Sales: $220 million
Hazleton, PA; McElhattan, PA
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 tight-lipped, privately held First Quality Nonwovens is in the 90,000-100,000 ton range. In 2009, with raw material prices dipping, sales likely dropped at the roll goods producer and industry experts put sales in the $220 million range.
Much of this output supplies First Quality’s huge private label disposables business which includes a huge disposable diaper business. This business was purchased from Covidien’s retail products business (formerly Tyco) in early 2008 but even before this addition the company had operated a sizable private label business including feminine hygiene items and adult diapers. In 2007, the company announced it planned to enter the disposable diaper business and even began laying the groundwork for a Greenfield investment before acquiring Covidien and propelling itself to the forefront of the industry.
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.
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.
However, entering this business has not been without its hurdles. Last year, First Quality reportedly lost a large contract with Wal-Mart when it discontinued its White Cloud brand of disposable diapers. Despite, this First Quality is expanding its place in diapers. Last year, First Quality reportedly won approval to construct a one-million-square-foot diaper manufacturing facility in Granville, PA and sources close to the company say future investment will continue.
In other investment news, First Quality began making spunlaced nonwovens last year 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.
Beyond nonwovens, in June the company announced it would add a thru-air dryer tissue machine at a new site in Anderson, SC to target the luxury paper towel and bath tissue markets.