Veronica Hagen, chief executive officer; Mike Hale, chief operating officer; Dennis Norman, chief financial officer; Dan Rikard, svp, general counsel, and secretary; Bob Dale, senior vice president of research and development; John Heironimus, senior vice president, chief marketing officer and chief sustainability officer; Mary Tomasello, senior vice president of human resources and information technology; Charles Saine, senior vice president of procurement; Scott Tracey, vice president and general manager, Europe; Rolando Dominguez, vice president, general manager, Latin America; Richard Gillespie, vice president, general manager, Canada; Daniel Guerrero, vice president, general manager, U.S.; Wuling Zhang, vice president and general manager, Asia
Benson, NC; Mooresville, NC; Waynesboro, VA; Clackamas, OR; Magog, Quebec; North Bay, Ontario; Cuijk, The Netherlands; Bailleul, France; Tarragona, Spain; San Luis Potosi, Mexico; Buenos Aires, Argentina; Cali, Colombia; Nanhai, China; Suzhou, China.
Benson, NC; North Little Rock, AR;
Spunbonded, meltblown, SMS, composites, through air bonded, adhesive bonded, resin bonded, thermal bonded, spunlaced, airlaid, apertured film, film laminates, extruded polyolefins, thermal laminated, hydroentanglement, and other proprietary fabric forming, surfacing and binding systems
APEX, Agribon, Chicopee, Boxer, Chifonet, Chux, Durapex, Fresh Guy, J-Cloth, Lavette, Masslinn, Medisoft, Morana, Quix, Poly Breathe, Polysafe, Stretch’N Dust, Sur-prep, Spinlace, Ultraloft
Recent highlights for PGI include finalizing plans for new lines in Asia and North America, a large-scale European acquisition and continued headway in sustainability efforts. The company continues to expand its scope in the global spunmelt market while also participating in a number of industrial areas.
As expected, sales dropped slightly in 2009 to $882.7 million compared to $1.07 billion in 2008 as raw material price decreases drove down prices on the spunmelt side and economic softness led to lower volumes in industrial segments. However, profits fared much better than expected for the year with adjustable EBITDA increasing 12% to $124.4 million and net income more than tripling to $18.2 million.
“In 2009, we began to prove out the value of our global business model and the resiliency of our consumer disposables business,” said CEO Veronica “Ronee” Hagen. “In a year when many companies were suffering, our profits improved. Also, during 2009, we sharpened our strategic focus.”
Through a strategic planning focus, PGI developed a complete set of goals and objectives focused on its markets and functions and the company is now committed to continuing to achieve business excellence in 2010 and beyond in every area, from sales and marketing and research and development, to procurement, sourcing and global supply and delivering the best total value to customers.
Among the various alternatives being evaluated to sustain PGI’s global leadership is the potential sale of the company. In April, the company’s board of directors established a special committee comprised of independent directors to evaluate strategic alternatives to unlock shareholder value. The company has retained Blackstone Advisory Partners LP—who is also rumored to be a potential suitor for the company—as its financial advisor and Cravath, Swaine & Moore LLP as its legal advisor to assist in its evaluation. The special committee has retained Janney Montgomery Scott LLC as its financial advisor and Richard, Layton & Finger as its legal advisor to assist in its evaluation.
“The timing for this process is ongoing but during the review we have conducted business as usual for PGI and all of its stakeholders and will continue to do so,” Ms. Hagen said.
And, for PGI the past couple of years business as usual has meant investment, particularly in spunmelt technology, and the last 12 months have been no exception. In December, the company said it would invest in two spunmelt lines globally, one in the U.S. and one in China. In the U.S., the company said it would invest $65 million to expand its Waynesboro, VA facility. The investment—which was initiated in the second quarter of 2010— will include the use of proprietary technology to establish a new manufacturing line and increase production as well as the expansion of the current building in order to accommodate the new line. The project will also create 41 new jobs.
PGI currently operates two spunmelt facilities in the U.S.—one in Waynesboro and one in Mooresville, NC. “Both (facilities) were considered for this investment,” Ms. Hagen said. “Each facility delivers consistently outstanding results because of the talent and dedication of our employees at these locations. This made the decision of where to locate the new asset very difficult.”
The Virginia Economic Development Partnership worked with both the City of Waynesboro and the Shenandoah Valley Partnership to secure the project for Virginia. Delegate Steve Landes also assisted with the project. Governor McDonnell approved a $750,000 grant from the Governor’s Opportunity Fund to assist Waynesboro with the project. Governor McDonnell also approved $750,000 in a performance-based grant from the Virginia Investment Partnership (VIP) program, an incentive available to existing Virginia companies. The Virginia Department of Business Assistance will provide new job training assistance through the Virginia Jobs Investment Program.
The new line will serve the North American hygiene market, which is currently being fed through lines in Mexico, Argentina and Colombia, which have all seen investment in recent years. The latest of these is a state-of-the-art spunbond line in San Luis Potosi, Mexico, which came onstream in May 2010 and is meeting high quality hygiene and medical demand in both Mexico and the U.S.
One global area where, up to recently, PGI has not been present in spunmelt in Europe, but the company changed that in a big way last year when it acquired Barcelona, Spain-based Tesalca-Texnovo nonwovens businesses from Grupo Corinpa. The business—PGI’s first European spunmelt operation—is operating as a new wholly owned subsidiary (PGI Spain). The acquisition furthered PGI’s strategy of strengthening its position as the global leader in the hygiene market by increasing its presence in Europe, the world’s largest volume market, and bringing it into new markets in Western Europe and Northern Africa where Tesalca-Texnovo has a strong customer base.
Texnovo was founded in 1989 as a family-owned private business focused on the industrial segments and the Tesalca business operations were added a decade later to supply the hygiene and medical segments. Tesalca-Texnovo is the only organization that manufactures spunbond polypropylene nonwoven materials in Spain and is a leader in the European market.
The Tesalca-Texnovo operations are headquartered in Barcelona and operate two plants in Tarragona, Spain on the same property, with six Reifenhauser Reicofil lines serving the hygiene, medical and industrial/agricultural segments.
“With this acquisition, PGI now has a strong position in spunbond/spunmelt technology in the four major regions of the world, allowing us to serve our existing global hygiene and medical customers while allowing us to add valuable new customers,” Ms. Hagen said. “We are very pleased with the performance of PGI Spain as it has become integrated into PGI processes and systems.”
Also increasing in importance to PGI is its Asian spunmelt operation, which includes a large spunmelt line as well as a converting facility for the conversion of medical garments in Suzhou, and the company has already announced it will add to its Chinese output sometime this year. “We have announced an expansion in the People’s Republic of China where the market is very strong for our products and services, particularly in healthcare and hygiene where there is a hub of conversion of medical garments and related products,” Ms. Hagen said.
Additionally, the company will expand its Chinese research capabilities with a research “Center of Excellence” (COE) to develop new nonwoven technology platforms yielding differentiated, higher-performing materials for the global healthcare, hygiene and industrial markets. This COE will be located at the PGI facility in Suzhou, China, in an expanded research facility. The center will focus on developing new technologies to significantly improve barrier, opacity, breathability, softness and comfort in engineered polymeric materials.
A dedicated team of PGI scientists, researchers and engineers has been assembled to advance these properties that are critical in providing improved performance in infection control devices, hygiene products and protective apparel.
The COE will develop a collaborative work structure with PGI’s other global research and development facilities in the U.S., Latin America and Europe. It also will tap into Asia’s growing research and development capabilities and leverage existing technology expertise in Europe and North America by forming alliances with research companies, universities, technology think-tanks, raw material suppliers and customers. The Center of Excellence will focus on both product and process invention to further complement its global leadership in these fields.
In addition to hygiene and medical, PGI concentrates its efforts on the wipes and industrial markets.
In the wipes area, PGI continues to find success with its Spinlace product, a continuous filament wipes-producing technology, which was launched in April 2007 and doing well in the hard surface cleaning market. PGI created Spinlace to bridge the gap between value and performance in wipes. By eliminating the carded manufacturing steps, PGI is combining continuous filament pulp and its proprietary Apex imaging technology to achieve the performance attributes customers want at competitive prices.
“Our consumer wipes offering are particularly strong in hard surface cleaning applications,” Ms. Hagen said. “In the industrial market segment where the recession had the greatest impact, we are beginning to see some very good improvements and have worked to focus our business on core markets where we can establish scale and a sustainable leading position.”
Looking forward, PGI will continue to expand its businesses in its core markets: hygiene, healthcare, wipes, and select industrial applications. “We are very pleased with our advancement in underdeveloped countries and will continue to offer differentiated products where we have a strong presence in developed countries,” Ms. Hagen concluded.