Sales Reports

First Quality

January 1, 2009

Location: GREAT NECK, NY

Sales: $250 Million

Description: Plants
Hazleton, PA; McElhattan, PA


Hygiene, medical

First Quality Nonwovens continues to invest in both its nonwovens and its packaged goods business with plans for a new diaper plant as well as its first foray into spunlacing making headlines in recent months. Formed in 1996, First Quality Nonwovens has steadily invested in its nonwovens business to make it what it is today, one of the world’s largest suppliers of spunmelt nonwovens for medical and hygiene applications. Based in Great Neck, NY, the company has nonwovens operations in Hazleton and McElhattan, PA, which largely serve its massive private label businesses.

According to industry insiders, the current output of tightlipped, privately held First Quality Nonwovens is in the 90,000- 100,000 ton range, making its sales in the $250 million range. About 18 months ago, First Quality made an ambitious purchase within the private label diaper market when it bought Covidien’s retail Products Business (formerly Tyco), making it a forward integrated nonwovens supplier and converter.

First Quality had already produced private label feminine hygiene items, adult diapers, wipes and consumer paper products prior to this purchase and had announced earlier in 2007 plans to enter the private label diaper market.

At the time of the acquisition, the company indicated that ownership of Covidien provided it with a more diversified product portfolio and a full range of adult incontinence, feminine hygiene, wet and dry wipes and baby diaper products and would enable First Quality to enhance its relationships with retail customers by offering broader, more innovative product lines and greater value.

The deal was valued at $335 million. Covidien’s retail products business—once known as Tyco Healthcare—had sales of $744 million in fiscal 2007.

First Quality is already expanding this business. In July, a report regarding First Quality’s approval to construct a one-million-squarefoot diaper manufacturing facility in Granville, PA was published on the Pennsylvania governor’s official website. The new construction is expected to create 500 jobs in the area within the next five years.

In other investment news, First Quality began making spunlaced nonwovens this spring on a 3.6-meter-wide Rieter hydroentanglement line, which will reportedly feed the company’s private label baby wipes business. Until the new line started up, First Quality had concentrated its nonwovens business on spunmelt technology. The company’s most recent spunmelt investment—its eighth line—was added in late 2008.

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