Page 22 - Hoftex Annual Report 2018 EN
P. 22

Letter to Shareholders Supervisory Board Report
Group Management Report Consolidated Financial Statements Annexes
22
The global economy may for the most part be shaped by governmental policy in the 2019 fiscal year. Global economic growth already began to slow in late 2018. One of the main risks for a further level- ling off in the medium term could be an intensification of the American-Chinese trade dispute. Since we operate a production site in China, higher import duties in the US could have a direct impact on us. Further barriers to trade could also have an effect on our value chain. For instance, a “disordered” Brexit poses a risk to us along with many other companies in the European Union and in Great Britain. Reluctance to make new investments could likewise reduce our order intake from Great Britain. To counteract this risk, the management is keeping a constant eye on the Brexit negotiations and crafting and coordinating appropriate measures. In general, the Hoftex Group’s global orientation and international positioning is an opportunity and offers numerous options for counteracting global economic risks.
The Hoftex Group depends on dynamic markets in a range of industry sectors. In terms of customers, the most important sectors are the automotive industry, the apparel and the household textile industry. In terms of suppliers, the Hoftex Group directly depends on the fibre production industry. A downturn in these industry sectors could pose a risk to the Hoftex Group in general. We are con- tinually adapting our sales and marketing strategy to the current conditions in an attempt to win new markets and customers, counteract the risks mentioned above and further diversify our sales strategy.
  We face powerful competitors in the textile industry worldwide. A further increase in competitive pres- sure, accompanied by rising raw material prices and growing price pressure from customers could have a significant impact on our results of operations and net assets. As a countermeasure, we always strive for close, positive customer relationships and constantly analyse the markets that are relevant to us.
4.2. Risks and opportunities
Digitalisation is another global economic driver that should not be underestimated and is thus also important both in the textile industry and especially for us. Our aim is to remain one step ahead of the rest of the industry with digitalisation initiatives in production, administration and sales. We view this as a crucial, forward-looking opportunity to keep pace with market trends and take on a pioneering role in the industry.
Increasing digitalisation of processes and technologies enables us to improve our quality assurance systems and tools along our entire value chain, which can help reduce the risk of complaints.
Strategic risks and market risks
Our research and development activities span a wide range of products and applications in the world of textiles. Major investments could increase the risk of losses, which in turn could have an impact on our net assets and results of operations. Nevertheless, our research and development team’s inno- vative and creative work presents a tremendous opportunity for the entire group and is absolutely indispensable in maintaining our competitive edge.
Furthermore, close development partnerships with customers and suppliers help us leverage syner- gies and explore opportunities that can extend to the purchasing/procurement and sales teams.
Operating risks and opportunities
Research and development





















































































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