Sales Reports

Andrew Industries

January 1, 2009

Location: MANCHESTER, U.K.

Sales: $130 Million

Description: Plants
South Carolina, China, U.K.

Needlepunch, thermal bonded and chemical finishes

Brand Names
Fiberlox, Microfelt, Checkstatic and Pleatlox

Major Markets
Filtration, Technical Felts and Laundry products

After reporting a record year in fiscal 2008, Andrew Industries, a maker of needlepunched nonwovens for filtration media, said its sales declined slightly to $130 million for the year ended March 2009, in large part due to the global economic downturn during the second half of the year.

How much the economic downturn impacted its business varies by region, said Danny Grover, president of Southern Felt, Andrew’s U.S. subsidiary. “Our global nonwovens division has experienced a 15% downturn in North America, a 12% downturn in Europe and a 20% upturn in the Asia-Pacific. Overall, year-on-year the division’s sales and earnings have remained much the same.”

Andrew Industries Group, through its subsidiaries in the U.S., China and the U.K., specializes in needlepunched felts largely targeted at the baghouse filter market.  Founded 114 years ago, the company established its U.S. subsidiary, Southern Felt in 1988. Five years ago, it expanded into Asia with the establishment of Andrew Industrial Textile Manufacturing Company in Shanghai, China.

According to Mr. Grover, demand for products in China and the Asia-Pacific region continues to grow overall at 20% with exceptional growth coming from power generation, steel, aluminum, cement and asphalt. Andrew added a second filter felt
production line in China in March this year and plans to install a third line within the next three years.

“This second line, made in Germany, is the most modern filter felt production line anywhere in the world at this time,” Mr. Grover explained.

Despite this growth, earnings were hurt by the global shortage of meta aramid fibers as new Chinese entrants to the meta aramid fiber market destabilized the filter felt marketplace.

Meanwhile, Southern Felt’s $6 million investment in a new German high temperature chemical treatment and thermal stabilization line in South Carolina proved to be well-timed as demand for PPS felts in the power generating sector increased. The expansion added 375,000 linear yards of needlepunch felts for the filtration market monthly.

Another major investment—this time in Europe—in a line that makes felts from PTFE fiber is also planned for the near term. This is led by growing demand for products in the incineration center. Decreasing PTFE pricing has made these fibers more economically viable in segments requiring high temperature and chemically resistant performance.

In terms of regional growth, now that Andrew has conquered China, the next step will be expansion in India with a state-of-the-art manufacturing facility. Unlike, China where the company makes filter bag materials, the India site will be run similarly to the Southern Felt operation which manufactures filter felt in roll goods to support the filter bag fabricating industry.

In December 2008, Andrew sold its Canadian filter bag fabricating subsidiary, Filterfab, to the National Filter Media Corporation of Salt Lake City, UT, because as NAFTA developed, Filterfab increasingly came into competition with Southern Felt Company’s filter bag fabricating customers in NAFTA and this conflict of interest needed to be eliminated.

In recent years, other divestments have included the closure of Eastern Felt and Northern Felt in Rhode Island and Canada, respectively, and the consolidation of Slater Felt in Missouri into its South Carolina operation.  Andrew also consolidated its two U.K. business units into one operation.

According to Mr. Grover, the company’s size is fine as it is. “For the time being we have more manufacturing capacity than demand for our products, but one benefit of this temporary situation is that our manufacturing efficiencies are improved which helps maintain margins,” he said, adding that he is confident that Andrew will easily weather the economic downturn.

“Our nonwovens division is very focused on the filtration sector and the three economic regions of North America, Europe and Asia Pacific in which we operate give us a good model to ensure that we come out of this global economic downturn
in good shape and ready to respond to an upturn.”

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