Sales: $294 million
Description: Key Personnel
Mikael Staal Axelsen, General Manager, Personal Care Division; Jorgen Bech Madsen, General Manager, Technical Division; Ole Houmann, Finance Director; Kenneth Mynster Dolmer, Purchasing Director
Two in Aalborg; one in Malaysia, three in the Czech Republic
DS/EN ISO 9001 Quality management 1991:2000; DS/ISO 14001 Environmental management 2001; DS 2403 Energy management
Drylaid, carded, needlepunched, thermalbonded, spunbond/meltblown, technical air-lay
Fibertex, Flexback, Formtex, Compoflex, Multigeo, Superflor, Weedseal, Fiberforce, Fibergreen, Fibertex patio, Fibertex universal, Fiberacoustic, Two-in-One, Comfortback, Matchback, Woodback, Q-Match, Making the perfect match, Comfort, Elite, Dual.
Industrial textiles—primary and secondary carpet backings, automotive, furniture and bedding, filtration; technical textiles—building and construction, composites, do-it-yourself, horticulture; hygiene—applications within baby diapers, feminine hygiene and incontinence.
Sales grew but earnings were under pressure for Fibertex, Aalborg, Denmark. The maker of nonwovens for both personal care and technical applications has responded to increased raw material pressures by streamlining processes to eliminate as many raw material costs as possible. “We have evaluated our business and where there are unacceptable profits we have added price increases,” said Jorgen Bech Madsen, general manager of Fibertex’s Technical Division. “If that didn’t work, we have been willing to lose business if we have had to. And further price increases will be added, if raw material prices continue to increase.”
In addition to raw material prices, Fibertex’s business was negatively impacted by the weak U.S. dollar, which has made doing business in North America prohibitive for Euro-based businesses. While Fibertex still exports to the U.S., only value-added products are targeted there, mainly in the technical business.
Despite these pressures, in 2007, group sales reached DKK 1.6 billion, up from 1.3 billion in 2006. Growth was felt across its two major divisions—Personal Care and Technical—as new capacity ramped up through its entire business.
Fibertex’s personal care division operates out of two facilities—one in Aalborg, Denmark and another near Kuala Lumpur, Malaysia, which contain a total of five production lines all based on spunmelt technology. Currently all of these lines, even the newest, which was completed in early 2007, are operating at full capacity, but executives have no plans to expand this business, given the state of the European hygiene market. “We see exciting growth opportunities in both areas but there is an overcapacity situation in the European hygiene markets,” Mr. Madsen said. “No one is adding capacity.”
The addition of the fifth line as well as improved efficiencies in the older lines helped drive personal care sales up 33% to DKK 1.069 million ($196 million) in 2007 and further increases are expected for 2008 as all lines are now highly efficient and increasing their marketshare. Asia-Pacific sales particularly are growing at a high rate as demand in the region exceeds supply, Mr. Madsen added.
Instead, Fibertex is offering its customers a means by which to diversify. In April, the company announced a joint venture company, called Innowo Print, with technology making it possible to print directly on nonwoven materials for products such as diapers and femcare products.
The new company, located in Harz, Germany is owned by Fibertex and the two businessmen Lars Christiansen and Carsten Pedersen. Commercial production began in June. “It is definitely a part of our strategy to go after value-added nonwovens but also being competitive in large markets,” Mr. Madsen said.
Meanwhile, Fibertex’s technical business comprises about a third of the company’s sales and targets the construction, industrial, automotive and filtration markets, out of Fibertex’s Aalborg headquarters as well as three sites in the Czech Republic, which were acquired from Vigona in 2004 to increase exposure to Central and Eastern European countries and broaden its technical portfolio.
Sales in this division rose 9% to DK 583 million ($107 million) in 2007. Of the three Czech sites, one is outdated and scheduled to close in 2009; the other two have seen a number of improvements by Fibertex during the past four years. The most recent of these is a new air lay line, announced in September 2007, which will manufacture acoustic fabrics targeting the automotive industry. The new line became fully operational in August 2008.
“This technology allows us to reduce weights compared to most acoustic materials,” Mr. Madsen said. “Other benefits include better moldability, reduced raw material usage and increased performance.
The new air lay line in the Czech Republic joins thermal bonding, drylaid and needlepunching machines at the operation. Since acquiring the business, Fibertex has added a large-scale needlepunch line and upgraded an older drylaid line there.
Meanwhile, in Denmark, Fibertex’s Technical division operates a sizable needlepunch operation, which also received a boost last year, when plans for a new line was announced. The new line replaces older, obsolete lines and became fully operational in August 2008.
These measures are part of the division’s “Capturing the Future” plan, which is intended to improve earnings and ensure its sustainable development. Other tenets of this plan include the movement of labor-intensive operations to modern facilities in the Czech Republic, where wages are lower, and the development and sale of high-margin products and the expansion of Fibertex’s position in regional growth markets. The results will be an increase in earnings.
“Our plans are to strengthen the two divisions,” Mr. Madsen said. “We run them separately because the divisions don’t have a lot to do with each other.”