Four years after the last Texcare Asia exhibition in Singapore, this year’s event, held in Hong Kong from May 9 to 11, was billed as strategically important for any companies wishing to learn about the market in China.

Apart from brand name, global region and organiser, the two events shared little. Much can and has happened in four years, and the economic dynamics of the region have changed dramatically. Happily, exhibitors (and organisers) were not disappointed with the spread of countries represented by visitors.

Yan Long, chairman of China Light Industry Machinery Association (CLIMA), commented that economic growth in China was likely following the country’s entry into the World Trade Organisation and in the run up to and beyond the 2008 Beijing Olympic Games. He said: “In Beijing alone the number of hotels is set to double before 2008, with existing ones primed for renovation and modernisation.”

Chinese visitors

The greatest percentage of visitors from outside Hong Kong itself were from China, some 380 delegates or 15% of the total. Combining that number with the aggregate of visitors from Hong Kong and Macau, which like Hong Kong is a Special Administrative Region (SAR) of China, shows that nearly 60% were from that country. More than 85% of visitors came from Asia, with large delegations from Taiwan, Japan, Malaysia, the Philippines and Singapore. The organiser’s total figure for visitors was 2,531.

Counting every individual company, agent, association, publisher and training organisation listed in the show catalogue, there were some 87 occupying 60 stands. An attentive visitor walking around Texcare Asia 2002 would have struggled, however, to identify as many as 50 suppliers. One good-humoured exhibitor put it like this: “We get at least two chances with every visitor because even if they only spend a morning here, they’ll go around the whole show twice.” This was not a large exhibition be any stretch of the imagination.

This year’s Texcare Asia show was smaller than its predecessor event for a number of reasons. There was a sense that talk of markets growing in China and elsewhere in the region was not yet something that was being experienced “on the ground”, and this consequently led to caution about making commitments. After all, there are a few years between now and the 2008 Olympics.

Hundreds more hotels

According to Zhong-Wen Zhang, vice managing director of CLIMA, at present there are somewhat more than than 300 high-quality hotels in Beijing, and their laundry equipment is old and will need to be replaced in time for the 2008 Olympics. He quoted the China Tourism Administration as saying more than 500 new hotels will be built for the Games by 2006. In addition, more hospitals will open and existing ones will be re-equipped.

The crucial question, then, is that of timescale, and it would appear the main decisions will be made in two years from now – in 2004. For exhibitors, this year’s Texcare Asia show was more about making contacts and developing existing reputations in the region than talking about the next sale.

Some exhibitors chose to economise by not bringing any hardware to display. This may also have been a reflection of concern over the perceived high number of industry exhibitions. Companies like Jensen (an exhibitor at Texcare Asia) and Kannegieser (not an exhibitor) like to hold in-house exhibitions of their equipment and expertise. No doubt cost-effectiveness is one factor in their decision to do so.

Largest stands

Interestingly, the companies with the two largest stands at the show were Shanghai-based SailStar and the Swedish company Electrolux Laundry Systems. “SailStar is positioning itself as a manufacturer to provide the entire line of fabric care equipment worldwide,” said the company’s vice president Eric Lee. By forming joint ventures, acquiring companies and by licencing technology the company aims to expand internationally, gain knowledge and acquire key technologies. The manufacturer has certainly come a long way in a relatively short time.

“Many people think the Chinese only buy cheap equipment,” said Mr Lee, “but it’s no longer true”. Owner-managers are looking for cost effective products – and that does not necessarily mean the cheapest. Mr Lee explained that his company’s strategy is to proceed very cautiously in what he calls a highly competitive market, and to introduce new products in a limited manner. Working with reputable distributors and setting up branch offices is key to this, he said.

Prominent on the SailStar stand was the company’s liquid CO2 machine. Mr Lee said this is the most advanced drycleaning technology, but emphasised that the machine was designed to demonstrate the future for drycleaners. So far the technology has only been adopted in specialist areas, such as cleaning leather and wool articles. But Mr Lee expected it will be used increasingly and will co-exist with other technologies.

As if to demonstrate SailStar’s expansionist policy, a newly established joint venture with the German company Büfa Chemical was highlighted at the show. Under the agreement, textile and leather care products will be produced at Shanghai exclusively for the Chinese market. A spokesman said: ” It is the aim to become the leading company on the Chinese market with high-quality products and prices adapted to the market. He added: “The quality of drycleaning has to be improved to meet the rapid growing requests on quality by the customer.”

Electrolux Laundry Systems also recognises the different requirements of East and West. According to Landry Guillochon, market support manager with Electrolux Laundry Systems in Asia-Oceania: “The laundry culture is as different as people’s culture.” Western laundry equipment companies tend to regard Asia as a distant market, he said, but it’s important to recognise that the region is not underdeveloped. As an example, he cited Singapore as being comparable with Europe in terms of higher labour costs and space restrictions.

Generally, however, machines sold in Asia tend to be lower in specification compared to the West because of budget limitations, he said. For example, low-spin machines are popular for cultural and cost reasons.

Conceptual themes

The Electrolux stand was arranged in terms of “concept solution” themes, and there were some interesting products displayed. The Transpo 40 trolley has been designed to ease the handling of wet laundry. It was developed with Sophus Berendsen and has been so successful in recent four-month trials that it is now the subject of worldwide patent applications.

Søren T Larsen, product category manager with Electrolux, said there is now a move away from coins in launderettes towards smartcard systems. Simply, instead of using coins to operate machines there is a central point where smartcards may be topped up with credits. The ELS network system enables monitoring of every machine and can, for example, allow a “happy hour” to be programmed to encourage use in quieter times.

A curious feature of smartcards is that on average 70% of credit is never used, offering an unexpected profit stream for those operating the system. The ELS system is due to undergo trials in the UK and Australia soon, and will be shown in Japan, where the coin-op market is large, in September.

Life’s certainties

“There are few things in life that are certain,” said Herman Van de Voorde, director of second-hand equipment supplier De Vlieger, “but people will always eat, they will always stay in hotels and they will get sick and go to hospital.” The Texcare Asia exhibition was a convenient way to test the market, said Mr Van de Voorde, whose company sells larger machines – starting at 60kg washing machines. At the beginning of the show he was expecting to see people from mainland China, as Hong Kong is a relatively easy – if expensive – venue for them to visit. But the company’s interest is in the whole of the region, from Australia north.

Economically, the region needs to improve, said Mr Van de Voorde. Asked what he hopes to achieve from the exhibition he said: “It’s an investment; we have yet to see how good.”

Herbert Tsui, export manager of Jiangsu Sea Lion Machinery Group, explained that his company is “the biggest manufacturer” of laundry machines in China. He said it supplied 43% of the hotel market in mainland China last year. It also supplies hospitals and the military and Mr Tsui said Sea Lion has a 90% share of the railway market for uniforms and linen. The company has been

established 40 years and produces drycleaning machines, washer-extractors, automatic dryers, ironers, folders, finishing equipment and so on. Mr Tsui said growth in China is spreading from the east coast westwards. Tourism especially, he said, is strong in the west of the country. The replacement market is also gaining ground with some machines more than 20 years old now. The company has 900 workers in China and produces 7,000 machines each year. Its European agent is UK-based Cherrytree, and it has a joint-venture factory in Russia.

Alliance Laundry Systems was keen to say it is the largest manufacturer of commercial laundry equipment in north America, and it is a leader in drying tumblers and the coin-op sector. The company’s area sales manager for Asia Andrew Kan Hai Chee said: “We are here to get to know people, potential distributors as well as customers.” He saw little difference in the OPL market in the West and Asia, saying where differences do exist, they are mainly due to lower labour costs.There is less desire to use automated equipment in Asia.

Recently in the more developed economies like Hong Kong and Singapore, he said, more centralised laundries serving hotels have been established. This is a trend that is likely to spread among major cities across the region where there are high labour and real estate costs.

Aiming at hotels

The largest machine on Primus’s stand was an FS120 high-spin, open-pocket, 120kg washer-extractor with tilting option. The company’s area sales manager Yves Deconinck explained that this is a new machine for customers in the Far East and is aimed at five-star hotels. Also on the stand was a new FS16 high-spin model featuring a larger door than the machine it replaces; a barrier washer for which Mr Deconinck said there is a market in the semi-conductor industry in the Far East; and various equipment for coin-op laundries. Mr Deconinck said he hoped to make contact not just with potential customers from China, but the whole Pacific Rim.

For Flavio Tonello of Tonello the fashion market in the Far East was one that held great potential. The company’s turnover has increased from US$16million in 2000 to US$27million last year, growth that can be attributed largely to new technologies like the company’s laser robot.

Tonello is developing a high temperature washing machine and a novel solution for programming its laser and spray robots, so development and innovation can be taken to be ongoing. For Mr Tonello, Texcare Asia was a useful vehicle for furthering the company’s interests in the region. “I want to increase our involvement here,” he said, adding that he plans to exhibit at shows in Egypt and Korea in the coming months.

Milnor had an advantage at Texcare Asia compared with some other exhibitors: it has a couple of large installations in Hong Kong that it was able to take potential customers to visit. One of these laundries processes 100tonnes of linen every day, and this from a ninth and 10th floor location!

Like a number of other exhibitors, Milnor choose not to show any machinery on its stand. Fritz Ulrich Eckert, a director based in Belgium, said Milnor finds it increasingly difficult to justify the expense of attending all the exhibitions for the industry around the world.

Best technology

“I think this is the best drycleaning technology we’ve ever had,” said Erwin Biesinger of Multitex’s drycleaning machine, which is designed for silicone solvent. The reasons he thinks it is so good are compelling: although it uses a relatively expensive solvent, it requires only 1% solvent loading to be effective; calculations have shown that the cost for cleaning one garment is h0.04.

Mr Biesinger explained that the solvent – produced by Bayer/GE, Dow Corning and Wacker Chemie – is “absolutely harmless”, so much so that residue from the cleaning process may be thrown away with normal rubbish. He said garments are easy to iron after cleaning, there is no odour, total investment is around h50,000 and typically 300 pieces can be processed every day.

The process has a short cycle time of 30 minutes, operates at high speeds up to 950rpm and runs in a vacuum. Multitex’s machine is shock mounted meaning no bolting is necessary. Mr Biesinger said: “There is good interest in the solvent and system at Texcare Asia,” and he said he had had useful discussions with people from Hong Kong, Taiwan, Australia and Korea. The Multitex machine is made in Germany with some parts sourced from China.

New from flatwork ironers accessories company San-Ai Industries at the exhibition was the Techno-Press ironer spring. Futoshi Motoda, manager of the company’s International Department, explained that conventional springs can travel along the steel band upon which they are mounted. The new spring uses a base band that has a notched edge to lock springs in position. In this way the Techno-Press spring prevents bunching of springs, which can happen if springs slip along a conventional flat-edged base band. This in turn leads to longer felt life and consistent ironing.

Mr Motoda said he was looking to meet distributors to the laundry industry and thought that China had the greatest potential for growth of all countries in the region.

On the Hoffman/New Yorker stand representatives from the company’s Hong Kong agent, Takaoka, were on hand to greet visitors. Kent Cheung, customer service supervisor with Takaoka, said the presses and shirt finishing machines may not be the cheapest, but they were very popular in China because they are built to last for 20 or 30 years. Most visitors, said Mr Cheung, already owned the company’s equipment, and they were keen to know about spares supply, should it be necessary.

Rapid development

In recent years, said Zhong-Wen Zhang, vice managing director of CLIMA, the laundry and cleaning industries have developed rapidly in China.

There are now 10,000s of laundries and more than 1,000 domestic machinery manufacturers and suppliers, many of which are large enterprises like SailStar and Sea Lion, both exhibiting. He said it is not only Beijing, host to the 2008 Olympic Games, that will be affected by the building programme. Shanghai too is being developed, and the city has applied to host the World Fair.

Mr Zhang said people living in the cities increasingly send their washing to laundries. Living standards and people’s expectation have increased as the economy has developed. There are few drycleaning shops, though the two largest companies are Pride and Zheng Zhang.

Asked about China’s entry to the WTO, Mr Zhang said the main effect will be on importation tax. This is now 10% and may be reduced to about 5% by 2005. Obviously, this will lead to more imports. Mr Zhang hinted that many of the new five-star hotels will look for “top-grade machines” from Western companies rather than the “medium-grade machines” produced by most domestic manufacturers. “We think it’s a good idea to co-operate with famous brands,” he said.

CLIMA is authorised by the Chinese Government to organise conferences, exhibitions and exchanges with foreign companies.

Mr Zhang said his association has been working with Messe Frankfurt for two years now and he hopes the next Texcare Asia exhibition can be held in Beijing (or Shanghai) in 2004, in order that the timing is most suitable for the substantial building programme.

“In the meantime,” he said, “we hope to organise a fact-finding delegation for well-known companies in order to lay a foundation for the next exhibition.”