Sales Reports

KNH Enterprises

January 1, 2002

Location: Taipei, Taiwan

Sales: $55 Million

Description: "Key Personnel
J.C. Tai, president and owner; Dr. Kirk Hwang, vice president corporate planning and international operations; George Wong, hygiene market director; Herman Tai, industrial specialties applications director; Alvin Hu, technical vice president

Taipei, Taiwan; Shanghai, China

ISO Status
ISO 9002 certified; 9001 in process

Air through bonding, thermal bonding, melt blown, airlaid, needlepunching

Brand Names
KNH brand used for hygiene; Co-Fiber for industrial specialty products

Major Markets
Hygiene, industrial, agriculture, geotextiles

Reporting flat sales for 2001 was KNH Enterprises, a Taipei, Taiwan-based roll goods producer that has focused on streamlining its business to achieve higher profits despite the weak economy. “We have been restricting our customer base and strategically focusing on initiatives with key customers,” explained company president J. C. Tai. “By doing that, our top line is flat, but our profits have improved 30% in conjunction with management cost cutting.”
With a total annual capacity between 17-20,000 tons, KNH produces carded, airlaid, thermal bonded and melt blown nonwovens for the hygiene, industrial, agriculture and geotextiles markets as well as for a number of niche segments. As part of an effort to focus on new initiatives, the company has recently entered a number of new markets and is currently offering a variety of new products. “Our product portfolio is more complete than ever before,” Mr. Tai revealed. “We have been exploring initiatives in the hospital, cleanroom and dust collection areas, and now that we have completed exploring these areas, we are ready to enter them.”
In other market penetration news, KNH is poised to expand its presence in the agriculture market. The company has been testing a sun/moisture control web for agricultural applications in Japan since 2001 and is now ready to roll the product out to Taiwan, Korea and China. Prospects for this material are so optimistic that by next year the company expects to sell 20 million square meters of it per year. Additionally, the company is focusing on key industrial segments as an area where it could provide value added service and diversification. “Much of our research and development is valuable in this area,” Mr. Tai added.
Last year, in the industrial segment, KNH began an alliancewith SSA (Spill Station Alliance, Sydney, Australia, to sell heavy-duty drainage products in Australia. This alliance is reportedly performing well and helping KNH to improve its presence in the Australian market.
Another key focus area for KNH was the further development of its two-in-one airlaid product—a preintegrated nonwoven product with an airlaid absorbent core featuring two layers of an air through bonded nonwoven and one layer of airlaid material. Originally introduced to the hygiene market in late 2000, the two-in-one product is now being improved to achieve better waste reduction as well as process simplification. The concept has also been expanded with the development of a three-in-one product, which is similar to the two-in-one but coated with a polyethylene layer.
Also in the development stage for KNH is an airlaid/SMMS material, manufactured through a dipping process, which is ex­pected to come onstream during the first quarter of 2002. “We are very excited about the potential applications for this product,” Mr. Tai said. “There are various areas where it shows potential, particularly the apparel industry.”
The variety of sophisticated new products being offered by KNH is a result of the company’s commitment to innovation and technology. The company believes that roll goods producers need to differentiate their product offerings in terms of structure and functionality to succeed in difficult economic environments. “In terms of technology, everything we do is with the goal of fencing off the competition—to offer different functions and provide better services,” Mr. Tai explained.
Looking toward KNH’s converting business, the company has continued its strategy of aggressively adding lines for feminine hygiene product manufacturing. KNH currently makes sanitary pads for a full range of applications including heavy protection products for the Chinese market. The company expects to boost this business by adding a new air through bonding line in its Shanghai, China facility during the second quarter of 2003. The line’s carded/airlaid/airlaid/carded materials target the hygiene and medical markets.  
As for future capital investment plans, KNH is taking a wait-and-see approach to expanding its capacity. While Mr. Tai admitted that the next significant capital investment would involve its three-in-one airlaid product for ultrathin feminine care items, he did not specify when the company would make such a move. “It could be next year or it could be in 10 years,” he teased.
Whether or not KNH will invest in capital improvements will most likely depend to some degree on the oversupply situation that has been plaguing the nonwovens industry with intense competition, pricing pressures and other headaches. “The oversupply situation is a nightmare,” Mr. Tai opined. “Pricing structures are now designed for specific applications. In the future pricing needs to be more flexible to allow us to tailor our products to individual business needs.”
In the future, nonwovens executives will have to be creative to achieve success. For instance, the continued proliferation of nonwovens into new areas, traditionally dominated by other materials such as film, paper and wovens, is necessary for the industry to continue to grow.
“In my view, the industry should bring in new innovations and find new applications to accelerate growth and get out of the price war situation,” Mr. Tai explained. “This is already happening as nonwovens continue to replace woven and paper products. Furthermore, it has already been demonstrated in nonwovens’ replacement of films in water barrier products.”