Strong signals of growth as the region’s markets recover

Things are looking up in the Benelux region. While the economies of the three countries are not yet booming, the slowdown of recent years is beginning to let up, leading to some optimism in the textile care sector.

In the Netherlands, the economy grew by 0.7% in the third quarter of 2013, according to Statistics Netherlands.` However, Government consumption fell by 0.6%, mainly due to reduced spending on public administration, although it spent more on care than in the previous year.
Even though 8,000 employee jobs were lost in the quarter, the government predicted that the speed of economic recovery was picking up.
In Belgium GDP rose 0.2% for the full-year 2013, but employment fell by the same amount during the year and unemployment was up 4.3%, according to the National Bank of Belgium. The government forecasts growth of 1.1% for 2014 but predicts that unemployment will continue to "edge upwards" in 2014 as the rate of job creation is slow. (National Bank of Belgium, Economic Review December 2013).
In Luxembourg, the situation was not so rosy, however. While GDP increased by 0.2% in the third quarter of 2013, unemployment reached 7.1%, compared with 6.4% in 2012. However the government statistics agency Statec reported some signs of a return in consumer confidence. Household consumption was up by 0.7% in the third quarter alone. Statec Luxembourg, Conjoncture Flash January 2014.
"We see strong signals that the recession in the Benelux countries will soon be over, although it would be unrealistic to predict high growth figures," says Geert Braeckman, general manager of Jensen Benelux. "The government has dramatically cut its budgets and the economy will not fully bloom in the years to come." This means that laundries find their prices and volumes remain under pressure and they have to find ways of cutting costs still further and of raising productivity.
Lars Blechschmidt, managing director sales and marketing for Kannegiesser, believes that Belgium's economic situation will force laundries to cross the borders between countries to try and cut costs. He says that there are certainly differences in operating costs - labour costs still vary from country to country. "In addition, hospitals and nursing homes are forming groups to put pressure on suppliers to reduce prices even though they can currently be considered to have reached a historically low level." Hotels are also forming into larger groups and seeking lower price while still asking for first class service. Now because laundries have had to reduce their charges they need to increase turnover so they can make a profit. This has led to greater competition when laundries tender for hospital or nursing home work. "The published numbers show that in 2012 nearly 30% of the laundries operated at a loss," Blechschmidt says. "This is certainly because of the low prices that they are getting for their services and fierce competition means that laundries are not going to be able to increase charges in the near future."
Huub Hoffmann, from Netherlands-based Vega Systems, agrees. ".In the last few years a lot of hospitals and nursing homes have started to purchase services and goods together," he says. "So where once there would be seven or eight customers working with three to four different laundries, now these seven or eight have become one large customer that works with one laundry, which, of course, influences pricing, risk management and investment."
The main laundry groups that are operating on the Benelux market are Clean Lease Fortex (healthcare), Synergy Health (healthcare), Berendsen (workwear) and Initial (workwear). In addition, Hoffmann says, the government is cutting costs and will no longer pay for services such as cleaning personal clothing for nursing home residents, so laundries have lost a lot more work. "When you look at another important market - hotels and restaurants - you see a similar development. In the last few years they had fewer guests and again this means less work for the laundries," he says. Restaurants are increasingly using paper napkins and reducing their use of table cloths. "However, when the economic situation starts improving, this market will also pick up again and laundries will get more work again," Hoffmann predicts.

Highly competitive
Reindert Baars, commercial director for Christeyns in the Benelux market says that the market continues to be highly competitive, with a focus on cost reduction and volume to improve economies of scale.
Segmentation and specialisation is resulting in a push for innovation and cost reduction programmes that reduce water and energy consumption and increase productivity, Baars adds. "There is great interest in systems to control, monitor and report laundry-related performance indicators."
While the healthcare sector has moved toward consolidation into large groups, the hospitality section is still dominated by family-owned laundries. According to Braeckman at Jensen: "The segment of "pro-fashional" garments is split between large groups and family companies."
The niche markets are picking up pace, says Wim Opsomer from Laco Machinery. "Small laundries are getting many enquiries for small quantities from boutique hotels with 20 - 40 beds," he says, adding that while the bigger laundries focus on high volume work, they are leaving this niche market unattended.
"Although the high end-customer is willing to pay a premium for good quality washing and ironing, the bigger laundries will turn away these small customers, so they are forced to enquire at a small local laundry."
Opsomer says the small laundry will grow if it is well organised and provides a good level of service and quality. "The finishing equipment plays a major role in this process. We are seeing many small laundries switch from cylinder ironers to chest ironers to be able to absorb this growth." He adds that in the process, they will increase their efficiency and quality and also reduce the energy used per kg of linen.
He says Laco is seeing a good level of interest in its new Air-Stream chest.
"This chest not only increases the capacity of the ironer by 25% but also reduces energy consumption by 20%," he says. "It is the first development in the ironing industry since we brought out the gas-heated flexible chest some 20 years ago."
Jensen has also been supplying automated systems to smaller laundries, including many Napkin Bottom-Up Stackers for the automated cross-folding and stacking of small pieces.
For larger laundries, it says that decentralised feeding in combination with the sorting of large pieces in one or more finishing lines with Jenrail is also becoming a real trend in the Benelux.
"Both sheets (one side) and duvets (two corners) can be fed in a mixed operation into the system. The system sorts the articles in such a way that the ironer can process them at the highest efficiency rate," Braeckman explains.
The company is seeing increased demand for its Jenway system, which automatically removes and stores finished linen at one central point in the laundry. "In recent years, the Benelux region has been the pioneer among European countries with respect to automation," Braeckman adds.
"That's why so many highly automated laundries are located in the Benelux area. When they were built they were equipped both with the latest technology and the highest degree of automation that was available at the time, to make sure they could achieve sustainable growth.
However, banks are still reluctant to provide financing. Opsomer says that it seems that while the laundries are able to move on from the financial crisis, the banks cannot do so and he observes that additionally, government subsidised funding for innovative equipment becomes more difficult to obtain.
Huub Hoffmann from Netherlands-based Vega Systems agrees: "Pricing is under pressure, banks are becoming more critical and costs are going up, so this means it's not easy.
"In recent years a few laundries went bankrupt; however, there are also several companies that are growing, making profit and are investing," he says.
Energy and water efficiency are key areas where laundries in the region are looking to reduce costs .
Baars at Christeyns says that resource-saving developments in the laundry sector include systems for steamless operation and ironer heat recovery. He also mentions his company's Sanoxy-Max system for tunnel washers and the Compact One for washer-extractors. Management information systems such as Laundry X-pert also help to increase efficiency.
However he adds that the focus on water and energy saving relates directly to the move to reduce a laundry's carbon footprint as well as to cutting costs.

Investing in alternative solvents
Renzacci's Marco Niccolini says the uncertainty in the Eurozone has made drycleaners very cautious about spending, although the situation is much better in Benelux than in many other countries such as those in southern Europe.
However, cleaners that are willing to invest are investing in alternative solvent machines, which are seen as more efficient and which will process a wider range of materials.
"Renzacci sells a complete range of alternative solvent machines in the Benelux market and Niccolini says there is demand for GreenEarth, K4 and hydrocarbon.
Christeyns' Reindert Baars agrees, adding that the increased momentum to phase out perc is both driven both by awareness of drycleaning's carbon footprint and by the wider availability of alternative processes.
This is echoed by Gerry Wientjens from Netherlands-based Wientjens who says that while laundries are mainly concerned with cutting costs they also want to become more environmentally friendly in the use of chemicals and solvents.
"We have developed a large drycleaning machine for cleaning industrial workwear, which works with the solvent K4. The unit has been in operation for four months now in the Netherlands with good results."
With regard to the structure of the industry, there are two distinct sectors according to Niccolini. First are the drycleaners that do not want to invest in alternative solvents. This group tends to outsource the drycleaning to a central service while they act as a point for dropping-off and collecting work.
This is a trend that has gathered pace as the economic crisis grew but Niccolini believes it will change as the economy improves and these cleaners will return to processing work in-house.
The second group is formed of those setting up drycleaning business for the first time. Niccolini says these businesses will install both modern drycleaning machines that use alternative solvents and professional washer-extractors, so that they can provide a wide range of services to improve their chances of profitability.
These cleaners tend to purchase a 22kg washer-extractor so they can deal with larger items such as bed linen.
Niccolini adds that research conducted by Renzacci indicates that the traditional cleaner that just relies on a perc machine or on a washer-extractor will eventually disappear to be replaced by modern shops that offer a wider range of services to customers.
He says that every customer stepping into the shop should find that it has service for everything they want to be cleaned.

Future trends in drycleaning
CINET, the umbrella trade organisation, reports that trade associations in the Benelux countries are working to help drycleaners respond to future trends.
This month, NETEX, the Dutch National Drycleaning Association will hold its national congress, an event which it expects will be attended by over half the country's drycleaners. This year it looks at the growing focus on online communication with presentations on ordering, logistics, packaging concepts and marketing strategies.
Last November Belgium's Federation of Textile Management (FTN) held a symposium on textiles of the future with an emphasis on the advanced functionality and characteristics of new textiles. Held at Noordwijk's Space Expo, it also looked at how space technology could influence future developments.

SPACE THEME: Maryn Warmoeskerken speaking at the FTN symposium