Optimistic outlook from Europe’s biggest player22 November 2022
It may not be exactly what one might expect in these troubled times, writes Eugene Gerden, but he finds there is, despite all the challenges, a mood of cautious optimism permeating the German market
The German laundry and drycleaning sector is steadily developing despite ever increasing energy prices, according to recent statements from leading German operators and independent analysts.
In accordance with earlier forecasts made by analysts at the German Textile Cleaning Association (DTV) and independent experts, the growth of the German textile care industry will not exceed 1% this year compared to 2021. In addition to the energy crisis, the low growth expectations are mainly due to the consequences of the Covid-19 pandemic and current geopolitical instability in Europe. The ongoing military conflict between Russia and Ukraine being the unmissable factor in this equation.
Still, there is a possibility that growth of the industry will be significantly higher in 2023 which will allow the German textile care sector to maintain its leading positions in the EU market in volume terms as well as revenue generated. According to data from Statista and DTV, the current turnover of the industry is estimated at slightly more than €4 billion.
In the meantime, despite the generally complex economic situation in Germany, most of the leading market operators have no plans to revise their plans for expansion in the local market. As a rule, the German market remains a priority for growth for the majority of global companies in the textile care industry. One of which is Jensen Group, which plans further development and expansion of its range in the German market this year.
As Martin Sukop, sales director at Jensen Germany told LCNi, particular focus of attention for the company is on the further automation of the country’s laundry sector, as well as energy savings – gthe latter an issue, which in light of the current events has taken a centre stage.
Sukop comments: “The need for automation and energysaving machinery in Germany’s heavy-duty laundries becomes more and more vital. Jensen expects demand for automation and logistics solutions to increase as high energy costs and staff shortages become a global problem. Tourism and business travel are catching up at the same time. By introducing robotics and AI, Jensen and its partner Inwatec have developed a completely new approach to laundry automation. According to Sukop, German laundries are more and more interested in automating their production processes as some jobs in laundries become harder to recruit for and can be physically difficult to perform.
The company has successfully launched a number of new products in Germany in recent months, one of which is the THOR. Linen system which it says is a revolutionary new method for automatically separating and sorting bed sheets, fitted sheets, towels of all sizes and more. THOR.Linen processes a high number of items up to 1,400 items/hour in mixed production.
At the same time another product is THOR Robot separator, recently debuted at the Clean Show in Atlanta, USA and seen in Europe at EXPODetergo in October, which automatically sorts T-shirts, uniforms, towels and flat linen in the soil sorting area and can be integrated into a Futurail loop.
Representatives from other major global siuppliers spoke about the current complex environment in Germany. Frederick Ahrens, sales director DACH, Alliance Laundry Systems, also said the current energy crisis makes its adjustments to the German business of the company, however, despite this, it continues its active development.
Ahrens comments: “Business at the beginning of the year was calm, then we were faced by the Ukraine conflict, but business is speeding up in every segment nevertheless. The main growth we had was with commercial laundries and barrier washers. Also, the facility management sector is strong this year. We see the energy crisis and rising energy costs acting as a big barrier to investment in laundromats and commercial laundries at the moment. But at the end of the year, we are optimistic to achieve growth versus 2021.”
Ahrens remains cautious regarding the further growth prospects in a volatile market, saying: “We will see how we can solve the challenge of rising energy costs and being profitable as a business owner. As a manufacturer we work hard to deliver solutions so that laundry will also be a worthwhile business in the future. We expect market growth in Germany, although times are insecure for many customers.”
In the meantime, another global player, Kannegiesser, also commented on the volatility in the German market. Michael Harre, head of sales and marketing at Kannegiesser says that in addition to rising energy costs the industry is faced with the shortage of skilled personnel.
Michael Harre comments: “The German textile care market in 2022 was impacted by large fluctuations in laundry volumes, availability of labour, and both skyrocketing energy costs and uncertainties regarding energy supply. At present, demand can hardly be met. Laundries are working within the limits of their capacity. It is extremely difficult to obtain sufficiently qualified personnel. In addition, there is uncertainty about the security of gas supplies.”
According to Harre, the demand from laundries for consultation on possible automation solutions with integrated robotisation is high. He also added that Kannegiesser has developed special concepts in this field to enable existing plants in particular to work more productively through smart use of automation.
Harre continues: “Our partners in the textile care market can implement and integrate these solutions while the laundries are in operation. This allows for efficient workflows in times of a continuing difficult labor market and lays an important foundation for the future development of laundries.
Kannegiesser has also developed various smart concepts for energy management in laundries. This enables us to work out the ideal concept depending on the availability of various primary energy sources. followers, launderers can become independent of resources that may be in short supply. All concepts have one thing in common: significant reduction in energy consumption. This is possible both by applying technologies for single machines and by combining them with laundry-wide resource management systems.
Harre believes the solutions in the field of automation and energy supply open doors for German customers to respond to the challenges of the current situation. They are also a requirement for being at par with the latest developments in terms of productivity and energy efficiency in the future.
Harre expects the level of competition in the German textile care market will continue to be tightened. In this regard, market players must offer new concepts and approaches for doing business in a highly competitive and mature German market.
Harre continues: “Sustainability has become an increasingly important issue for the public in recent years. Escalating energy costs or even the availability of energy have brought this even more into the spotlight. The laundry industry as a prime example of a circular economy will continue to grow in the coming years. The requirement for this, however, is that the companies adapt to the demands of the market. Customers’ very different needs must be taken into account while providing excellent service and reasonable prices. The constraints of energy costs and labour shortage will continue to have their impact. In the future, laundries will therefore have to master a wide variety and at the same time work productively and save resources. We believe that this is only possible through the introduction of automation and robotisation. The textile care industry will succeed by combining high automation, mastering variety and implementing energy efficient operation.
Given the current market trends, companies are taking efforts for the launch of new concepts in the German market, which could be in high demand among the local customers and contribute to the rise of their competitiveness.
For example, the new tuning concept ‘Tuned by Jensen’ addresses the concern of German laundries about the lack of energy supply. Washroom and finishing machinery can be tuned, for example, the software for eligible EXPG ironers can be updated to provide a more gas-efficient way. Tests have shown gas savings of up to 10% under mixed production.
According to the company, another concept, ‘Hygiene Plus’, is a tuning concept for tunnel washers. It is a hygiene package for existing Jensen tunnel washers which solves the problem of bacteria buildup in the double drum. Kellner Laundry in Osterode, Germany, retrofitted its Jensen tunnel washer with the patented UVClean.
Laurence Evrard, Ecolab senior regional marketing manager, Germany, says: “The major challenges for textile rental companies in Germany are labour shortages, especially for hotel laundries that lost labour during the pandemic. The longterm care segment grew significantly the last years and some laundries have specialised in this market segment but currently we don´t see here any further increase.
“Nowadays the laundries are working again at 100% but have difficulty attracting staff. In some regions in the laundry industry is in competition with other more profitable industries.” He also cites the increase of the minimum wage in Germany as of 1 October and chemical costs as factors increasing difficulties going forward which include:
- Difficulty to increase productivity due to labour shortage
- Difficulty to push price increase to their end customers (especially in the healthcare segment)
- Disrupted supply chain, especially for linen (disruption or lower quality).
Evrard believes low temperature washing is the key to lowering costs and says: “In the past nine months, the laundry industry has been challenged with increasing energy costs. What in the past was around 5-8% of the overall laundry cost bill, today, it is three to five times more. We are happy to be able to support our customers in these challenging times by sharing with them our knowledge and rich experience in low-temperature washing.” He adds that the full range of Ecolab laundry chemicals is EU Ecolabel registered. One example is the company’s Performance Industrial. “Its unmatched performance in colour protection, soil removal and 55°C disinfection has made it popular among our major workwear accounts. Meanwhile, OxyGuard40 solution delivers unprecedented whiteness at just 40°C and ensures amazing quality at the lowest operational costs for hotel linen. AdvaCare ULTIMATE is our new development for healthcare linen and it ensures a full disinfection profile at 40°C,” says Evrard