Demands in this market are driven by shifts in performance, location and cost requirements.
Medical barrier nonwovens (SMS, spunlace, wetlaid and films for nonwoven laminates) are primarily used in disposable surgical gowns, drapes and sterile tray wrap markets. The job of these end-use products is to prevent the potential of blood- and alcohol-borne pathogens from coming in contact with the surgical staff and to reduce small particle contamination of the surgical site from the surgical staff and environment. To meet these high-performance expectations of small particle, blood and alcohol repellency, the fabrics and end-use medical products must meet stringent tests by AAMI and European standards. In addition, they need to do this at an affordable cost. The end product cost is most influenced by the fabric cost and the converting labor cost.
Thus, major changes in the medical barrier nonwoven segment have dictated the adoption of new business and investment strategies for nonwoven roll goods manufacturers, captive and merchant finishers of these fabrics, raw materials providers and others.
These changes include:
Different fabric performance requirements for key end-use applications
Shifts in the size and regional locations of fabric converting demand which impact the positions of key roll goods suppliers
Improved production technology investments to reduce total value chain costs
Global adoption of AAMI and European standards for surgical drapes and gowns has changed the medical barrier nonwoven performance requirements. For example, while AAMI level two protection requires a spray impact of less than one gram and a statistically significant minimum of 20 cm of hydrostatic head, AAMI level three requires these fabrics to have a Spray Impact Test result of less than one grams and a minimum 50 cm hydrostatic head based on multiple samples from three different lots for statistical purposes. The level three hydrostatic head requirement is difficult for two banks of meltblown to achieve on an SMMS machine at a 50 gsm basis weight without operational excellence, which yields good meltblown formation and, thus, fine fiber meltblown basis weight uniformity.
While not required by AAMI or European standards, to make SMS even more effective in the operating room, the fabric is treated with both anti-static and alcohol repellent chemicals. This treatment approach requires a sophisticated technological understanding on how to uniformly apply these two very different chemicals at acceptable production rates. The number of roll good suppliers able to provide this sophisticated treatment at an affordable cost is very limited.
For even higher protection levels, AAMI level four requires more sophisticated tests (ASTM F1670 and F1671) to demonstrate the ability of the resulting end-use product to protect from blood borne pathogens. For a balance of breathable comfort with acceptable performance, AAMI Level 4 performance is provided by film-based nonwoven laminates in surgical gowns, such as Kimberly-Clark’s KC400 MicroCool gown, Cardinal’s SmartGown Surgical gown and Medline’s Prevention gown.
While the debate between disposable and reusable medical barrier end-use products continues on cost and environmental fronts, the evidence of better infection prevention rates for disposables continues to shift the penetration of nonwovens into this market to significant levels. The US market is around 90%. Western Europe is rapidly increasing to the 60-70% range, and even the more developed areas in Asia are moving in this direction, with penetration forecast to grow in the range of 10-20%.
This higher penetration rate means that the total medical barrier nonwoven market is forecast to grow by approximately 4% per year from 271,000 tons in 2012 to 332,000 tonnes in 2017. Much of that growth is forecast to be in SMS and film for nonwoven laminates and is forecast to occur in Asia due to the shift in converting demand that has occurred over the past 15 years.
Shifts in the location of demand growth for state-of-the-art medical barrier fabrics have been occurring for some time and continue to result in changes whereby roll goods producers, finishers and integrated and contract roll goods converters invest in new and upgraded capacity. Economic factors, such as differential labor and polymer costs, and shipping cost trends, are driving changes in the
location of converting operations for medical disposable products
and, over time, will determine the most
attractive locations for investment in medical barrier nonwovens.
It is well known that North America, and, more particularly the U.S., is one of the largest gown, drape and surgical tray wrap end-use markets at approximately 40% of the total medical barrier nonwoven end-use product market, followed by Europe at 30%.
However, to decrease the converting cost of the end-use products, the converting demand for medical barrier nonwoven fabric has shifted dramatically from North America and South America to the lower cost labor in Asia—primarily China, for now, but other Asian countries (e.g., Thailand, Indonesia, and Malaysia) participate and even more will be evaluated (e.g., Vietnam, Cambodia and even Myanmar) with over 60% of converting now in Asia.
This shift obviously impacts the decisions on where roll goods production should be placed to meet the converting location demands. Not surprisingly, many vendors have moved production to Asia to meet this shift.
The purpose of the value chain analysis is to determine where the profit is made in the production and treatment of medical barrier nonwovens, the end product converting and the marketing/distribution of the product. The value chain developed was for non-reinforced gown production. This value chain comparison illustrates where the fabric is made (U.S., China, Middle East), where it is treated or laminated (on-site or off-site, in-line or off-line), where it is converted (China or Mexico) and where it arrives in the distribution center. For simplicity, only a U.S. distribution model was utilized.
Obviously, the marketer profit is maximized with the lowest cost combination of fabric, treatment or lamination, converting and shipping. It stands to reason that the most profitable approach is to produce a medical barrier nonwoven completely on one site and near the converting location. This minimizes the fabric production and transportation costs. This happens with the China SMS medical barrier nonwoven fabric production with in-line topical treatment and converting in China. It is interesting to note that China fabric treated off-line and the U.S. produced fabric that is topically treated in-line are relatively similar in final marketer profit.
On the other hand, the use of the spunlaced medical barrier nonwoven fabric produces a total cost result that is not profitable if the individual partners in the value chain are obtaining a sustainable profit. This profit comparison is made, however, against the estimated selling price of SMS nonwovens. In reality, spunlaced medical barrier nonwovens are sold at higher prices than SMS and are somewhat profitable.
These significant changes in performance requirements, converting location demand and low cost require a higher level of sophistication in production quality capabilities, including more meltblown banks in SMS, a shift from spunlace to SMS and more film-based laminates. This has led to large investments by primarily spunmelt companies like PGI (China), Advanced Fabrics (Saudi Arabia), and Ahlstrom (India), plus announcements by several others like Avgol (China), First Quality (China), and Toray (China) to meet these requirements.
The goal is to have a cost-effective SMS to meet the desired barrier levels. In the future, it is anticipated that more breathable film-based nonwoven laminates will be required to meet the more stringent AAMI Level 4 performance while providing comfort to the surgical staff and patients. The companies that are positioned to cost effectively produce these laminates, like Kimberly-Clark, will be the ones most able to benefit.
Warren Collier is the author of the John R. Starr, Inc. subscription report, Global Opportunities in Medical Barrier Nonwovens and Manufacturing Economics 2012-2017 published in February 2012. To obtain a detailed prospectus for this study, please contact John R. Starr, Inc. at firstname.lastname@example.org.