H UGE P OTENTIAL FOR I NDUSTRIAL L AUNDRIES IN R USSIA
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1 TEXTINATION NEWSLINE H UGE P OTENTIAL FOR I NDUSTRIAL L AUNDRIES IN R USSIA SECTOR EXPERTS RELY ON HOSPITALS AND HOTELS AS NEW CUSTOMERS FOR PROFESSIONAL LAUNDRIES Moscow (gtai) - Half Russia washes with old DDR washing machines. At least the industrial laundries. They are now worn out. Therefore experts believe that the market for washing machines and spin tunnel, centrifuges and industrial dryer could double in a few years. The same applies to special detergents. An excellent business perspective is waiting for German laundry technology suppliers The Winter Olympics in Sochi were not only a highlight in Russia from a sporting point of view. Also for Russia's industrial laundries the big event was a turning point: In Sochi Russia's largest laundry emerged - with a capacity of 100 t of laundry per day. 200 new hotels were built for the Olympics. Two thirds of them have send the washing externally, most of it to the washing operator Cotton Way and thus in modern washing machines and detergents from Germany. Washing tunnel and ironers were delivered by Kannegiesser, the dosing systems and detergents came from Burnus Hychem and the giant laundry has been certified by the Baden-Württemberg Hohenstein Institute. Already in Soviet times industrial washing machines and mangle equipments were known as top brands from Germany. Until today Textima equipments from the DDR can be found in many of the once state-owned laundries. However, many of these machines are 30 or 40 years old. They need three or four times as much water as modern facilities and thus tons of detergent. They are also considered as power hogs - and the prices for them explode even in the energy wonderland Russia. Textination GmbH 1
2 These arguments play a role especially for those investors who took over state laundries in Russia in the wake of the recent waves of privatization. The companies Cotton Way and Riquest with twelve large laundries each and Blesk incare with four companies are now among the largest industrial laundries Russia. There are nearly 40 large laundries with a capacity exceeding 30 t per day and 30 enterprises with 5 to 30 t in Russia, Martin Rimbach, Managing Director at Burnus Hychem says. Since two years Burnus Hychem supplies dosing systems and special detergents to this sector in Russia. Competitors are the international manufacturers Ecolab, Diversey, Kreussler, Büfa and Procter & Gamble Professional. Of the 40,000 tons of specialty chemicals, which the Russian industrial laundries consume annually, these six providers supply about 22,000 t, Rimbach says. Among them only Procter & Gamble operates a local production. Note: The majority of the fabric care chemicals are imported. The large tunnel washing machines are mainly supplied by two manufacturers: the Jensen-Group and the German Kannegiesser GmbH. Kannegiesser has already equipped 18 laundries with modern technology. And the potential of the Russian market is huge. "We are not talking about dozens of growth percent, but about doubling or tripling of the volume," says Dmitri Kolotkow, sales and marketing director of Kannegiesser Russia. A number of reasons support this optimistic forecast. At first, the majority of Russian laundries are technically still in the 70s and 80s of the last century. Private investors however benefit from energy- efficient, resource- conserving installations. And invest in higher capacities. More and more large corporations outsource the cleaning of work clothes to external laundries. The most prominent example is the Russian railway. The group with now over one million employees across Russia even rents the complete washing. With the Republic of Tatarstan the first of the 83 Russian federation subjects abolished the hospital own laundries and outsourced everything to Cotton Way. This is after all the bed linen and workwear of all nurses and doctors from 52 hospitals. Other regions will follow this example. Textination GmbH 2
3 Also market expert Rimbach believes in a positive market development. At the moment, each year half a million t of laundry would be washed at Russian industrial laundries, he says. Trend upwards. New projects are being followed by the company Riquest in St. Petersburg. There all existing facilities should be replaced by new ones. In short: "Riquest turns the entire laundry around," Rimbach says. It will commence in spring A strong successful development is recorded by Kanegiesser for Moscow and the surrounding area as well as in the Kaluga region. In Moscow Blesk inccare has recently taken over the Olympic laundry from 1980 and equipped it with three Kannegiesser washing-streets. The official opening is expected for 2014, marketing director Olga Maschkowa says. In this and another laundry Blesk incare has invested nearly USD 30 million. And thus is able to wash 4,000 t laundry and carpets every week. Speaking of carpets: Blesk incare specializes in door mats. "This is a booming market," Maschkowa says. The demand is already huge today. Eight soccer fields could be covered with the mats, which Blesk incare cleans daily with the new washing tunnel. Work clothes for food manufacturers, sheets from hospitals and hotels or towels from livestock breeding - the working and purity standards in the commercial sector in Russia are very strict. Guaranteed high quality standards however can be provided by new equipment only. Kannegiesser salesman Panteleev therefore is optimistic: "Russia is a huge market" Finally, there is nowhere as much dirt as with us. But still the Russian legislature - probably unintentionally cares for comparatively moderate growth in the market for industrial laundries. Because according to the applicable law workwear in Russia must be replaced every year. This hinders the business with leased workwear. If a laundry Textination GmbH 3 V.
4 acquires expensive workwear for a customer, it is interested in high-quality materials and detergents, so that the special clothing must be replaced as seldom as possible. "Today, however, no employer has an incentive to buy expensive special clothes," Dmitri Kolotkow says. Because after just one year rented clothing has not yet amortized. But he is sure: in a few years the law is tilted. And Russia will develop like Western Europe. If alone Russia s hospitals outsource their laundry - then the need for additional washing technique will be EUR 5 to 10 million. Per region. For Russia in total that would reach EUR 500 million. Also the need for clean room technology is increasing year by year. And with that cleanroom laundry. "This is still a small market - but growing steadily," Kolotkow says. The same is true for the hotel sector. What was Olympia for Sochi, the FIFA World Cup could become for another ten Russian regions - a project engine in the laundry sector. German suppliers have Russia experience, know-how and superior technologies to get this engine running. Russian imports of washing machines and detergents (in USD million) Goods (HS-Code) Change 2012/2011 in % Washing machines for laundry (8450) From Germany (2012) Spin dryer (842112) Full automatic washing machines (845011) Washing machines for the textile industry (845140) Wash apparatus minerals (847410) Detergents for housholds (3402) Source: UN Comtrade Textination GmbH 4
5 Contact addresses: OOO Burnus Rus Ul. Ketscherskaja 16, Moskau Tel.: / Internet: Contact: Martin Rimbach ( Cotton Way Ul. Maschi Porywajewoj 34, Etage 12, Moskau Tel.: / Internet: Riquest Ul. Obrastsowa 4a, Moskau Tel.: / , Fax: Internet: Blesk incare 1. Kotljakowski per. 13, Moskau Tel.: / Internet: Contact: Olga Maschkowa Source: Bernd Hones, Germany Trade & Invest Translation: Textination-Team Textination GmbH 5
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