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Adrian Wilson

On the Floor

30th June 2014, Shanghai

After the horse has bolted...

Walking around the recent ITMA Asia + CITME 2014 exhibition in Shanghai – which had a total of 1,600 exhibitors, with  80% of the 100,000 visitors from China itself – it was very evident that the number of European textile machinery manufacturers present has shrunk.

Chinese exhibitors, however, were up by 21% on the previous show two years ago.

One reason for this is that a significant number of European machine builders have now been purchased by the China Hi-Tech Group Corporation (CHTC).

CHTC had total assets of RMB 580 billion in 2013, with 24 domestic subsidiaries and 15 overseas enterprises, in total employing 56,000 people. © Adrian Wilson

In fact, CHTC companies had virtually an entire hall to themselves at this show.

CHTC had total assets of RMB 580 billion in 2013, with 24 domestic subsidiaries and 15 overseas enterprises, in total employing 56,000 people. Founded in 1998 and headquartered in Beijing, it was built on the merger of many Chinese textile machinery companies and organisations previously run by the country’s national Ministry of Textile Industry, including China Textile Machinery (Group), China Texmatech, The Textile Industrial Corporation for Foreign Economic and Technical Cooperation, the China National Chemical Fiber Corporation and The China Silk Industrial Corporation.

Now by far the largest textile machinery company in the world, in 2011, the huge Hong Kong-headquartered Fong’s Group was merged into CHTC.

Following the amalgamation of Fong’s into CHTC, further purchases of European companies have been made. © Adrian Wilson

Fong’s started as a dyeing and finishing machinery manufacturer and its proximity to China proved highly beneficial following the country’s opening and reform policy of 1979. It subsequently made a number of purchases of European dyeing and finishing machinery specialists, including:

  • Switzerland’s Xorella, a manufacturer of steam setting and conditioning equipment for yarns and fabrics.
  • German dyeing machinery maker Then.
  • Goller, the Swiss manufacturer of wet finishing ranges.

Following the amalgamation of Fong’s into CHTC, further purchases of European companies have been made.

During 2011, CHTC purchased the former companies of Oerlikon’s Carding Division to form the Autefa Solutions Group. With three operations in Germany, Austria and Italy, Oerlikon had built up this business on the acquisition of long-established European nonwoven technology companies, including Fehrer in Austria, FOR and Octir in Italy and Autefa itself in Germany.

And in 2012 German finishing technology leader Monforts was acquired, as well as the Swiss dryer technology specialist Strahm, which has been merged with Autefa.

So what’s happening here, exactly?

It looks somewhat like a retraction of China’s trust in private enterprise to run efficiently on its own and something of a return to centralised control, doesn’t it?

During 2011, CHTC purchased the former companies of Oerlikon’s Carding Division to form the Autefa Solutions Group. © Adrian Wilson

Another interesting development, however, is in the field of intellectual property protection.

Europe’s textile machinery builders have complained for decades about the plagiarism of their machines and the organisers of the Shanghai ITMA show these days make firm reassurances that all issues relating to intellectual property will be forcibly protected. Nevertheless, it all seems a little too late for that.

The machines of German warp knitting specialist Karl Mayer, in particular, seem to have been successfully copied down to the smallest detail by at least three major Chinese companies.

Yet in Shanghai, Charles Beauduin, president of CEMATEX, representing European machine builders and the owner of the ITMA brand, spoke of the tremendous efforts made by China in progressing its intellectual protection (IP) laws in the past few years.

The machines of German warp knitting specialist Karl Mayer seem to have been successfully copied down to the smallest detail by at least three major Chinese companies. © Adrian Wilson

And just a few days earlier, at the 1st Asia Disposable Hygiene and Personal Care Products Summit which was also held in Shanghai, Jeff Lindsay, of APP – the world’s largest paper manufacturer and a substantial producer of nonwoven wipes – suggested that China can now teach the West lessons in not only IP, but also sustainable production.

“The perception that China lacks innovation is sad to hear,” he said, “ and the old idea that China steals intellectual property from the West is now actually reversing. Twenty years ago China was issuing virtually no patents and now it’s leading the world.”

APP itself, has set the goal of having filed 1,000 patents by the end of 2014, and Lindsay cited the case of graphene and how it will be developed.

Invented at Manchester in the UK, there are now 50 British patents relating to its use.

And also over 2,000 Chinese patents on how it can be exploited.

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EDITOR'S VIEWPOINT

Editors ViewPoint
As well as there being fewer European machine builders present at ITMA ASIA + CITME, it seemed that there were fewer European members of staff on many stands. This is understandable as European machine builders develop their own Chinese staff in subsidiary companies and agencies.

Comments

  • Adrian Wilson 13th August 2014 11:28AM

    Hi Jeff, Many thanks - when I say 1,000 patents I mean in total by 2014, not just in 2014 alone. Or at least that's what I have in my notes. Is that nor right?

  • Jeff Lindsay 13th August 2014 2:24AM

    Great article, Adrian. Not sure where the number of 1,000 patents for APP came from though - might have been an error in translation when the Chinese cospeaker from APP, was talking about the aggressive patent filings of one of our subsidiaries (note that our patents are usually filed in the name of our subsidiaries, so you won't find many for APP, and most of ours are in Chinese, so free Western search engines probably won't find them at all ). I think the number 1,000 for 2014 doesn't apply to his company nor to us as whole.

  • Adrian Wilson 21st July 2014 21:56PM

    Yep, I think you're absolutely right Ian. But lessons are hardly being learned. With things like graphene it just seems like a long history repeating itself...

  • Ian Smith 17th July 2014 16:52PM

    The lack of European companies at ITMA Asia, is probably more to do with the fact that the market in China is so price sensitive that those companies who remain cannot compete with local machinery companies. The price difference is so large, in the next ten years the remaining signifant European companies will be bought by Chinese and Indian Organisations.

  • Ravishankar 2nd July 2014 12:56PM

    Your analysis is very right. Chinese companies have successfully made very complicated machines like warp knitting which was monopoly of european manufacturers . As demand is there in their country, it is but natural for them to develop machines rather than depending on the s=west. Next 10 years will show how much europeans can compete in this field. I wish to congratulate the chinese on their achievements.

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