Throughout 2005 and the early months of 2006, it seemed that nonwovens manufacturers couldn’t add spunmelt capacity fast enough. The diaper market’s widespread conversion from thermal bonded to spunbonded backsheets had created a shortage for the material worldwide and all of the major players were looking to fill this void.
From Brazil, the U.S., China, Sweden and Spain to Denmark , Italy, Malaysia and the Czech Republic, new spunmelt lines—many of which are based on Reifenhauser technology—are coming onstream, representing hundred of millions of dollars in investments. As these new lines start production, industry observers will be anxiously waiting to see whether or not the nonwovens industry will absorb the new capacity.
“The reason for a lot of the installations to date has been to fill a demand,” said PGI’s CEO James Schaeffer, whose company has been responsible for much of the planned capacity. “The demand will flatten out and slow down as new machines come on. But, there’s been a little bit of a shortage over the last year or two and the new machines will satisfy that.”
PGI, based in N. Charleston, SC, has announced plans to build a new line near Shanghai, China and one in Mooresville, NC. Additionally, the company has recently started new spunmelt lines in Cali, Colombia and San Luis Potosi, Mexico. These new lines will bring the number of spunmelt lines PGI operates throughout the world to 23, making it a clear leader in the market.
Mr. Schaeffer said that in addition to filling increased demand, PGI’s aggressive growth plan in spunmelt follows a period where it hadn’t introduced significant technology in the area. “Now is the right time to expand to support customer demand,” he explained.
New investment has also been driven by the market’s need for lower weight materials, largely combating rising raw material—namely polypropylene—prices. One way for companies throughout the hygiene market supply chain to cope has been through lessening the amount of material used to make their products.
“There is a clear trend toward lower basis weights,” said Pieter Meijer, vice president of sales and marketing, BBA Fiberweb. “Raw material prices are at historic highs and are expected to stay high. Since modern spunbond and SMS fabrics can deliver the right performance at lower weights, one way for customers to control the rising costs of materials has been to reduce basis weight.”
BBA Fiberweb, for instance, recently announced it would construct a 20,000-meter-per-year Reifenhauser 4 line in Sweden, representing a $25 million investment and partially replacing existing older capacity. In making this announcement, BBA Fiberweb, which is currently on the selling block, said additional capacity expansion would soon be announced.
“Spunbond and SMS are the most important technologies in the nonwovens industry because the fabrics are uniquely suited to the needs of the largest markets,” Mr. Meijer remarked. “Fiberweb will continue to invest in these technologies to upgrade existing capacities and grow with our customers.”
Dennis Durkin, vice president of sales and marketing for Avgol Nonwovens, agreed that the spurt in world spunbond capacity has been brought on by the need for more sophisticated technology to create new generation spunbond fabrics that are more lightweight than ever before. “There is a lot of competitive pressure in the diaper market, demanding lighter and lighter weights,” he said. “The older assets can’t make suitable products. Hygiene manufacturers are looking for basis weights as low as 10-11 grams per square meter and the older equipment has no prayer of making these weights.”
It’s unclear, however, whether older capacity is being idled or targeting new applications. The answer, experts say, depends on the company. BBA Fiberweb, for instance, has announced it would close down some older capacity. Meanwhile, Avgol uses its two oldest machines in Israel to target industrial areas and less sophisticated hygiene applications, Mr. Durkin said.
A Market In Expansion
Also in Europe, Fibertex announced last spring it would add a third spunmelt manufacturing line, also based on Reifenhauser technology, to its Aalborg, Denmark facility-the company’s fifth spunmelt line in total—to meet growing demand for the material in the hygiene market. Meanwhile, Albis has brought an Ason bico spunbond line with multicomponent technology online in Italy. This marks Albis’ first foray into spunbond, a move that has been necessitated by many of its customers’ conversion from thermal bonded to spunbond nonwovens in baby diapers, according to Pietro Landone.
“Yes, we are new in spunmelt because we just started a line in 2005, the first spunbond line of the Albis Group,” he said. “We had to enter this market because it is important in hygiene. It is 95% of the group’s business.”
Other recent European investments include Texbond’s fourth line in Italy, Telsaca’s new line in Spain and a 12,000-ton-per year Reicofil 4 line—announced last month by Dounor—in France.
Meanwhile, in the U.S., Avgol, an Israel-based spunmelt manufacturers, has been making tremendous strides with its Mocksville, NC facility. Since acquiring the site, which then contained one line, in 2001, the company has already added not one but two spunmelt lines to the operation. The most recent, which came on stream in late 2005, is reportedly already selling at 85% capacity.
Beyond Avgol, other U.S. players making waves in the spunmelt market include PGI with its Mooresville, NC line, Ahlstrom FiberComposites, which operates a large composite line in Windsor Locks, CT mainly targeting the medical market, and First Quality Nonwovens with its spunbond lines in Hazleton, PA.
Whether or not the North American market will face an overcapacity situation, experts predict, will depend on the actions of Kimberly-Clark, the maker of Huggies diapers but also a nonwovens producer in its own right. This company is undergoing a large streamlining initiative in its healthcare and infant care businesses, which will eventually result in the closure of 20 plants. Company officials won’t say exactly which plants will be affected, but if the consolidation reduces the amonunt of nonwovens K-C is making to fuel its own diaper business, capacity in North America will remain tight. If K-C continues to supply much of its own coverstock, spunmelt producers may have to look harder for customers.
Overcapacity, however, is no stranger to the spunmelt market. In fact, some would say that the market has faced a continuous oversupply problem for the last 20 years that only ended about 18 months ago as more diaper manufacturers began using more spunbond. “This shortage is a new phenomenon and both sides are having to make adjustments to cope with the tight supply situation,” said Avgol’s Mr. Durkin.
Forging New Markets
As diaper manufacturers make plans to penetrate emerging markets, so have spunbond manufacturers. Looking for the large volumes that low penetration markets beyond North America and Europe can provide, spunmelt producers have made a point of setting up their operations in these markets.
A good example of this is Fibertex. The company three years ago announced it would start a new facility in Malaysia, its first venture outside of Denmark, and a year later it unveiled plans to add a second line to the operation. Since its start-up, the new facility has been credited with adding significantly to Fibertex’s hygiene-related sales. “It is a high potential market and that’s why we entered there,” said Etienne Ficht, who is responsible for Fibertex’s hygiene division. “But, Asia-Pacific is not a magic place where if you are there, you are automatically successful. There is tremendous competition there, just like in Europe. The difference is there are a greater number of countries and markets to tap.”
Another company with global expansion plans is PGI. After focusing heavily on Latin America, where it has recently added lines in Colombia and Mexico, PGI last spring announced an ambitious expansion plan in China. The addition of a new manufacturing plant in Suzhou, set to come onstream later this year, will make PGI China’s largest spunmelt producer—the company already operates two lines in Nanhai, China. In Nanhai, the company will add an advanced chemical bonding line, allowing it to make sublayer products for the hygiene market.
“As we think about new installations, we consider what is the right equipment for the right locations,” Mr. Schaeffer explained. “It has to be consistent with our strategy.”
For Avgol, global expansion has also been a part of its strategy. With a successful North American operation under its belt, the company now has its eye on less developed areas. Last year, it formed a 50/50 joint venture with Hubei Goldkinglong Investment Stock Co. Ltd., which operates a 3.2 meter wide Reifenhaeuser line to meet demands of hygiene and medical markets. The machine is reportedly capable of producing 10,000 tons of material per year. According to executives, material made on this line is supplying both domestic and global markets.
And, while no plans are firm, Avgol has hinted that Eastern Europe will be its next area of interest. “We already have a large percentage of employees of Eastern European decent,” Mr. Durkin said. “The region has a highly skilled workforce that can be used there and we think we really have something to bring to the table.”
In Eastern Europe, Avgol will have a formidable opponent. Znojmo, Czech Republic-based Pegas Nonwovens, which was recently purchased by a private equity firm, reported last year that 100% of its $93 million in annual sales comprised spunmelt nonwovens. The company currently produces 55,000 tons of material per year, which is largely supplying local markets including the Czech Republic, Slovakia, Poland and Hungary, as well as Western Europe. During the past 13 years, Pegas’ growth has been impressive, allowing it to add seven production lines.
Also charting strong growth is Brazil’s Companhia Providencia. Like Pegas, Companhia Providencia is focused solely on spunmelt, producing 60,000 tons of the material on eight production lines. According to the company’s international business director Cleber Santos, Companhia Providencia has grown along with the Brazilian hygiene market, increases that have allowed the company to average a new line every two years.
“Growth in Brazil has leveled off and is not as strong as it once was, Mr. Santos said. “But, there is a lot of opportunity elsewhere in South America. Every country still presents some beneficial rates for hygiene but Brazil remains the largest market.”
Moving toward the Middle East, Advanced Fabrics (SAAF), based in Saudi Arabia, has had a busy four years since entering the market in 2002. Last year, the company added a treatment line to produce antistatic products in-house and currently a second spunmelt production line is being constructed. “Strategically, we had planned to divide our business between medical and hygiene with a little room for some other applications but hygiene has grown much more quickly,” said managing director Ian Disley. “In 2005, we got the nearest to this ratio.”
Make Room For Medical
Ahlstrom FiberComposites is largely targeting the medical market with spunbond material manufactured on its large composite line located in Windsor Locks, CT. “In recent years, we have seen a greater acceptance of spunmelts, mainly in European medical communities,” said Paul Marold, vice president and general manager, medical nonwovens. “And, globally we foresee increased demand for bicomponent spunbond fabrics. Spunmelt plays a dominant role today in the drape and gown market.”
To help it target more diverse markets, Ahlstrom last year forged a partnership with SAAF to promote sterile barrier wraps, made from spunmelt, in the European market. “The strategic alliance with SAAF enables both Ahlstrom and SAAF to benefit from SAAF’s manufacturing expertise and innovative product range, allied to Ahlstrom’s global presence, strong relationships and product offerings. SAAF’s specific know-how allows Ahlstrom to offer a multitude of technologies to our customer base,” he said.
And, Ahlstrom is not the only spunmelt producer with medical nonwovens on its mind. In fact, most of the producers interviewed by Nonwovens Industry are noticing a trend toward greater acceptance of disposable spunmelt-based drapes and gowns—opposed to reusable wovens—as the medical market looks to save costs and ward off infection. However, the technological requirements of these products, combined with cost pressures in the medical community and a movement of converters to China and other eastern countries have kept many manufacturers from charging full force into this market.
Still, medical as well as a whole range of industrial markets are sitting squarely on the radars of most spunmelt manufacturers. As new capacity comes onstream—and as technological advancements open up doors in new markets—clearly spunmelt will continue to create markets for itself. PGI, for instance, offers its Titan brand spunbond material, which can be as much as 50% stronger than more typical spunbond materials. This product has seen great acceptance in industrial markets.
“The market trends are aiming toward stronger materials, and people want stronger fabrics that are also softer,” Mr. Shaeffer explained.