fiberglass continues to hold its rightful place in nonwovens despite competition from synthetics

By Ellen Lees Wuagneux | August 17, 2005

fiberglass continues to hold its rightful place in nonwovens despite competition from synthetics

No doubt about it, fiberglass has been around for a long time. It was 1932 when an Owens-Corning experiment aimed at improving the production of architectural glass mistakenly resulted in fine glass fibers. Since then, glass-based roll goods have found their way into key markets such as filtration, roofing, insulation and composites, not to mention a host of high end, niche technical applications.

Belying its popularity in certain sectors, glass has undergone an almost unparalleled degree of scrutiny over its health effects and, for a while anyway, had earned the "bad rap" of a potentially dangerous carcinogen. It's not surprising then that when synthetic media came on the scene, many guessed this more glamorous alternative would threaten the hard earned marketshare of its traditional precursor, particularly in markets such as filtration.

Although in some arenas—such as lower efficiency filtration applications—the battle between synthetics and glass wages on, for the most part each seems to have found its place in a market that is typically believed to be big enough for both. Certain value-oriented geographical areas such as Europe, for instance, have traditionally shown a predilection for glass, while synthetics have achieved great inroads in high turnover applications worldwide.

And how have synthetics managed to avoid being subjected to the same rigorous testing standards as glass? The answer is twofold: synthetic fibers are a newer entity and, secondly, they are not thought to pose the same risks because of their larger size, which makes them less soluble and less readily airborne. Generally speaking, synthetic fibers are not small enough to inhale and therefore are not assumed to be directly transported into the lung.

As for growth, synthetics are taking the lead and growing at a double digit rate, while glass is plodding along at a more conservative 5% or so (compared to a previous high of about 11%). Just the same, glass continues to serve the vast majority of high efficiency air filtration applications and—because of its mechanical properties and performance advantages—is expected to maintain this position for the long term future.

In terms of price, glass has an advantage—it can cost as much as 50% more in some cases to replace glass with a comparable synthetic product in sub-micron sizes. In the air conditioning filtration arena, the largest area supplied by blanket glass, synthetics and wet laid paper have begun to erode glass' historically strong marketshare. In the HEPA air filtration market, some companies are shifting from a dependence on glass to an expansion into melt blown materials, a trend with obviously significant potential long term implications.

One company responding to increased demand for specialty synthetic media for cleanroom, HVAC, indoor air quality and face mask/respirator segments is roll goods producer Hollingsworth & Vose (H&V), East Walpole, MA, which recently finalized plans to add a third melt blown line at its Floyd, VA plant. The $4.8 million, 44,800 square foot capacity increase—which is expected to be up and running within the next 12 months—is reportedly a response to a combination of current market demand, anticipated growth and increased sales resulting from a new set of NIOSH standards, which became effective last month.

Roll goods producer Lydall, Manchester, CT, has also increased activity in this sector with its recent entrance into the melt blown arena. The company has added two 60 inch wide machines at its Technical Papers Division in Rochester, NH, which complement its wet laid and needlepunched nonwovens portfolio. The new lines, Lydall's first foray into melt blown technology, target air and liquid filtration end uses, with an emphasis on liquid filter applications.

The Economy: A Waiting Game
On the economic front, most insiders report that the glass market is in a state of quasi-suspended animation, with only a select few manufacturers adding capacity and most waiting for a reprieve from lowered stock prices, reduced demand and the fear of further economic downturn. Following a peak of robust activity and capacity increases in late 1995, the glass market has been more or less on hold ever since, with improvement glimmering either near or far on the horizon, depending on your perspective. Many manufacturers are expecting improvement in the short term future and are biding their time by making plans cautiously and concentrating on current demand.

In response to these market conditions, Evanite Fiber, Corvallis, OR—like many of its competitors—has undergone what it calls several "mini expansions," which have improved its ability to respond to future demand. Commenting on the move was Robert Bender, Evanite's director of sales, "We have made changes to our infrastructure in order to handle future waves of growth over the next three or four years," he said. Mr. Bender added that the company is responding to this comparatively slow period by being very judicious about expenditures and future deals.

Another glass fiber supplier looking ahead with cautious optimism is Lauscha Fiber International (formerly Fibron International), Summerville, SC, which recently completed a 25% capacity increase at its facility in Lauscha, Germany. This completes its first phase of expansion, with the second phase expected to be implemented by the year 2000.

As for roll goods producers, Ahlstrom Filtration, Mount Holly Springs, PA, recently initiated proprietary machine upgrades to improve the efficiency of its production of high quality glass grades. A substantial volume run at its Mt. Holly Springs headquarters was shifted to the Taylorville, IL mill, providing additional capacity for glass. The company also recently expanded its binder-free glass nonwoven product offerings for specialty filtration and medical device applications and—in support of its engine filtration business—developed a range of glass fiber grades for hydraulic filters; media with retentions of 7, 12-15, 20-25 and 50 microns is available.

Such capacity expansions may be causing other less positive repercussions in the market as well, with manufacturers such as Johns Manville, Denver, CO, reporting heightened levels of competition. According to Ann Doelling, director of filtration, "There is extreme pricing pressure and it is a very tough market. Prices in some segments are eroding faster than the market is growing and in the end, this means a loss in net dollars. There is currently slow growth due to the Asian recession in many areas and JIT delivery requirements have become more stringent as well," she said.

Christopher Coates, vice president, general manager of Ahlstrom Filtration's Technical Specialties unit, cited a strong level of competition in the HEPA market. "The most significant trend here seems to be the swing from tight supply to excess capacity. Deliveries have gone from months to weeks and the market is much more competitive. For us, however, the economic climate has been positive as our specialized applications are somewhat insulated from the pressure in other market sectors." Mr. Coates added that raw material prices are currently flat with much more pressure on suppliers to stay cost competitive.

R. Vijayakumar, director of marketing for high efficiency filter media at H&V, also offered an update on the current economic climate. "The glass market is a bit mixed and will be for the next 12 months; however, the rest of the filtration market remains relatively strong." Mr. Vijayakumar then pointed to the Far East as an exception. "Very minimal new semi-conductor construction is going on in Asia," he said, "and almost all projects are on delay. This is devastating for some companies, which have been forced to scale back as much as 80%." He added that the current crisis in Asia has had a significant but not catastrophic influence on business at H&V due to the company's level of diversification. "By the most optimistic estimate, things will improve by the end of this year, although it will probably be mid-1999 before we see any real change," said Mr. Vijayakumar.

Ms. Doelling also discussed the effects of the Southeast Asian economy.

"This geographical sector represents a substantial portion of the market," she said, "and manufacturers are attempting to compensate for this loss in other markets such as Europe and North America. This will be very difficult to do. As a result, we are seeing more aggressive pricing because less of the 'pie' is now available," she said.

Environmental Action Upped
The glass market, perhaps because of its deep roots in the filtration industry, has always been concerned with environmental issues, albeit not always as a direct result of actual regulations or formal legislation. In many cases, advancements in product development—such as the addition of an environmentally friendly product feature—are more a result of marketing savvy than actual environmental compliance. As one manufacturer put it, "The adoption of new bells and whistles more often stems from hyper-competitiveness in the market than from actual environmental concern." Nevertheless, several environmentally-related topics have been attracting attention recently, most of which specifically impact the filtration sector of the glass business.

Heading up the list is a developing EU directive that regulates the use of fiberglass in certain filters. "This will increase the use of more bio-soluble glass in order to avoid warning labels on roll goods," said Ms. Doelling. "The new regulation will call for glass fibers that, when breathed in, can break down faster in lung tissue and body fluids," she said. Ms. Doelling added that Johns Manville is moving toward more bio-soluble glass and has developed a range of new glass products such as "902" glass, which was developed for the European market but will soon be available worldwide. Johns Manville is currently converting all its equipment to produce this product. "This regulation will necessitate compliance throughout the entire industry, including U.S. manufacturers exporting into the European market," said Ms. Doelling. "The new glass will compete with synthetics and may affect the use of synthetics in certain markets," she said.

H&V's Mr. Vijayakumar offered a different perspective. "There are ongoing discussions about the labeling of glass microfiber out of Germany and the EU but it is not yet clear what effect this will have on roll goods producers. Testing is not yet complete and since glass fiber is not being sold directly, it may not really be an issue."

Another environmental concern relevant to the glass market is a proposed ASHRAE standard for electrostatically charged (synthetic) media. The new standard will separate synthetic from glass media and will offer synthetics higher efficiency status though a distinct ASHRAE rating. The standard, which was delayed due to strong challenges from glass manufacturers, is currently in the process of being adopted. At the heart of the debate lies the industrial HVAC market, a business that is obviously valuable to both glass and synthetic media manufacturers.

Another recent "green" issue is the review of "PM10," which is an EPA regulation that has been in effect for approximately two decades. Essentially the regulation allows the release of particulate matter (PM) that is smaller than 10 microns. The agency recently decided, however, that the standard needs to be revised to allow the release of only that particulate matter smaller than 2.5 microns. The regulation, which will take effect following a three-year testing period, will impact the nonwovens filtration industry directly because it will require the use of baghouse filtration systems, which are almost always made of synthetic media.

The EPA is also underway with a regulation concerning antimicrobial claims. The action stems from concern over false or misleading product labelling and is not expected to have a drastic effect on fiberglass-based products such as filters since most do not yet make antimicrobial claims. The EPA regulation's most significant influence is on manufacturers of filtration media who may be holding off on getting involved in antimicrobial air filtration products until the issue is settled.

A Shrinking Supply Chain?
While some companies look on a potential trend toward integration in the glass sector as a lot of fuss over a single acquisition—last year's purchase of Evanite by a company owned primarily by H&V—others contend it is the start of a vertical and horizontal integration blitz that will have a long lasting impact on the future of the glass market. These manufacturers claim that this trend is being driven by an overabundance of players in the filtration sector and incessant pressure to cut costs.

"The real story," said one manufacturer, "is too threatening for most of us to even talk about. In filtration there is a move toward fully integrated producers, a trend that has taken hold in Japan already. Filter manufacturers are buying melt blown lines and are starting to produce their own media. Roll goods producers are also beginning to make their own fiber (H&V's purchase of Evanite is an example of a type of soft integration at least). The question is 'how long will it take before second parties do not exist any more?'"

John's Manville's Ms. Doelling did not agree. "Integration is not a major trend in the filtration sector," she said. "Forward integration is a very tough move that the market may not support. Customers—filter manufacturers—do not want to compete against one of their roll goods suppliers. As for filter manufacturers integrating backwards, we have seen a few but they generally lack the required technical expertise and purchasing power—they are at a cost disadvantage when it comes to purchasing raw materials," she said.

Mr. Vijayakumar, of H&V, saw vertical integration as a possibility but one that is limited generally to the synthetic market. "A glass machine is much more expensive to purchase," he explained. "It also requires production expertise and a water source. The cost of melt blown lines has also come down, so it is much cheaper to acquire this technology."

Evanite's Mr. Bender agreed. "Licenses are not expensive and melt blown technology is being bought up right and left. This may lead to overcapacity in the melt blown area eventually, which will be a problem for synthetics," he said.


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