Location: Atlanta, GA
Sales: $133 Million
Description: Key Personnel
Mike Burandt, president, consumer business, North America; Bill Schultz, president, European consumer business; Paul Farren, vice president & general manager of Nonwovens; Michael Lecuit, sales manager, French Operation; Massimo Conforti, sales manager, Italian Operation; Mike Sprangers, sales manager, North America; Tom Kalupa, senior sales representative; John Rank, Sales Representative
Green Bay, WI (two facilities); Glen, France; Avigliano, Italy
Both U.S. plants ISO 9002 certified; Italy plant ISO 9002 certified; France plant ISO 9002 certified
Baby wipes, industrial and food service wipes, feminine hygiene, absorbent core, tabletop, medical, moist toilet tissue, meat packaging.
Despite tough times in its core nonwovens market—airlaid—Georgia-Pacific remains committed to this technology. With nonwovens sales holding steady at $133 million, the company produces about 40,000 metric tons of airlaid material annually, 30% of which is consumed internally by its large consumer products business. The remaining 70% feeds feminine hygiene, tabletop and wipes markets globally.
While much of the industry is waiting to see how the planned surge of North American spunlaced capacity will impact the airlaid market, G-P executives refuse to let airlaid be discounted. “Spunlace is a very viable substrate that can satisfy several current and potential market demands,” said Paul Farren, vice president and general manager, nonwovens. “But, I don’t subscribe to the belief that the airlaid market is dead. Airlaid is a low-cost, extremely absorbent material and that combination provides tremendous value to our customers. The airlaid process has the ability to utilize multiple combinations of fibers to satisfy required attributes.
In fact, Mr. Farren blamed capacity alone for many of the problems facing the airlaid industry. “We value cellulose-based technology. It’s just a matter of honing that technology. There are three things—service, dependability and speed to market—that we are delivering in value.”
As spunlaced nonwovens emerge as a more common substrate in disposable wipes, airlaid could potentially be impacted. This occurred in Europe several years ago, but North American airlaid is much stronger in terms of research and development than its European counterparts, according to Mr. Farren. “In fact, already many new markets for airlaid, that cannot be named, are emerging and G-P is ready to serve them,” he said. “You have to be bold and nimble to find markets where you can be unique and work with strategic customers to continue to satisfy their needs.”
Also helping G-P is its large consumer products business that uses nearly a third of its airlaid output annually. Since acquiring it in 2001 from Ft. James, G-P has proven its commitment to this operation. This was most evident in early 2002 when G-P designated nonwovens a separate business unit for the company which includes nonwovens, retail, commercial and roll goods operations and is a part of the consumer products side of the company.
During the past two years, G-P developed and then abandoned a plan to spin its consumer products business off from its building products business. The plan was temporarily shelved when executives feared that weak economic conditions in 2002 and into 2003 would lower its premium. Since then, building products sales have risen sharply, showing how each side could balance each other out and leading G-P to abandon its plan indefinitely. “Ultimately consumer products is where Georgia-Pacific wants to be, but building products has really done well.” Mr. Farren said. “Building products is excelling today, but we anticipate the same for consumer products shortly.”
After deciding not to separate the businesses, G-P has been selling off some of its business units to make it leaner. One of these units was the Golden Isles fluff pulp business which was purchased by Koch Industries in May 2004. While certain synergies exist between these two divisions, Mr. Farren said the sale didn’t result in any loss for nonwovens, which was treated like any other customer by its former sister division.
Now that G-P has streamlined its business and developed a clear plan for the future, the next step will be to back up its commitment to nonwovens with an investment. Last year, G-P adapted an existing airlaid line to use multibonded technology. This emerging technology is preferred by several wipes converters and further demonstrates the airlaid process’ versatility.
G-P continues to review investment opportunity options. Such an investment could benefit G-P’s entire consumer products business. “If you want to be a consumer product company, there is nothing better to be in than nonwovens. G-P is number one in tissue and towels, and nonwoven capability adds substrate versatility to our existing vast array of consumer offerings,” Mr. Farren said.