The Hindu Business Line : European textile machinery makers see dwindling demand from China

ASIA continues to be the top export destination for European textile machinery manufacturers. However, demand from China, which was until 2003, its top textile machinery importer, is dwindling drastically.

According to Mr Ragnar Strauch, Director, Export Marketing, Association for Textile Machinery, Germany, "There are strong signs now that the Chinese market has peaked and that orders for textile machinery are going down." This was in part due to the aggressive expansion in capacity a few years ago, which spurred growth to double digits. Germany is one of the leading textile machinery exporters to India.

He said, "In the first half of 2003, German manufacturers saw over 30 per cent growth in textile machinery exports to China. However, in the first half of 2004, this has fallen to a little over 11 per cent growth in exports."

He added that the situation was worse for Italian manufacturers who experienced excellent growth in exports to China in earlier years, but are now witnessing lower, and in some cases negative growth in their business.

In the first six months of 2004, the overall value of German textile machinery exports touched 1.8 billion euro, lower by 4.6 per cent than the previous yearIncrease in exports was reported by weaving machinery makers (17.5 per cent) and washing, bleaching, dyeing and finishing machinery (11.5 per cent). However, spinning machinery exports and knitting and hosiery machinery exports dropped by 20.1 per cent and 10.2 per cent, respectively.

However, according to Germany's Textile Machinery Association data, China is still the most important export market accounting for 518 million euro, followed by Turkey (194 million euro) and the US (136 million euro).

China is also witnessing frenzied consumer activity and this had led to an energy crunch. Some factories, Mr Strauch said, were only working at night or about three to four days a week because of the country's energy woes.

He added that while the Chinese may have over invested in capacity, the understanding was that Indian manufacturers were moving cautiously, investing only after they have studied the existing market situation.