Location: Weinheim, Germany
Sales: $1.4 billion
Description: Key Personnel
Thomas Kehl, managing director, spokesman; Christoph Josefiak, managing director, technical; Walter Schwarz, managing director, North America; Andreas Kreuter and Gerhard Schaut general managers, interlinings; Lee Sullivan, general manager, tuft; Jörg Sievert, general manager, filter; Bill Casey, general manager, hygiene; Harald Stini and Helmut Beck, general managers, technical nonwovens including shoe components
Weinheim, Germany; Neuenburg, Germany; Kaiserslautern, Germany; Greetland, U.K.; Barcelona, Spain; St. Omero, Italy; Cape Town, South Africa; San Martin/Buenos Aires, Argentina; Jacarei, Brazil; Suzhou, China; Yang Mei Tao-Yuan, Taiwan; Tayuan, Taiwan; Durham, NC; Lowell, MA; Hopkinsville, KY; Pyungtaek, South Korea (Korea Vilene Company)
Drylaid staple fiber, wetlaid, spunbonded, meltblown, electrostatic spun microfiber, stitchbonded, needlepunched, thermal bonded, chemical bonded, water entanglement
All locations are ISO 9001 and 14001; locations serving the automotive industry are QS 9000 certified.
Vilene, Viledon, Vilmed, Pellon, MicronAir, Vlieseline, Vildona, Fliselina, Lutradur, Lutrasil, Evolon and others
Apparel interlinings, filtration, medical, protective clothing, automotive interior trim, electrical insulation, electrical specialties, home furnishings, industrial wipes, hygiene, shoe components, coating substrates, carpet backings, landscape fabrics, geotextiles, agriculture, furniture and bedding, industrial nonwoven specialties
Novedrate (CO) Italy
Total Sales: $163.2 million
Riccardo Sollini, president and CEO; Bernhard Klein, managing director, technology and production; Achille Locatelli, technical counselor; Francesco Sancassani, marketing and sales (roofing division); Conrad Mauritz, marketing and sales (wadding division); Ing. Massimo Migliavacca, technology & production; Riccardo Forni, finance, administration, IT&S
Novedrate (CO), Italy, Pisticci (MT), Italy, Colmar, France; Lodz, Poland; Macon, GA
Drylaid carded and/or needlepunched and/or chemical bonded, spun bonding, thermal bonding, chemical bonding
Main locations are ISO 9002 certified
Terbond, Texbond, Polifill, Polifill T3, Ecozero
PET spunbonded nonwovens, needlepunched and chemically/thermally bonded, standard or reinforced with MD glass filaments; PET staple fiber nonwovens, needlepunched and chemically bonded, standard or reinforced with MD glass filaments; Construction: Thermobonded PET panels for thermal and acoustic insulation; Waddings for furniture and garment: PET high loft nonwovens, resinated, thermobonded, calendered and/or needlepunched
The continuation of a large-scale reorganizational/improvement plan has defined 2002 and the early part of 2003 for the world’s largest roll goods producer, Freudenberg, Weinheim, Germany. The company has been busy implementing phase one of this plan, which was announced in May 2002, and planning phase two, which is expected to begin in the near future, according to executives.
Included in phase one, representing a $40 million investment, is a plan to modernize and restructure Freudenberg’s facilities in Europe and North America. The plan has streamlined the company’s five key divisions—interlinings, filtration, hygiene/medical, technical nonwovens and tuft—to operate fully independently of one another. Now each division is fully responsible not only for product development, marketing, sales and services but also for production and the plants and the lines themselves.
The company’s largest site, located in Weinheim, Germany, now houses Freudenberg’s European interlinings business as well as its filtration media businesses. To accommodate this consolidation, the company added a printing line, modernized two existing base lines for interlinings and added a new production line for various types of filtration media at the site. Meanwhile, in Parets, Spain, which now houses the technical business, the company replaced two base lines, a move that increased efficiency. Also under the new plan, the Kaiserslautern, Germany site, now manufactures products for the tuft, filtration and hygiene/medical segments; the Neuenburg, Germany, operation also houses the technical nonwovens and the Greetland, U.K. facility is responsible for hygiene and medical production. Freudenberg’s Colmar, France site will be dedicated to producing the company’s Evolon microfiber nonwovens.
In the U.S., this plan has led to the transfer of production lines from Lowell, MA to more modern facilities in Durham, NC and Hopkinsville, KY. The transfer mainly affected products targeting automotive and home furnishing applications. The Lowell site still houses the division’s research and development and marketing operations as well as production for the semiconductor polishing pads segment and select converting capabilities.
According to company executives, the improvements are running ahead of schedule and are expected to be complete sometime next year. Already, the plan, which was intended to defend Freudenberg against weak market conditions, has led to cost reductions and quicker times to market for Freudenberg. “Our customers recognize that we are striving to be more oriented toward them in terms of flexibility and speed,” explained managing director Thomas Kehl. “We have demonstrated a commitment to the industry and our customers believe in us.”
While no firm plans for the second phase of Freudenberg’s improvement plan have been announced, executives expect that they will continue the efforts made in phase one by bringing similar initiatives to more far-reaching global areas. For instance, future projects could enhance Freudenberg’s operations outside Europe and North America including Cape Town, Africa; San Martin/Buenos Aires, Argentina; Jacarei Brazil; Suzhou, China; Yang-Mai Tao-Yuan, Taiwan; Tayuan, Taiwan and Pyungtaek, South Korea.
Also making headlines for Freudenberg this year was the appointment of Mr. Kehl as the company’s new managing director in February. Before joining Freudenberg, Mr. Kehl held positions as the head of technical fibers at KoSa and a managing position for the spunbond division at Hoechst Celanese. High on Mr. Kehl’s list of priorities is completing the restructuring plan to help the company complete its ultimate goal of becoming a more customer-driven company. “We want to be more flexible to our customers’ needs,” Mr. Kehl explained. Under the plan, Freudenberg’s five key divisions will operate independently while still falling under the company’s corporate umbrella. This way each division is able to operate independently while still profiting from the advantages and synergies of a large company.
Freudenberg’s largest segment, interlinings, has been impacted by shrinking markets and pricing pressures in the U.S. and Europe as well as an overall shift in the apparel industry to China. Together with Japan Vilene Company (JVC) Freudenberg operates a strong sales network within China. Executives are clearly confident that a place for interlinings still exists in the western world. Nearly half of the new lines commissioned under phase one of Freudenberg’s restructuring plan will target interlinings.
Also boosting Freudenberg’s interlining business was the introduction of the new adhesive system, called PowerDot, earlier this year. PowerDot adhesive system is expected to complement Freudenberg’s state-of-the-art adhesive technology and reinforce its strong position in the apparel interlinings and embroidery business.
Freudenberg’s most recent acquisition is the Comfortemp brand from Frisby Technologies, Winston-Salem, NC. Comfortemp is a line of dynamic, climate-control materials developed by Frisby for insulation, home furnishings and linings for apparel and footwear. Freudenberg’s interest in Comfortemp dates back to July 2001 when the company partnered with Frisby to manufacture Comfortemp Nonwovens. Under this agreement, Freudenberg made the nonwoven material while Frisby manufactured and sold it. “The purchase gives us access and rights to certain brands,” Mr. Kehl explained. “It is part of our plan of growing in interlinings and shoes.”
Also central to Freudenberg’s business strategy is tuft, its polyester-based spunbond business. Targeting mainly the automotive, carpet broadloom and tire industries, tuft operates facilities in Durham, NC, Kaiserslautern, Germany and Tayuan, Taiwan. Luckily, polyester-based spunbond has not seen the overcapacity and price erosion problems that are prevalent in polypropylene technology and tufts has remained a growth area for Freudenberg. The most recent expansion in this segment was in December 2001, when a $40 million line came onstream in Durham. To date, this 100-million-meter machine is running at full capacity and the company is currently debottlenecking existing lines to increase its annual output.
The hygiene/medical business has profited greatly by the company’s restructuring efforts. These efforts have given the division the ability to react to market trends quickly, which is important in this competitive market. While this market is always a challenge, Freudenberg has been making steps to be more innovative in its efforts to meet customer demands.
In recent years, the filtration segment has become increasingly important to Freudenberg due to heightened concerns over fresh air among consumers. “It’s an important growth business, a core business, and it always has been,” Mr. Kehl explained. “We’ve always had a strong position there.”
Among Freudenberg’s efforts in this segment is an expanded portfolio in the area of ASHRAE (American Society of Heating, Refrigeration and Air Condition Engineering) filters and media containing activated carbon for the adsorption of odors. Additionally, filtration for odor removal are available for general HVAC (heating, ventilation and air conditioning) applications, industrial process and cabin air filtration for automotives.
During the past several years, Freudenberg’s MicronAir filters business for automotive interior filtration has seen its share of ups and downs as market preferences have impacted this segment both positively and negatively. Increased interest in making air filtration devices standard in new vehicles provides a boost to the business in the late 1990s, but this success was temporarily halted when economic conditions weakened in 2001 and 2002. More recently, this business has been revitalized as consumers have become more interested in breathing fresher air. Freudenberg has responded to this trend by investing $25 million in a new plant for MicronAir cabin air filters in Kaiserslautern, Germany. Announced in October, this new site is adding 61 new jobs to the site and increasing production significantly. Freudenberg has forward integrated to produce the entire filter, which comprises a nonwoven material with an activated carbon layer, at the site.
The latest news from the filtration segment came in May when a partnership with Pneumafil Corporation, Charlotte, NC, was announced. This worldwide marketing partnership is designed to supply inlet filtration systems to the gas turbine marketplace and combines the performance and reliability of Freudenberg air filtration media with Pneumafil’s knowledge of the design and manufacture of inlet filtration systems for the power generation, process and offshore environments. The partnership is expected to enhance each company’s portfolio and enable them to offer inlet filtration solutions worldwide.
The fifth division, technical, includes Freudenberg’s activities in the shoe, battery separator, cable, automotive, building and geotextile markets. “The technical textiles segment has always been a segment of industrial growth, outpacing growth in all other textile applications,” Mr. Kehl explained. “Basically nonwovens can replace any other more expensive, higher performance products. You name it and nonwovens has its place.”
While these segments are not without price sensitivity and competition, they are generally regarded as areas where innovation can claim a fair price.
In addition to its five key segments, Evolon is also an important business for Freudenberg. Introduced in 1999, this continuous filament spunlaced materials features good drapability, soft feel, high tensile strength, excellent comfort properties and good launderability. Because of its uniqueness, Freudenberg opted not to include it into one of the five divisions and instead broke it out from the rest of the nonwovens business. Among the areas where Evolon has already gained acceptance are protective apparel, home and functional textiles, automotive interiors and synthetic leather. Currently, Evolon is produced on one line in Colmar, France, but a feasibility study on adding a second line is currently underway. Other plans for Evolon include reducing its weight to below 100 gpsm, which will ultimately open up additional applications for the technology.
Turning toward the overall nonwovens industry, Mr. Kehl admitted that it is not without its problems, which include stiff competition and overcapacity. However, there is no industry without its problems, in his opinion, and he is confident that growth will continue in nonwovens. For Freudenberg, growth will mainly come in the filtration, tufts and technical segments however its other two key segments, interlinings and hygiene/medical will not be ignored.
“In the next five years, I hope to see us as a leaner company with great strength in customer orientation,” Mr. Kehl predicted. “Our focus will be enhanced and we will be a by far larger business than we are today.”
Achieving these goals will mean making choices for the company. Freudenberg will pay close attention to market trends to gauge when and where growth is most attainable. And, while Freudenberg has done some forward integrating in recent years, it has no intention of becoming a consumer product company, a trend that has been rocking the nonwovens industry in recent years. “We have no interest in developing branded products for the consumer markets,” Mr. Kehl explained. “What we are willing to do is to work with partners but we have no intention to sell directly to the consumers. That is not our target in the nonwovens business.”
Instead, forming partnerships, licensing agreements, acquisitions and new products will be the primary means by which businesses will be expanded. “You have to make choices,” Mr. Kehl concluded. “You can’t grow at the same speed in all segments at the same time. You have to focus on the areas you think are important at a particular time.”
Continued stagnancy in worldwide economies led to a contraction of demand as well as pricing pressures for Freudenberg Politex, Novedrate, Italy, a supplier of polyester nonwovens in the roofing industry and voluminous nonwovens in the furniture and garment industries. To counter these trends, Freudenberg Politex improved product quality standards in both roofing and waddings. This strategy led to a 10% increase in the group’s sales volumes in the worldwide roofing market.
The group is able to develop products with superior technical quality by continuously research both standard spunbonded and staple polyester nonwovens as well as those reinforced with fiberglass filaments. One particular area of success was in the development of a patented process whereby polyester mats are reinforced in the machine direction with fiberglass filaments. Through this process, the company’s Texbond R staple product is formed. The inclusion of fiberglass stabilizes the polyester mat, which is often stretched during manufacturing. The fiberglass keeps the polyester from shrinking back when exposed to heat on the roof. This product, which is used for modified bitumen style roofing applications, was first created by Freudenberg Politex through a patented process in the early 1990s. Since then 100% of its U.S. lines and a big portion of its European business have incorporated fiberglass.
Freudenberg Politex added a second high speed line in its Macon facility to produce the reinforced staple polyester mats Texbond R in March 2002. Also, in Europe Freudenberg Politex is adding a line to increase the production capacity of reinforced spunbonded, Terbond R, in Pisticci, Italy. Announced in April 2003, the new line will be able to produce 10,000 tons of the material per year when it comes onstream in 2004. Output will target worldwide markets.
In addition to capital investment, market orientation and technical know-how have contributed to the development of other new products such as polyester panels for acoustical and thermal insulation in the Ecozero family, which are suitable for different technical applications, from the insulation of walls and ceilings in the building industry to acoustic insulation.
Other important new products for Freudenberg Politex have been Polifill T3 and Polifill T3 Urban, new paddings for technical sportswear and premium garments. These three-layer thermoregulated fillings were successfully launched in late 2002 and early 2003 and have already brought good results.
In the future, Freudenberg Politex will further strengthen its position through innovation and the launch of new products in construction, while the wadding division will continue its campaign for the development of sales of the new products. This will lead to increased sales in both business areas.