Karen McIntyre, Senior Editor04.17.13
During the past decade Latin America has become a driving force in the global nonwovens industry, led largely by rapid investment in Brazil as well as other leading nations in this region. The presence of two of the region’s largest nonwovens producers—Companhia Providencia and Fitesa—in the global marketplace as well as their proximity to major biopolymer supply sources will only boost the region’s importance to the global nonwovens industry moving forward.
While Brazil does dominate the market representing nearly half of the 300,00 metric tons produced in South America, other countries are also gaining ground. Mexico, including a large PGI-owned operation, produces about 98,000 tons and the Caribbean makes about 9,000 tons. Within South America, in addition to Brazil, significant amounts of nonwovens are made in Argentina, Colombia and, most recently, Peru.
The majority of the capacity being made in the region encompasses spunbond and spunmelt nonwovens for the hygiene market but there are a number of smaller needlepunch lines in the region, according to Rick Jezzi, the author of INDA’s recent report, “Latin American Nonwoven Markets: Trends, Forecasts, and Analysis 2012-2017.”
“A lot of the needlepunch lines are vertically integrated producers who are also serving a variety of end uses,” he explains. “They are not sophisticated but they are there.”
One market gaining in importance, Jezzi adds, is the automotives market. Brazil, the country that represents half of South America’s population, has a large automotives presence.
For now, however, hygiene seems to be the big industry promoting nonwovens growth in the region with major players including locals like Fitesa and Companhia Providencia and U.S.-based Polymer Group Inc., which has sites in Colombia, Mexico and Argentina.
By the numbers
With a total capacity above 400,000 metric tons, the Latin American nonwovens industry is becoming a global force, and this figure is expected to growth as new investments come onstream.
Gauging figures for the total region can be diffiuclt but ABINT, the Brazilian nonwovens and technical textiles industry reports that the increase has been growing in the 10-12% range in recent years thanks to both new market development and investment projects.
In Brazil, as the two major local producers have embarked on U.S. expansion projects, the number of exports has decreased in recent years, and new market growth in domestic markets has been able to divert this capacity within Brazil. This has been beneficial because exports out of Brazil can be difficult.
Going global
With two sites and 11 lines in Brazil, Companhia Providencia announced a North American strategy in 2008. While this plan faced some delays due to the global economic crisis, the company’s second U.S. line, located in Statesville, SC, was completed last month, bringing Providencia’s capacity to 140,000 tons.
In announcing the U.S. investments, executives at Providencia indicated that U.S. investment would lessen the strain of its Brazilian operation, which has been increasing its U.S. exports in recent years. Even before producing nonwovens in the U.S., Providencia reported that about 20% of its global output supplied this market.
That being said, the addition of 40,000 tons of capacity in the U.S. will allow Providencia to grow is South American business, the majority of which is conducted domestically in Brazil, which is the largest consumer market in Latin America.
Meanwhile, back in Brazil, in June 2012, Providencia completed work on a second production line at its site in Puoso Alegre, adding 20,000 tons and tripling output at the site. This $63 million investment was announced in 2011 when executives said it would meet domestic market demand in the disposable hygiene and medical product segments. “At the end of 2012, the region accounted for more than 70% of the company’s production capacity,” says CEO Herminio Freitas adding that Brazilian nonwovens segment growth has outpaced the overall economy two to one during the past five years, increasing 10% per year.
“We chose Pouso Alegre because it is a site that is logistically well placed to receive raw materials and rapidly meet the needs of our customers,” Freitas says. “As well as having the advantage of already operating in the region, we also have access to a local reservoir of experienced labor.”
Elsewhere in Brazil, Providencia operates an eight-line site in Sao Jose dos Pinhais, which was the recipient of regular investment throughout the 1990s and early 2000s.
Also growing rapidly, but largely through acquisition, is Fitesa. This Brazilian nonwovens maker, owned by Petropar, entered the U.S. market in 2008 through a joint venture agreement with Fiberweb, and the two companies built a nonwovens line in Simpsonville, SC. As this line became operational and line number two was being pondered, last year, Fitesa announced it had purchased the entire venture from its partner as well as Fiberweb’s hygiene-related assets in North America and Europe. This move propelled Fitesa, which before its agreement with Fiberweb had only a small Brazilian operation into a multinational manufacturer of a range of nonwovens technologies.
Sales and marketing manager Ray Dunleavy says the partnership with Fiberweb helped Fitesa gain access to North America, preparing it for this rapid expansion. “I think the FitesaFiberweb exercise was a terrific template for this new venture,” he says.
Prior to the acquisition, FitesaFiberweb encompassed spunmelt operations in Brazil, South Carolina, Washington and Mexico. The purchase included these assets as well as Fiberweb-owned spunmelt lines in Sweden and Italy, carding lines in Green Bay, WI and Simpsonville, SC as well as an airlaid line in Tianjin, China. Additionally, the joint venture had already announced plans to add a spunmelt line in Lima, Peru as well as a carded line in Brazil to the operation and construction on these two investments has been recently completed.
The new spunmelt line in Lima serves the Pacific coast of South America, an area Dunleavy describes as an open market—this growing market is not easily served by Brazilian operations because travel through the Andes is difficult.
Meanwhile, the new carding line—which will be both resin and air through bonded capable—in Brazil will help Fitesa meet demands for acquisition and distribution layers and other carded applications like topsheets and backsheets.
Although it doesn’t have a presence in Brazil, Charlotte, NC-based PGI Nonwovens has been able to be a Latin American nonwovens leader through an ambitious expansion strategy outside of Brazil. It’s most recent investment, a spunmelt line in San Luis Potasi, Mexico, became operational in 2010, joining other large-scale lines in Mexico, Argentina and Colombia.
According to company CEO, Veronica “Ronee” Hagen, the latest investment enhanced the company’s capabilities in both the hygiene and healthcare markets and PGI continues to focus on having state-of-the-art capabilities in Latin America.
A mix of manufacturers
From an end user perspective, diaper market leaders Procter & Gamble and Kimberly-Clark both show a strong presence in Latin America and typically one or the other possess the largest marketshare in most of the region’s major countries. Beyond these two multinationals, however, local players are present in all of the markets. These local companies include Absormex in Mexico, Hypermarcas in Arentina and Brazil, Evergreen in Brazil and CPMC in Chile and Peru.
While Swedish hygiene maker SCA’s Latin American presence has traditionally been small, the company acquired Pro Decart, a family-owned hygiene maker last year, hoping to gain entry to the hygiene market. This company is largely focused on adult incontinence but also sells baby diapers and wet wipes. “I am very happy that we are now establishing ourselves in Brazil, which is also of strategic significance,” says Jan Johansson, president and CEO of SCA. “We have for some time worked on finding the right solution for entering this important emerging market.”
It seems growth in the region is being driven by increased exposure to diapers to consumers who a few years ago did not even have the option of using disposables on their infants.
Amauri Hong, director of Brazilian diaper maker Ever Green told NWI recently that a boom in Brazilian diaper production four years ago gave many local consumers access to these products.
“About four years ago, the Brazilian market saw an explosion in the total amount of diapers being produced and sold, increasing significantly penetration levels, especially in the Northeast region of Brazil where the lower tier consumer class started having disposable income to try baby diapers,” he says. “Before this time babies in these regions either used to go naked or wear cloth diapers.”
These consumers initially used basic, low entry, low profit margin baby diapers but already Brazilians have become more sophisticated in their tastes.
“The Brazilian market is still very far from the qualities we would normally see in North America, Europe or Asia, or even compared to some of our regional players in Chile or Colombia,” he says. “However, with the improvement of social and economic conditions among Brazilian consumers, there is a growing demand for better diapers.”
While Brazil does dominate the market representing nearly half of the 300,00 metric tons produced in South America, other countries are also gaining ground. Mexico, including a large PGI-owned operation, produces about 98,000 tons and the Caribbean makes about 9,000 tons. Within South America, in addition to Brazil, significant amounts of nonwovens are made in Argentina, Colombia and, most recently, Peru.
The majority of the capacity being made in the region encompasses spunbond and spunmelt nonwovens for the hygiene market but there are a number of smaller needlepunch lines in the region, according to Rick Jezzi, the author of INDA’s recent report, “Latin American Nonwoven Markets: Trends, Forecasts, and Analysis 2012-2017.”
“A lot of the needlepunch lines are vertically integrated producers who are also serving a variety of end uses,” he explains. “They are not sophisticated but they are there.”
One market gaining in importance, Jezzi adds, is the automotives market. Brazil, the country that represents half of South America’s population, has a large automotives presence.
For now, however, hygiene seems to be the big industry promoting nonwovens growth in the region with major players including locals like Fitesa and Companhia Providencia and U.S.-based Polymer Group Inc., which has sites in Colombia, Mexico and Argentina.
By the numbers
With a total capacity above 400,000 metric tons, the Latin American nonwovens industry is becoming a global force, and this figure is expected to growth as new investments come onstream.
Gauging figures for the total region can be diffiuclt but ABINT, the Brazilian nonwovens and technical textiles industry reports that the increase has been growing in the 10-12% range in recent years thanks to both new market development and investment projects.
In Brazil, as the two major local producers have embarked on U.S. expansion projects, the number of exports has decreased in recent years, and new market growth in domestic markets has been able to divert this capacity within Brazil. This has been beneficial because exports out of Brazil can be difficult.
Going global
With two sites and 11 lines in Brazil, Companhia Providencia announced a North American strategy in 2008. While this plan faced some delays due to the global economic crisis, the company’s second U.S. line, located in Statesville, SC, was completed last month, bringing Providencia’s capacity to 140,000 tons.
In announcing the U.S. investments, executives at Providencia indicated that U.S. investment would lessen the strain of its Brazilian operation, which has been increasing its U.S. exports in recent years. Even before producing nonwovens in the U.S., Providencia reported that about 20% of its global output supplied this market.
That being said, the addition of 40,000 tons of capacity in the U.S. will allow Providencia to grow is South American business, the majority of which is conducted domestically in Brazil, which is the largest consumer market in Latin America.
Meanwhile, back in Brazil, in June 2012, Providencia completed work on a second production line at its site in Puoso Alegre, adding 20,000 tons and tripling output at the site. This $63 million investment was announced in 2011 when executives said it would meet domestic market demand in the disposable hygiene and medical product segments. “At the end of 2012, the region accounted for more than 70% of the company’s production capacity,” says CEO Herminio Freitas adding that Brazilian nonwovens segment growth has outpaced the overall economy two to one during the past five years, increasing 10% per year.
“We chose Pouso Alegre because it is a site that is logistically well placed to receive raw materials and rapidly meet the needs of our customers,” Freitas says. “As well as having the advantage of already operating in the region, we also have access to a local reservoir of experienced labor.”
Elsewhere in Brazil, Providencia operates an eight-line site in Sao Jose dos Pinhais, which was the recipient of regular investment throughout the 1990s and early 2000s.
Also growing rapidly, but largely through acquisition, is Fitesa. This Brazilian nonwovens maker, owned by Petropar, entered the U.S. market in 2008 through a joint venture agreement with Fiberweb, and the two companies built a nonwovens line in Simpsonville, SC. As this line became operational and line number two was being pondered, last year, Fitesa announced it had purchased the entire venture from its partner as well as Fiberweb’s hygiene-related assets in North America and Europe. This move propelled Fitesa, which before its agreement with Fiberweb had only a small Brazilian operation into a multinational manufacturer of a range of nonwovens technologies.
Sales and marketing manager Ray Dunleavy says the partnership with Fiberweb helped Fitesa gain access to North America, preparing it for this rapid expansion. “I think the FitesaFiberweb exercise was a terrific template for this new venture,” he says.
Prior to the acquisition, FitesaFiberweb encompassed spunmelt operations in Brazil, South Carolina, Washington and Mexico. The purchase included these assets as well as Fiberweb-owned spunmelt lines in Sweden and Italy, carding lines in Green Bay, WI and Simpsonville, SC as well as an airlaid line in Tianjin, China. Additionally, the joint venture had already announced plans to add a spunmelt line in Lima, Peru as well as a carded line in Brazil to the operation and construction on these two investments has been recently completed.
The new spunmelt line in Lima serves the Pacific coast of South America, an area Dunleavy describes as an open market—this growing market is not easily served by Brazilian operations because travel through the Andes is difficult.
Meanwhile, the new carding line—which will be both resin and air through bonded capable—in Brazil will help Fitesa meet demands for acquisition and distribution layers and other carded applications like topsheets and backsheets.
Although it doesn’t have a presence in Brazil, Charlotte, NC-based PGI Nonwovens has been able to be a Latin American nonwovens leader through an ambitious expansion strategy outside of Brazil. It’s most recent investment, a spunmelt line in San Luis Potasi, Mexico, became operational in 2010, joining other large-scale lines in Mexico, Argentina and Colombia.
According to company CEO, Veronica “Ronee” Hagen, the latest investment enhanced the company’s capabilities in both the hygiene and healthcare markets and PGI continues to focus on having state-of-the-art capabilities in Latin America.
A mix of manufacturers
From an end user perspective, diaper market leaders Procter & Gamble and Kimberly-Clark both show a strong presence in Latin America and typically one or the other possess the largest marketshare in most of the region’s major countries. Beyond these two multinationals, however, local players are present in all of the markets. These local companies include Absormex in Mexico, Hypermarcas in Arentina and Brazil, Evergreen in Brazil and CPMC in Chile and Peru.
While Swedish hygiene maker SCA’s Latin American presence has traditionally been small, the company acquired Pro Decart, a family-owned hygiene maker last year, hoping to gain entry to the hygiene market. This company is largely focused on adult incontinence but also sells baby diapers and wet wipes. “I am very happy that we are now establishing ourselves in Brazil, which is also of strategic significance,” says Jan Johansson, president and CEO of SCA. “We have for some time worked on finding the right solution for entering this important emerging market.”
It seems growth in the region is being driven by increased exposure to diapers to consumers who a few years ago did not even have the option of using disposables on their infants.
Amauri Hong, director of Brazilian diaper maker Ever Green told NWI recently that a boom in Brazilian diaper production four years ago gave many local consumers access to these products.
“About four years ago, the Brazilian market saw an explosion in the total amount of diapers being produced and sold, increasing significantly penetration levels, especially in the Northeast region of Brazil where the lower tier consumer class started having disposable income to try baby diapers,” he says. “Before this time babies in these regions either used to go naked or wear cloth diapers.”
These consumers initially used basic, low entry, low profit margin baby diapers but already Brazilians have become more sophisticated in their tastes.
“The Brazilian market is still very far from the qualities we would normally see in North America, Europe or Asia, or even compared to some of our regional players in Chile or Colombia,” he says. “However, with the improvement of social and economic conditions among Brazilian consumers, there is a growing demand for better diapers.”