Growth and investment11 July 2018
A promising economic forecast for 2018, the financial strength of the textile rental companies and high labour costs mean investment in new, more efficient equipment is definitely on the cards, says Kathleen Armstrong
The French economy is on the up, according to Insee, the National Institute of Statistics and Economic Studies, France’s official statistics agency. In the fourth quarter of 2017, GDP rose 0.7% in volume terms, a 0.1% increase on the previous quarter, and the prediction for the first quarter of 2018 is a similar rise, to 0.7%. The year finished with an overall rise in GDP of 2% (in volume terms), up on 2016’s 1.6% increase.
This, and the promising forecast for 2018, means the French economy is investing again, says Clément Silvaggio, regional business director for Jensen-Group.
“The two major sectors for the industrial laundry business are public healthcare and private rental laundries. Public hospital spending is strongly influenced by politics,” Silvaggio suggests.
In 2016, the then government, under President François Hollande, introduced a health law (the loi de santé) which, among other things, requires hospitals to collaborate regionally on healthcare delivery, including medical and logistical investments (groupement hospitaliers de territoire – GHT).
“Practically, for us as a major supplier to the healthcare sector in France, this means either the closing of small- to medium-sized hospital laundries (below five tons/day) and the opening of new turnkey laundries (over 15 tons/day) or the extension of existing laundries in the same area,” Silvaggio adds.
Also likely to affect businesses in France is the reform to the labour code introduced by the Macron government (which came into power in May 2017). The reforms, which were introduced in September 2017 and ratified by the Senate in February, aim to bring more flexibility into the workplace, including the simplification of collective bargaining in small- to medium-sized businesses, the reform of wrongful dismissal rules, the streamlining of redeployment procedures and the merging of consultation bodies in businesses with more than 50 employees into a single social and economic committee (CSE).
One area boosting business in France is tourism. “Tourism in France remains strong, which is good news for the hospitality sector,” says Ecolab. “France remains the most visited country in the world, with 89 million visitors in 2017, an 8% increase over the previous year after two years of decline following the terrorist attacks in 2015.”
Silvaggio agrees: “In the linen private rental business, the development of tourism with nearly 90 million visitors in France in 2017, is boosting this sector, and new projects are launched to absorb this growth in the hospitality sector.”
The French textile rental laundry business has long been a consolidated market dominated by a few integrated groups and key franchises. “The phenomena is continuing with the amazing growth of Elis, in France and abroad through its recent acquisition of Berendsen Group and the recent [January 2016] acquisition of RLD Group (30 plants in France) by MNH Group and Vermeer Capital. RLD Group is now acting on the market under a new name: Kalhyge,” Silvaggio explains. “The acquisition by Kalhyge of healthcare plants from Initial in France show that this move to more concentration may be not finished.”
In April 2017, the then RLD Group (its name was changed to Kalhyge in November 2017) reacquired Groupe Viennois, a textile rental and hygiene business with sites in Bourgogne-Franche-Comté et Centre-Val-de-Loire, helping it to further strengthen its position in the sector nationally.
Meanwhile, in addition to its acquisition of Berendsen, Elis enhanced its market position in the French laundry sector with the March 2017 acquisition of Blanchisserie Blésoise in Blois, which serves customers in the health and hospitality sectors in the Centre Val de Loire and Île-de-France regions, and in April 2017, Blanchisserie des Gaves (Biarritz/Lourdes/Pau region) and FlashOcean (Charente-Maritime and Bordeaux regions).
In healthcare, according to Carole Chagnon, marketing director for Miele Professional in France, the focus on hygiene is changing the approach to laundry care approach, both in nursing homes and hospitals.
“Miele barrier washer-extractors are one of the outcomes of this approach, with separation between contaminated and clean operations,” she says.
In the drycleaning sector, the French Ministry of Ecology, Sustainable Development and Energy introduced a national plan in December 2012 to gradually replace all perchlorethylene drycleaning machines by 1 January 2022 and to ban the purchase of new perc machines from 1 March 2013. This has led some of those operating in the sector to investigate alternative solutions, such as wetcare as more environmentally friendly options.
“Developments in both the wetcare and hygiene area are impacting OPL employees in France, who need to be specifically trained on programs, textile, processes and equipment in order for wetcare and hygiene approaches to make the most of cleanliness and fabric care,” Chagnon says. “Fewer and fewer independent actors remain present in the drycleaning sector, while international and national groups are benefiting from this changing environment.”
To help drycleaners in the transition, the Ministry for Ecological and Inclusive Transition, the French Environment and Energy Management Agency (ADEME) and the water agencies have set up a system of financial aid for drycleaning operators to help both with the substitution of current equipment and clean-up.
“Optimised processes are key, as the labour cost in France is still high,” Chagnon comments. “In order to optimise processes, proper global OPL solution planning is key, and Miele France has an integrated engineering office that can help define a tailored concept in terms of implementation, workflow, equipment, personal training, laundry cycles and cost savings. In addition, Miele France has strong partnerships with detergent manufacturers to offer the best laundry solution, like Kreussler for wetcare solutions.”
In the professional laundry sector, digital developments are not as mature as they are in domestic laundry, Chagnon adds. “But that doesn’t mean that everything which can be digitised has to be digitised. We need to focus on used-based digitisation that will help and support the professional customer – and keep it simple. This might mean simple functions like detecting when detergent dispensers are empty and telling the user to refill them.”Dosing equipment and other efforts to optimise operations and reduce water and energy use have become part of the modernisation of textile care in France, according to Ecolab.
It says laundries are also moving toward phosphate-free products, low-temperature washing and other sustainable practices.
“Hotels are asking laundries for EU Ecolabel-certified products which means they pass along the request to suppliers like Ecolab. EU Ecolabel certified products must be biodegradable and have a low toxicity profile in addition to delivering on packaging and washing performance requirements,” the company says, adding that demand will only continue to increase as consumers and businesses become more environmentally conscious.
“In Europe, and France, water is an ongoing concern with 60% of European cities considered ‘water stressed’ and this number is expected to increase with economic expansion,” the company says.
“While agriculture is often cited as the biggest user of fresh water in Europe, nearly 80% of freshwater withdrawals are destined for the industrial and tertiary sectors,” it adds.
Ecolab says one of the main drivers behind the shift to more environmentally friendly practices in the region is how it enhances a business’s reputation and image. However, sustainability also represents a growing challenge for the industry as companies face increasing pressure to do more with less.
Another challenge in the industry, Ecolab says – not necessarily specific to France other than the relatively high level of textiles produced in the country – is textile lifespan. “We’ve partnered with various customers on sustainable investments to help reduce their environmental footprint with, for example, Ecolabel products and plant monitoring systems to reduce water and energy usage,” the company explains. “In the past two years, Ecolab has implemented sustainable solutions to reduce the environmental footprint of more than 40 sites in France.”
Another area that is increasingly putting the focus on sustainability in France is self-service launderettes. Chagnon cites Laverie Eco, located in the south of France, as a good example of a 100% sustainable concept combining technology and efficiency. This includes products that are highly efficient in energy consumption, including heat pump dryers from Miele, which enable up to 60% energy savings, together with a hot water recycling tank and dosing pumps.
“Everything is in place to allow efficient resource management,” Chagnon says.
In addition, she adds, public institutions and other national actors in the laundry sector have become more sensitive to the environmental approach of their operations, in comparison with small independent actors.
Automation has also made significant inroads in the modernisation of laundry operations in France. “As in many other European countries, the price level of hospitality linen rental is not at the level it should be, and the key is the improvement of the efficiency in order to lower the production cost, and preserve a minimum margin for the rental laundries,” Silvaggio comments. “This can be done through more investment in automation, and in energy saving equipment. Jensen has been promoting Cleantech for many years now, and all our equipment or solution are always built around the idea of the maximum saving of primary energy, the lowest impact on environment, and the best working conditions for the operators.”
Efficiencies are being made, for example, in well-automated laundries in the hospitality and garments sectors, including the automation of laundries specialising in personalised clothing for care homes for the elderly and the development of various apps for workwear. However, Silvaggio suggests there is still some room for improvement in the hygiene sector processing items such as mats and continuous roller towels.“As with other sectors, there is talk of industry 4.0 and the Internet of Things,” Ecolab says.
“For the textile care industry, this could include dosing equipment as well as plant management systems. Ecolab’s Envision helps professional laundries optimise their operations and reduce costs through plant monitoring and real-time data.”
While government incentives to invest in new equipment may not be as prevalent as they are in countries such as Italy, the financial strength of the textile rental companies and the high labour costs mean investment in new, more efficient equipment is definitely on the cards.
However, Chagnon suggests: “While the economic situation may be getting better in France, all investments are considered in a careful and precautionary manner. In many sectors, laundry is not the first priority and often seen as a support function. [Therefore] a careful study needs to be done [for example] to evaluate the return on investment of an OPL compared to other solutions, in order to convince professionals to invest, showing not only long-term savings but also other benefits such as textile care, quality of cleaning and independence.”
And with this, further modernisation can begin.