. This means there is only one user interface which minimises incorrect operation by staff,” Stahl explains.

Ecolab also offered a solution to help laundries improve their data management with the launch of its enVision system at Texcare.

Automation and robotics

This goes hand in hand with developments in automation and robotics featured at the Frankfurt show and which are grabbing German laundries’ attention as ways to improve efficiency. This includes machines that provide automatic transfer for linen and data from the dryer to the ironing line, automatic towel feeding robots and Kannegiesser’s new FA-X Servo, a folding robot designed to automate the folding of hospital garments or workwear.

Dalkowski adds: “The use of RFID in laundries nowadays is nothing new, but looking into the future, it will be much more important to make it help improve production processes, as well as to deliver services which meet the needs of customers, such as apps or supporting ordering and delivering. We have seen new developments in this area and a lot of new research projects are on the way.”

Drycleaning

The drycleaning sector in Germany has remained relatively stable and continues to be dominated by family-owned businesses, with only a couple of franchises operating in the country. As older shop owners retire and close their shops, younger entrepreneurs are opening new ones. “They are much more service oriented, into marketing and driving around to find new customers,” says Dirk Freitag, managing director of Multimatic Isla Deutschland.

This often includes having a bigger shop, where the main drycleaning machine is located, and four to five smaller shops, which just have finishing equipment, as well as offering a shirt service.

German consumers expect a one-stop service, when they visit their local drycleaners, as Freitag explains: “In the past washing and drycleaning were separate. Now everyone does everything: drycleaning, wetcleaning, washing – you have to offer the entire range. Shops also often need to have an ironer for larger items such as blankets and tablecloths. If they don’t have the space, they find a partner to process it for them.”

Business is also coming in from the influx of refugees into the country: people who have had to be fed, housed, educated – and provided with textiles. “There are so many orders for drycleaning blankets and linen – streams of products to be cleaned and washed,” Freitag says.

As in the laundry sector, and perhaps even more so, compliance with environmental regulations is a key focus. “In Germany we have still a 50% perc and 50% alternative solvents trend. Customers who changed a drycleaning machine to comply with the German rules could be still using a 28-year-old machine,” comments Alex Arrighi, international sales and marketing director for Böwe Textile Cleaning. “But as many older machines will have to be replaced in the near future, business should move soon. In the last two years further steps have been made towards alternative solvents and well established German and global chemical companies are also focusing on this.”

He cites Dow-Safechem’s new Sensene modified alcohol solvent.

“The specifications and features for perc machines in Germany are different in that they have to comply with the BimSchG rules,” Arrighi says. “However for drycleaning machines customers here like to have self-cleaning water separators and for this reason Böwe has greatly developed this technology and owns the Multisolvent trademark. We also offer and install wetcleaning machines, such as Böwe’s aQueous Laundry System.”

Wetcleaning

However, Marco Niccolini, global sales and marketing director for Renzacci, says wetcleaning has declined somewhat in Germany as the usage of new solvents has grown.

In addition, he says: “The government is becoming more conscious that wetcleaning is not just carried out with water but is chemical cleaning in water. Therefore legislation will introduce added restraints with regard to water drainage and chemical agents.”

As we have already seen, environmental legislation in Germany is strict. With drycleaning and wetcleaning this not only applies to solvents and other chemicals but also the characteristics of the shop itself and its compliance with regulation – and this has impacted on the opening of new shops.

Nevertheless, Niccolini says Renzacci noticed increased interest from the drycleaning and laundry sector at this year’s Texcare. And it is now working to help drycleaners in the country realise the full benefits of alternative solvents.