Sales Reports

Hollingsworth & Vose

January 1, 2005

Location: Walpole, MA

Sales: $175 Million

Description: Key Personnel
Val Hollingsworth, president and CEO; Charles Miller, vice president and general manager, engine and industrial filtration; Tom White, vice president and general manager battery products and vice president, business development, David von Loesecke, vice president and general manager, high efficiency and specialty filtration; Randall Rogers, vice president and general manager, industrial specialties and engineered composite materials; Juergen Binzer, vice president and general manager, European engine and industrial filtration products; Jean-Paul Francois, vice president of sales, European high efficiency filtration and separation products; Justin Harkiewicz, vice president and general manager, Asia-Pacific; Jeff Sherer, vice president and CFO; Douglas Klauber, vice president, technology; Mike Paddock, vice president, human resources; Mark Hutchison, vice president, operations

Apizaco, Mexico, Corvallis, OR, East Walpole, MA, Easton, NY, Floyd, VA, Greenwich, NY, Hatzfeld, Germany, Hawkinsville, GA; Kentmere, UK, Suzhou, China (under construction), West Groton, MA, Winchombe, U.K.

ISO Status
Apizaco, Mexico, QS-9000; Corvallis, OR, ISO 9001:2000; East Walpole, MA, ISO 9001:2000; Easton, NY, ISO 9001:1994 and QS 9000: March 1998; Floyd, VA, ISO 9001:2000; Greenwich, NY, ISO 9001:1994 and QS 9000: March 1998; Hatzfeld, Germany, ISO 9001:2000; Hawkinsville, GA, QS- 9000 and AS 9100; Kentmere, UK, ISO 9001:2000; West Groton, MA, ISO 9001 and QS-9000; Winchcombe, UK, ISO 9001:2000 and QS 9000

Wetlaid, meltblown, carded, crosslapped, needlepunched, thermal point bonded, thermal overall bonded, thru-air bonded, latex bonded, thermal and chemical lamination, solvent-based saturation, composites

Brand Names
AFM, AFN, AlphaPerm, AquaSure, Duo-Phase, DynaSeal, EnergyGuard, Fastock, FiberRich, HiPerm, HollTek, HovoFuse, Hovoglas, Hovoliner, Hovolon, Hovomat, Hovopulse, Hovosorb, Hovotex, Hovotherm, Hovotrim, Hovowipe, Magnaseal, NanoMelt, Nanoweb, PurePerm, Saf 'N' Shielded, Soft 'N Stable, Stitchbackers, Technostat, The Cat, Tufguard, ValPac, WallTek

Major Markets
Engine & Industrial Filtration: Air-heavy duty, automotive and cabin air; Fuel—heavy duty, automotive,common rail, in-tank; Oil-heavy duty, automotive; Industrial—gas turbine, dust collection, hydraulic
High Efficiency & Specialty Filtration: Analytical/
medical/biotech; coalescer; drinking water; HEPA, ULPA & cleanroom; HVAC; pool & spa; room air cleaner; respiratory/surgical face masks; specialty liquid; vacuum cleaner
Battery Products: Battery chemistries for industrial and automotive markets—alkaline manganese; nickel cadmium; nickel metal hydride; valve regulated lead acid; specialty-lithium thionyl chloride, zinc air
Industrial Specialties: Apparel-embroidery backing; label stock; waistband canvas; engineered composite materials-automotive gaskets; industrial sealing materials; thermal/acoustical barriers; Floppy Disk Liners; Home Furnishings: drapery buckram; wallcovering substrates; window covering
Advanced Fiber Nonwovens: Composite roll materials; composite tank and pipe materials; EMI shielding; ESD and ground planes; fuel cell GDL materials; radar absorbing veils; low observables; sporting goods; surfacing veils

A 7% sales increase was reported by Walpole, MA-based Hollingsworth & Vose with all business units posting strong results, thanks primarily to strengthening of the cleanroom market, solid battery product sales resulting from an improvement in the telecommunications sector, general growth in engine filtration applications, new synthetic composites and meltblown product introductions into the HVAC market and further penetration into the wall covering market.
H&V’s main businesses are High Efficiency and Specialty Filtration, Industrial Specialties and Engineered Composite Materials, Battery Products and Engine and Industrial Filtration. The High Efficiency and Specialty Filtration (HESF) segment has continued to introduce new products including NanoMelt meltblown media, pleatable synthetic composites and additions to its pool and spa filtration media line. In addition, H&V has continued to penetrate existing market segments with its glass and synthetic product lines.
“Innovation continues to play a strong role in this segment,” said company president Val Hollingsworth. “For example, our NanoMelt product is being very well received in the market due to its ability to outperform current products and meet new filtration standards such as Swedish National Testing Institute P mark certification and the EN779 standards.”
Nanomelt media’s fine fiber structure provides a higher mechanical filter efficiency than other meltblown media with coarser fiber content. Though an electrostatic charge boosts the initial efficiency to an even higher level, the media continues to perform at high levels of mechanical efficiency even after the electrostatic charge becomes masked from particle loading and fume exposure, according to executives.
H&V’s pool and spa media product line, AquaSure now includes a copper version, which maintains antimicrobial functions while incorporating copper’s ability to inhibit the growth of mold, fungi and algae. Beyond pool and spa, this technology has potential in other liquid and air filtration markets, according to the company.
Meanwhile, sales in the Industrial Specialties segment improved on new product introductions and favorable exchange rates. New products include embroidery backing, waistband products and friction materials. “H&V’s wallcovering substrates, HollTek and WallTek, have also continued to penetrate the market, displacing vinyl coated paper. Key benefits of using H&V’s substrate include the ability to easily strip the wallcovering and the nonwovens’ permeability, which avoids mold and mildew found in traditional products. These products also meet ASTM F793 requirements for Category V Type II commercial wallcovering,” Mr. Hollingsworth said.
H&V’s Engineered Composite Materials (ECM) line continues to expand into new markets including friction materials and adsorptive products. H&V recently introduced saturated friction material to the automotive aftermarket for use in automatic transmissions. H&V’s material is bonded to steel plates and used as clutch discs inside the transmission. Quality and durability are the key performance characteristics and commercial quantities are in production for the domestic market; introduction into the European and Asia-Pacific markets will be made soon.
Also included in this division is Advanced Fiber Nonwovens (AFN) where a focus has been placed on two product lines—conductive nonwovens and fuel cells. The key differentiating characteristic of H&V’s nickel-coated carbon and stainless steel veils and mats is their isotropic properties.
H&V supplies 9, 12, 50 and 100 gsm products globally to applications such as EMI and radar absorption and reflection; ground planes for antennas and communications modules and lightning strike protection. AFN is leveraging H&V’s experience with electrochemical devices by supplying high quality gas diffusion layer (GDL) substrates for use in PEM fuel cells. During 2004, AFN has expanded its fuel cell product offering to include domestic production of uncoated and coated gas diffusion layer (GDL) materials.
H&V’s Battery Products business has benefited from a gradual rebound from the 2000/2001 telecommunications sector crash. In addition, the alkaline, or primary battery, market continues to be a key market for H&V.
New product developments in the Engine and Industrial Filtration Group have focused on providing high performing synthetic media to the market. These products combine the durability and efficiency performance characteristics the market requires at a cost-effective price so that customers can employ the product with the best cost per unit of performance, according to Mr. Hollingsworth. To extend its capabilities in the nanofiber areas, H&V recently signed a global licensing agreement with Donaldson Company, covering technology used to produce nanofiber filter media and nanofiber-containing filter elements for pleated air filters for on-road vehicle operations. H&V will independently make, use and sell nanofiber filter media and sublicense customers.
From a regional perspective, H&V Europe’s contribution to the engine and high efficiency filtration business has been enhanced by the successful startup of a new meltblown line in Hatzfeld, Germany. This state-of-the-art line supplies media used in a broad range of applications from HVAC bag media, face mask and vacuum bags to auto and cabin air and fuel filtration and can process a broad range of polymers including polypropylene, polyethylene, polyesters, polyamides, polycarbonate and polyphenylene sulfide. Basis weights between 5 and 400 gsm and calipers ranging from 0.07-13 mm can be produced. H&V is also capable of producing sub-micron fiber diameters on this line.
“We expect meltblown to have a long-term role in the filtration market as the performance requirements for engine filtration increasingly require longer life products that are more efficient at current pressure drops,” Mr. Hollingsworth said.
Another core growth area for H&V is China where the company formed a subsidiary in 2004. Hollingsworth & Vose (Suzhou), Ltd. is a wholly owned foreign enterprise (WOFE). A machine capable of producing engine filter media is being installed.
New markets such as China as well as new products across all of its divisions will continue to drive growth going forward for H&V, according to Mr. Hollingsworth. “As we noted last year, H&V will continue to grow organically though product innovation, key customer relationships and market focus,” he said. “In addition, we will strategically and selectively evaluate acquisition opportunities which complement or extend our business base and manufacturing assets.”

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