Rieter Spun Yarn Systems with good perspectives
According to a report of Swiss helvea (equity research) and its visit to Rieter, and a discussion session with Rieter Chairman/CEO Erwin Stoller and CFO Joris Gröflin, the company reports a continuing uptrend in sales since last fall and it will continue also into the second quarter of the ongoing year. However it faces difficulties in the Indian market because of the persisting distortion of the cotton market and the attitude of the former joint venture partner to sell textile machinery at ridiculous low prices
The general economic worldwide trends are still noticeable, and China as a market is performing similar to 2012, however Rieter is gaining market share, especially with the new automated version of the rotor spinning machine.
In India the former Rieter joint venture partner, Lakshmi Machine Works (LMW), is very aggressive in its home market by offering textile machinery at very low prices and its management does not want to refrain from these actions in order to keep its manufacturing capacities at high level. However Rieter’s market position has enhanced and several projects are in negotiations, but the crux is that financing is still difficult to obtain.
Rieter uses the favourable currency situation – weaker Swiss Franc – to diversify its markets. Stronger demand is reported from Indonesia, Vietnam, South Korea and Thailand, as well as from the USA. Turkey is still going strong, benefitting from the governments incentive programme, particularly in the south/easter part. Turkey offers also the strongest outlook for Rieter because of the strong prerspective for compact spinning. TextileFuture has reported in detail before. Let’s hope that the actual political uprises do not have a negative impact in Turkey.
Rieter Spun Yarn Systems will complete its expansion by investment in China and India by the end of this year and this will further influence favourably the cost situation in the future.