Interview with Mr Luc Tack

The strong increase in turnover was realized in both the Weaving Machines division and the Industries division. The Weaving Machines division experienced a strong year in 2010 following the quicker than expected recovery of the weaving machine market, which was mainly driven by a strong demand in Asia. Particularly in China, the market for locally produced machines started to recover at the end of 2009. From the second quarter, exporting textile companies were also running at a cruising speed. This resulted in a recovery in the demand for imported weaving machines produced in Ypres. In the second half of 2010, the market remained good, which was also due to the favorable exchange rate of the Euro. In the fourth quarter of 2010, the Chinese demand for weaving machines slowed down; one of the reasons being the continuously increasing price of cotton. However, this effect was compensated for by an increasing demand from other regions in the world. Sales of spare parts and weaving accessories also profited from a favorable market in 2010.

The Industries division also showed a strong external growth in 2010. Proferro, our foundry, successfully implemented a new molding line, with larger molds and an automated cast iron transport. As a result of the marketing campaign for the new molding line and a clearer marketing presence, Proferro managed to reach new sectors and customers. PsiControl Mechatronics , which produces electronic and electro-mechanical components, mainly showed growth due to an improving demand for electronic products and assemblies. This all resulted in a rise in activities in various sectors, such as compressors, earthmoving equipment, textile machines and HVAC (heating, ventilation & air conditioning) with existing and new customers.

As in all industries also in textiles, there are 3 major headaches: the raw material cost, the energy cost and the cost and availability of labor. Therefore Picanol focuses in all its developments on these items, so that their customers can get the most out of their material, their energy and their talent. Add to that time and market and they are perfectly armed to cope with the ever-changing market conditions.

We expect that Asia will continue to be the largest market for several years to come, not only driven by an increasing export, but mainly because of a steady growth of the local demand for textile products due to the rising purchasing power.

(Contd)

The Picanol Group aims to be present in all important markets at the service of customers. For this purpose the Group has a worldwide sales network that is continually adapted to the changing markets and the specific needs of customers. Through its network of highly trained, specialized and results-oriented employees and agents, the Picanol Group aims to create value for its customers all over the world.

In the fourth quarter of 2010, the Chinese demand for weaving machines slowed down; one of the reasons being the continuously increasing price of cotton and the volatile exchange rates. However, in the past ten years more than half of all textile machines (not just for weaving) produced in the world have been sold into China. So we expect that Asia will continue to be the largest market for several years to come, not only driven by an increasing export, but mainly because of a steady growth of the local demand for textile products due to the rising purchasing power.

Indeed this is very important for capital investment decision in India where cost of money is very high compared to other Asian and European countries. Also weaving is highly capital intense and without TUFs, customers would not go for major investment. It would also put Indian textile manufacturers with a global disadvantage, on their cost of input. Also this scheme would give better opportunity for the weavers to manage the operation of their unit efficiently with lower working capital. This is the time to replace old conventional weaving machines with latest technology weaving machines, which are more energy efficient, and yielding higher productivity.

As for Picanol it is a welcome decision to revive TUFS as now more and more customers would go for new green field project and also for an upgrade of existing weaving plants. Some of the customers who suspended their project in the recent past due to TUFS withdrawal would go ahead and complete their modernization program. Not only for big corporates, but small and medium scale weavers would also benefit in considerable way as for those market segment 5% difference is significant to their costing – an additional benefit apart from the technical textile industry that is already getting a 10% capital subsidy.

Picanol has always been a frontrunner in innovation when it comes to textile machinery. It has played a pioneering role worldwide in the development and production of weaving systems for 75 years now, and is a leading manufacturer of weaving machines for technical textiles. In 1971, the Picanol Group introduced the very first electronically controlled weaving machine in the world. It was also the first weaving machine manufacturer in the world to obtain ISO 9001 certification. Thanks to its policy of innovation, the Picanol Group has managed to surprise the market time and time again with new, high-tech weaving machines, from the Omnium in 1936 to its latest flagship models like the OMNIplus 800 and the OptiMax, thus reinforcing its position among the world leaders.

R&D and product innovation continue to play a central role in the further development of the high-tech activities. Our huge R&D efforts are aimed not just at development and production of the most advanced weaving machines and related products and services, but also at achieving the most profitable weaving process in the world. In this way, the Picanol Group is able to offer its customers innovative solutions for raising the efficiency and productivity of their weaving process.

Companies venturing into new markets particularly appreciate the excellent performance for their upcoming investments when choosing Picanol. As for services, our local staff are accustomed to new developments, so that consulting and installation of machines for more demanding fabrics does not pose any difficulties. As a frontrunner in innovation when it comes to textile machinery, Picanol dedicates 30% of its product management capacity to technical textiles. An equal part of the R&D effort is devoted to novelty applications. New developments that serve real customer requirements can be brought to market very rapidly. Picanol always pays attention to user-friendliness and modularity. So customers are not left floundering when market requirements change. Both major platforms – OMNIplus 800 airjet and OptiMax flexible rapier – are designed for the high-end market segments, such as technical textiles. With Picanol, you start to win.

I would say: come and see us at ITMA Barcelona, hall 3 booth C 140!

Thanks!

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