Vorsprung durch technik15 May 2020
Germany continues to live up to its established image as a technological innovator and nowhere more so than in textile care but like everywhere else it has been catapulted into the Covid-19 age. Where to now? Penny Wilson reports
Vorsprung durch technik’ means ‘progress through technology’ and was a catchphrase coined by car maker Audi for its 1980’s ad campaign which became synonymous with the rapid rise of Germany to become the world’s fourth-largest economy followed by the United States, China, and Japan, measured last year by nominal gross domestic product (GDP). No doubt about it, German engineering has become much admired, its efficiency envied. The price of modernising eastern Germany has been high, but it has been a powerhouse with low unemployment for well over a decade. Yet last year the country’s federal statistics office, Destatis, reported the German economy grew at just 0.6%, showing a marked growth slump and the weakest expansion since 2013. German manufacturing had been in recession for months and the economy had been relying on services for growth. “Growth in 2019 was mainly supported by consumption expenditure,” Destatis says. Germany’s export-focused economy had been hit by the US-China trade war, uncertainty over Brexit and a sharp decline in car industry output. Then Covid-19 showed up.
KFW Research, part of German state-owned development bank KFW, predicted for 2020 as a whole that GDP would increase by just 0.8% instead of the previous 0.9%. But this forecast was based on the outbreak being confined to China and soon receding – a hope decimated as the pandemic strengthened its grip worldwide. As Germany closed its borders and went into virtual lockdown, Munich-based institute IFO warned the German economy could shrink by as much as 20% this year. At time of writing, Chancellor Angela Merkel’s government was scrambling to patch together a E750 billion (US$820 billion) stimulus package.
Meanwhile the German trade organisation DTV said the effects of the novel coronavirus crisis and the federal government’s decision to ban hotel accommodation and large gatherings had already had a dramatic impact of small and medium-sized laundries and textile service providers. A flash survey among members earning sales mainly from hospitality showed a 60% average sales decline. And hours worked decreased by 45%. At time of writing, the trend was increasing. Says the DTV: Some firms have already suffered a total loss. In addition, customers increasingly want to make payments later. Many companies fear that there will be a shortfall because customers in the hotel and catering business could become insolvent.”
Many in the textile care industry turned to Kurzarbeit (shorter work time). It’s a tool designed for companies which means that in a downturn they can send their workers home, or radically reduce their hours, and the state will replace a large part of their lost income. It is one of the reasons why Germany recovered so quickly after the 2008-9 crisis”, Anke Hassel, professor of public policy at the Hertie School in Berlin told the Financial Times. Temporarily laid-off workers receive ‘Kurzarbeitergeld’ or ‘short-work money’ from the Federal Labour Office (FLO), the agency also responsible for issuing unemployment benefit. The scheme promises them 60 per cent of their pre-crisis pay. It has, reports the FT, existed since the early 1900s. The pandemic has parachuted into a worldwide model.
“Every week that tangible solutions are not carried out, it will increase the dramatic consequences on the European professional textile care sector as a whole,” CINET wrote to the European Commission. It asked the EU to plead the case of the Professional Textile Care industry to every European government “to recognize a formal position for the laundries as an acknowledged crucial profession to be able to continue providing services” and without obstructions, such as lockdowns.
Given worldwide economic uncertainties around Covid-19, one can only give a snapshot of textile care industry pre virus. The workwear market has shown good growth rates in Germany, Europe’s largest. The European industrial and occupational workwear market is worth around €2.9 billion in Europe, growing at an average 7.5% a year. The biggest local importers include Germany, also the biggest EU exporter (around E216 million in 2018).
Textile care pundits report workwear, now heavily influenced by outdoor and sportswear styles, will become increasingly demanding and uptrading, already evidenced, will lead to further German market growth driven more by quality than quantity.
Meanwhile, high hotel occupancy figures and ambitious growth plans last year drew high hopes for those dealing with hospitality. Nearly 762 new hotels with more than 111,000 rooms currently are in the planning pipeline, with the focus on leading business centres such as Hamburg, Munich and Berlin.
Service innovations include Drugstore DM which has teamed up with Persil to include a laundry service into its offerings. The company is currently testing its new service in Munich and Essen, where customers’ clothing is sent by DHL’s GoGreen to a Hannover laundry – 700 miles away - as a package and returned to a customer-selected DM-store or a desired address within three working days. Persil Service has been offering online laundry services since 2015, when its mother company – The Henkel Group –joined forces with cleaning company Stichweh and parcel service DHL to allow customers to simply post their dirty laundry.
Another, Büssemaker, cooperates with the food retailer Rewe. Meanwhile, Stefan Büssemaker founded the Cologne-based online service WaschMal. The start-up is now working with more than 200 local partners to reach customers in 1,314 cities where the company already offers its services. The supply of entire office complexes will be the next goal to achieve. Partner-Reinigung also promises digital access to the customers. In addition to a personal contact person, WaschMal provides a management and driver app solution for the planning of journeys for dry cleaning. The Miele Venture Capital subsidiary is a shareholder and the washing machine manufacturer reportedly wants to increase its investment.
As always, technology rules both for the end user and textile care provider themselves. “These days people who want to take shirts, and men’s and women’s suits, in for cleaning generally look for the nearest specialist company on their smart phones,” says Daniel Dalkowski of the European Research Association for Innovative Textile Care (Europäische Forschungsvereinigung Innovative Textilpflege - EFIT) in Berlin.
“A cleaning company’s homepage and its entry on search engines or social media is the first source of information for people who are travelling, on holiday, or relocating.” Together with the University of Applied Sciences Landshut (Hochschule Landshut), EFIT has prepared a guide to getting into the online laundry and textile cleaning business, to give companies an overview of the opportunities the internet provides for winning and retaining customers. The manufacturer of textile cleaning machines, Böwe Textile Cleaning, from Sasbach, has developed an app that can be used on Android and iOS systems to convey extensive knowledge on all areas of laundry care to their users.
“In everyday operation, many different questions arise about the machines, procedures and textiles received”, says Böwe’s managing director Frank Ziermann. The Böwe app covers all the concerns of textile care companies: the information ranges from operational planning to calculating installations, solvent characteristics to correct stain removal, and fibre technology to handling complaints.
‘The first detergent, or artificial soap, was produced in Germany during World War I. In 1946, the first ‘built’ detergent launched, comprising a surfactant (a surface-acting agent or soap) and a builder (a chemical that enhances the performance of the surfactant.) A stronger economy and the development of relatively inexpensive washing machines in the wake of World War II sent detergent sales soaring; by 1953, they outstripped soap sales in the USA’
‘In February last year, WIRTEX merged wih the German Textile Cleaning Association (DTV) with branches in Berlin, Bonn and rankfurt. DTV represents around 800 industrial textile service provider companies and suppliers’
‘The European market for textile rental services has seen moderate growth in the past years. Growth rates have not risen above 2% in recent years and are unlikely to exceed this rate in the near future. Average industry growth is set to be 1.7% annually until 2022, according to a study by Interconnection Consulting.’
GERMAN TEXTILE CARE SECTOR TO MAINTAIN LEAD IN EUROPE DESPITE COVID-19 SPREAD
The ongoing spread of COVID-19 and associated with this economic recession in Germany, writes Eugene Gerden, will not result in a significant drop in the local textile care sector, that will be growing by 1% annually until 2023, according to a recent study, conducted by analysts at Statista agency and some leading German experts in the field of textile care.
Even such low growth rates will allow it to maintain leading positions in the EU market, in volume terms as well as revenue generated.
According to Statista and the German Textile Cleaning Association (DTV), the current turnover of the industry is estimated at slightly more than EUR 4 billion. Experts at DTV believe there is potential for further growth this year, albeit at rates significantly lower than those expected by some analysts.
As in the case of other EU nations, in recent years the German industry has faced serious challenges, triggered by the ever-growing demand for sustainability and convenience.
That has led to the growth of demand for cleaning agents that are less harmful to nature and humans and are easy to use. Moreover, amid the ever growing importance of water savings in Germany, more and more local laundries have started to pay more attention for the rational use of water resources for their needs.
According to data frmDTV, at present the average water consumption in the German textile service industry is 11 l/kg. However, many German companies in recent years have been able to achieve a much lower usage of between 6 and 10 l/kg.
The German government supports the latest initiatives of the industry’s players from its side implementing a regular control for their operations.
The latter is primarily in the form of the conduction of regular inspections of their facilities on the subject of their compliance with various industry standards.
In general, in recent years the requirements for the German textile care sector have been significantly tightened, while local companies have been obliged to report yearly consumption of chemicals, water and energy per ton of textile.
According to DTV, at present about 600 000 tonnes of detergents and 330 million cubic metres of water are used for textile care in Germany, however, as part of the state plans and leading local operators is a significant increase of these figures within the next several years.
Implementation of these plans, however, will probably result in reduction of sales of these products in the local market. In recent years the annual sales of household care products in Germany have reached approximately EUR 5,1 billion, of which about EUR 3,5 billion accounted for the local textile care sector.
According to analysts, currently the German market for household care products remains highly concentrated, with sales largely shared among a few multinationals, such as Henkel, Procter & Gamble, Reckitt Benckiser, SC Johnson, and Unilever. At present the German textile care sector employs about 69.000 persons. Of these, 67.5% are women.