Location: Allschwil, Switzerland
Sales: $91 million
Description: Key personnel
Poul Mikkelsen, chairman; Peter Stoffel, CEO; Jack Richardson, COO; Ingo Johannsen, CFO; Michael Norboge, vice president of Personal & Home Care; Claudia De Buman, vice president of Special & Technical Applications
Asheville, NC, USA; Soultz, France; Mildenau, Germany
Lidro, Norafin, Rn’S
Wipes, Hygiene, Medical, Filtration, Packaging, Protective apparel and Automotive
Sales of $91 million reflect a slight increase for Jacob Holm Industries, a solution provider serving industries with mainly spunlaced and needlepunched nonwovens to date. This figure is expected to jump significantly in 2005 and 2006 as a large spunlaced line comes onstream in North Carolina, the company’s first U.S. production site.
Jacob Holm Industries invested $65 million in this U.S. facility to accomplish two phases of business expansion in the U.S. The facility’s new line, using technology from Fleissner, Jacob Holm, Kuster and A. Celli, will be able to produce at least 15,000 metric tons of material per year and, more importantly, the facility is designed and constructed to accommodate further expansion in the near future. The line will chiefly serve the personal care and household wipes markets but also features enough flexibility to create other substrate types including cotton for various markets.
The company made a decision to enter the U.S. last spring after sales there, once representing as much as 20% of its total business, were hit by U.S. currency fluctuations. Last year, U.S. sales accounted for approximately 10% of Jacob Holm sales. Also contributing to this decision was increased demand for spunlaced nonwovens in the U.S. wipes market, which was reportedly led by Procter & Gamble’s conversion from airlaid to spunlace in its U.S. baby wipes business.
“The growth in the U.S. has been better than we hoped,” said CEO Peter Stoffel. “Some U.S. companies already have no choice but to buy spunlaced products in Europe or Israel.”
Wipes currently represent about 70% of Jacob Holm’s total nonwovens business. This figure was once as high as 80%. But executives are looking beyond this market for growth and expect it to keep decreasing as a focus on other areas continues.
“We are looking to other markets where we can sell more functions and differentiate our products. This is being demanded, to some degree, in wipes, but moreso in areas like filtration and protective apparel.”
Here Jacob Holm is working with high performance fibers such as Teflon, Nomex, PVA, meta-aramids and poly-aramids. “If a fiber is cardable, we can use it,” explained Mr. Stoffel. “We are examining this in all aspects of our business but wipes are limited in how much differentiation a customer will pay for.”
From a geographical standpoint, much of Jacob Holm’s focus is on maintaining its European business while preparing for its North American expansion. However, five years ago, the company, which operates facilities in France and Germany, made a commitment to being a global company. “It was our decision to go to the U.S. first but it’s safe to say we will go to Asia next,” Mr. Stoffel said.
Like many of his peers, Mr. Stoffel cited rising raw material prices, and the retail market’s failure to absorb them, as a key challenge facing nonwovens. “It has been hard to pass increases on and the industry isn’t going to develop if we can’t increase our prices. Productivity can only take us so far when it comes to cutting prices.”
So far, the result of this problem has been industry consolidation, a trend Mr. Stoffel sees continuing in all tiers of the industry. “The good thing is the market is still growing so it is a good market to be in,” he added.
In corporate news, Jacob Holm in 2004 reorganized its organizational structure into global business units, Personal & Home care (PHC), encompassing wipes used domestically, and Special & Technical Applications (STA), containing filtration, protective apparel and other specialty applications. With this reorganization came a move of the company’s corporate headquarters from Jyderup, Denmark to Basel, Switzerland as well as some personnel appointments. Jack Richardson, formerly of Johnson & Johnson, was named chief operating officer; Ingo Johannsen, who formerly worked for Siemens in business development and mergers and acquisitions, joined the company as chief financial officer; Michael Norboge, formerly U.S. sales director was named vice president of Personal & Home Care and Claudia de Buman was named vice president of Special & Technical Applications. Mr. Stoffel said that the global units will give customers a key focal point for dealings around the world.