A New Way To Do Business

By Karen McIntyre | August 18, 2009

As this issue went to press, Fiberweb and Fitesa announced they were going forward with a plan to merge their spunmelt businesses in North and South America. Together, the two companies will sell about $200 million worth of spunmelt nonwovens, largely to the hygiene market, making the venture the second largest producer of the material in North America.

According to Fiberweb CEO Daniel Dayan, the deal provides his company with exposure to new equipment in North America as well as a South American customer base. Fitesa, meanwhile, will benefit from Fiberweb's experience and its financial and technological support. Included in the deal is Fitesa's planned investment in North America, which will give Fiberweb access to state-of-the-art equipment in an important hygiene market at half the investment of going it alone.

In today's challenging market, signing on with a partner is a great way to give yourself instant exposure to a new business or new region with less investment. That is the theory behind this new joint venture. Fiberweb shut down most of its older spunmelt lines a few years ago, recognizing that the outdated technology was not competitive in today's hygiene market. Reluctant to pony up the large sums required for new investment in spunmelt, Fiberweb instead decided to sit out of the hygiene market—for the most part—until the opportunity with Fitesa presented itself.

As the hygiene market—and its suppliers—continues to face consolidation, tightened margins, high penetration levels and other challenges—certainly more companies will look at creative ways to target new areas and expand their businesses. All of this will naturally be of benefit to the global nonwovens industry.

Karen McIntyre