Make no mistake about it. These are times that try men’s souls. The global recession punched some sectors of the spunmelt market hard—especially the housing and automotive segments. While other sectors like hygiene and medical have been less affected by the epic economic crisis, they’ve had their fair share of problems. With rising raw material costs, higher energy prices and customers’ demand for lighter weight fabrics and improved cost efficiencies, it is no wonder that spunmelt makers are hammering away at plans to differentiate themselves.
With strategies ranging from tying the knot with new partners to investing in new lines in new markets to shutting down uncompetitive lines, to reducing capacity, to launching new products in niche markets, spunmelt makers have a fresh bag of tricks that are intended to help them hit paydirt.
Also in these manufacturers’ favor is the fact that spunmelt—despite these problems—continues to be a healthy growth market. According to INDA/EDANA’s Worldwide Outlook 2007 to 2012 report, the worldwide production of spunmelt nonwovens in 2007, which included spunbond and meltblown materials, totaled 2.6 million tons.
“Our estimates for 2012 will be close to the forecasts, and spunmelt will continue to account for almost half of all nonwovens production in 2012. When you include staple polypropylene volume used in needlepunched and the minor amount of carded thermal bonded materials with polypropylene-based spunmelt production, you will find that polypropylene nonwovens production will account for close to 47% of the world’s nonwovens output by 2012,” said Ian Butler, INDA’s director of market research and statistics.
Tying The Knot
The year 2009 may be remembered as the year in which many spunmelt producers walked down the aisle with partners to strengthen their hold on the spunmelt market.
For PGI Nonwovens, partnership was created through acquisition. In December, the Charlotte, NC-based company completed its acquisition of Barcelona, Spain-based Tesalca-Texnovo from Grupo Corinpa, S.L., creating a new, wholly-owned subsidiary, PGI Spain and giving the world’s largest maker of spunmelt nonwovens instant access to the European hygiene market.
Based in Tarragona, Spain, the newly acquired business contains six spunlaid lines serving the hygiene, medical and industrial/agricultural segments. The additional capacity brings PGI’s global spunlaid capacity to more than 285,000 metric tons.
Meanwhile, Fiberweb and Fitesa opted for a joint venture partnership to expand their scope in spunmelt when they formed FitesaFiberweb last summer.
Already, the partnership has begun construction on a new spunmelt line in Simpsonville, SC. The new Reicofil 4 multibeam line is expected to come onstream by the end of this year.
“It’s a $50 million investment. Our current capacity is 78,000 metric tons per year of spunmelt nonwovens. It will reach over 100,000 (metric tons) when the new line is ready and will supply the medical, hygiene and industrial markets,” said Fernanda Gastal, FitesaFiberweb’s sales and marketing manager.
In addition to the new line, the joint venture includes Fiberweb’s plants in Washington and Mexico as well as Fitesa’s spunmelt operation in Brazil. A second Reicofil 4 line in Simpsonville is expected to come onstream in late 2012 or early 2013.
It seems joint ventures are at the heart of Fiberweb’s growth strategy in spunmelt. Months after signing the Fitesa deal, Fiberweb said in December 2009 it is collaborating with Japanese nonwovens maker Chisso Corporation’s Fibers and Fabrics division to evaluate the establishment of a new jointly-owned spunbond nonwovens manufacturing operation in China. The proposed venture would focus on hygiene and personal care products and would use the latest generation of spunbond/spunmelt manufacturing technology, benefiting from the extensive experience of
both partners in specialty spunmelt technology.
Fiberweb CEO Daniel Dayan said the proposed venture is a natural extension to Fiberweb’s existing Asian business, which already includes two airlaid lines in Tianjin on China’s northeastern coast, as well as its current spunmelt operations, which currently do not extend to the Far East.
“ Today we’ve very big in spunbond in Western Europe. Through the FitesaFiberweb joint venture we’ve become very big in North America and Latin America. We’re in Asia with airlaid and some industrial products but not polypropylene spunbond,” he said.
Mr. Dayan added that a Chinese spunmelt operation would improve its relations with global customers. “It’s helpful to global hygiene customers to have suppliers with the same kind of global footprint that they do, so we’re looking at an Asian investment,” he said. “While we could do that by ourselves, cooperation with Chisso could be really advantageous for both parties.”
Like its deal with Fitesa, forging a partnership with Chisso would give it access to a new market at a 50% lower investment rate than going it alone.
“(Chisso) needs new capacity. We want new capacity. The scale of these new machines is such that doing it together optimizes the risk profile for both companies,” said Mr. Dayan.
The two companies will spend the next couple of months looking at market and economic conditions before finalizing plans.
One spunmelt manufacturer who has already existed in China as a joint venture partner is Israeli spunmelt producer Avgol, who has recently increased its stake in a five-year-old partnership with Hubei Gold Dragon Nonwoven Fabric Co.
“Avgol has the controlling interest in the joint venture now and that is what allowed us to expand our market there. We see it as a very promising market for us and as a very important part of our long-term growth,” said Dennis Durkin, vice president of sales and marketing.
Avgol’s second Chinese line should be up and running by late in the second quarter. It will add 15,000 metric tons per year.
Prepared for Growth
While acquisitions and partnerships, in China and beyond, are some companies’ spunmelt growth story, it’s certainly not the only way manufacturers are growing their businesses. In fact, despite the global economic turmoil, the past 12 months have seen new lines planned for North Carolina, Mexico, Italy and Turkey, just to name a few, proving that optimism still exists in the spunmelt area.
This can best be proven by the business activities of Reifenhauser Reicofil. This German machinery producer has sold nearly 200 spunmelt lines globally in its lifetime and is widely considered the technology leader in the area. While the company reported a remarkable reduction in orders between May 2008 and June 2009—as customer projects stalled amidst a tightened credit market—more recently, recovery has begun in earnest.
“As of July to now, we have a huge order income,” said sales representative Markus Muller. “That represents all of the lines that got stuck in the process of the crisis.”
Among those in Reifenhaueser’s current order queue is PGI. In December, this company announced that it is investing in industry-leading technology in the U.S. and Asia to serve the hygiene and healthcare marketplace. PGI plans to install Reifenhauser Reicofil spunmelt machines in the U.S. and China. Construction associated with the projects was expected to begin early in the first quarter of 2010, and material is expected to be commercially available in mid-2011.
According to reports, PGI will combine Reifenhaueser’s industry-leading technology with recent proprietary technological developments, to deliver differentiated products to customers that are intended to achieve improved barrier, softness and opacity for use in diapers, surgical gowns and drapes.
Companhia Providencia is another company that had to postpone expansion plans when the financial markets imploded. While its plan to enter the North American market through investment in South Carolina was never shelved completely, construction on a new line in North Carolina began about 18 months later than originally planned in late 2009.
“Our estimated start-up is scheduled for the first quarter of 2011,” said Mr. Jones. The line will be a wide machine with multiple spunbond and meltblown beams. It will be capable of making advanced nonwoven hygiene, protective apparel and medical fabrics. The line will also incorporate some proprietary technologies to enhance fabric softness, drape and bulk.
Product diversity for this nonwovens producer, which operates 10 lines in Brazil is also a focus. “We are expanding our product line to include the more technically challenging medical and protective apparel markets. The requirements of these markets fit well with the capabilities of our development and manufacturing people as well as our most recent production lines,” said Mark Jones, project manager.
In addition to its nonwovens lines, the company has recently added more laminating and printing lines, bringing its totals to five and four, respectively. “All of these downstream lines are running with full production schedules,” said Mr. Jones.
Commenting on future expansion plans, Mr. Jones said, “We will continue to analyze the South American and global markets to identify opportunities. We are not constrained by any national or regional boundaries and our newest expansion into North America should serve notice that we will be a global nonwovens supplier.”
While investment, particularly through joint ventures, has been a focus for Fiberweb, it has also shuttered several older, underperforming lines and replaced them with more sophisticated technology to drive up profits.
“We’ve taken out uncompetitive spunbond plants. We’ve taken out three lines in Europe—one in France, one in Germany and one in Sweden. We brought up a major new line in Sweden in 2007, and a major new line in Italy in 2009, which on its own has an equivalent capacity to the three lines we’ve closed and we’re building a line with Fitesa as part of our joint venture in Simpsonville, SC at the moment.”
Fibertex Personal Care is also in expansion mode at its Malaysian facility. One of the facility’s two production lines is currently under construction to add another beam. The investment will add more than 10% to the total production capacity in Malaysia.
Meanwhile in Masserano, Italy, nonwovens producer Union Industries is adding a six-beam, 5.2 meter Reicofil spunmelt line which will add a whopping 24,000 tons per year to its current capacity. The new line, featuring SSMMMS technology, is expected to start up during the third quarter of 2010. The new line is expected to help Union Industries meet its goal of supplying the hygiene and medical nonwovens market with high quality, ultra-lightweight nonwovens.
Moving east, Turkish nonwovens producers are also making headway with expansion plans. Gulsan is adding a new six-beam, 4.2 meter, SSMMMS bicomponent Reicofil 4 nonwovens line to its operation. The new line will add 20,000 tons and bring Gulsan's total capacity to 41,000 tons when it becomes onstream in the fourth quarter of 2010.
At the same time, Mogul has recently added a fourth meltblown line to its operation, which also houses three polypropylene spunbond lines and one polyester spunbond line. “We are mostly focusing on meltblown for product development. We developed pulp-added Asterion meltblown fabrics and are also working to develop microdenier meltblown fabrics for fine filtration media. Another area we are trying to develop in meltblown is wipes. We’re also working on how nano coatings can help us to develop spunmelt fabrics for different end uses,” said Serkan Gogus, commercial director.
While the hygiene and medical sectors have been somewhat recession proof, the economic crisis has been a drag on many spunmelt sectors including the automotive and construction sectors.
“One of the main challenges in the market is to maintain a sustainable business model in a market fraught with pricing pressures and noncontrolled raw materials and general costs,” said Mikael Staal Axelsen, CEO, noting that Fibertex ran its lines at reduced capacities last year. “We didn’t want to sell our products below cost,” he said.
Emphasizing that things have been fairly good for the hygiene industry compared to many other industries, Mr. Axelsen acknowledged that consumption was down during the first half of 2009, especially in emerging markets, but the market recovered during the second half of 2009.
Speaking for the machinery side of the business was Oerlikon’s Ed McNally, sales director for nonwovens. Acknowledging that the greatest challenge has been the economic condition, undercapacity is finally encouraging his customers to invest in full production lines.
“More companies are attempting to extend the life of existing assets and/or postponing new capital expenditures. However, 2008-2009’s continuing undercapacity of meltblown globally has given rise to a number of companies now interested in the production of this media. This increase in opportunity, coupled with our more competitive product line has kept our meltblown equipment sales within expectations,” he said.
Mr. McNally said in the last two years there have been opportunities in China. He envisions China will continue to be an important market as well as India. Oerlikon entered the meltblown business in 2006 when it purchased the J&M Labs’ technology from Nordson. Additionally, the company offers spunbond technology, once known as Ason Neumag.
Going back to the nonwovens producer’s point of view, FitesaFibwerweb’s Ms. Gastal is also optimistic about her company’s hygiene-dominated business. “New applications are being developed and materials are being replaced by nonwovens. Today a diaper has a lot more nonwoven than it did five years ago. Consumption in diapers and the feminine care items is going up again. While customers may migrate from major brands to less expensive private labels in an economic downturn, they don’t stop consuming diapers or napkins. You may have a change in the mix of the products but not in the total consumption amounts. As the economy starts the recovery process, consumers go back to branded products,” said Ms. Gastal.
With a whopping 90% of Avgol’s business devoted to hygiene, Mr. Durkin agreed with Ms. Gastal’s assessment of the market. “It’s relatively recession-proof. You typically see a change in the mix between branded and private label, but the overall market doesn’t decrease in a recession because of recessionary things. There was growth in private label in 2008 and 2009,” he said.
On the other hand, industrial markets, particularly construction, have felt a bigger blow from the global recession, but Fiberweb’s Mr. Dayan remains optimistic that growth can be achieved by launching new products such as new roofing underlays, which Fiberweb has unveiled in the U.S. and Europe.
“We’re seeing good marketshare gain in both areas. In the U.S. where roofing felt is traditionally used, we are attacking with a nonwoven synthetic product. Since synthetic products are lighter and much thinner than roofing felt, roofers can carry more material per roll up a ladder, making the job safer, easier and a great deal quicker,” said Mr. Dayan.
Fiberweb is also betting that growth will come from new roofing products with enhanced UV stability. New filtration products are also on the horizon for the company which is currently adding a new meltblown line in France. “We’re introducing enhanced capacity for meltblown fabrics for face masks. With the swine flu epidemic, we’ve seen enormous growth with governments wanting to stockpile very large quantities of face masks or face mask material. That’s a growth area as well,” said Mr. Dayan.
The air filtration segment also represents growth for Fiberweb. “With more HVACs, there is more concern about pollution and nonwovens tend to be good value products. We’re looking at a range of things in that area,” said Mr. Dayan.
Noting that Fiberweb is a big player in pool and spa filtration, offering Reemay specialized polyester nonwovens, Mr. Dayan said, “We‘re seeing markets returning to normal and volumes beginning to recover in many areas—apart from construction. If we get new products right we can do pretty well.”
No Meltdown for Meltblown
While it’s best known for its hygiene business, Reifenhauser Reicofil also sells meltblown stand-alone lines to produce filters for air and liquid filtration. “We see the market growing, especially at the moment with the swine flu,” Mr. Muller said.
Arnold Wilkie, president of Florida-based meltblown machinery company Hills Inc. also sees a silver lining in the medical field. “Meltblown has done well through the recession. Everyone who has meltblown capability has had some pretty good business. A lot of that is going into face masks. We’ve sold some new equipment into that business and are looking forward to getting some additional orders throughout the world.”
Mr. Dayan is also upbeat despite the lingering recession. “Customers are also looking to use more sophisticated products to further reduce costs or improve properties of their products for consumers. Those trends are continuing,” said Mr. Dayan.
Fiberweb’s volume in hygiene was down 10% in the first half of 2009, but it is much improved in the second half year. So it gives you the flavor that things are coming back to normal.”
Keeping An Eye On Costs
Addressing cost efficiencies is a trend that continues to prevail. “Raw material prices are always a challenge. You have to work it out with your customers,” said Avgol’s Mr. Durkin said.
Reifenhauser’s Mr. Muller seconded Mr. Durkin’s sentiments when it comes to cost reductions.
“There is one major trend over the past year and that is cost reduction. The highest impact on cost of the finished goods is resin. This leads to lower and lower fabric weights, which is challenging for us because we have to continuously adapt our technology to fulfill this need. This means lower fabric weights but still having properties that are comparable to higher fabric weight of products sold a couple of years ago. We have a very sophisticated laboratory here that has three lines installed for customer trials. One is a six beam line SSMMMXS for the development of hygiene and medical products,” said Mr. Muller.
Lightweight Is A Fave
When it comes to trends in the spunmelt market, the need for lightweight and soft fabrics is paramount.
FitesaFiberweb’s Ms. Gastal agreed. “Currently we are focused on the ultra lightweights. You can offer very high coverage with less consumption of resin. This gives you a more sustainable product because you can use less raw material. We are going this way with sustainability and also providing better performance like rewet, strike through and softness for baby products,” said Ms. Gastal.
Mr. Durkin agreed more about the necessity of providing lightweight fabrics. “Our specialty is very lightweight—10-11-12 gsm products. Customers continue to try to use lighter weight products while retaining a variety of physical properties. We’ve been able to respond to those challenges so that’s a big part of our success. I don’t expect it to change,” said Mr. Durkin.
The challenge is to not only be able to make these ultrathin products without a rip or a tear on high speed lines but making them uniform, soft and without waste.
“Customers want improved uniformity, reduced basis weights, higher barriers, softer fabrics and of course, lower costs,” said Companhia Providencia’s Mr. Jones. “Customers also want differentiation, which is not always easy with commodity-type materials. However, with our downstream capabilities of printing and laminating we can offer some very cost effective alternatives.”
Oerlikon’s Mr. McNally said when it comes to meltblown, the trend continues to be finer fibers at acceptable throughputs and utility. “In the larger fiber size markets, the trend is higher productivity and yields. In terms of polymer, we see a direction towards higher usage of PBT designed specifically for meltblown,” he said.
Spunmelt producers are in agreement that they need to accommodate customers who are increasingly seeking cost efficiencies and greener products.
Noting that the raw material most spunmelt grades use comes from oil, Ms Gastal said,“This is a challenge for the future of the product and the industry. In our Washougal, WA plant, we already have production of PLA-based nonwovens, a sustainable resin that is made from corn. It’s one of many attempts to serve the market with an alternative.”
No stranger to the green movement, Hill’s Inc. was involved in pioneering the use of recycled polyester from drink bottles back into textile applications. “We’ve done a lot of projects utilizing those sort of materials. “We were also pioneers in utilization of PLA. In addition, we recently entered into an agreement offering Tatecraft, an ecofriendly dyeing technology that uses almost no water and utilizes very low energy as compared to conventional dyeing technologies,” said Mr. Wilkie.
Reifenhauser Reicofil is another machinery company focusing a significant portion of its efforts figuring out how its machines, which already run PLA, can be more green. “Machines have to be developed in a way that they are capable of running green products. It definitely adds to the sustainability trend—saving resources and saving energy goes together.”
Mr. Muller envisions that spunmelt companies will eventually have labels certifying the carbon footprint of their technology.
When it comes to the future of the spunmelt market producers predict that there will be an increased focus on the medical sector. According to Mr. Muller, disposables are already taking the place of traditional, durable and washable products such as cotton that are used in wound care for covers or medical gowns.
“We see a lot of growth for medical—gowns, drapes and covers as they go from durable to disposable. The actual growth started in the early 2000s, when we were really capable of serving the market with new products. The key factor here is to have high barriers, meaning protection against penetration of liquid, by increasing the meltblown portion in the fabrics. However, there is a lot of alcohol involved in surgery, which would kill this natural barrier, so you have to treat the fabrics to make them alcohol repellent. With our SSMMMXS line we offer the ideal platform for the development of such products,” said Mr. Muller.
The future of spunmelt also hinges on the ability to develop specialty products. Reifenhauser Reicofil’s XSXSX line is designed specifically for the development of specialty products. “One of our latest (lines) is for lofty products— a bulkier product which has a higher thickness. This product was traditionally coming from carding machines, staple fiber carding. There seems to be a trend to replace cards with spunbond nonwoven machines because the cards are no longer competitive. A card has a comparably quite low throughput compared to our machines. The other big advantage is that in our machines you go from the resin to the final product in one step,” said Mr. Muller.
Mr. Muller is also seeing more of his company’s customers targeting nonwoven-based geotextile products in road construction, particularly in Russia and India.“We provide machinery to produce geotextiles. It’s an old market, but again it was dominated by the carding industry and now is shifting to spunbond nonwovens,” said Mr. Muller.
Hills’ Mr. Wilkie foresees growth in niche markets such as nanofibers. Hills has the capability of making bicomponent meltblown as well as nanofibers in meltblown at extremely high production rates. “We are finding a market for smaller than normal fibers, somewhere around average one-micron range. Most of that is going into air filters, where you can get a more efficient filter with smaller fibers. We can make nano meltblown fibers that are 250 nanometers or even smaller. There are a lot of folks looking at the market applications for those kinds of products. There are some specialty filtration applications. It’s a niche market so far, but there’s a lot of potential and opportunity.”
Crediting new spunbond technologies combined with new polymer technologies and downstream development work done in a number of places including North Carolina State University, Mr. Wilkie said, “We can now make textile materials, specialty filtration materials and a lot of other materials that couldn’t be made with nonwovens in the past. There’s a lot of opportunity there. The recession has slowed down some of the commercialization in that respect, but it will come around and you’ll see a lot of exciting things down the road with spunbond,”said Mr. Wilkie.
Fibertex meanwhile is offering its customers the ability to differentiate itself through printing directly on nonwovens. Through a joint venture with Innowo Print in 2008, Fibertex can print on lightweight nonwovens in up to six colors, allowing customers to empower their brands with images and designs.
All of these innovations will help spunmelt nonwovens broaden their market scope. Where once the technology seemed synonymous with disposable items,, more applications are not only cropping up but many are growing in importance to most producers’ product mix.
Mr. Wilkie envisions spunmelt opportunities beyond just hygiene and medical applications. “You’ll see it displacing traditional textiles. We’ve got folks making artificial leather, wipes and lots of things from spunmelt and it will continue to grow. Machines capable of making many different products so that they can change with the marketplace. We do believe that next year will be a turnaround year for a lot of folks. There are a lot of technologies sitting on the shelf that are ready to go commercial. We’ll realize a lot of that next year. The future is bright and we are well positioned for that” said Mr. Wilkie.
Mogul’s Mr. Gogus predicted there will be an increased interest in spunlaid and hydroentanglement composite materials (with the addition of pulp airlaid sometimes) as well as in bicomponent technology. “We see new product development trends for renewable sources like PLA or lyocell, although they are not fully commercial or widely accepted yet,” said Mr. Gogus. “On the polypropylene spunbond side most of the growth we foresee is in the hygiene area; on the polyester side we see growth in technical areas. “For meltblown we see growth in filtration and masks.”
By region Mr. Gogus is banking on the Far East, (Middle East) and other areas that parallel polymer investments. “The recession and cost consciousness has increased the need for low cost materials, which is good for nonwovens and particularly spunmelt in the long run,” he said. “The recession negatively affected and reduced almost all markets in the short term, but we’ve seen signs of improvement in the last three months.”
Avgol’s Mr. Durkin summed up the future of the spunmelt market in these words, ”If you don’t work with customers and listen to them, you’re done. This business more than anything else depends on people’s trust and ability to depend on you to get them what they need, when they need it anywhere in the world and to be able to make the same product because they are basically looking to make uniform products throughout the world.”
Perhaps Mr. Mueller’s take on the future captures the essence of all spunmelt makers and machinery companies. “We hope to further explore new markets besides the markets we believe we are already serving very well. In the markets we are serving well we are ready to address with our customers any challenge that may come up in the future, any changes in product and related machinery.”