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The Year That Was



despite economic crises, raw material pricing and consolidation, the nonwovens industry continue to invest in the future.



By Karen Bitz McIntyre
Editor




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In the history books, 2008 will be remembered as the year when the global financial system crashed, the U.S. elected its first African American president or Michael Phelp’ earned the most-ever gold medals in one Olympics game. In the nonwovens industry, it will be remembered as a time when nonwovens producers battled record high raw material prices by creating more efficient manufacturing prices, looked for new markets to combat pricing pressures and market maturity and still found time to invest in new technologies.

As we move into 2009, Nonwovens Industry has taken the time to compile what we consider to be the year’s top 10 most important news stories.

In late 2007, First Quality, a maker of spunmelt nonwovens and marketer of some private label feminine hygiene articles, said it would buy the retail business of Covidien, including its sizable private label diaper business. The nonwovens industry then spent 2008 wondering how this deal would affect supply and demand in the spunmelt nonwovens market as one of its key consumers of spunmelt—Covidien—was now a part of a large-scale spunmelt manufacturer.

After the deal was announced spunmelt maker Avgol, a key supplier to Covidien, shelved plans to build a new line at its Mocksville, NC facility “It’s no secret that Covidien was a big customer of Avgol’s,” said company spokesman Dennis Durkin, shortly after the deal was announced. “There is no reason to not assume that they will source themselves but it is really too soon to judge the overall effect on the market. Of course, it could be a situation where we are just trading capacity—losing some business but gaining others.”

Covidien’s Retail Products business, headquartered in King of Prussia, PA, reported sales of $744 million in fiscal 2007. Products include adult incontinence, feminine hygiene, wet and dry wipes and baby diaper products. According to First Quality, the transaction, which was completed in the first calendar quarter of 2008, allows the company to enhance its relationships with retail customers by offering a broader, more innovative product line and greater value.

“The acquisition of Covidien’s Re­tail Products business is a compelling opportunity for First Quality,” said Richard Martorella, director of finance and treasury of First Quality. “The addition of Retail Products creates a more comprehensive Absorbent Hygiene business, solidifying First Quality’s position in our three core areas. Together, the First Quality Ab­sorbent Hygiene division will provide customers with a full suite of premium products serving the infant care, adult incontinence and feminine hygiene segments. We welcome Covi­dien’s Retail Products business and its hardworking and dedicated em­ployees to the First Quality family.”