The segment, which comprises 43% of Oerlikon Group’s business, delivered an overall good performance in 2019 despite the contraction in global manufacturing. Looking at the quarterly development, a high level of order intake (> CHF 200 million) has been sustained for nine consecutive quarters. Year-over-year, order intake decreased by 3.0% to CHF 1 122 million compared to CHF 1 157 million in 2018 due to the record level of orders in 2018. Segment sales increased by 0.7% to CHF 1 106 million, compared to CHF 1 098 million in 2018. The increase in sales was mainly attributed to the higher demand in filament equipment and systems, particularly in China, which compensated for the decline in carpet yarn and staple fibers equipment. The nonwoven business, under the newly launched Oerlikon Nonwoven brand, noted healthy interest with initial successes in sales in 2019.
The segment managed to sustain its double-digit profitability. EBITDA was CHF 144 million, or 13.0% of sales. Due to a number of higher-margin projects, coupled with disciplined cost management, the segment saw higher profit margins in the first half of the year. During the second half of the year, a number of systems that came from the prior downcycle period were delivered and recognized, impacting the 2019 EBITDA margin. EBIT for 2019 was CHF 117 million (2018: CHF 106 million) or 10.6% of sales (2018: 9.6%).
Development in Markets
In 2019, the world fiber market experienced slower growth at 1% to about 106 million tons of fiber production due to weaker economic climate. The manmade fibers market continued its 10-year expansion, while the natural fibers market softened. The manmade fibers market today comprises 63% of the global market and is a steadily growing market driven by increase in population and higher demand for clothing and industrial applications, which presents ongoing opportunities for Oerlikon’s manmade fibers technologies and services.
Textile Applications (Filament Spinning and Texturing)
In 2019, the filament equipment business maintained strong top-line sales, driven mainly by healthy demand in China. As customers act to secure leadership in the tightening Chinese filament market, a high level of order intake was realized, resulting in a strong project pipeline with delivery reaching into 2022.
For filament spinning customers, Oerlikon Barmag presented the latest member of its WINGS family FDY PA6 (fully drawn yarn polyamide). These winders are based on a new 24-end winding concept, making an efficient production of FDY in the challenging polyamide 6 process a reality. A large technical textile manufacturer in China was convinced of this innovative solution and the installation was completed in 2019. The segment also successfully launched another innovation – ACW WINGS, opening up a new market segment for upgrades of installed machine. In the first expansion phase, 96 positions were installed, which produced AA-quality yarn at a full package rate of 98% and a breakage rate of only 0.5 per ton. Further 88 positions were delivered at the end of 2019.
The texturing equipment business also developed well in 2019, supported by product launches and increased service business. At ITMA, Oerlikon Barmag unveiled the new eAFK Evo texturing machine with its active cooling technology. Satisfied by the benefits of the system, UNIFI Manufacturing, Inc. collaborated with Oerlikon Barmag to develop a specially designed eAFK Evo pilot machine that can manufacture various Unifiber virgin and REPREVE®-branded recycled polyester yarns at considerably higher texturing speeds, while delivering consistently high-quality yarn and can enable innovative performance yarns.
Special Filament (Carpet and Industrial Yarn; Extruders)
Following a high level of orders and sales for carpet yarn systems over the past few years, the market was calmer in 2019, particularly in the U.S. and Turkey, which are the two key markets for carpet yarn production.
In 2019, Oerlikon Neumag launched BCF S8 Mono- and Tricolor in 2019. The Tricolor solution allows the production of more than 200 000 different color shades, superior spinning speed, 99% system efficiency and potential energy savings of up to 5%.
Plant Engineering (Continuous Polymerization, Staple Fibers and Nonwovens)
The Oerlikon Nonwoven brand was introduced at the beginning of 2019 and initial successes have already been recorded. Among others, a deal with a renowned European meltblown specialist was closed for a system that will be deployed to manufacture nonwovens for applications in the filtration and wipes sector. The commercial production launch is scheduled in the first half of 2020. High interest was also registered for plant engineering and continuous polymer projects, while staple fibers saw a decline in demand in 2019 due to challenging market conditions.
Digital and Sustainable Technologies
In Germany, Oerlikon completed the integration of former AC Automation (now called Oerlikon Barmag Automation). This integration marks a milestone in Oerlikon’s ongoing quest to offer innovative, fully automated and digitally networked Industry 4.0 solutions for textile and packaging customers in the manmade fiber industry. To drive this goal forward, Oerlikon has intensively developed its digitization solutions, including in the area of IT infrastructure for large-scale plants and has successfully installed its first smart factory solutions, including data center in a box, on the market.
Working with its joint venture partner, BBEngineering, Oerlikon Barmag presented an in-house spinning plant recycling solution called VacuFil, which enables customers to reuse process material waste to manufacture high quality yarns. The segment is currently evaluating possibilities for the mechanical or chemical processing of textiles for reuse of textile raw materials.
Development in Regions
The segment benefited from increased sales in China (+10%) and China continues to be the Manmade Fibers Segment’s largest market, accounting for 60% of revenues. Sales also grew in the rest of Asia (+130%) and Turkey (+99%), albeit from a low level. Sales however decreased in Europe (-28%), in North America (-30%) and in India (-77%) compared to 2018.