We make our customers successful. - Oerlikon Barmag

concentrated mainly on Turkey. To a lesser extent orders were taken in the middle East, Europe and South
America – markets in which Zinser can compete well. With new-style electronically controlled drives and
with machine types suited for manufacture of compact yarns in cotton and wool, Zinser was able to close
a number of development contracts and launch several new products. In particular some first successes
with large-scale projects for compact yarns demonstrated that technology had caught up in this sector,
where previously it had lagged somewhat. New production technology for high-volume wearing parts
promises to strengthen the developing after-sales market. A new venture in India, started in the spring
of 2003 to make flyers for the local market, has got off to a good start and met its initial objectives. In
cooperation with a global partner a new approach to the construction of complete ring-spinning solutions
has been developed and documented to a marketable level.
Winding machines hold their own in difficult currency conditions. The winding machine business
unit benefited again from strong demand from Asia and maintained its high volume of sales as in the
previous year. Short-term fluctuations were quickly absorbed by increased flexibility in production.
However the effect of the strong euro in the dollar-oriented Asian markets was to neutralize the benefits
of our cost reduction programs and prevent any improvement in margins. Efforts to improve market
share in the hard-fought Chinese market were given high priority. A number of process improvements
were introduced, for example exact measurement of the yarn length. These improvements will reduce
the drop-out rate of the cross-wound packages in subsequent processes such as weaving and knitting by
over 70%.
Twisting in a headwind. The overall performance of the twisting business was poor, despite one or two
flashes of success in the carpet cord and tyre cord areas. In Asian markets volumes and prices were under
enormous pressure caused by unfavourable currency developments, and also by SARS in the first half
of the year. In particular the Japanese, but also other local Asian competitors, exploited the currency
conditions, which were favourable for them, to win customers with attractive prices. This put margins
under pressure, so not only were volumes down but margins were extremely poor on what business
remained. Substantial cost reductions were achieved in the second half-year as part of the Tempus
program, including reduction of the workforce by 20% in the fixed cost area, but this was not enough
to compensate in 2003 for the problems outlined above. New products for manufacture of carpet yarn
and special effect yarns were introduced successfully in the second half-year; these will influence sales
and profits in 2004. The twisting group was reorganized in 2003 into a fully integrated business unit with
an HQ and production locations in Krefeld, Kempten and Suzhou (China).
Embroidery systems successful with a new program. The embroidery systems business unit as a whole
had a good year in which it was able to increase its sales and its market share. Under new management
the various large-scale systems were quickly modularized and the number of parts greatly reduced, which
improved the cost base. High volume orders from Asia and Turkey led to increased sales and improved
margins. For Melco’s single and multi-head embroidery machines new software was introduced which
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