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Not the Time For Needlepunch



with their major market in dire straits, makers of needlepunched nonwovens are preparing for better days



By Karen McIntyre
Editor




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The unraveling of the automotives market has presented major challenges for manufacturers of needlepunched nonwovens. Many of this market’s major players reported that automotives sales have at times comprised as much as half of their business. For them, fewer auto sales have meant lessened demand as they watch with interest how Washington deals with Detroit.

“Many car makers had a lot of inventory so they have had to really put the brakes on production levels,” said Jørgen Bech Madsen, CEO of Fibertex’s industiral division. “Now, many plants are working athalf or three quarter time to ease this overcapacity situation.”

In describing conditions in the needlepunch market, Mr. Madsen saidyou have to look at the situation before September—when the banking crisis began in the U.S.-and after September. Since then, it has been only the companies with enough foresight to predict market downturns who have been successful. Fibertex, for instance, had already undergonea large-scale restructuring plan in 2008. This included the movementof labor-intensive operations from Denmark to the Czech Republic as well as the replacement of older equipment with more efficient modern machines. “We have two modern and lean manufacturing sites in Europe—one in Denmark and another in the Czech Republic. This means that we are very competitive in terms of products and new innovations as well as costs.”

Therefore, Fibertex is confident that not only will it be able to survive until the economic crisis is over, its business will be set to rebound. In fact, it is many experts’ opinion that all that can be done in these challenging times is to prepare for better times.

One major needlepunch producer, however, may not be so lucky. Propex Fabrics, which is a combination of the former Amoco Fabrics and Fibers and SI Industries and once one of the largest needlepunch makers in the U.S., is expected to be sold in a bankruptcy court auction this month, about 14 months after filing chapter 11 bankruptcy protection citing a general economic decline and rising raw material prices as contributing factors. At the time of its protection filing, Propex listed debt of $231 million.

According to reports, the sale of Propex is tied to a $65 million loan being offered by Wayzata Investment Partners, an investment house that already holds 19% of its prebankruptcy debt.