Hollingsworth & Vose

September 7, 2006

Hollingsworth & Vose
Walpole, MA
$187 million

Key Personnel

Val Hollingsworth, president and CEO; David von Loesecke, vice president and general manager, engine and industrial filtration and high efficiency and specialty filtration; Tom White, vice president and general manager battery products; Randall Rogers, vice president and general manager, industrial specialties and engineered composite materials; Juergen Binzer, vice president and general manager, European engine and industrial filtration products; Justin Harkiewicz, vice president and general manager, Asia-Pacific; Jeff Sherer, vice president and CFO; John Fitzgerald, vice president, technology; Mike Paddock, vice president, human resources


Apizaco, Mexico; Corvallis, OR; East Walpole, MA; Easton, NY; Floyd, VA; Greenwich, NY; Hatzfeld, Germany; Hawkinsville, GA; Kentmere, UK; Suzhou, China (under construction); West 

ISO Status

Apizaco, Mexico, QS-9000; Corvallis, OR, ISO 9001:2000; East Walpole, MA, ISO 9001:2000; Easton, NY, ISO 9001:2000; Floyd, VA, ISO 9001:2000; Greenwich, NY, ISO 9001:2000; Hatzfeld, Germany, ISO 9001:2000; Hawkinsville, GA, ISO 9001:2000 and AS 9100; Kentmere, UK, ISO 9001:2000; West Groton, MA, QS-9000; Winchcombe, UK, ISO 9001:2000 and QS 9000


Wetlaid, meltblown, carded thermal bonded (point and flat calendared), latex bonded, thru-air bonded, needlepunched, thermal and chemical lamination, aqueous and solvent-based saturation, nanofiber coating, composites

Brand Names

AFM, AFN, AlphaPerm, AquaSure, BGO, Duo-Phase, DynaSeal, EnergyGuard, Fastock, HELP, HiPerm, HollTek, HovoFuse, Hovoglas, Hovoliner, Hovolon, Hovomat, Hovopulse, Hovosorb, Hovotex, Hovotherm, Hovotrim, Hovowipe, Magnaseal, NanoMelt, Nanoweb, PurePerm, Saf ’N’ Shielded, Soft ’N Stable, Stitchbackers, Technostat, The Cat, Tufguard, Unisorb, ValPac, WallTek

Market Sectors

Engine and industrial filtration: air-heavy duty, passenger car and cabin air; fuel-heavy duty, passenger car, common rail, in-tank; oil-heavy duty, passenger car; industrial-gas turbine, dust collection, hydraulic. High efficiency and specialty filtration: analytical/medical/biotech equipment coalescers; drinking water; electronic equipment; HEPA, ULPA and cleanroom; HVAC; pool and spa; room air cleaner; respiratory protection/surgical face masks; specialty liquid filtration and separation; vacuum cleaner. Battery products; battery chemistries for industrial and automotive markets: alkaline manganese, nickel cadmium, nickel metal hydride, valve regulated lead acid; specialty-lithium thionyl chloride, zinc air, paste fiber-PA10-6. Industrial specialties; apparel; embroidery backing; label stock; waistband canvas; engineered composite materials; automotive and industrial sealing materials; thermal/acoustical barriers; electrical insulators; specialty roll form composites; friction substrates; UL-rated materials; floppy disk liners; home furnishings; drapery buckram; wallcovering substrates; window covering; advanced fiber nonwovens; composite roll materials; composite tank and pipe materials; EMI shielding, ESD and ground planes; fuel cell GDL materials; radar absorbing veils; low observables; sporting goods; surfacing veils

The world’s 13th largest roll goods producer Hollingsworth & Vose, East Walpole, MA, was able to achieve successful results in 2005 despite industry-wide energy and energy-related raw material pricing hurdles. Most business units reported good results despite these challenges, and H&V’s total nonwoven rolls goods sales in 2005 were $187 million, up a solid 7% from 2004 revenues of $175 million.

“Continued high raw material prices for fibers, binders and chemicals, and the ongoing high cost of energy, have resulted in earnings pressure and necessitated further price increases to our customers during 2005,” commented Angelika Mayman, director, new markets for H&V. “A portion of these cost increases are still absorbed by the roll goods manufacturer, resulting in margin reductions and increased pressure to improve manufacturing efficiencies,” she added.

In H&V’s high efficiency and specialty filtration business, growth continued, stemming from the strength of its base business, despite a modest downturn in the cleanroom market in 2005 relative to 2004. “Our respiratory business had favorable results, due in part to H&V’s high quality media and our ability to meet many international standards,” reported Ms. Mayman.

New products in this segment include H&V’s patented low boron PurePerm, which has been well received by the cleanroom market. PurePerm is comprised of unique glass fibers that contain negligible trace levels of boron oxide, which ensure that the filter medium does not contribute to boron contamination in the cleanroom.

H&V’s NanoMelt meltblown media, pleatable synthetic composites and pool and spa line continue to do well. During 2005, H&V continued the development of its NanoMelt media, adapting the product for expected U.S. standards. According to H&V, NanoMelt media provides a higher mechanical filter efficiency than other meltblown media due to its fine fiber structure. NanoMelt was originally developed in 2004 to meet new filtration standards going into effect in Europe.

Pleatable synthetic composites are now a commercial product for mini-pleat ASHRAE applications, offering ease of pleating, high efficiency and low resistance. The pool and spa product line, which includes both silver and copper versions (AquaSure Ag and AquaSure Cu, respectively), has fared well in the market due to its high water flow rates, minimal resistance, superior filtration efficiency and dirt holding capacity. H&V describes AquaSure Ag as the first pool and spa media to integrate antimicrobial protection into the fiber (rather than a surface coating) for longer lasting effectiveness over the life of the filter.

In its industrial specialties segment, markets were stable between 2004 and 2005 for H&V. A continued focus on home furnishings, including window treatments and wallcovering materials, embroidery, waistband and friction markets, offset declines in certain other markets such as diskette.

In the wall coverings sector, HollTek and WallTek continue to penetrate the wallcoverings market due primarily to specific characteristics (easy strippability and permeability) that H&V’s products offer as well as the continued penetration of nonwovens into this traditional woven market.

The engineered composite materials product line, part of the industrial specialties business, has been successful with its introduction of new friction materials and adsorptive products, additions to the traditional gasket business.  H&V’s saturated friction material is used in the automotive aftermarket for use in automatic transmissions and offers quality and durability.

In H&V’s AFN segment, the focus continues to be on conductive nonwovens as well as composite roll covers and lightning strike protection. H&V’s conductive nonwovens are isotropic, extremely uniform and conductive. Composite roll cover media is used for paper machines and printing sleeves where H&V’s nonwovens offer surface smoothness, durability, stiffness and uniform wear. The company’s media for lightning strike protection is a component of a composite structure employed to protect aircraft and wind turbines.

“H&V’s high quality gas diffusion layer (GDL) substrate for use in PEM fuel cells continues to be an important development for the company. We offer both coated and uncoated versions, and have brought certain critical process functions in house to ensure the highest quality product,” offered Ms. Mayman.

Although many applications for fuel cells are still in the market development phase, H&V is taking steps to ensure that it is well-positioned to provide the market with the media for this complex product. H&V is leveraging its expertise with electrochemical devices to participate in the broader alternative energy market, which includes both fuel cells and NiMH batteries for hybrid electric vehicles.

As for H&V’s battery products segment, the business continues to expand. “Our battery business is exhibiting good, steady growth and continues to benefit from an improved telecommunications market,” she said.

The company’s engine and industrial filtration group performed well in 2005, benefiting from H&V’s ability to provide high quality cellulose and synthetic products to the engine and general industrial market. “Our innovations in synthetic composites, begun several years ago, combine durability and efficiency to provide the best cost per unit performance. As the market has increasingly turned to synthetic media for certain applications, H&V’s broad product offering has successfully met customer needs,” Ms. Mayman said adding that H&V has the flexibility to provide these substrates as free sheets or composites, including meltblown/cellulose composites, fine fiber meltblown, adsorptive filter media (AFM), Technostat, H&V’s triboelectret media, and Nanoweb, its proprietary nanofiber coating.

On the European front, the new meltblown line in Hatzfeld, Germany was started up successfully during 2005. The original plan was to focus on significantly extending H&V’s capability and capacity in meltblown production for high efficiency filtration market segments and provide local supply for its European customers. Market demand for technically advanced filtration media in high efficiency air and liquid filtration has been strong, and the line has been running successfully throughout 2005, the company reports.

In Asia, the company’s immediate strategy is to complete the construction of its manufacturing facility in Suzhou, China to serve the broader Asia-Pacific region. H&V also plans to maintain and expand its presence in the Americas and Europe to support key businesses.

In Mexico, H&V purchased its joint venture subsidiary in Apizaco in January 2005. “This was an initial step in a process of continued investment in the mill to support regional and global engine and industrial filtration customers,” explained Ms. Mayman.

Wrapping up, she pointed to organic growth through product innovation, key customer relationships and market focus as key strategies for short- and long-term growth. “Geographic expansion and acquisitions will be evaluated selectively to complement or extend our business base and manufacturing assets,” Ms. Mayman concluded.

In October, H&V unveiled plans to install a wetlaid microglass manufacturing line at its Suzhou, China facility to serve filtration and battery separator markets. This investment is part of H&V’s Asia Pacific strategy announced in November 2004 to capitalize on market growth in the region. The machine will produce high quality filter media for HEPA, ULPA, HVAC and appliance applications as well as valve-regulated lead acid (VRLA) battery separator substrates. H&V’s materials are designed to meet demanding industry standards.

“We are pleased to implement this second phase of our Asia Pacific strategy. Customers in the region will benefit from reduced lead times as production will be local, while continuing to receive the highest quality materials,” commented CEO Val Hollingsworth. Site construction in Suzhou should be completed by the end of 2006, with the previously announced machine for engine filtration markets to be started in the first quarter of 2007. Engineering for the glass machine is underway and the line is expected to be operational in early 2008. Slitting, converting and warehousing operations complement the manufacturing capabilities.