Sales: $236 million
Description: Key Personnel
Mikael Staal Axelsen, CEO, Fibertex Personal Care; Jorgen Bech Madsen, CEO, Fibertex Industrial Nonwovens; Ole Houmann, CFO; Kenneth Mynster Dolmer, purchasing director
Two in Aalborg; one in Malaysia, two in the Czech Republic, one in Germany, one in South Africa
Drylaid, carded, needlepunched, thermal bonded, spunbond/meltblown, technical airlaid
Fibertex, Fibertex Nonwovens, Flexback, Formtex, Compoflex, Multigeo, Weedseal, Fibergreen, Fibertex Patio, Fibertex Universal, Fiberacoustic, TWO-in-ONE, Comfortback, Weedseal, Woodback, Q-Match, Making the perfect match, FibertexCOMFORT, FibertexElite, FibertexDual, FibertexPRINT
Industrial textiles—primary and secondary carpet backings, automotives, acoustics, furniture and bedding, filtration, nanotechnology; technical textiles—building and construction, composites, do-it-yourself, horticulture; hygiene—applications within baby diapers, femcare and adult incontinence
With a new Malaysian line planned for its hygiene business and a new South African plant in the works for its industrial division, Denmark’s Fibertex continues to invest in the future. And, so far, its investment strategy has paid off with sales volumes continuing to rise and new investments underway.
As for last year, executives described its business in 2009 as good and report that conditions have been improving during the first half of 2010. While total nonwovens sales decreased from DKK1.589 million to DKK1.350 million, this was due largely to lower raw material prices on the hygiene side and a drop in volume in the company’s industrial nonwovens division. At the same time, operating profit (EBIT) increased from DKK88 million to DKK117 million, thanks to the plunge in raw material prices as well as better-than-expected results in its Malaysian operation. Earnings within the Industrial Nonwovens segment were challenged this year due to the difficult market situations.
In recent years, Fibertex’s Personal Care division has grown significantly, with sales increasing from DKK642 million in 2005 to as high as DKK1090 in 2008 and decreasing slightly to DKK935 million. This growth has largely been attributed to ambitious investment in spunmelt technology. Today, Fibertex operates three state-of-the art lines in Aalborg as well as two in an Asian facility near Kuala Lumpar, Malaysia, and personal care sales are expected to increase even further as a new Malaysian line comes onstream in late 2011.
“Asian growth continues to be strong,” said Mikael Staal Axelsen, CEO of Fibertex Personal Care. “Southeast Asia in particular is leading this growth.”
Announced in March 2010, Fibertex’s third Malaysian line will add approximately 22,000 tons of spunmelt capacity to the facility, representing a 65% increase, when it comes onstream in late 2011.
Fibertex opened the Malaysian facility in 2003 and added a second line to the site in 2005. In September, Fibertex announced it would invest $7.5 million in adding a new beam on one of the lines. The new beam will be operational in the second half of the year.
Also benefitting its hygiene business is its joint venture company Innowo Print, which operates a factory in Germany with Christiansen Print for direct printing onto nonwoven materials. Among the developments made through this partnership, which was formed in early 2008, are the ability to print patterns on lightweight nonwoven materials that are completely harmless, do not rub off and have every conceivable health and safety approval, to add fragrance to a color or add a print to a color that changes color. Already, the venture prints on 1000 of the roughly 75,000 tons of nonwovens that Fibertex Personal Care makes each year.
On the industrial side of Fibertex’s business, many key markets were challenged in 2009, causing sales to decrease from DKK500 million to DK415 million after the year started with a 35% first quarter drop in revenue. These difficulties were felt the hardest in the automotive and bedding industries, which executives reported, began to recover as the year progressed and government initiative programs began to take hold.
Luckily for Fibertex, these challenges were somewhat buffered by a restructuring program begun before the global economic crisis hit in 2008. This plan included a DKK130 million investment in new, state-of-the-art equipment, lessened raw material consumption, price increases and staff reductions. More specifically, the plan included the start-up of two modern needlepunch lines, one in Aalborg and the other in the Czech Republic, which use fewer raw materials, price increases, the shutdown of outdated production lines including an entire older factory in the Czech Republic, the relocation of several lines from Denmark to the Czech Republic, a more streamlined production process, innovation and product development.
“We continue to move a lot of this business into lower cost base regions like the Czech Republic facilities,” said Jorgen Bech Madsen, CEO of Fibertex Industrial Nonwovens. “We moved an upgraded needlepunch line from Denmark to the Czech Republic. Now in Denmark there is just one ultra modern needlepunch line and some fiber production. “
Amidst these efforts, Fibertex has not abandoned its quest to bring its industrial business into growing geographical markets. In early January, the company announced it has started a new operation, including a state-of-the-art needlepunch line, in South Africa. The new facility will make and market needlepunch nonwovens, primarily geotextiles for road construction as well as products for the growing South African automotives industry, which is moving toward more sophisticated, lower weight products.
“There are currently a lot of nonwovens being sold in Africa but they are heavier weights, made on older machines, and this investment will serve infrastructural programs in South Africa and neighboring countries,” Mr. Madsen said.
By creating this subsidiary, Fibertex hopes to capitalize on growth in South Africa where plans are in place to invest more than $96 billion in infrastructure improvements during the next five years. These include large road and bridge construction projects, which will require large amounts of geotextile fabrics. Even with the great potential the market holds, it took Fibertex three years to decide to invest in South Africa because it can be difficult to do business there, Mr. Madsen added.
The new, high-tech, state-of-the-art factory will initially employ just over 40 employees. Annual turnover is expected to be approximately $12-$15 million with decent profit in the coming years. From a long-term strategic perspective, the project is expected to serve as a gateway—not only to southern Africa but eventually also to other markets in the Southern Hemisphere such as Australasia, India, the Middle East and South America.
The South African company is jointly owned by Fibertex, the Danish Industrialization Fund for Developing Countries (IFU) and the South African company Safyr, which is owned partly by local industry specialists and partly by Industrial Development Corporation (IDC)—South Africa’s equivalent to the Danish State investment fund Vækstfonden. Fibertex will invest approximately $5 million in the company, acquiring a 26% ownership share. IFU has previously participated in a similar Fibertex project in Malaysia, and Fibertex has the option of acquiring IFU’s 25.8% in the future.