The Rupp Report: Itema Results – More Than A Turnaround

A few weeks ago, the Italy-based Itema Group, in its own words “the world’s largest privately held provider of advanced weaving solutions, including weaving machines, spare parts and integrated services,” announced financial results for the full year 2014. Itema said: “Thanks to the satisfactory results in volumes, prices in line with expectations, as well as the continuing and relentless actions to reduce variable and fixed costs, the consolidated profit before taxes from operations significantly exceeded expectations, up 20 percent on a year-on-year basis.”
Well, after a time of troubled water, not only for Itema, but for the whole industry, it was time to take a closer look at Italy. The Rupp Report recently spoke to Carlo Rogora, CEO, Itema. And, as he said when he started his job in Colzate, there was a lot to do. And it seems he did a lot!
Positive Balance Sheet
The financial results press release said: “Following from the +12 percent increase in volumes of machine sales in the first half of 2014, the Group closed the year with sales +10 percent referring to European production and a substantial confirmation of previous year volumes for the Chinese Subsidiary.” According to Carlo Rogora the company grew by some 60 percent in the past two years in a market that declined, according to Itema’s estimates, by some 30 percent over the same period.
RR: What are the reasons for this success?
Carlo Rogora: You have to know your market well. We monitor the market very careful with our global, I may call it, intelligence team. And so we know the figures quite well, even country by country. This is very important for us to be ready and react flexible to any market change.
RR: Mr. Rogora, you call Itema “the only major weaving machine manufacturer to grow in a global weaving machine market recession.” Why is that?
Rogora: Well, there are a few reasons for that: First of all, our new model in the market; then the presence and commitment of our sales force, and, as I mentioned before, our extreme flexibility in production. You have to give the market what the market needs and when it wants it.
Short Production Times
RR: How did you meet market demands?
Rogora: In the past three years we shortened the production and throughput time from 6 weeks down to 4 weeks. If you want to be successful in the markets you have to be fast.
RR: You write in your annual results, “We are on the right path with renewed confidence, stronger-than-ever company set-up and highest acclaimed product portfolio.” Is this the essence of what you said just before?
Rogora: You may say so. In the last three years, not one single stone was left upon another. We x-rayed everything to improve our performance. Today we have every tool to do it right first time from a technological point of view and from a commercial end. As far as I know, we are the only weaving machine producer to offer two years of guarantee for every new machine.
RR: This needs a lot of research and development. How is your R&D organized?
Rogora: You are right; and it needs a lot of attention. We have two departments in our R&D. First of all our product development: 40 engineers are constantly working to improve the existing models by checking every single detail of the machines. Then we have the division that we call “research and innovation.” Fifteen people are working outside our premises in the building of the famous “red one kilometer” along the motorway from Milano to Bergamo. Their single job is to develop the weaving machine of the future.
India: A Growing Market
India is still some kind of a “spinning market” and not a weaving country, due to more than 50 million hand looms. Itema writes that its “operations in the Indian Subcontinent delivered the biggest comeback with a turnaround year and +100 percent year-on-year growth in volumes just from India alone, where Itema has developed over the years a comprehensive sales and after-sales service organization operating from its own offices cities.”
RR: India is still the kind of a “spinning market” and not a weaving country, due to still some estimated 50 million hand looms, the so-called 100 dollar looms from the past. Why are you so successful in this difficult market in such a short time?
Rogora: Yes, that is true. We really started from scratch. We took a ticket to participate in this difficult and traditional market and reorganized the whole local team. However, last year, we registered a period of unique growth, reaching remarkable results in terms of number of machines installed thanks to our two versions of the very successful A9500 airjet machine with the models A9500e, the basic machine and the A9500p, the top model. This particular model is very well accepted, and far as we know, it can handle much heavier fabrics than any other weaving machine.
Global Sales
RR: The press release says: “Itema once again increased its geographic reach with highest-ever number of countries in which the Company sold its weaving machinery.” Who is on the top list of countries?
Rogora: We sell to more than 50 countries around the world; the top list is, of course, still led by China, followed by India, Turkey and Italy. Yes, Italy!
RR: You already mentioned the start of lean manufacturing across Itema manufacturing and assembly lines two years ago. Where are you today with the implementation of the program?
Rogora: I’m very happy with the results. We increased the efficiency of the workforce by 30 percent with a remarkable change of the attitude of our people. Along with this change goes a tremendous increase of the quality; and what is very interesting for our finance department, a reduction of our inventory. Believe it or not, but it works. All this is an ongoing process and next year we can start a second assembly line with the same people.
RR: Every manufacturer is writing nice stories about his machines. You say that your products “offer features for advanced weaving machines, which constantly receive accolades from the growing ranks of customers.” Why you think this is true?
Rogora: You know, our target is to fulfill the dreams of your customers, and, as mentioned before, we never say no, we are committed and are working hard to build the ultimate weaving machine.”
RR: Itema claims that its rapier weaving machine R9500 “is the most innovative rapier loom on the global market and it represents half of Itema’s revenues from weaving machines. The annual results say, “the R9500 attained the status of global best-seller.” What is the background that leads you to call the R9500 a “global bestseller”?
Rogora: Its reliability and performance, as well as the capability to weave virtually every type of fabric with, I can say, a perfect quality. The flexible rapiers and an optimized shed geometry further increased the versatility of the R9500, making it a success. As I already mentioned regarding India, the A9500 airjet weaving machine is doing very well too. Just to name the cam sley drive coupled with the optimized shed geometry, which guarantees top flexibility to weave a wider range of fabrics.
The Future
RR: Itema closed 2014 with the highest backorder for the last five years. However, how do you see the near future of the weaving market in general, and Itema’s future in particular?
Rogora: That’s a difficult question. The year 2015 has already changed some times. The first two months were a disaster, and then it recovered. Now we’re back on track but I’m sure, we will have a drop later this year also due to the ITMA 2015. However, it will probably be the same like 2014.
It looks like that Itema did its homework and maintained its positive trends for the second year in a row after 2013 and 2014. It seems that there is more than just a turnaround in the air.

April 14, 2015