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Terrot’s managing director Thomas Archner speaks to John Mowbray, Editor of Knitting International magazine, about the company’s plans to emerge from administration and how it will protect it’s core markets.
Thomas Archner, the current managing director of Terrot is in a good mood. Since taking over the running of the company he has streamlined manufacturing, boosted technical development, and made sure that all its costs are funded directly from the current turnover. Terrot is viable. And these days it’s vibrant. Visitors to Terrot’s stand at ITMA will have seen a new look company, with new look machines, to signify a new message: Terrot is confident about its future.
Archner explained, “after we entered administration in 2001 we cut our machine capacity by 35% and relocated all machine production to our site in Chemnitz, eastern Germany. And because this reduced our labour costs we are not only financially stable, but we have major established markets, and a major established brand in our favour.”
Terrot has been building large diameter circular knitting machines since 1862 and it claims that, ‘one in six large diameter circular knitting machines worldwide started life on Terrot’s production lines’. This long-established record coupled with new technical innovation and financial prudence is at the very heart of its future strategy. The company will also continue to present Terrot’s latest technology at the leading machinery shows and it will also take part in textile symposiums in regions such as Russia and Vietnam.
Apart from technical innovation, Terrot is keen to stress that one of its biggest strengths is its existing customer base, and the fact that it does actually supply a growth industry. “The world’s growing population will always need to be clothed,” said Archner. The challenge for Terrot, however, is to retain its market share of the knitting machine market in the growing manufacturing regions of an ever changing textile world. Archner confirmed to Knitting International that despite regional shifts, and a migration of production to Asia, Terrot has no plans to move its manufacturing overseas. “Machine production will remain here in Germany,” he said. “Yes, we will open a new service centre in China. But that’s because we need this level of support in our key markets to provide the help with technical sales, spare parts and also fabric development.”
“Selling just machines was the business 20 years ago”, he continued, “but now we have to offer a greater fabric design and after-sales service to compete effectively. For example, we work very closely with five of Europe’s leading knitters on fabric development.” Terrot produced 750 machines in 2003 and this year expects to build 800 which will return it to the same production levels as 2002. Terrot’s full machine capacity nowadays is around 900 machines. Around 70 per cent of Terrot production is now going to Asia, 20 per cent to Turkey, and 10 per cent to Europe and the rest of the world.
China accounts for a third of all Terrot’s machine sales. “Around 60 per cent of machines we export to China are single jersey, mainly a mix of mechanical and electronic equipment. Other Asian countries where Terrot is strong include India, Pakistan, Bangladesh and Thailand.” Terrot’s main markets in Europe are Germany , Italy, France and Spain. The trend among its European customers is for electronic jacquard machines, stripers, spacer fabric technology and a new demand for very fine gauge machines (up to 46G Single Jersey and 32G Double Jersey).
Some of our customers are also very strong on the automotive front and we have customers in Germany, France and Thailand knitting different types of fabrics for automotive end-uses. For example, the headliner material in the Mercedes A-class was produced on a Terrot APL2.
Terrot notes that sales are strong in China and India. The company’s two biggest markets. “We have seen that much of the new activity in India is being driven by the abolition of quotas. One new Terrot customer in India was actually a fabric finisher. But decided to knit his own fabric because of the quota situation. This potential for growth has been noted by potential investors in Terrot who realise that our core markets are set to benefit greatly from quota removal in 2005.”
Interestingly, Archner also believes that 2005 will not have a massive impact on European knitters - which has been widely predicted. This is because he thinks this has already happened. “The European circular fabric knitters which are left have specialised already. In general, our customers in this region produce very high quality and technically demanding synthetic fabrics for sportswear, lingerie, automotives and other technical applications. I don’t think that these short runs of high-end products can be serviced from Asia. In my opinion, these knitters will not be squeezed too much further.”
“The European knitters also have strong development relationships with fibre and yarn processors and suppliers in the region. They can respond quickly to what’s happening in the large local market. And if there are changes, it certainly won’t happen overnight,” he concluded.
Caption: Thomas Archner, Managing Director of Terrot: “we can now fund the business from our cash-flow.”
www.knittinginternational.com
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