01.01.05
Location: Wilmington, DE
Sales: $1.25 billion
Description: Key Personnel
Mark Vergnano, vice president and general manager DuPont Nonwovens; Tom Schuler, global business director—Tyvek/Typar; Nigel Budden, global business director—Sontara
Plants
Richmond, VA (Tyvek); Old Hickory, TN (Sontara, Suprel. Softesse); Luxembourg (Tyvek, Typar); Asturias, Spain (Sontara); Shenzhen, China (Tyvek and Sontara converting facility)
ISO Status
All plants ISO 9002 certified; Luxembourg facility also 9001 certified
Processes
Flash spun (Tyvek), spunbond (Typar), spunlaced (Sontara)
Brand Names
Tyvek, Tychem, Sontara, Suprel, Softesse, ComfortMax, Typar (worldwide except North, Central and South America)
Major Markets
Construction, health care, protective apparel, industrial, filtration, absorbents, home furnishings, envelopes, geotextiles, graphics, packaging, footwear
Sales increased about 6% (estimated) to reach approximately $1.25 billion in 2004 at DuPont Nonwovens, Wilmington, DE, thanks to significant gains in Eastern and Central Europe, Asia and Latin America, according to executives. Additionally, a strong performance in the construction market contributed to gains for the business.
“Our goal has been to drive our business toward double-digit top and bottom line growth and in 2005, to date, we’ve gotten a little closer to that,” said Mark Vergnano, vice president and general manager of DuPont Nonwovens. “We are at 7% growth for the year so far.”
Earnings growth has been more challenging than sales growth, due to escalating raw material costs. Because DuPont operates with a goal of equating price with value, it has been careful not to increase costs haphazardly. “We try to look at the value we bring to our end users and keep our price points in line with the value,” Mr. Vergnano said. “In some cases, this basic equation has gotten out of whack because of rising ingredient costs.”
That said, DuPont was able to keep price increases minimal until the second quarter of 2005. Instead, the company relied on increased efficiency wherever possible and improved management of raw material purchasing to keep costs in check. Still, remaining profitable was particularly challenging in certain tight margin areas such as medical fabrics and critical cleaning. DuPont exited some of the tighter commodity areas such as consumer wipes, where it did not see an opportunity to add value and be profitable.
“The consumer wipes market is in a similar situation as the hygiene market was 10 years ago,” Mr. Vergnano said. “A lot of companies are chasing high volumes with off-the-shelf technology. This doesn’t really leave a lot of room for value.”
Also facing significant competitive and cost-related challenges is the health care market, where DuPont remains a major player. As hospitals and buying groups, particularly in North America, try to reduce costs of worker and patient apparel, margins have been squeezed and raw material costs have not always been absorbed. “We continue to believe that we have a superior value proposition in the health care market. The key for us is to ensure that our message and value is understood by the health care providers and patients that will benefit from our advanced technology and science,” stated Mr. Vergnano.
Meanwhile, DuPont Nonwovens’ two other key growth areas—construction and personal protection—continue to provide stellar growth for the company, thanks largely to developing world economies as well as innovation in existing markets. That’s not to say, however, that new markets are not interesting to the company. A recent initiative will help DuPont enter new territories as well as a new market—filtration. Last year, the company acquired a new nonwovens technology from a small Korean technology firm. This new technology is designed to produce uniform fine fibers and adds to DuPont selective barrier technology. This technology will not only help DuPont expand offerings to existing markets but also enter the filtration segment, which is steadily increasing its use of nonwovens. “Filtration is an area we have looked at for some time,” Mr. Vergnano explained. “But, until now, we haven’t had the right technology to allow the right approach.”
After purchasing the technology, as well as a pilot line making the material last year, in May, the company went public with an announcement it would increase the venture to a full-blown market development facility from which it will explore global opportunities for the technology. Within the next 12 months, executives expect to also announce plans for a full-scale commercial production line centered on the technology. “This facility could be anywhere but clearly we would like to extend our footprint in Asia,” Mr. Vergnano said.
The Korean investment is the first nonwovens manufacturing facility in Asia wholly owned by DuPont, although it does operate a joint venture in China as well as converting assets in China and Japan. For now, the company is able to satisfy Asian demand in its existing technologies from facilities in North America and Europe but has been plowing other resources into Japan, China, India and Korea, the four Asian countries earmarked for future growth.
Beyond Asia, Eastern Europe and Latin America are other hot spots for growth. In Eastern Europe, DuPont has been able to meet demand from its Western European bases, while in Latin America, the company’s joint venture with shoemaker Cipatex, called DuPont Cipatex, has allowed it to meet demand in footwear as well as other markets. As for Latin American markets outside of Brazil, DuPont is not currently active but is assessing them.
“Our focal point is Brazil,” Mr. Vergnano said. “Argentina has been a little rocky economically and the other countries in South America are not showing as much demand. Mexico is doing well and we are evaluating it for growth.”
From a technological standpoint, polymer science is expected to pave the way for DuPont to grow in its nonwovens business. The first product offering made with Advanced Composite Technology, Suprel, continues to fare well in the health care market where it combines the softness of polypropylene and the strength of polyester. The company continues to examine new areas for the material as well. Beyond the ACT technology, DuPont Nonwovens is relying on the polymer expertise of its parent company.
“We want to drive innovation with polymer knowledge owned by DuPont,” Mr. Vergnano explained. “This means adding new polymers to existing polyolefins to bring many more functionalities to the market.”
These functionalities could include strength or flame resistance and down the road could even allow DuPont to use bio-based polymers in its nonwoven substrates. “This type of technology will be a big driver for some of our future new products,” according to Mr. Vergnano.
Tyvek
The DuPont Tyvek business continues to perform well thanks to superior product performance as well as continued focus on educating the end user. One example is the construction market where the company has been educating architects and builders on the importance of using housewrap and other Tyvek products. These efforts have paid off in Central and Eastern Europe as well as in Asia where DuPont has increased its downstream presence in recent years. Also, the Tyvek business has outperformed the market in North America and Europe despite that market’s fluctuations.
New product development has also been a key growth engine for Tyvek, with a focus on offering added functionalities to the substrate.
“Just this spring, we have added five new products to our Tyvek line that will allow us to enter new market segments or add new functionalities to markets where we already exist,” said Tom Schuler, global business manager of Tyvek. “This enables us to enter new markets and reinforce our competitive position in existing ones.”
One such product, introduced this spring is Tyvek Reflex. This new product has been metallized to add thermal performance while maintaining its water holdout and breathability.
These new products were developed from a constant effort to hone Tyvek flash spinning technologies to fit the changing needs of the market as well as to meet the specific demands of different regions. These efforts have allowed DuPont Tyvek, in addition to construction, to target such markets as protective apparel, medical packaging, envelopes, packaging and graphics.
While construction continues to be the largest market for Tyvek, protective apparel continues to gain in importance. This segment has benefited from the creation of DuPont Personal Protection, a business that brought all of the DuPont personal protective products under one umbrella and has allowed the company to provide the customers and end users with a wider range of protection from this single business. According to Mr. Schuler, this corporate-wide structure has expedited infrastructure investments and technology development. “By expanding the offering and our presence downstream, customers have gained access to a more complete offering and we’ve gained tremendous insight into their current and future needs,” he added.
In addition to Tyvek for dry particulate hazards, DuPont Personal Protection includes DuPont Nomex for thermal hazards, DuPont Tychem for liquid and gas chemical hazards, DuPont ProShield for general-purpose applications and DuPont Kevlar for cut-and-abrasion protection. Growth in this segment is driven largely by worker protection, not by large-scale catastrophes. “But, it is our job to be ready to respond to disaster,” Mr. Schuler said.
In addition to its traditional markets, Tyvek is also making headway in some new markets. Among these is the automotive textile market in Asia, which has shown considerably more interest in nonwovens than other regions. “You really have to tailor products to meet the needs of specific markets,” Mr. Schuler explained.
This has also been a challenge in existing markets. Take construction, where differing national construction codes have led DuPont to offer 40 different roofing products in Europe alone. “What we do is spend a lot of time understanding what our end user needs,” Mr. Schuler said. “We learned how important it is to bring the power of DuPont to market. If nonwovens can’t meet a need, we have great resources within the rest of the company to work with to find the right solution for that particular customer.”
Sontara/Suprel
The DuPont Sontara business continues to look for new roles for its new polymer technology, which was originally unveiled in spring 2003. Marketed initially under the Suprel brand name to the health care apparel market, products made with this technology combine multiple polymers to add functionality to the nonwoven. With Suprel, the polymers are polyproplyene, for softness, and polyester, for barrier protection, but virtually any two polymers can be combined in this process, called Advanced Composite Technology (ACT). “We are looking at the many segments that DuPont operates in to see how ACT would benefit them,” explained Nigel Budden, global business manager of Sontara. “These are not necessarily typical nonwovens uses. It is good for us, as well as for the industry, to broaden the use of nonwovens.”
Currently, Mr. Budden, who assumed his position this spring, could not comment on specific target areas for the polymer technology, but he would say that the mixing of polymers and technology will enable DuPont to meet a wide range of applications. “We are learning about unmet needs that this technology can satisfy with added or new functionality for a nonwoven material.”
For now, the technology’s chief role is in the health care market where surgical gowns and drapes have been launched in partnership with Medline Industries. While well respected and accepted, the growth of these new products face similar value-to-price barriers found in other nonwovens markets. The health care market is extremely cost conscious and while the material is valued by those who use it, the purchasers don’t always appreciate the value-added benefits of Suprel.
Still, as a huge market for DuPont, health care will always be considered a staple. In addition to Suprel, the company offers a traditional spunlace product, which was recently renamed Softesse from Sontara in the health care market, and a film-based material called Acturel. “The health care market will always be bullet proof when it comes to many economic drivers,” Mr. Budden explained. “Sometimes it just takes a little longer for new technology to be accepted. Once you really understand the needs of the market, however, you can tailor your products to meet them and DuPont is well prepared to do this.”
Beyond health care, the wipes market continues to be an important one for the Sontara spunlaced product. However, pricing issues and other economic factors led the company to exit the mass consumer side of the business. “We prefer to be in areas where we can add value to a product and the mass market was just not a place where we could do this,” Mr. Budden explained. “The company will continue to look at wipes areas where value-added features are appreciated. These could include industrial, some niche consumer and high-technology sectors.”
In addition to new markets, growth will come from new geographies. A partnership with Brazilian footwear maker Cipatex has begun to yield business in areas beyond footwear, and joint ventures in Japan and China continue to fare well. Additionally, in expectation of increased Asian growth, the company has increased its Asian sales and marketing group.
“It’s safe to say that there will be growth in Asia,” Mr. Budden said. “Just look at the number of people there. It’s just a matter of picking which economy will grow and when and being ready for it.”
As it conquers new markets, developing new ways to make nonwovens will allow DuPont to bring materials to new places, which will mean good things for the company as well as for the nonwovens industry as a whole. “It is our goal to develop products and technologies that you wouldn’t even know were a nonwoven,” Mr. Budden said. “This will help us ensure that as an industry we are sustainable.”
Sales: $1.25 billion
Description: Key Personnel
Mark Vergnano, vice president and general manager DuPont Nonwovens; Tom Schuler, global business director—Tyvek/Typar; Nigel Budden, global business director—Sontara
Plants
Richmond, VA (Tyvek); Old Hickory, TN (Sontara, Suprel. Softesse); Luxembourg (Tyvek, Typar); Asturias, Spain (Sontara); Shenzhen, China (Tyvek and Sontara converting facility)
ISO Status
All plants ISO 9002 certified; Luxembourg facility also 9001 certified
Processes
Flash spun (Tyvek), spunbond (Typar), spunlaced (Sontara)
Brand Names
Tyvek, Tychem, Sontara, Suprel, Softesse, ComfortMax, Typar (worldwide except North, Central and South America)
Major Markets
Construction, health care, protective apparel, industrial, filtration, absorbents, home furnishings, envelopes, geotextiles, graphics, packaging, footwear
Sales increased about 6% (estimated) to reach approximately $1.25 billion in 2004 at DuPont Nonwovens, Wilmington, DE, thanks to significant gains in Eastern and Central Europe, Asia and Latin America, according to executives. Additionally, a strong performance in the construction market contributed to gains for the business.
“Our goal has been to drive our business toward double-digit top and bottom line growth and in 2005, to date, we’ve gotten a little closer to that,” said Mark Vergnano, vice president and general manager of DuPont Nonwovens. “We are at 7% growth for the year so far.”
Earnings growth has been more challenging than sales growth, due to escalating raw material costs. Because DuPont operates with a goal of equating price with value, it has been careful not to increase costs haphazardly. “We try to look at the value we bring to our end users and keep our price points in line with the value,” Mr. Vergnano said. “In some cases, this basic equation has gotten out of whack because of rising ingredient costs.”
That said, DuPont was able to keep price increases minimal until the second quarter of 2005. Instead, the company relied on increased efficiency wherever possible and improved management of raw material purchasing to keep costs in check. Still, remaining profitable was particularly challenging in certain tight margin areas such as medical fabrics and critical cleaning. DuPont exited some of the tighter commodity areas such as consumer wipes, where it did not see an opportunity to add value and be profitable.
“The consumer wipes market is in a similar situation as the hygiene market was 10 years ago,” Mr. Vergnano said. “A lot of companies are chasing high volumes with off-the-shelf technology. This doesn’t really leave a lot of room for value.”
Also facing significant competitive and cost-related challenges is the health care market, where DuPont remains a major player. As hospitals and buying groups, particularly in North America, try to reduce costs of worker and patient apparel, margins have been squeezed and raw material costs have not always been absorbed. “We continue to believe that we have a superior value proposition in the health care market. The key for us is to ensure that our message and value is understood by the health care providers and patients that will benefit from our advanced technology and science,” stated Mr. Vergnano.
Meanwhile, DuPont Nonwovens’ two other key growth areas—construction and personal protection—continue to provide stellar growth for the company, thanks largely to developing world economies as well as innovation in existing markets. That’s not to say, however, that new markets are not interesting to the company. A recent initiative will help DuPont enter new territories as well as a new market—filtration. Last year, the company acquired a new nonwovens technology from a small Korean technology firm. This new technology is designed to produce uniform fine fibers and adds to DuPont selective barrier technology. This technology will not only help DuPont expand offerings to existing markets but also enter the filtration segment, which is steadily increasing its use of nonwovens. “Filtration is an area we have looked at for some time,” Mr. Vergnano explained. “But, until now, we haven’t had the right technology to allow the right approach.”
After purchasing the technology, as well as a pilot line making the material last year, in May, the company went public with an announcement it would increase the venture to a full-blown market development facility from which it will explore global opportunities for the technology. Within the next 12 months, executives expect to also announce plans for a full-scale commercial production line centered on the technology. “This facility could be anywhere but clearly we would like to extend our footprint in Asia,” Mr. Vergnano said.
The Korean investment is the first nonwovens manufacturing facility in Asia wholly owned by DuPont, although it does operate a joint venture in China as well as converting assets in China and Japan. For now, the company is able to satisfy Asian demand in its existing technologies from facilities in North America and Europe but has been plowing other resources into Japan, China, India and Korea, the four Asian countries earmarked for future growth.
Beyond Asia, Eastern Europe and Latin America are other hot spots for growth. In Eastern Europe, DuPont has been able to meet demand from its Western European bases, while in Latin America, the company’s joint venture with shoemaker Cipatex, called DuPont Cipatex, has allowed it to meet demand in footwear as well as other markets. As for Latin American markets outside of Brazil, DuPont is not currently active but is assessing them.
“Our focal point is Brazil,” Mr. Vergnano said. “Argentina has been a little rocky economically and the other countries in South America are not showing as much demand. Mexico is doing well and we are evaluating it for growth.”
From a technological standpoint, polymer science is expected to pave the way for DuPont to grow in its nonwovens business. The first product offering made with Advanced Composite Technology, Suprel, continues to fare well in the health care market where it combines the softness of polypropylene and the strength of polyester. The company continues to examine new areas for the material as well. Beyond the ACT technology, DuPont Nonwovens is relying on the polymer expertise of its parent company.
“We want to drive innovation with polymer knowledge owned by DuPont,” Mr. Vergnano explained. “This means adding new polymers to existing polyolefins to bring many more functionalities to the market.”
These functionalities could include strength or flame resistance and down the road could even allow DuPont to use bio-based polymers in its nonwoven substrates. “This type of technology will be a big driver for some of our future new products,” according to Mr. Vergnano.
Tyvek
The DuPont Tyvek business continues to perform well thanks to superior product performance as well as continued focus on educating the end user. One example is the construction market where the company has been educating architects and builders on the importance of using housewrap and other Tyvek products. These efforts have paid off in Central and Eastern Europe as well as in Asia where DuPont has increased its downstream presence in recent years. Also, the Tyvek business has outperformed the market in North America and Europe despite that market’s fluctuations.
New product development has also been a key growth engine for Tyvek, with a focus on offering added functionalities to the substrate.
“Just this spring, we have added five new products to our Tyvek line that will allow us to enter new market segments or add new functionalities to markets where we already exist,” said Tom Schuler, global business manager of Tyvek. “This enables us to enter new markets and reinforce our competitive position in existing ones.”
One such product, introduced this spring is Tyvek Reflex. This new product has been metallized to add thermal performance while maintaining its water holdout and breathability.
These new products were developed from a constant effort to hone Tyvek flash spinning technologies to fit the changing needs of the market as well as to meet the specific demands of different regions. These efforts have allowed DuPont Tyvek, in addition to construction, to target such markets as protective apparel, medical packaging, envelopes, packaging and graphics.
While construction continues to be the largest market for Tyvek, protective apparel continues to gain in importance. This segment has benefited from the creation of DuPont Personal Protection, a business that brought all of the DuPont personal protective products under one umbrella and has allowed the company to provide the customers and end users with a wider range of protection from this single business. According to Mr. Schuler, this corporate-wide structure has expedited infrastructure investments and technology development. “By expanding the offering and our presence downstream, customers have gained access to a more complete offering and we’ve gained tremendous insight into their current and future needs,” he added.
In addition to Tyvek for dry particulate hazards, DuPont Personal Protection includes DuPont Nomex for thermal hazards, DuPont Tychem for liquid and gas chemical hazards, DuPont ProShield for general-purpose applications and DuPont Kevlar for cut-and-abrasion protection. Growth in this segment is driven largely by worker protection, not by large-scale catastrophes. “But, it is our job to be ready to respond to disaster,” Mr. Schuler said.
In addition to its traditional markets, Tyvek is also making headway in some new markets. Among these is the automotive textile market in Asia, which has shown considerably more interest in nonwovens than other regions. “You really have to tailor products to meet the needs of specific markets,” Mr. Schuler explained.
This has also been a challenge in existing markets. Take construction, where differing national construction codes have led DuPont to offer 40 different roofing products in Europe alone. “What we do is spend a lot of time understanding what our end user needs,” Mr. Schuler said. “We learned how important it is to bring the power of DuPont to market. If nonwovens can’t meet a need, we have great resources within the rest of the company to work with to find the right solution for that particular customer.”
Sontara/Suprel
The DuPont Sontara business continues to look for new roles for its new polymer technology, which was originally unveiled in spring 2003. Marketed initially under the Suprel brand name to the health care apparel market, products made with this technology combine multiple polymers to add functionality to the nonwoven. With Suprel, the polymers are polyproplyene, for softness, and polyester, for barrier protection, but virtually any two polymers can be combined in this process, called Advanced Composite Technology (ACT). “We are looking at the many segments that DuPont operates in to see how ACT would benefit them,” explained Nigel Budden, global business manager of Sontara. “These are not necessarily typical nonwovens uses. It is good for us, as well as for the industry, to broaden the use of nonwovens.”
Currently, Mr. Budden, who assumed his position this spring, could not comment on specific target areas for the polymer technology, but he would say that the mixing of polymers and technology will enable DuPont to meet a wide range of applications. “We are learning about unmet needs that this technology can satisfy with added or new functionality for a nonwoven material.”
For now, the technology’s chief role is in the health care market where surgical gowns and drapes have been launched in partnership with Medline Industries. While well respected and accepted, the growth of these new products face similar value-to-price barriers found in other nonwovens markets. The health care market is extremely cost conscious and while the material is valued by those who use it, the purchasers don’t always appreciate the value-added benefits of Suprel.
Still, as a huge market for DuPont, health care will always be considered a staple. In addition to Suprel, the company offers a traditional spunlace product, which was recently renamed Softesse from Sontara in the health care market, and a film-based material called Acturel. “The health care market will always be bullet proof when it comes to many economic drivers,” Mr. Budden explained. “Sometimes it just takes a little longer for new technology to be accepted. Once you really understand the needs of the market, however, you can tailor your products to meet them and DuPont is well prepared to do this.”
Beyond health care, the wipes market continues to be an important one for the Sontara spunlaced product. However, pricing issues and other economic factors led the company to exit the mass consumer side of the business. “We prefer to be in areas where we can add value to a product and the mass market was just not a place where we could do this,” Mr. Budden explained. “The company will continue to look at wipes areas where value-added features are appreciated. These could include industrial, some niche consumer and high-technology sectors.”
In addition to new markets, growth will come from new geographies. A partnership with Brazilian footwear maker Cipatex has begun to yield business in areas beyond footwear, and joint ventures in Japan and China continue to fare well. Additionally, in expectation of increased Asian growth, the company has increased its Asian sales and marketing group.
“It’s safe to say that there will be growth in Asia,” Mr. Budden said. “Just look at the number of people there. It’s just a matter of picking which economy will grow and when and being ready for it.”
As it conquers new markets, developing new ways to make nonwovens will allow DuPont to bring materials to new places, which will mean good things for the company as well as for the nonwovens industry as a whole. “It is our goal to develop products and technologies that you wouldn’t even know were a nonwoven,” Mr. Budden said. “This will help us ensure that as an industry we are sustainable.”