Sales Reports

Royal Ten Cate (Polyfelt)

January 1, 2006

Location: Linz, Austria

Sales: $91 million

Description: Key Personnel
Andreas Matje, CEO; Michel Haudrechy, VP marketing and sales; Manfred Winkler, VP product supply; Nick Blasl, VP finance and IT services, Frank ten Oever, VP human resources

Linz, Austria; Bezons, France; Almelo, Netherlands; Kuala Lumpar, Malaysia

ISO Status
ISO 9001:2000

Spunbond, needlepunch and hydroentanglement

Brand Names
Polyfelt, Bidim (geotextiles and geocomposites), Polyline, Polymat, Megadrain, Envirofelt, Enviromat, Polyfelt AR, Polyfelt Hydrocomp, Polyfelt Rock PEC, Polyfelt Rock GX

Major Markets

An important highlight this year for Austrian geotextile specialist Polyfelt was its €70 million acquisition in October 2005 by technical textiles powerhouse Royal Ten Cate (RTC), headquartered in The Netherlands. With nonwovens sales reaching €73 million last year, Polyfelt continues to hold tight to its leading position in the European civil engineering and construction markets.
According to Guenter Froschauer, commercial director, the company’s 2005 performance was impacted by two main influences. “On one side, market development was slowed by the high Euro exchange rate compared to the U.S. dollar. Additionally, internal restrictions, mainly caused by the installation of a new production line, limited our ability to grow sales.” Mr. Froschauer added that there was a significant increase in competition, especially in Europe, as well as constant increases in raw material prices that made 2005 a very tough year.
With intense competition permeating European markets, Polyfelt reported that customers are currently tending to prioritize cost reduction efforts over new product developments. Although several internal product developments—such as Geodetect  (a geosynthetic composite combining reinforcement with monitoring of soil movements) and Polyfelt HM, a high modulus grid for special reinforcement applications—have been successfully introduced, sales volumes were not impressive, especially in 2005, according to the company. “This could be explained by the weak and mainly cost-orientated crisis that had to be overcome by the construction industry, especially in the German market,” explained Mr. Froschauer.
Commenting on the European nonwovens industry, he pointed to a consolidation trend exemplified by several take-overs in Europe. “The acquisition of Polyfelt by Royal Ten Cate is a typical example. This trend is partly driven by the stronger competition caused by decreasing margins due to increasing raw material and transportation costs, as well as stymied sales price increases in the main mass markets.” He added that there is also a trend where producers that formerly supplied exclusively nonwovens are now offering competitive, varied product ranges.
In terms of export markets, the company is continuing to focus on the EU, including the new EU candidates. Other neighboring countries, such as CIS (the Commonwealth of Independent States or the former USSR Republics), the near and Middle East and other Eastern European countries, are gaining more importance for Polyfelt.  
When it comes to production technology, Polyfelt’s capacity in Europe exceeds 30,000 tons, which is 100% spunbond. The company uses a hydroentaglement process only on its newest production line in Linz. “Developed in-house, this hydroentanglement technology—in combination with the use of new and improved raw materials—enables us to improve the technical properties and therefore the performance of our geotextile products.” Mr. Froschauer added that the new line could help Polyfelt examine new applications.
Polyfelt is now in a phase of consolidation within the existing plants and has no plans to increase capacity in the short term. Going forward, Mr. Froschauer said that profitable growth—achieved largely through export activities—continues to be a strategic goal for Polyfelt.
Key benefits for customers are expected to include not only high quality products and solutions but also a well developed distribution chain and outstanding technical support. Polyfelt predicts that synergies with Royal Ten Cate’s other activities will leverage those possibilities further and result in a powerful global position.
“In the beginning of 2006 we successfully implemented in Europe a new organization out of formerly independent companies but maintained their regional distinctions. This sort of ’think global, act local’ policy will be intensified in the future so we can provide customers a perfect one-stop solution.”

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