Location: Jyderup, Denmark
Sales: $87 MILLION
Description: Key Personnel
Poul Mikkelsen, CEO; Peter Stoffel, COO: Michael Steen Lunde, vice president of business development; Jos van Hattum, sales director; Bruno Guymard, research and development manager
Soultz, France; Mildenau, Germany
Norafin, Lidro, Rough n’ Soft, Duplex, Triplex
Cosmetics/hygiene, household, industrial, medical
North American expansion is among the highlights of Jacob Holm’s business this year. The company announced in April that it would build a spunlace line in the Asheville, NC, in light of increased demand in the U.S. and a promising European business.
Executives have said that North Carolina was chosen as a location because of its strong, existing nonwovens infrastructure and good business climate. The operation will be easily accessible to several key marketers of wipes, which will be the line’s key target market, according to the company.
Representing a $40 million investment, the new line joins several other projects announced in recent months by other European spunlaced producers looking to grab a share in the burgeoning U.S. wipes market. Jacob Holm’s decision to enter the U.S., however, was not made because some U.S. wipes marketers’ planned conversion from airlaid to spunlaced substrates. In fact, while much of Jacob Holm’s European business centers around personal care and other types of wipes, the North American line is expected to serve industrial markets such as wipes for the food service industry and packaging materials.
“We are ready for a competitive market; we never had the illusion that there wouldn’t be huge competition in the U.S.,” said Michael Steen Lunde, group vice president. “There are very few industries that experience a total monopoly so having a line that runs well and produces the right products will be rewarded. People will make it work, make it grow.”
Mr. Lunde added that while this new line is based on spunlaced technology, it could produce other types of substrates required by customers in the future. The U.S. facility will also have after-treatment capabilities.
Paramount to building the foundation for this new venture has been Holm’s U.S. sales director Michael Norboge, who has worked with U.S. clients since 1999. Mr. Norboge will continue in his senior role serving existing and future Jacob Holm clients.
Using technology from Fleissner, Jacob Holm, Kuster and A. Celli, the U.S. line will be able to produce at least 15,000 metric tons of material per year. Construction will begin next month, and the line should come onstream in June 2005. The operation will employ 50 hourly and 20 salaried employees.
While waiting for the new line to come onstream, Jacob Holm will continue to focus on its existing roll goods business, which currently has facilities in Soultz, France and Mildenau, Germany. While other companies involved in wipes have forward integrated either by acquiring or investing in a converting operation, Jacob Holm is content honing its spunlaced material.
“Conducting development work with our branded clients has allowed us to see what platforms will shape the future of the nonwovens industry,” Mr. Lunde explained. “One always has to watch out that things will change.”
A constant stream of investment in research and development, engineering and quality practices has allowed Jacob Holm to be competitive. Its European plants have been able to escape some of the overcapacity issues affecting Europe thanks to long-term contracts with branded manufacturers.
These manufacturers are trending away from middle ground quality wipes. Instead, there seems to be demand for standard commodity substrates and specialized value-added products that can fetch a higher price. This has led to two key challenges for Jacob Holm: developing a standard product at a more efficient price and coming up with innovative, value-added properties to add to its spunlaced material.
In addition to its three spunlaced lines, Jacob-Holm operates a needlepunch line in Germany, which was purchased as part of its acquisition of Norafin in 2001. While much of this output reinforces its spunlaced business and diversifies its products in the wipes market, it has been making headway in filtration and cosmetic areas. “You really have to challenge yourself to get value in needlepunch because it’s a slow process, it’s expensive and it’s hard to make money off of,” Mr. Lunde said.