We have been represented in China for more than 15 years and are the most important international manufacturer there for textile machinery and installations in all market segments of staple fibre processing, filament and nonwovens production – with a total of 2,500 employees on-site producing machines for the local market. As from 2008, we will be producing our texturing machines entirely in Suzhou, our most modern production site throughout the world. There, the plans for expanding the production area by more than 30,000 m² are already in full swing. Upon completion of these measures, we would dispose of a total of more than 100,000 m² of production area in Suzhou alone. This is how we strengthen our leading position also in the future. Our development know-how, however, will continue to come from Europe, mainly from Germany and Switzerland, and will remain there. Also in India, we will become more involved in future. We will have set the strategies for this by the end of the year.

We distinguish ourselves in particular through already being active in all areas over the entire textile value added chain of yarn, filament and nonwovens production.

All other areas are monitored by us. However, there are no concrete activities.

In the first half of 2007, Oerlikon Textile recorded an extraordinarily good result with a high two-digit growth in turnover and even a triple-digit growth in earnings. The order situation, too, is very promising. For exact figures, please refer to our published semi-annual report. In this period, the textile segment is one of the strongest growth motors of the entire Oerlikon Group. For the second half year of 2007, Oerlikon Textile is expecting a continuation of the strong demand, in particular in the staple yarn sector. In the medium to long-term, a stabilization of the market at a high level is to be expected.

For Oerlikon, the takeover of Saurer AG was the highlight of the financial year 2006. Through this, Oerlikon has trebled the number of its employees to 19,000 worldwide and has reached a dimension which opens up great potential for the future. The integration into the Oerlikon Group and the transformation into the segment Oerlikon Textile went smoothly and, above all, quickly. This also made appear the already expected synergies, which are not only reflected in our results. As a global player, Saurer AG fits superbly into Oerlikon’s portfolio and is in line with its corporate orientation. Synergy effects occur on several levels, such as in technology or in joint purchasing. Oerlikon’s expertise in surface coating for tools and components will directly benefit the further development of former Saurer products such as textile machines and gears. Conversely, Saurer’s core areas of competence in the field of mechatronic assemblies, such as magnetic bearing assemblies, are of interest to Oerlikon.

Moreover, we benefit from advantages as regards tapping new markets. Oerlikon has good access to the Russian Market which is also a benefit for Oerlikon Textile. This region is one of the textile markets of the future. On the other hand, Oerlikon is benefiting from the fact that Saurer is well positioned above all in China, India and Turkey - markets in which Oerlikon has done little business hitherto.

Social and ecological responsibility is one of the pillars of our group's culture which is supported by all our employees. For the promotion of sustained and socially responsible development, Oerlikon has signed the UN Global Compact Initiative established by the former secretary general of the United Nations, Kofi Anan. Simultaneously, the group is establishing an extensive sustainability reporting in order to also be able to account for the company’s ecological and social dimensions and progress. Exactly in the textile sector, the ecological perspective is a necessity. An example for this: Oerlikon Textile develops plants, machines and components which conserve resources and which notably save energy. For more than three years, this is achieved through the energy efficiency program ‘e-save’. This label is only awarded if the energy balance of new machines and components is significantly lower than a comparable competitor's model or than previous machine generations. Depending on the textile production process, machines labelled with ‘e-save’ save at least ten per cent energy, some up to 40 per cent.

It is our core task to make our customers more successful through innovations and advanced technology. We achieve this through a systematic knowledge transfer between neighbouring technology fields as well as a great effort in research and development: Oerlikon Textile works closely with its customers and invests around 110 mio Swiss Francs (CHF), equivalent to roughly six per cent of its turnover, in research and development. Over 600 scientists work solely on turning innovative ideas into productive applications and establishing these quickly in the market. Customers can test out product attributes on manual and automatic systems in special technology centres around the world, as well as developing new applications. Oerlikon Textile owns more than 4,400 valid patents, 330 of these are only from the year 2006.