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Oerlikon Textile Simplifies Organization

23 Nov '11

4 min read

The Oerlikon Group will simplify its Textile Segment to further increase competitiveness and profitability. The three key elements of this change are

• The consolidation of the five Textile machinery and components businesses into three Business Units (bus),
• The relocation of Textile's headquarters to Shanghai, and
• Increased R&D investment in both Germany and Asia to around CHF 80 million.

In line with the new organizational structure, Clement Woon, an internationally experienced executive will succeed Thomas Babacan as Segment CEO on 1 January 2012. Oerlikon's CEO, Dr. Michael Buscher, said: "We have seen strong improvement in our Textile business, resulting in record margins. With the announcement today, we are positioning the Segment even closer to our largest customers, consistent with our strategy to further increase efficiency and profitability. I would like to thank Thomas Babacan for his dedication to Oerlikon and welcome Clement Woon to the company."

Today's announcement supports the continuation of the focus on operational discipline, lifting the underlying performance of Oerlikon Textile to a new level, building on an already strong market position in Asia.

The refocusing of Oerlikon Textile comprises three key elements:

Simplified organization with consolidation from five BUs to three
A new Manmade Fibers BU will comprise Oerlikon Barmag and Oerlikon Neumag. The new Natural Fibers BU will consist of Oerlikon Schlafhorst and Oerlikon Saurer. The structure of the Textile Components BU remains unaffected by the realignment. Branding will not change.

Shift of key Oerlikon Textile management to Shanghai
Oerlikon Textile Executives, including the CEO and CFO, will relocate to Shanghai in the first quarter of 2012. By end of 2012 more than 40 % of all Textile senior management positions will be based at Oerlikon's new office in Shanghai.

R&D investments in Germany and China
Oerlikon Textile will increase its 2012 R&D investment in Germany to around CHF 60 million (worldwide to around CHF 80 million) and start ramping up R&D capacity in China. The German R&D organization will focus on the continued development of groundbreaking innovations such as the recently launched Autocoro 8 from Oerlikon Schlafhorst. The Asian R&D capability will specialize in regional adaptation.

After successful contribution over many years, Thomas Babacan will hand over his management responsibilities as Segment CEO to Clement Woon (52, a citizen of Singapore) on 1 January 2012 and leave the company. Clement Woon, an executive with extensive international experience, particularly in Asia, has a strong background in both the technology and service industries. He will be Oerlikon's first Segment CEO based in Asia. The position of Oerlikon Group COO will be eliminated.

With a presence in this region for almost 50 years, Oerlikon Textile's sales in Asia will reach around 70 % of total sales in 2011. "To ensure the continuation of this success, we will manage the textile business directly out of its most important market and at the same time strengthen R&D capabilities, especially in Germany", said Group CEO Buscher. Nearly 45 % of Oerlikon Textile employees are based in Asia today, with that share rising to 50 % by the end of 2014. By the end of 2012 more than 40 % of Oerlikon Textile senior management positions will be based in Shanghai (up from 10 % at present). With this simplification of the organization, and a strong order book reaching into 2014, Oerlikon Textile is positioned to benefit from long-term trends in the textile industry.