| fibre2fashion: |
The elimination of global textile quotas has drawn reactions from different sections of the textile industry. What is your impression of the state of the global textile machinery industry? |
Mr. Reuter
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China made very heavy investments in textile industry expansion ahead of the new WTO quota arrangements that came into effect at the beginning of 2005. Investments in textile machinery have slowed in China in the first half of 2005, not least because of the uncertainties due to the reintroduction of quotas. Nevertheless, China will continue to expand its dominant role in the textile industry, while India, Turkey, Pakistan and other countries in Asia and South America will also be very important markets for Rieter. |
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| fibre2fashion:
| As a maker of integrated systems for manufacturing yarns from natural and man-made fibres for all applications, could you please enumerate the challenges facing Rieter in the free trade era? |
| Mr. Reuter |
The free trade era has made the textile industry's move to Asia occur in a much shorter time than expected. In order to be close to our customers and to support them in the traditional Rieter style, we are on the way to expanding our activities further in Asia, be that China or India. At the same time we benefit as an exporter from lower taxes and duties.
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| fibre2fashion:
| What specific strategies has your company adopted to meet these challenges? |
| Mr. Reuter |
We are expanding our present Chinese production site in Changzhou. We are expanding our sales and service network and also increasing our product offerings, specifically for Chinese customers. In India, on the other hand, Rieter will enlarge its production capacity, which became possible since acquiring Suessen.
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| fibre2fashion:
| Currently, a trend for buying second-hand or used machinery is very much in vogue, specially in Asian countries. How big is the market for used machinery and how can the organised sector companies like yours reverse this trend? |
| Mr. Reuter |
There has always been a market for second-hand machinery, but it has increased lately due to the lower utilisation of production capacity in Europe and North America. Our answer is to offer innovative machines at competitive prices. At the same time we are also supplying spare parts for the used machines and helping to update them (retrofit).
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| fibre2fashion: |
Do you expect textile machinery manufacturing companies to play a dominant role on the basis of price or quality, and to what extent? |
Mr. Reuter
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Rieter is a quality brand for machines and services. Customers are ready to pay a certain premium that is justified by the better return. Therefore, we also have to compete on cost or better performance/cost of our machines. Let's not forget innovation: even in the traditional textile business innovation is possible and can change the industry. |
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| fibre2fashion:
| Turning to the non-wovens market, how is this particular business developing? |
| Mr. Reuter |
The non-wovens business is so far only a niche market for Rieter compared with the dominant spun yarn systems business, but the expansion of the non-wovens business is making progress. Rieter concluded several sales of Spunbond and Spunlace lines in the first half of 2005. The non-wovens sector has considerable potential for the future and Rieter wants to play an active role.
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