The bad news is this:
In two sectors of the spunmelt market—housing and automotive—growth is at a standstill. Production levels in U.S. factories have plummeted. Banks and credit companies are faltering and, as the world braces itself for crashing global markets, both capital and consumer spending have come to a screeching halt.
Now, for the good news:
Hygiene and medical markets—both heavily targeted by spunmelt producers—are less affected by economic fluctuations and have held their own despite consumer spending slumps and wild fluctuations in resin and energy pricing. Spunmelt materials as a whole have a strong base from which to weather the current storm; in the last decade they have enjoyed a healthy growth rate of more than 10% per year worldwide. This growth has come mostly from developed regions of the globe but also, slowly and steadily, from emerging markets where nonwoven-based disposable goods are just coming into the picture.
According to INDA’s predictions, consumption of spunmelt nonwovens is expected to continue over the coming five years at a moderate pace. “Even with this slowdown, spunmelt technologies are expected to account for almost half of all nonwoven production/consumption by 2012,” said Ian Butler, INDA’s director of market research and statistics.
In a report INDA tabled in early 2008, the worldwide production of spunmelt nonwovens in 2007, which included spunbond and meltblown materials, totaled 2.6 million tons. Spunbond materials produced from various polymers, spunbond composites and bicomponent fibers accounted for a vast majority (more than 90%) of the total. Monolithic meltblowns account for the balance. When it comes to polymers, polypropylene continues to be the primary resin used for spunmelt nonwovens, followed by polyester and polyethylene.
In terms of capacity, several investments have been announced for North America (most notably by Avgol, Fitesa, Companhia Providencia and PGI). More tonnage is expected to come onstream as spunmelt producer First Quality adds capacity and continues to forward integrate into the disposable diaper market. While the full impact of First Quality’s acquisition of Covidien’s diaper business has yet to be seen, for the time being, North America appears to have adequate capacity in the marketplace for current and future demand.
Not surprisingly, the loose capacity situation in North America, coupled with looming economic worries, have forced some companies to take a second look at plans for growth. Tight credit markets make expansion an even greater challenge as banks seek greater assurances on the success of potential investments.
Offering his take on the current state of the North American market was Dennis Durkin of Avgol. He referred to nonwovens as a somewhat recession-proof business from the demand side. “That being said, all companies depend on banking and credit sources to assist in ongoing operations and capital growth plans. This is a great challenge for any business with relatively low profit margins such as ours. If you are not running at capacity or very close to it, it can be very challenging.”
Arnold Wilkie, president of machinery supplier Hills, Inc. described these challenges as “an unprecedented whiplash” of rapidly rising costs followed by a sudden economic slowdown. He feels that these challenges, in the long run, will benefit markets and customers, although he acknowledged that they are painful when they are happening. “Some roll goods and machinery suppliers have consolidated, shut down older facilities, built productive new facilities and some have left the business. This is industrial evolution on a fast timetable,” he said.
In the European market, recent spunmelt capital investments have shifted the capacity balance to the point of overcapacity. Indeed, many European producers are concerned that competing on price rather than quality could be damaging to the market. For example, Fibertex Personal Care’s CEO, Mikael Staal Axelsen, believes that—rather than price—spunmelt producers’ competitive edge should be customer service, quality, innovation and localizing with end product makers to support growth and new investments.
“Just adding more of the same will destroy our business and recent reports of financial troubles are a sign of this overcapacity situation. Fortunately, the industry has started to acknowledge that just adding more capacity isn’t the way forward. Producers need to change their behavior to avoid what other industries have done in the past. Our industry should be a classic example in the future of what not to do.”
Despite complaints of setbacks, delays and overcapacity in Europe, some manufacturers continue to invest to take advantage of new opportunities in the spunmelt arena. Fibertex Personal Care, for instance, has established a joint venture in Germany, Innowo Print, which targets the personal care industry with lightweight printed nonwovens. The state-of-the-art technology gives baby diaper and fem care manufacturers the ability to use nonwovens directly printed with images and other prints.
“Direct printing on nonwovens will initially be a niche area but it helps differentiate Fibertex in the market,” said Mr. Axelsen. With an annual capacity of 120 million square meters, the new line began commercial production in June 2008.
Taking a different tact in the European arena is Dounor SAS, which has decided to take a wait-and-see approach to expansion plans until the market sorts itself out. The company’s most recent investment was a Reicofil IV line, which it built in mid-2007 at its sole facility in Neuville En Ferrain, France. The line is Dounor’s fourth multibeam spunmelt line—all of which are Reicofil—and produces 12,000 tons of lightweight spunmelt nonwovens for hygiene and medical applications.
“We think it wiser not to invest and not to get into debt while the crisis is not behind us,” said Stéphanie Hoyas, product manager. “As a precaution, due to this economic climate, cautiousness and drastic management are compulsory. Today, we have nothing to guide us.” She stressed the tricky nature of forecasts due to variations in raw material prices, reductions in credit availability and exportation challenges due to the dollar/euro exchange rate.
However, Ms. Hoyas did point to one positive result of the economic adversity. “We have strengthened our relationships with our suppliers and customers to get through this difficult period. This crisis has reinforced customer/supplier loyalties.”
Another European company that appears to be holding off on investment plans is Italian producer Albis SpA—part of Albis Group— whose sister company Albis Germany Nonwoven GmbH has reportedly filed for insolvency. (The company declined to offer any further details at the time this article was written.)
Hoping to build on the success of its first Neumag Sauer line, Albis unveiled plans in January 2007 to expand its spunbond capacities and ordered a second Neumag (now Oerlikon Neumag) spunbond plant. Featuring a three-beam SMS configuration, bicomponent capability and a production width of seven meters, the new line was set to be the world’s widest spunbond line.
The company’s first installation, which came onstream in 2005, comprises two beams, a meltblown unit, bicomponent capability and a production width of five meters.
One European company making strides with Oerlikon Neumag technology is Freudenberg Vliesstoffe, which has retrofitted one of its polypropylene homo-polymer spunlaid lines at its Kaiserslautern plant to add bicomponent technology using an Oerlikon Neumag system. The line now features multipurpose capabilities and can produce polypropylene and polyester with copolymer products for various product categories.
Oerlikon Neumag is also installing a turnkey line for Freudenberg at its Suzhou, China plant. This complete carding line, including openers, cards, crosslappers and needlelooms will serve industrial customers in the Far East. (For more information on Oerlikon Neumag’s technology, see Suppliers’ Corner, page 56.)
Also in Asia, Italian film supplier Pantex International plans to add a new line in China in response to strong demand from the Asian market. No further details on the expansion were available as we went to press.
Pantex currently operates a joint venture with Japanese fiber and nonwovens producer Chisso Corp. to produce and sell unique perforated nonwovens in China. While Pantex’s Gangzhou, China-based production line makes perforated nonwovens, Chisso, through its Chinese subsidiary, contributes fiber and nonwovens know-how and bicomponent spunbond material to the venture.
Growing & Globalizing
Other companies are also making the most of spunmelt expansion opportunities in regions beyond Europe. Avgol, for one, is underway with plans to add a state-of-the-art Reifenhauser line in China to support ongoing business in the region. Jointly owned by Avgol and China’s Hubei Gold Dragon Nonwoven Fabric Co. Ltd., the line will be Avgol’s second polypropylene manufacturing unit in Jingmen in Hubei Province. Boasting a 15,000-ton capacity, the line is expected to begin running in early 2010.
Avgol is also keeping busy in North America, where it will upgrade two of its three spunmelt lines located in Mocksville, NC to increase annual capacity by 35,000 tons and help diversify its product range. “These upgrades are being made at the suggestion/request of our customers,” remarked Mr. Durkin. “It’s a two-phase program; the first phase should be completed in late Spring 2009 and the second phase should be finished in mid to late summer. Once this is completed, we’ll be capable of producing a whole new series of products to further support our current customers.”
Another spunmelt producer with an eye on opportunities in the North American market is Brazil-based Fitesa. The company has recently selected Laurens County, SC as the site for its $120 million North American plant, where two Reicofil 4 lines will be installed. “The first line is currently being assembled in Germany,” reported Fernanda Gastal, marketing manager. “With this project’s conclusion, Fitesa will have two state-of-the-art industrial parks for producing spunmelt nonwovens and supplying the Americas and the world.”
Back in Brazil, the company has come onstream with its second Reicofil 4 line at its Gravatai site. The 4.2-meter flexible spunbond line has a 15,000-metric-ton capacity and can supply both heavy weight fabrics for industrial markets as well as lightweight products for hygiene. Fitesa added its first spunmelt line, a 3.2-meter Reicofil line, in July 2006.
In light of such recent investments, it’s not surprising that Fitesa describes itself as “very optimistic” about the future of the spunmelt market. According to the company, it is taking advantage of the fact that hygiene products continue to increase the use of nonwovens, especially in countries like Brazil, where cloth-like backsheet materials are just being implemented in many end products.
“Also, as lightweight fabrics improve, the use of nonwoven core wrap is increasing,” Ms. Gastal observed. “This market continues to grow at a double-digit pace in developing countries and at a slower pace in developed markets—but it is growing just the same.” She added that the potential for future growth is great in countries such as Brazil, where the majority of babies are not yet wearing disposable diapers.
For its part, PGI has also shown its commitment to the North American spunmelt market with a $50 million plant expansion in San Luis Potosi, Mexico. The new multi-beam Reicofil 4 spunmelt line will produce high-barrier materials for hygiene and medical applications to meet growing demand from customers in North America. It will increase capacity by approximately 15,000 metric tons. In addition to serving customers in Mexico and the U.S., the line is also a gateway for PGI to supply its products to Central America and the Caribbean. The new line is expected to begin production by mid-2009.
Brazilian spunmelt maker Companhia Providencia has also set its sites on the North American horizon. The company has established a wholly-owned subsidiary to begin production in the U.S. This subsidiary will create a two-line nonwovens operation that will make an estimated 40,000 tons of nonwovens per year.
The two lines represent an investment of $120 million for the company. The first line is expected to begin operation in July 2009; the second will come onstream during the first half of 2010. Both will be purchased from Reicofil. Companhia Providencia currently operates nine spunmelt nonwovens lines, all in Brazil, with a capacity of 40,000 tons. Its sales are split evenly between its local Brazilian market and foreign sales, including North America.
When it comes to the high volume, ultra high speed production of lightweight spunmelt materials, the hygiene market is largely dominated by one full-line supplier—Reifenhauser. For proof of the company’s dominance one need look no further than the approximately 191 lines put into production since the debut of Reicofil technology for nonwovens in 1985. While all of the spunmelt producers contacted by Nonwovens Industry for this article agreed that there is indeed a spunmelt machinery monopoly, none were able to suggest an easy solution to this situation.
However, competing technologies are emerging to challenge Reicofil. One is offered by Galileo Group, an Italy-based machinery specialist. “If you purchase a Reicofil line, you have the same technology as all of your competitors,” opined Ron Smorada of Galileo Spunbond Holding. “You’re then in a position where you can only sell on price. Meanwhile, Reicofil is twice as expensive for the same hygiene product output. Our approach has been to offer money-saving technology that gives customers differentiation and flexibility.”
According to Dr. Smorada, Galileo is in the midst of continued discussions with several interested companies and hopes to finalize a sale in the first quarter of 2009 with a non-U.S. customer that is already a player in the industry. “Capital equipment is in a very slow mode everywhere, so we are encouraged by the ongoing interest in our technology,” he said.
Another Reicofil challenger, Oerlikon Neumag’s preferred approach to the machinery monopoly in the hygiene area is to offer entirely new nonwoven materials rather than compete head-to-head on speed or efficiency. “For standard hygiene and medical nonwovens technology—which is based on a long history and operates on extremely high efficiency levels—development potential is more or less exhausted,” stated Martin Rademacher, director of marketing for Oerlikon Neumag. “The real opportunity for a supplier is to develop a technology that can produce future nonwoven materials (like fine denier, bicomponents or combined technologies).” He added that suppliers should concentrate on developing a technology for making better or cheaper nonwovens—not on producing today’s products more cost efficiently.
Mr. Rademacher went on to describe competition among machinery suppliers in other markets beyond hygiene as more complex. “For the production of hygiene and medical nonwovens, we still have to compete against Reicofil. For other products like technical textiles, we compete with Faré, NKK, Rieter Italien and Chinese companies. The decision criteria and the final choice depend mainly on the capabilities of the plant to fulfill the product specifications.
Oerlikon Neumag’s system features a segmented spinning beam that divides the melt flow over the entire spinning width from the spinning pump onward for each segment and separately guides it to the spin pack. This ensures that the melt has exactly the same temperature and retention time. The melt flows meet again in the spin pack, directly before the spinneret. This ensures a uniform titer distribution, a stable spinning process up to the last spinneret hole and a reduction or elimination of edge effect. A key component during the production of microfibers is the draw slot, which is responsible for the titer. A new innovated design ensures a constant air supply over the entire plant width and offers stable draw conditions.
Ms. Hoyas of Dounor feels machinery diversity will be important moving forward. “Only market growth can lead to more variety among machinery suppliers. It’s healthy in a free market for other companies to compete with the market leaders.”
A major player in the spunmelt sector for the last decade, Rieter Nonwovens System targets companies looking for different technology options. “There is a clear need for an alternative and Rieter provides this answer,” stated Bruno Roche, business manager. “Spunbond technologies have been so well optimized that they have reached their limits. Because there is a clear tendency for a similar machine format, producers lose advantages versus their competition.”
Rieter currently has eight Perfobond 3000 lines in the field producing uniform spunbond fabric at low basis weights. The draw slot system is equipped with an innovative forming system and offers advantages in tensile strength, softness, volume and air permeability. In combination with Rieter’s meltblown system, the machines can create SMS fabrics with excellent air permeability, hydrohead and rewet.
No More “Same Old, Same Old”
One up-and-coming company in the spunmelt arena is Hills, Inc., based in West Melbourne, FL, which offers advanced spunbond and meltblown machinery in addition to equipment for staple fiber and filament yarn production. Hills provides bicomponent extrusion technology to Reicofil, key subsystems to manufacturers who engineer their own machines and complete spunbond machines.
The latest complete machines by Hills make microfiber and nanofiber spunbond via splittable bicomponent pie fibers and islands-in-the-sea dividable fibers. The company recently shipped its third production-scale spunbond machine specifically equipped to make spunbond with islands-in-the sea fibers.
Hills spunbond machines offer sophisticated bicomponent extrusion technology, temperature separation of the two polymers, high temperature capability, high pack pressure capability, ultra-high-speed slot draw units and characterizable forming tables. Many different polymers can be used and different products can be made on the same machine.
Also offering alternative spunmelt technology is NonWoven Technologies, Inc. (NTI), Oyster Bay, NY. According to company president Tony Fabbricante, NTI’s technology offers much-needed innovaton to the “same old, same old” spunmelt market. “We are a newcomer bringing major breakthroughs to the nonwoven industry after five decades of ‘What’s new in spunmelt equipment?’”
NTI’s recent strategy has centered on awarding Arthur G. Russell (AGR) sole exclusivity of its patented fiber-making technology. With their combined technical and automated equipment building experience, the companies are currently building a high-pressure, narrow nonwovens line, which is expected to launch in early 2009.
According to AGR/NTI, 83% of finished goods are less than 15-inches wide. The companies’ demo spinneret assembly package will be a 15-inch active fiber-making width, having four-rows (M-M-M-M) and will be only 14-inches long.
“Our technology is unlimited and can also be used to make SMS at spunbond line speeds,” stated Mr. Fabbricante. “Our meltblown nanofibers are made by pounds per hour compared to electrospinning, which produces at grams per hour. At any orifice size, our throughputs are 25% above conventional spinning, and our four-row line will deliver at least 50% more fibers over a conventional one-meter line.”
Challenges, Challenges, Challenges
Even beyond the challenges of today’s world economy, spunmelt producers have their hands full trying to achieve balanced capacity levels, optimized production and strong customer loyalties. All the while, they are doing everything in their power to stay competitive while creating less expensive, lower weight and better quality products at faster line speeds. No small job.
Fitesa’s Ms. Gastal is looking forward to a respite from such challenges as the market recovers. “The spunmelt chain has been very busy during the past 12 months trying to align its operations to the ups and downs of raw material costs. We hope that from now on, in a balanced market, every company will find its place in order to support market needs.”
For Avgol’s Mr. Durkin, being competitive in a tough economy is all about global positioning, consistency and value. “We believe you have to have a truly global presence and be capable of providing consistent superior value to customers wherever they choose to grow their business. This is easy to say and hard to do since it involves coordinating your operations throughout the world to be able to make the same product with the same/similar physical characteristics. You have keep up with your customers and technology. If you don’t stay at the top of your game, there are plenty of competent competitors waiting to take your place.”