After a long period of virtual events, our chamber organized its second live event: an informal dinner on February 24, 2022 in Gent.
Mr. Johan Verstraete, Vice President Weaving Machines, Picanol Group was the guest speaker, talking about Picanol’s experiences in China.
Ms Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce, welcomed the participants and introduced the speaker.
Mr. Johan Verstraete explained that Picanol is part of the Picanol Group, a diversified industrial group active worldwide in the fields of mechanical engineering, agriculture, food, energy, water management, the efficient (re)use of natural resources and other industrial markets. It is present in more than one hundred locations in 25 countries and has more than 7,000 employees. The Picanol Group realized a turnover of €2.2 billion in 2020. The Group has five business segments: machines and technologies; agro; bio-valorization, industrial solutions and T-power.
The segment Machines & Technologies of Picanol Group includes the development, production and sales of high-tech weaving machines (Picanol), the foundry and mechanical finishing (Proferro) and the development and production of electronics (PsiControl). This segment has three production plants with 2,085 employees and realized a turnover of €451.3 million in 2020.
Picanol, which is part of the segment Machines & Technologies, has more than 1,300 employees and realized a turnover of €362.9 million. It invested €50 million in the last five years. Picanol is specialized in the design, development and production of weaving machines (based on airjet or rapier technology), spare parts and accessories. More than 90% of its exports are outside Europe. Picanol is an innovative top player, holding almost 900 patents. The company has production sites in Ieper (more than 700 employees) and Suzhou (China). Picanol is active on the global market. Picanol weaving machines are sold worldwide in more than 100 countries. Currently, some 2,600 weaving mills across the world are using Picanol machines, in total accounting for approximately 175,000 weaving machines. To date, Picanol has manufactured more than 375,000 weaving machines.
Picanol first became active in China in the 1960s. It established a service and training center in Shanghai in 1986 and a production plant in Suzhou in 1994, which moved to the Suzhou Industrial Park in 2004. Today, Picanol exports machines to China and has local production, service and training. Challenges include rising costs and availability of labor; the trade war with the U.S. and international sourcers diversifying away from China.
Lessons learned include:
• Focus on the market, not low cost: there is huge potential if well targeted. You should define your target segments and act consequently. Don't compete on price with local manufacturers. Define the product/market combinations and live up to them. China is no longer a low wage country.
• Adjust to the local habits and ecosystem. Build a reliable supply base.
• Build the team. It takes time. Set clear targets and focus. Use technical expertise from Europe and local management. Create clear organizational structures.
• Define your core know how and protect it, through patents, in house production or import from Europe. Keep on improving and innovating to stay ahead.
In conclusion, be loyal to your basic options; focus on local market potential, not cost. Stay flexible and react fast to market evolutions. Everything is transparent so handle carefully related to technology and pricing. If you want a partner, be selective.
