The largest nonwovens technology in terms of volume, spunmelt nonwovens are regaled by manufacturers for their cost and production efficiencies as well as their flexibility. In recent years, these substrates have become thinner and, at the same time, stronger, thanks to new technology on the machine end that has combated raw material price increases and price senstitivity in the hygiene market, the key end area for spunmelt nonwovens.
According to estimates provided by INDA, Association of the Nonwoven Fabrics Industry, spunmelt output globally is about two million tons and growing 8-9% annually. Approximately three-quarters of this output is based on polypropylene raw materials, much of which is feeding the hygiene market. Growth in hygiene has largely been caused by a higher percentage of spunmelt materials in each individual diaper. In fact, modern diapers contain nearly 100% spunmelt nonwovens. Even the interior of the diaper, once comprised of tissue material, is now spunmelt nonwovens, as faster line speeds required stronger materials that could handle increased pressure.
As demand has grown for spunmelt nonwovens, driven by more of this product going into each individual diaper, so has capacity, with manufacturers around the world chasing this demand with state-of-the-art technology. Drivers for these new investments are three-fold. While the market is growing, creating the need for new machinery, recent investments are the result of the development of technology that has given manufacturers the ability to create fabrics with lower basis weights but they must invest in new machinery to achieve this. Likewise, newer machinery gives manufacturers the ability to create product that is more cost effective and with greater performance.
“Spunmelt producers are faced with continuous investment to remain cost competitive,” said David Price of industry consultancy John R. Starr, Inc. “ The advancement of technology is so rapid that equipment can become obsolete in a short period of time.”
Ian Disley, general manager of Saudi spunmelt provider Advanced Fabrics, agreed. “There is a lot of new capacity coming onstream so it’s getting competitive, but because the market is moving toward lighter weights, manufacturers have to be able to make good, lightweight fabrics,” he said. “Anyone who can’t achieve a quality product that is 15 gsm or below, I would think is in trouble.”
Hence, is the paradox of the spunmelt market. To be competitive, manufacturers must invest in new lines, but at the same time all of these new lines are creating more competition in the marketplace.
“The year 2007 was unprecedented with strong demand in hygiene from both the private label and the branded segments,” said Dennis Durkin of Cleaver Associates, a representative for Israeli spunmelt producer, Avgol Nonwovens. “This lasted for six months or so and companies started making investment decisions based on that level of demand.”
Avgol is among the companies currently in expansion mode. The company is currently adding a new line in its North American facility in Mocksville, NC. Since purchasing this facility in 2001—which at the time contained one spunmelt line—Avgol has invested heavily here with the latest investment representing its fourth line. Additionally, from an international perspective, Avgol is adding a line in Russia to meet the needs of the Eastern and Central European markets and reportedly examining a possible purchase of a more diversified nonwovens producer, Fiberweb, to add more capabilities to its business.
While Mr. Durkin could not comment on any future purchases, he did say he feels confident that growth will continue for Avgol; however, he questions if it will be able to maintain the same level of growth that propelled its sales from $48 million in 1999 in to $225 million in 2007.
Dennis Norman, vice president of strategic planning and communication for Polymer Group Inc., a company that has invested heavily in Reicofil-based spunbond and spunmelt technology in recent years, said he sees this technology as the innovation market for future developments in nonwovens processing. “A lot of the markets we are serving are moving toward this technology because it is the most efficient process out there,” he explained. “The ability to go from basic raw material to a finished product in one process is very attractive.”
This type of one-step process forms the backbone of PGI’s latest technology, Spinlace, which incorporates continuous filament technology, common in spunmelt, with a hydroentanglement process, without the carding step. When announcing this new technology—which will initially target wipes applications—last year, PGI described the technology as the result of company efforts to change how nonwovens are made.
As it focuses on new technologies, tried and true standards remain important for PGI. Most recently, the company said it would put another line in its San Luis Potosi, Mexico plant, this facility’s fourth such asset. According to Mr. Norman, these investments have synced with growth in the hygiene and medical markets. “Most of our expansion focuses on hygiene growth,” he said. “About 80% of our business is conducted in this market with the balance in our industrial markets.”
For companies like PGI, hygiene’s attractiveness lies in its large volumes and steady growth levels but this market is not without its downsides. As hygiene customers demand thinner, more efficient products, machinery and equipment assets can move in obsolence in a short time, meaning constant investment—and the price tag that comes with this—is necessary to remain competitive.
Currently the gold standard in hygiene markets is the Reicofil 4 line, which was launched in 2004 and several of these machines are already running around the world. Like its predeccesors, Reicofil 4 offers cost-effective, flexible technology but the price of this technology is steep.
“The Reicofil technology is the sustainable spunlaid nonwovens technology,” said company spokesman Hans Georg Geu. “The use of energy and the use of polymer for given properties are outstanding in the market. The visual aspect of the web is accepted and defines the standard in the market.”
These attributes are well represented by the dominating force Reicofil has had on the spunmelt market with upwards of 95% of all product being made on these machines. While many companies involved in this market have criticized the large dependence on Reicofil, so far few companies have put their money where their mouths are by investing in competing technology.
“There is definitely a need for competing technology, but so far none of the other players have made enough of an impression with us to work with a different supplier,” said PGI’s Mr. Norman. “However, performance is improving, so they are becoming more viable competitors.”
Italian nonwovens producer Albis has been one company taking a chance with non-Reicofil technology. The company is currently finalizing construction on a large, seven-meter SMS line based on Oerlikon Neumag technology and already operates two Neumag lines—a spunbond machine and an SPC line.
“The Neumag technology is completely different,” said Albis commercial manager Pietro Lanone. “You can easily identify at least 10 major differences between this technology and Reifenhauser. For one, this line is 40% wider than the widest Reicofil line.”
Additionally, the Neumag line uses thinner filaments resulting in more filaments per square inch, making the output stronger at a lower basis weight.
“We are trying to make something different from everyone else,” Mr. Landone continued. “Right or wrong, every company must have their own strategy.”
In addition to Oerlikon Neumag, RieterPerfojet in France has made strides in entering the spunmelt market. Already a leader in spunlace technology Rieter Perfojet has developed the spunbond technology, PERFObond 3000, to operate in multiple bonding applications, and hence, the ability to create a variety of finished goods applications. The development of this PERFObond 3000 technology has up to recently been focused on polypropylene fabrication, but recent developments have been made with polyester. In addition to this development, Rieter Automatik has developed a meltblown system that can be integrated into the company’s scope of supply for SMS and SMMS configuration lines.
New to the spunmelt equipment market is Galileo Group, an Italian/
Bahrain company that has already contracted with new player Bahrain Nonwovens—located in the Gulf region—who is expected to begin making product on the new line in 2009. “We are offering a new technology that can make products for the hygiene and industrial markets that are not traditional,” said Galileo Group spokesman Ron Smorada. “I have always criticized the nonwovens industry for not having enough product innovation. By that, I mean there is a real need for new markets and new technologies instead of everyone chasing the same markets with the same technology.”
Dr. Smorada added that he sees a clear need for multifunctional lines that can create high quality hygiene materials and on a quick turnaround also make products for industrial applications. “There are good indications that there is an interest in alternative materials.”
Avoiding reliance on hygiene products is Atex. With spunmelt investments in Italy and Georgia, the company has already strived to split its business evenly between hygiene, technical and industrial applications. Additionally, the company has opted against off-the-shelf Reifenhauser technology. “We have very flexible lines,” said Luca DiBenedetto. “We can change colors pretty easily and we can put in additives very easily.”
This spring, Atex will double its U.S. production capabilities with a new line in its Gainesville, GA facility. This investment was driven by strong demand in North America as well as the weakness of the U.S. dollar, which has meant favorable export fees into Europe.
“There is little or no research and development in the spunbond market that isn’t being made by the equipment producers,” Mr. DiBenedetto said. “Really all that is new is the ability to produce the lightest basis weight as possible at the lowest price and this goal is achieved by the equipment producer.”
In December, First Quality Enterprises, a maker of both spunmelt nonwovens and feminine hygiene products, announced it would buy private label diaper manufacturer Covidien in a move set to shake up the supply chain in the North American hygiene market. First Quality, which is currently adding a multi-beam Reicofil line, had announced in mid 2007 plans to enter the private label diaper market and this entry now makes it both a competitor to its customer and customer to its competitors.
Because many of the large spunmelt manufacturers considered Covidien a key customer, these companies are now playing a waiting game to see if First Quality will continue to source its spunmelt externally or feed its diaper business from its own spunmelt assets. At the same time, First Quality will now be competing with its customers, like Procter & Gamble or Arquest, on the disposable diaper market and if these relationships end, those customers could be looking for new suppliers.
“It’s no secret that Covidien was a big customer of Avgol’s,” Mr. Durkin said. “There is no reason to not assume that they will source themselves, but it is really too soon to judge the overall effect on the market. Of course, it could be a situation where we are just trading capacity—losing some business but gaining others.”
Currently, the market in North America has been characterized by most as “healthy.” In fact, some have even gone so far to say that there is an undersupply situation thanks to growing demand for spunmelt in diapers as well as Fiberweb’s 2007 decision to exit the North American hygiene busines by closing several older lines. However, with new lines coming in from Avgol, PGI and First Quality, in addition to the fact that the amount of spunmelt used per diaper seems to be at a maximum, worries over an overcapacity situation in the future are not without warrant. Add to this new capacity coming onstream in South America—with new lines planned for Companhia Providencia, Fitesa and PGI’s DNS facility near Buenos Aires, Argetina—which producers can export to the U.S. sans tariff and it’s no wonder that some could fear stronger competition to move capacity in the hygiene market.
Already, Europe is facing a bit of an overcapacity situation due to a number of new lines throughout the continent coming onstream during the past three years; however, many manufacturers continue to report growth. “Our growth has kept on expanding steadily and we started running a new Reicofil IV line in mid-2007,” said Stéphanie Hoyas, product manager for Dounor. “We are very happy with the technical and commercial developments of this new line and we are thinking of producing at full capacity in 2008. The new capacity provided by this line enables us to follow our customers’ developments and to meet the increasing demand on the market.”
Like Dounor, Fibertex added a new spunmelt line—its third—in Aalborg, Denmark last year and the company is reporting a sold-out situation on the new line despite witnessing some overcapacity in Europe. “We are very satisfied with our customer portfolio, but we sense an overcapacity situation in Europe related to three things—too many lines in the market, European exports not profitable due to currency exchange and U.S.-based suppliers exporting into Europe,” said Mikael Staal Axelsen, general manager of Fibertex’s personal care division.
However, in Asia, where Fibertex runs two lines at a Malaysia facility, supply is much more balanced, Mr. Axelsen continued. “Asia has much more balance regarding supply/demand and it is a growing market. Flexibility and global presence has been strategic gains for total business.”
As new lines come onstream throughout the world—either from new market entries or long-established players, it will be interesting to see how this new capacity is applied in the hygiene market or elsewhere. Like all markets, spunmelt is not without its problems, but it’s potential for large volumes and ability to grow in both existing and new applications have made it a good bet for many nonwovens producers.
“The bright shining star is that the market continues to grow,” concluded PGI’s Mr. Norman. “For the most part, our spunbond installations are incremental to our business.”