Sales Reports

Hollingsworth & Vose

January 1, 2009

Location: WALPOLE, MA

Sales: $240 Million

Description: Key Personnel
Val Hollingsworth, president and CEO; David von Loesecke, vice president and general manager, engine and industrial filtration; Mike Clark, vice president and general manager, high efficiency and specialty filtration; John Madej, vice president and general manager, Energy & Industrial Specialties; Jochem Hofstetter, vice president and general manager, Europe, Middle East, Africa region; Josh Ayer, vice president and general manager, Asia-Pacific; Jeff Sherer, vice president and CFO; Mario Sandoval, vice president of operations; John Fitzgerald, vice president, technology; Mike Paddock, vice president, human resources

Apizaco, Mexico; Corvallis, OR; East Walpole, MA; Easton, NY; Floyd, VA; Greenwich, NY; Hatzfeld, Germany; Hawkinsville, GA; Kentmere, UK; Suzhou, China; West Groton, MA; Winchcombe, UK

ISO Status
Apizaco, Mexico, ISO-9000.2000; Corvallis, OR, ISO 9001:2000; East Walpole, MA, ISO 9001:2008; Easton, NY, ISO 9001:2000; Floyd, VA, ISO 9001:2000; Greenwich, NY, ISO 9001:2000; Hatzfeld, Germany, ISO 9001:2000; Hawkinsville, GA, ISO 9001:2000 and AS 9100; Kentmere, UK, ISO 9001:2000; Suzhou, China ISO 9000:2000; West Groton, MA, ISO9001:2000; Winchcombe, UK, ISO 9001:2000.

Wetlaid, meltblown, carded thermal bonded (point and flat calendered), latex bonded, thru-air bonded, needlepunched, thermal lamination, aqueous and solvent-based webs, composites, webs incorporating functional

Brand Names
AFM, AFN, AlphaPerm, ALPHASEAL, AquaSperse, BGO, Capofilter, Cycleguard, DynaSeal, HiPerm, Holltek, HiPerm Plus, HovoFuse, Hovolon, Hovomat, Hovopulse, Hovosorb, Hovotrim, Hovowipe, Magnaseal, NanoWave, PurePerm, Saf ‘N’ Shielded, Soft ‘N, Stable, Technostat, The Cat, Tufguard, Unisorb, ValPac, ViaMat,

Major Markets
Engine & Industrial Filtration; High Efficiency Filtration; Energy & Industrial Specialties

Hollingsworth & Vose Company (H&V) looks back on 2008 as a yearof steady growth despite rapidly escalating raw material and energycosts and strong pressure to increase pricing at what proved to be thestart of a worldwide economic recession. Even in the face of suchfactors, worldwide sales were up 7% for H&V, with nonwoven rollgoods sales totaling $240 million in 2008. Both H&V’s Engine andIndustrial Filtration business as well as the High Efficiency and SpecialtyFiltration businesses contributed significantly to this growth.Meanwhile, the company’s Energy and Industrial Systems businessshowed a modest sales increase from 2007 to 2008.

Continuing to be a vital area of development and revenue forH&V is the filtration market, where energy efficiency and productcosts are top concerns of the market. As end user demands to improveair quality, further driving the need for higher performingfilters, the HESF business group anticipates continued salesgrowth in personal protective equipment and applications of IAQequipment and services. These include residential dwellings, commercialbuildings, schools and healthcare facilities.

To meet increasingly sophisticated demands from the market,H&V’s High Efficiency and Specialty Filtration business is offeringa variety of durable, high efficient, low pressure drop filter mediasolutions, such as Technostat and NanoWave extended surface filtermedia to provide a next-generation superior HVAC filter thatmeets and exceeds industry indoor air quality standards and contributesto a building’s LEED certification.

H&V’s NanoWave capacity was boosted in May with the rebuildof its NanoWave production line, a move set to expand itsproduction range of NanoWave products beyond ASHRAE bagfilters. NanoWave can be used in pleated panel air filters, as paintspray booth diffusion media, in respirators and facemasks, vacuumcleaner bags and filters and room air cleaners.

For its part, PerForm, H&V’s next generation HEPA/ULPA filtermedia for cleanroom applications, is setting new standards forperformance and processability. PerForm offers a significantlylower cost of ownership over the life of the filter, a benefit valuedby customers.

In the Engine and Industrial Filtration Group, H&V felt the impactof overall economic conditions as global demand fell for enginefilter products. The slow-down also reflected a significantreduction in automotive production and constant increases inpipeline inventories. Looking forward, however, the company expectsto see an uptick in demand due to legislation targeting morestringent air emission standards.

“Market pressures will drive smaller auto engines, smaller filters,longer service intervals and higher performance, with respect to increasedengine protection and resistance to heat and water,” predictedDavid von Loesecke, vice president and general manager forthe engine and industrial filtration business unit at H&V. He addedthat biofuels loom as a priority for 2016 emissions and are a mainfuel filter driver. “The group’s ability to provide high quality celluloseand innovative synthetic products to the engine and general industrialmarket ensured our continued market leadership in 2008.”

In its Engineered Composite Materials business, H&V enjoyedmodest growth in 2008. The business is expanding into areas thathave the ability to utilize H&V technology and focus on new applicationsoutside of the historical core markets for this material. Thecompany reports that demand for gaskets and seals are on the rise,mainly driven by a rebound in end use markets, rising demand forsealing products made from advanced materials and a slowdown inproduction growth for most OEM market segments. However,H&V expects this to be offset somewhat by advances in the maintenance/repair/operation market in light of the substantial amountsof new machinery and equipment put into use over the long term,creating opportunities for suppliers of component products.

Meanwhile, the Advanced Fiber Nonwoven (AFN) group remainscommitted to working with unique fibers to produce technicallydemanding composite materials. The Battery Productsbusiness continued introducing several new products to its EnergyGuardhigh-strength VRLA battery separator line.

In the area of surfacing veils, H&V’s AFN business holds itsplace as a worldwide leader and despite the economic downturnhas seen positive results in the sale of veils into the tank and pipemarket segment for static dissipative and corrosion resistancepurposes. In March, AFN introduced ViaMat, a new nonwovenorganic reinforcement material for electronic packaging.

The new ViaMat paper delivers improvements in dimensionalstability and enables higher interconnect densities. ViaMat featuresextreme surface smoothness, low CTE, isotropic propertiesand excellent laser ablation and drillability. “The product launchwas well received in the market and we’re currently working with a number of customers towards qualification,” explained NateBurnes, AFN business manager.

H&V has also kept busy recently with the rollout of several innovations.For instance, H&V’s Engine and Industrial Filtration businessintroduced a new line of Nanoweb-treated filter media at the2008 Filtration Show, which is designed to meet the growing needsof original equipment applications in gas turbine/dust collector airfiltration and deliver higher efficiency and longer filter life. RecentlyH&V introduced flame-retardant Nanoweb grades and will also belaunching all-synthetic versions later this year.

In its Battery Products business unit, the newest member ofH&V's patented EnergyGuard family of high-strength, uniform batteryseparator products was unveiled. EnergyGuard X delivers greateracid absorption resulting in a capacity boost and longer life for increasedwarranty performance. The separator's composition offershigh strength and greater capacity and product uniformity to ensureexceptional battery performance and manufacturing efficiency.

H&V’s Industrial Specialties group has rolled out new, environmentallyfriendly, low formaldehyde friction products for offroadvehicles and ViaMat for electronics packaging.

Beyond its North American base, H&V’s European operationswere strong during the first two quarters of 2008 but were negativelyimpacted during the second half, consistent with the industryand overall economy.

On the other side of the globe, H&V’s Asian operations inSuzhou, China continue to be the manufacturing base supplyingengine filter media and other technical specialty products forH&V’s customers in the Asia-Pacific region. “Many grades havebeen qualified and are now commercial,” said Bob Murphey, vicepresident of marketing for H&V’s engine and industrial filtrationbusiness unit. The facility’s second machine is now commercializinghigh quality filter media for HEPA, ULPA, HVAC and applianceapplications.

Moving forward into 2010 and beyond, H&V plans to continueinvesting in novel process technologies and increased capacityaround the world to serve core markets. The company is also lookingto further geographic expansion and continue the implementationof lean/six sigma principles. H&V’s business leadersconcluded that the strategy to differentiate through new productinnovation, market focus and key customer relationships will continueto drive growth and guarantee leadership in the marketscurrently served.