ACIMIT: Growth Will Come From Asia
The Association of Italian Textile Machinery Manufacturers (ACIMIT) recently released preliminary 2004 numbers, which indicate the Italian textile machinery industry saw a drop of 5 percent to 3,017 million euros in production activity last year. ACIMIT cites reduced deliveries as the reason for the drop.“This situation is the result of various negative factors (such as the stagnation in the domestic market and in other important textile markets, the considerable revaluation of the euro in terms of the U.S. dollar and price increases for raw materials) that have had a serious effect on the accounts of textile machinery companies,”Alberto M. Sacchi,ACIMIT chairman, said.Signs that appeared just after last summer of a slight recovery in certain downstream sectors proved to be false, resulting in a drop of 35 percent in domestic demand for machines between 2002 and 2004.ACIMIT also attributed this negative trend to European market stagnation and continued upward revaluation of the euro.“We are undergoing a serious restructuring,”Sacchi said,“in which company size growth, internationalization of the company activity and systematic innovation are now the indispensable competitive tools for strengthening Italian textile machinery companies.”Despite a drop of 4 percent to 2,293 million euros,ACIMIT says exports are still the largest area of production activity for the Italian textile machinery sector, making up more than 75 percent of company turnover.Asia continued to dominate exports of Italian textile machinery in 2004 and, according to the association, looks to be the best hope for continued growth in 2005 and beyond. China accounted for 17 percent of total exports, or 357 million euros. Exports to India also were up 17 percent compared to 2003, while exports to Iran and Pakistan rose by more than 75 percent and 57 percent, respectively. Turkey, ranking second overall, remains a strong export market.Exports to Eastern European countries such as Poland also were strong, as were sales to countries such as Syria and Egypt in the Mediterranean region.In an effort to compensate for a drop in sales to the United States, Italian textile machinery producers focused on South America. Brazil proved a particularly receptive market for machinery exports.In presenting its forecast for activity in the coming year,ACIMIT said,“Any slowdown in the world economy will inevitably also have a negative effect on producers of capital goods, especially if this slowdown also affects China, as forecast by certain important economic institutes. In the textile sector, it appears that the end of the Multifiber Agreement as of January 2005 will lead to scenarios that have still not been clearly defined.The end of the quota system established by this agreement could have serious repercussions on the growth dynamics within various textile industries. The beneficiaries of this new situation … will again be the big Asian sector players, China and India, to the detriment not only of the more developed industries, but also of the Asian countries that do not have the strength in numbers that China and India have. There is no doubt that there will be demand for the machinery, which can increase the quality levels of the finished products. The demand will come from both countries, which want to exploit the strong positions acquired, and countries [that] are not prepared to lose too much ground in the global challenge under way in the textile/clothing industry.”Based on these forecasts, the association believes international demand will be the saving grace of the Italian textile machinery sector, and much of that demand will come from Asia. It also does not rule out demand from other countries that may benefit from recently enacted or future free trade agreements.
Editor’s Note: See also Financial Data for specific numbers provided by ACIMIT.
ACIMIT: Growth Will Come From Asia