Sales Reports

Companhia Providencia

January 1, 2010

Location: Parana, Brazil

Sales: $225 million

Plant Locations
São José dos Pinhais-Paraná, Brazil and Pouso Alegre-Minas Gerais, Brazil

Key Personnel
Herminio Freitas, president and CEO; Eduardo Feldmann, CFO;  Alexandre Domeque, commercial director; Romeo Bregant, engineering and technology director; Fernando Becker, operational director

Spunbonded, SMS, meltblown, laminated nonwovens, printed nonwovens

Brand Names
Kami, Protect, Protect Advanced, Protect Ultra, Kami-Soft

Major Markets
Medical, agricultural, furniture and bedding, towel and coverlet, hygiene, filtration, wipes

The year 2009 ended with Companhia Providência moving forward on a planned U.S. expansion, which was originally announced in 2008 but put temporarily on hold due to global economic problems. Today, the $80 million investment in Statesville, NC is on track to be up and running during the first half of 2011.
The new line will add 20,000 tons of spunbond capacity to Providencia’s total output. It is the first U.S. investment for the company, which currently operates 10 lines in Brazil, which serve markets throughout the Americas.
Providência announced its intention to enter the U.S. market in June 2008 but construction was subsequently postponed when the global economic crisis hit. At the original announcement, executives said there would be not one but two lines added to the site to help Providência to better serve the U.S. market, where it is already doing considerable business but so far plans only one line have been publicly finalized.
Executives are confident that there is room for this new capacity in the North American market where competitors FitesaFiberweb and PGI are also in the midst of spunbond investments.
“The North American capacity total is now around 600,000 tons per year and Providencia’s capacity for this line is only 20,000 tons per year,” explained president Herminio Freitas. “Currently, we export nearly 10% of total capacity or 8000 tons per year.”
Based in Paraná, Brazil, Companhia Providência is Brazil’s largest nonwovens producer. In 2009, sales dipped slightly, 4.8%, to R$401 million due to weakness in the first half of the year. Conditions started to improve during the second half.
In Brazil, Providencia’s latest production line, the company’s 10th, came onstream in April 2008, giving the company the flexibility to target the medical market.  To further boost its role in medical, the company established a new medical fabrics division to help it not only take advantage of the new line’s capabilities but also from existing capabilities including cast films breathable films, printing and laminating. The company has already developed a number of certified blood and viral barrier products with the goal of ultimately growing its medical business to represent 10% of its total business.
Diversification, in fact, in medical and other markets, is a key component of Providencia’s strategy. All 10 of its current lines, as well as the one being built in North America, are based on Reicofil technology, and three-quarters of its business caters to the hygiene business. Expansion into new markets, as well as the completion of its North American operation, are two key tenets of the company’s growth strategy moving forward.
“Prospects for 2010 are for an increase in sales volumes and operations running at full capacity given that nonwoven products are sold as a raw material for non-durable consumer goods. In turn, the sale of such goods is directly related to monthly household income which has been reporting growth for some time and should continue this trend in the coming years.”

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