How dark could things get when electricity is scarce?
Interview about STOLL, the KARL MAYER GROUP’s business unit for flat knitting machines, and the current situation
Rising energy costs, supply chain disruptions, skills shortages, lockdowns and a war in the middle of Europe – the problems we are facing now are complex and are pushing many companies to the limits of their resilience. A snap survey conducted by the Federation of German Industries (BDI) in September 2022 shows: 58% of the 600 SMEs surveyed see the price increases for energy and raw materials as a strong challenge, and 34 % even see it as a possible threat to their existence. Delivery difficulties and delays were a severe or existential challenge for about three quarters of the participants in the BDI survey. In view of the significant price increases, around 40% of companies are postponing investments in their ecological and digital transformation.1
What is the situation like now, specifically in textile machinery manufacturing? Do companies in this sector face the same problems? my TEXTILE NEWS editor Ulrike Schlenker investigated these and other questions in an interview with Andreas Schellhammer, President of the KARL MAYER GROUP’s STOLL business unit, who is responsible for the global player’s flat knitting machine business.
US: The high cost of electricity is a concern for businesses worldwide. To what extent has this impacted you at the Reutlingen location? Is this expected to have an impact on the prices of your machines?
AS: Our manufacturing is not particularly energy-intensive, but of course the recent sharp rise in energy costs is an extraordinary burden for us. In this regard, we have to consider not only electricity prices, but also oil and especially gas prices. The procurement costs for certain parts and components have also risen irrationally in some cases, which has resulted in considerable pressure on our manufacturing costs overall. We are working hard to mitigate the effects of these cost explosions, but will still not be able to avoid price adjustments.
US: Let’s stay on the topic of procurement. In spring this year, a large lockdown paralysed the largest container port in Shanghai, and supply chains collapsed worldwide. Since then, the problems with delivery reliability have not improved. How are you dealing with this issue?
AS: Many of these developments were already apparent since the outbreak of the COVID pandemic, so we already took risk precautions in the supply chain some time ago. We are also continuously working on redesigning our assemblies, especially in the electronics sector, in order to take the availability of components into account. As a result, we have largely been able to ensure our ability to deliver so far.
US: In view of the supply chain and logistics problems, many brands are focusing on independence and short distances when it comes to sourcing. Has this change in purchasing strategy also affected your customers? For example, are you seeing locations shift back from Asia to Europe or America?
AS: There are some very exciting initiatives aimed at building up manufacturing close to their markets, but I would not call it a large-scale relocation yet. However, it is already clear that some of our customers’ customers are changing their purchasing priorities and spreading their procurement volume more risk-consciously, which has clearly benefited Turkey, for example, as a nearby textile location.
US: The hot summer this year has again shown us that climate change is already a reality and sustainable business is more important than ever. What solutions do you offer your customers to help them reduce their ecological footprint?
AS: In recent years, we have become dramatically aware of how important it is to use our planet’s resources carefully. This has quickly led to discussions about “sustainability” and, even more quickly, to discussions about energy consumption in our machines. This is of course very important, but I think we should go much further. The old virtues of German mechanical engineering such as “longevity” and “quality” will regain importance again, in my opinion. The most sustainable machine is one that operates very efficiently for as many years as possible. And to this end, it has to be easy to service and maintain and, ideally, also easy to modernise. We help our customers significantly in this respect with our upgrade options.
Flat knitting is also in principle already a very sustainable way of producing textiles. Our customers can produce exactly the 3D textile shapes they need for their products, avoiding waste and loss.
US: In recent years, you have invested extensively in new capacities for the development of these and other innovative textiles: this includes a state-of-the-art development centre in 2020, followed by a new customer centre. The customer centre was just opened in spring this year. What do you offer your customers here, and how has this been received?
AS: We now use our new customer centre intensively as a hub for innovations in the flat knitting sector. This includes training courses and workshops, as well as joint development projects that we work on with customers and partners. The large interest in these topics at the moment shows us how much people have missed personal contact since the start of the COVID pandemic.
US: Thank you for the insightful conversation
Click here for the core results of the BDI snap survey https://bdi.eu/#/artikel/news/lagebild-im-industriellen-mittelstand/
1 BDI: Situation in the industrial SME sector, information, SME policy, survey, 6 September 2022