To get out of the crisis, you need suitable products for the market
Interview with Franz-Josef Bütfering, President of EUMABOIS
Milan. Woodworking machinery manufacturers have a difficult year behind them, but optimistic voices are increasing. Franz-Josef Bütfering, President of the European Federation of Woodworking Machinery Manufacturers, EUMABOIS, talked about the current global situation of the woodworking industry with journalist Georg Dlugosch.
What’s the situation from the observatory of Eumabois, the association of European woodworking machinery and tools manufacturers?
Bütfering: There’s no denying we have gone through a major crisis. Turnover collapsed and it is still very low in many companies. We can expect such difficulties to endure a while longer, but there are also clear signs that we have taken the way out of this valley of tears. More and more indicators show that the curve is turning upwards. Recent exhibitions have brought not only a more favorable climate, but new business as well. This is why we are optimistic.
What’s the origin of good hopes?
Bütfering: German-speaking markets have been a safe route for woodworking machinery manufacturers looking for a way out of the crisis. Investments have been holding on relatively well and this is a solid base for the future. Under the current circumstances, we had excellent results in Nuremberg, for instance. Holz-Handwerk/Fensterbau, with 1,273 exhibitors from 35 countries and over 100,000 visitors, 16,500 of whom from outside Germany, reached the same levels as 2008, proving that the industry is recovering.
Which signals are you getting from the European scenario?
Bütfering: Europe is holding up together. Easter Europe has a better trend than Western countries, but its collapse was more dramatic. Real estate markets have not recovered, yer. That’s why we still see some caution in the purchase decisions of our customers. There will have to be an increased workload for the wood and furniture industry before we can see a significant rally of investments. For the time being, demand is mainly represented by old equipment replacement or adaptation of manufacturing systems. The industry in Poland recorded an extraordinary trend, but Drema in Poznan was confronted with two emergencies: on one hand, exhibitors and visitors were landed by the closing of European airways due to the volcanic cloud; on the other, the country was struck by the airplane crash that killed the Polish president. Despite these adversities, the number of visitors increased by 16 percent and it was encouraging to see the propensity to invest of many operators in Poznan.
In Italy, the second largest woodworking machinery producer, there were two major shows with a short period. What were the effects of such competition?
Bütfering: The effects of the international economic crisis had a strong impact in Italy. The main event, Xylexpo in Milan, had less visitors than expected with 50,000 approximately. The vicinity of the two shows complicated the decisions of exhibitors and visitors. Once again, it was apparent that the lack of planning and clarity in the exhibition scenario brings confusion and uncertainty not only for exhibitors, but also for visitors, who may not find a company they want to meet because they have chosen to exhibit at the other show. As European association, Eumabois is committed to guarantee well defined and transparent exhibition schedules for both categories.
What’s the situation outside Europe?
Bütfering: Signs of improvement are coming mainly from Asia, particularly China. Also South America is showing stronger propensity to investments. Even the key market of North America seems to be stabilizing, though at low levels. In Russia, the crisis has cleaned up the exhibition calendar and consequently funneled the country’s potential. Despite some problems, I consider this one of the best markets for woodworking machinery manufacturers.
What’s the reason for Russia’s troubles?
Bütfering: Markets in Eastern Europe are still weak. Customers have to deal with the consequences of the financial crisis. The 2008/2009 drop harmed several companies in this market, one of the biggest in the world. We see much interest, but companies still have few opportunities to get loans at affordable costs. For this reason, Russia will express its full potential with some delay.
Which markets are currently more interesting for European manufacturers?
Bütfering: The German-speaking area has remained at good levels even during the most difficult periods, and the handicraft sector distinguished itself as a good buyer. Then, China confirmed its potential as output market for European manufacturers. In South East Asia there are still good opportunities for some sectors, and mainly Vietnam is considered a secret promise for European suppliers. But Asian competitors are quite strong there. India is an interesting growth market, although volumes are still low. South American markets are emerging for their resources. There are plenty of raw materials, but machinery import duties are curbing competition. There is an increasing demand for quality, and consequently for European machinery.
So, European manufacturers have reacted well to the challenge...
Bütfering: Our companies were well positioned before the crisis. This is proved by the fact that, despite massive turnover reductions, only few companies have gone bankrupt. With their products, our companies are not just competitive, but leaders for many aspects. The most tangible evidence is their 60 percent market share. Even in the most trouble periods, our companies have conducted their business properly. Despite painful cuts, they have focused on innovation. R&D departments have pushed on the accelerator and today they can approach the markets with improved products.
Which are the next steps for European companies?
Bütfering: At LIGNA 2009 it was already clear that the future issues would be energy efficiency and efficient resource exploitation. In Hannover, big news and innovations were presented in this area, and the subject will keep us busy for a long time. Another factor companies have to manage is how to respond to relentless globalization. Sales organizations will have to become more and more global, if you look at future markets. From South America, to Russia, to China, there are many opportunities to seize after the crisis. The big challenge is to tailor products to specific customer requirements in each market.
How is Eumabois supporting its members in these challenges?
Bütfering: In Europe, the woodworking machinery industry has completely disappeared in some countries, England for instance. This is complicating things. On the other hand, the political turn of former Eastern Bloc countries opened up new ways to the East. Eumabois has supported the action of companies towards Russia, Ukraine, Slovakia and the Czech Republic. However, such expansion has changed their vision, as these markets are mainly dominated by small enterprises. This strategy is an important signal for our associates and is strictly connected to the quality issue. This approach is based on industry standards and regulations, the EC standards for instance, which protect products and their production from the negative effects of competition at all costs.
It sounds like a message against counterfeiting: what’s the Eumabois strategy in this respect?
Bütfering: We have decided to inform customers about the necessity to purchase original machines and components. In this phase, this approach seems more effective than a direct fight against counterfeiting. For this reason we launched the “Choose the Original – Choose Success” campaign to increase customers’ awareness of the value of original technology. Counterfeiting is unacceptable, because it threatens manufacturers and customers to the same extent. On the contrary, the benefits of original technology are evident. To have success on the Asian markets, European manufacturers must orchestrate their action.
EUMABOIS is a non profit Federation grouping 13 national Associations (Austria, Czech Republic, Denmark, Finland, France, Germany, Italy, Poland, Portugal, Russia, Slovak Republic, Spain and Switzerland) representing the major European Manufacturers of machines and accessories for woodworking. Approximately 800 industrial companies, accounting for 56 percent of global production, belong to Eumabois. All Member Companies are engaged in the manufacturing of machines, plants and accessories for all types of wood and wood-based materials.
European Federation of Woodworking Machinery Manufacturerswww.eumabois
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