The Rieter Group is proposing to separate its Textile Systems and Automotive Systems divisions to create two distinct listed companies with independent ownership and management. The proposal is expected to be approved at the company´s 2011 annual general meeting on April 13.

The current Textile Systems Division will continue to trade under the name of Rieter, whilst the automotive division will be known as Autoneum Holding AG. The transaction is not expected to result in job losses.

According to Rieter, the split is intended to provide greater strategic flexibility, allowing each company to position itself more clearly within its respective market. The company believes that following joint development, both divisions are now globally structured, individually sustainable and ready to function as standalone entities.

Currently both divisions operate as separate businesses, with their own management teams and organizations.

Erwin Stoller, Rieter´s executive chairman, said; "The proposed separation and making the divisions formally independent is a logical next step that we are now taking."

During 2010, Rieter Textile Systems orders rose 185% in2010 to CHF 1.4bn ($1.5bn) from CHF 510.8m ($564.6m) achieved the previous year. This increase has been attributed to growth in textile consumption in the major Asian markets, combined with improvements in the European and US textile markets. Sales growth strengthened in the second half of 2010, with revenue rising by 64% to CHF 870.4m ($962m) from CHF 532m ($588m) in 2009.

The Textile Systems division continued to expand development and manufacturing structures in India and China in 2010, with the aim to position itself in the mid-market segment of the major emerging Asian markets. In addition, the sale of Rieter´s nonwovens activities to the Andritz Group was completed on March 9.

Rieter Textile Systems expects a substantial sales increase in 2011, combined with improved operating margin, compared with 2010. Additional investments are planned to accelerate production plant expansion in Asia and thereby further improve market positioning in China and India.

Source: China Textile Leader