The answer from the industry as a whole would be yes to these ques- tions. The investments proved to be beneficial providing growth, profits and in meeting company objectives. However, the accurate answer depends on the specific company. Just as we observe stock market conditions and comment that cer- tain stocks should have been bought or sold at a particular time, so is it with investing in certain nonwoven areas. For example we hear that there is an overcapacity of spunbond production today worldwide. This translates into “the producers can make more than they can sell.” While this brings prices and profits down, making the investors nerv- ous, it does not mean that there are no markets where additional fabrics could be sold. It may mean that new products should have been devel- oped and that sales and marketing teams should be working overtime.
Some of these producers that entered the market years ago have in effect paid for their investment. They also proved that spunbond fabrics can satisfy their customers needs. Companies that more recently began production and those entering the market today with new facilities are at a manufacturing and marketing cost disadvantage. There is an additional disadvantage for the newcomers; most of the spunbond facilities that were installed during the last decade have been designed to directly com- pete with established spunbond materials in the giant markets. Most of these produce lightweight poly- propylene, pattern bonded fabrics for diapers, sanitary facings, wipes, fil- tration and other fabrics for these very competitive markets discussed at every conference and in nearly every article regarding nonwovens. This has been a profitable investment for those that were adept in setting up and running a business
Spunbond materials that are available today are viable prod- ucts for a multitude of end use applications. Existing markets consume more than a billion pounds worldwide and the pro- duction capacity is continuing to increase with new facilities and innovations on existing lines.
The spunbond portion of the nonwovens industry receives the spotlight because of its growth, dominance and the muscle of producers. However, other nonwoven processes share similar concerns regarding investing or divesting.
The U.S. economic picture today brings concern and doubt to most investors. A major portion of this dark cloud appears to have been generated by “predictions of doom” and not real or actual circum- stances. When the political and economic leaders express concern and doubt, it is obvious that the news media will select the portions that are the most “newsworthy” and dramatize them. It follows that businesses will incorporate some of this in their operations and plans. Numerous companies have cut back in nearly all areas that they perceive to be viable and are looking for additional areas where they can reduce the risks of the “downturn in the economy.” Studies have shown that, during a recession, the businesses that continue rather strong are do-it-yourself products, alcoholic beverages and tobacco products. So you can drink and smoke while you are repairing the hole in the roof. In the future, we hope that the bottle has a nonwo- ven label, the cigarette has a non- woven filter and the roofing material is made with a nonwoven.
Meanwhile, we will see nonwo- vens continue to serve markets that fill specific needs. A mother may buy fewer diapers because she is more conscious of the cost and more aware of how many times she changes her child day. Healthcare facilities may use fewer bed pads and other nonwoven products to cut costs, but this will be a small percent of their total usage.
As your stock broker would probably advise you “invest in stock for the long term.” If you are for the quick buy and sell to make your fortune, you better have some inside information. So is it with nonwovens.