Page 15 - Hoftex Annual Report 2018 EN

locations. Nevertheless, the slight dip in the projected sales volumes enabled TENOWO to free up additional production capacities for development and process optimisation. The Chinese location in Huzhou managed to outperform the previous year’s and the projected figures.
The traditional interlinings range, which comprises all apparel applications, developed according to plan, seeing its sales rise over the previous year. This market has been in decline in Europe for years but TENOWO continues to enjoy success along with solid sales.
The industrial market segment continued its upward trend. All other divisions also saw growth, not only compared to the previous year’s figures but also above unit sales and sales targets. Industrial with its various applications, such as filtration, construction and medical, has now become another important segment for TENOWO. To further strengthen this range the TENOWO Group acquired Italian nonwoven manufacturer Resintex Industriale S.r.l., located in Milan. Resintex Industriale S.r.l. specialises in manufacturing and selling nonwovens for the apparel and medical segments. TENOWO wishes to leverage the acquisition of Resintex Industriale S.r.l. to optimally blend the technical and developmental expertise of both companies and further develop and market Resintex’s existing product portfolio.
As part of its future strategic focus TENOWO signed an agreement on 20 April 2018 confirming the sale of its 49 % share in Supreme Nonwoven Industries Pvt. Ltd. to the Indian partners. The TENOWO Group’s decision to acquire a share of Supreme in 2006 was a strategic one. The investment in our own production facility in China in 2014 and various investments in the expansion of our facilities in the US location have put TENOWO on a successful path to international growth ever since. As part of TENOWO’s division strategy, a decision was made to place strategic focus on the European, Asian and American markets and to sell interests in Supreme to the existing fellow partners.
Letter to Shareholders Supervisory Board Report Group Management Report Consolidated Financial Statements Annexes
Moreover, TENOWO also made investments in its existing production locations in Germany and the US and expanded its capacities in stitch-bonding technology.
The HOFTEX division’s sales during the fiscal year just ended were EUR 22.7 million (previous year: EUR 27.3 million). The decline of 16 % in total resulted from the sales lost as part of the Hoftex Max Süss GmbH asset deal and the decline in sales and unit sales in the two remaining segments, spinning and dyeing. Alongside the immense price pressure that has been building up over the years due to products HOFTEX must compete with from Turkey and Asia, HOFTEX also saw a decrease in demand from various customers in the apparel and decorative fabrics segments. In addition, fluctua- tions in demand expressed in irregular call-off order cycles with the maximum possible freedom for customers, presented a major challenge to production, engineering and development, which had a negative impact on efficiency and efficacy. The lack of qualified personnel in production in the spinning mill and dyeing plant only exacerbated the situation. The HOFTEX division was unable to meet its sales and earnings targets in 2018 as overall conditions remained challenging.
Consumers remained reluctant even in the second half of 2018, to the detriment of the NEUTEX division, which produces and supplies decorative fabrics, internal sun protection and technical fabrics. NEUTEX’s total sales were EUR 15.2 million (prior year: EUR 16.8 million). The entire house- hold textile market was unable to buck the downward trend despite the continued construction boom in Germany, and this is also reflected in the industry’s figures. NEUTEX also saw a decline in domes- tic sales in the various segments in 2018. NEUTEX has increasingly focused its sales strategy on international markets for years now. While the NEUTEX division was able to further expand its market share in Western Europe and the US, Russian sales have been in a steady decline for years due to the political situation there and its impact on the Russian economy and consumer behaviour. The cost-containing measures and structural adjustments had a positive impact on the cost side, thereby improving the results of operations compared to the year prior despite the downturn in sales.
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