The economies of the Benelux countries continued to edge forward in 2015. In the Netherlands, GDP was up by 1.6% in the fourth quarter of 2015, compared to the same quarter the previous year and grew by 1.9% over the full year.
Corporate investment in machinery and installations rose and consumer spending also grew marginally, according to Statistics Netherlands. In Belgium, the National Bank of Belgium predicts final GDP growth for 2015 to reach 1.4%, a slight improvement on the previous year’s 1.3% figure.
Comparatively, Luxembourg shone with marked GDP growth of 3.5% in 2015, according to the country’s central bank (Banque Centrale du Luxembourg), although the final figure was 0.4% down on the original predictions.
The region’s current climate is being overshadowed by the number of economic migrants entering the European Union, according to Jean-Baptiste Van Damme, sales director Europe for Alliance International. "This impacts on investment in the public sector as it creates uncertainty," says Van Damme. "The priority for the sector is trying to find housing for refugees, which results in other issues such as investment being pushed back or put on hold."
However, the arrival of migrants has also brought opportunities, such as the need for self-service laundries where large numbers are being housed. "Collective laundry spaces are being installed within refugee centres, so that’s extra business," Van Damme adds.
The number of nursing homes is also continuing to grow in response to the shortage of services for the elderly, and this growth provides another opportunity for business.
Consolidation in the sector, as independent nursing homes are absorbed by larger groups, has opened up the ability to negotiate blanket orders, Van Damme says.
The restaurant sector in Belgium has seen a strong shift away from traditional restaurants to modern brasseries. "This is a huge market for us that is shrinking, as brasseries typically do not use table linen, but rather go for paper tablemats," Van Damme says. "This has a huge impact on the amount of linen to be laundered."
However, the company has built up business is in the fire brigade industry, where awareness of the need for fire-safe materials is growing. Alliance has worked with a manufacturer of clothing for firefighters to develop a laundering process for these garments that preserves the clothing’s protective function.
Belgium remains a strong coin-op market, while the Netherlands is a strong market for chemical cleaning, where Alliance sells mostly 18 and 24kg soft-mount washers and often these machines have specialist wetcleaning programs
In the Netherlands, bigger laundry groups are taking over parts of the market, according to Henk Robers, sales manager of Kannegiesser Europe.
"Groups like CleanLease Fortex, SynergyHealth, Malysse, Berendsen, Initial and CWS are well known in the market," he says. "International groups are expanding in the sector, and this creates enormous price pressure."
He says the level of investment is relatively small in the Netherlands compared to that of Belgium.
"The low prices that laundries get for their services mean that every investment has to be thought through carefully. Where productivity rates are low, even smaller investments have a big effect on the laundry’s output."
One of the keys to success in the current market, according to Jan De Smet, director business Region II for Jensen, is investment in equipment and processes that are more efficient.
"As well as pursuing the eternal quest to reduce their carbon footprint, customers are constantly seeking to improve productivity to compensate for high labour costs," he says.
But finding the right person for the right job is often a challenge, as is obtaining finance for large projects.
However, those who are able to get it right are reaping the benefits, De Smet says: "All of our customers who have maintained a healthy, constant rate of investment are successful, and the gap between these and the more investment-reluctant ones is starting to show."
Laundries in the region are also becoming bigger and demanding tools to help them measure their productivity and manage production.
For that, Jensen has developed a data collection system called Cockpit. It has also responded to their need for commissioning systems, which, together with its rail systems Jenrail, Futurail and Jenway, allows its customers to further optimise their productivity, De Smet says.
Reindert Baars, Ecolab’s senior marketing manager, SAT and Training, Europe, agrees that improving operational efficiency is a key focus for laundries in the region, addressing the issue through increased specialisation, improved economies of scale and the optimisation of water and energy costs.
"The Benelux region remains a very (price) competitive environment," he comments, adding that there is a clear drive for innovations to differentiate businesses in the various market segments. "Market standards, client expectations and service concepts keep developing in the various markets like workwear, hospitality and healthcare," he explains.
Sustainability and the commitment to reduce emissions is also a key part of both laundries’ and trade associations’ strategic agendas, Baars says.
Accordingly, Ecolab launched the OxyGuard40 wash process for the hospitality sector, which he says delivers both quality and whiteness at 40C, saving energy and water consumption and extending textile life. "The OxyGuard40 wash process has been recognised as the first wash program with the EU Ecolabel certificate," Baars adds.
In Belgium, laundries are also feeling pressure from taxation on water usage and from the new kilometre tax, due to be introduced on 1 April 2016, which will impact on logistical costs, according to Marc Broers, commercial director of Belgian textile rental company A&M Location.
The kilometre tax will apply to heavy-goods vehicles over 3.5 tonnes in Flanders, Wallonia and Brussels. However, the company is continuing its policy of investment, where finance is available.
"We have to be especially aware of the competition from neighbouring countries, because in Belgium labour costs are very high," he says.
Another challenge has been both the increased climate of insecurity in Belgium since the attacks in Paris in December, which had a significant impact on hotels in Brussels. Nevertheless, Broers says the hotel sector is continuing to develop in a positive direction, although the outsourcing of hotel personnel has not worked to the advantage of textile rental companies such as A&M, adding an intermediary between them and their clients.
Around 95% of hotels outsource their laundry and drycleaning, although most keep a small washing machine on premises, according to Frans Sijmons, owner of Netherlands-based laundry and drycleaning equipment distributor Polymark and Pantex presses. He says he "can see the light at the end of the financial crisis" but the situation is only just beginning to pick up. "Investment is poor – only 60% of what it used to be."
Challenge to longstanding shops
In the drycleaning sector, Sijmons says one challenge has been from entrants to the market that have set up business near well-established shops, offering lower quality service at lower rates, which has appealed to consumers when money is tight.
However, the younger generation has responded to this challenge by developing internet sites and offering consumers a wider range of services, including workplace delivery and pick-up, often at the same price as that offered in the shop, and night-time pick-ups from 24/7 collection points.
Drycleaners are also offering laundry and wetcleaning services, promoting themselves to clients as one-stop shops, to attract more business.
The sale of Metalprogetti transport systems is also growing. "Shops are becoming more modern with all of these developments," Sijmons adds.
However, while countries such as Germany are moving from pressing to ironing, the Netherlands remains firmly in the pressing camp. "It is not going away," Sijmons concludes.
In addition to handling Pantex presses, Polymark is the Dutch distributor for Fimas finishing equipment. Walter Cividini, managing director of Fimas, says: "In the Benelux our most popular products are the tensioning dummies – model 379 – and the shirt finisher – model 389. There is also a good demand for the 105 ironing table, which is specifically designed for finishing curtains and other large items, enabling them to be brought back to their original length after washing or drycleaning. We’re the only manufacturer that produces this in Europe."
Netherlands-based Wientjens also works across both the laundry and drycleaning sector, with a special focus on water and energy recycling. "Less and less water is being used and more and more energy recycled," says owner Gerry Wientjens. "The association for the textile care industry has agreed a multiple-year plan for reducing resource use and this has been successful. It has members looking for opportunities and it holds an annual competition for the most efficient plant, highlighting the winner."
In the drycleaning sector, Wientjens has developed a 100kg machine for industrial workwear. The M-1820 ECO industrial drycleaning module uses K4 solvent and can clean up to 1,200kg in eight hours. The VD-1600 distillation unit for use with K4 solvent is also available. While this offers an environmentally friendly solution for drycleaners, most drycleaners in the Benelux still use perc machines. Wientjens says there is interest in machines with alternative solvents but many are waiting to see whether they are as efficient as perc, holding off buying a new machine until they get a clearer view on which solvent to choose. Nevertheless, Renzacci says it is the alternative solvent machines that are its best sellers in region – around 80% of the drycleaning machines it sells use hydrocarbon, K4 or GreenEarth.
"In the Benelux there is an awareness of the need to advance and use alternative solvents, so they can begin offering new services for garments and demonstrate respect for the environment," says Marco Niccolini, general sales and marketing manager for Renzacci. "Perc still dominates as machines are not being replaced very quickly at the moment but in a few years that will change."
It also sells a lot of coin-op and wetcleaning machines in the region. One area in which it has made some progress is in the area of disinfection. "Customers in the Benelux are open to new proposals about additional services they can offer and how they can diversify," Niccolini says. "With the disinfection system, shops can tell customers that the business will provide the full range of services, not just laundry and drycleaning but also the disinfection of toys, curtains, uniforms, boots, helmets – items that are more difficult to wash or disinfect at home."
Renzacci’s disinfection system is available for OPLs, coin-ops and drycleaners to use.
While growth may be slow at the moment, opportunities in the region are attracting companies like Turkey-based Tolon, which opened a branch office in Ghent last year to improve its strategy for European markets. It has spent the last two years preparing its products for compliance with the standards in the various markets and is now working on getting distributors for its products.
"We want to enter the market as a "refreshingly new" manufacturer, with modern, attractive machines, modern tools and controls," says Carine Derez, vice president sales Europe. "We want to build a partnership with our distributors and offer outstanding service and follow-up."
Another development to watch for is the upcoming World Textile Services Congress, due to take place in Bruges on 5 – 6 October. It is organised by the Belgian textile care association FBT in collaboration with the TRSA and ETSA. The focus will be on best practice and economic, political and regulatory issues that affect the industry worldwide.
"The meeting will be an important get-together for international textile trade associations," comments Kannegiesser’s Robers.
Then, the spotlight will truly be on Benelux.