Nonwovens Industry
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Buckeye


Location: Memphis, TN

Sales: $225 Million

Description: Key Personnel
Kris Matula, senior vice president, nonwovens; Chip Aiken, senior vice president, manufacturing—nonwovens; Howard Cannon, vice president, nonwovens sales; John Erspamer, vice president, nonwovens product development; Marko Rajamma, vice president, nonwovens sales—Europe and Middle East

Plants
Delta, British Columbia; Cork, Ireland; Steinfurt, Germany; Gaston, NC

Processes
Latex bonded, thermal bonded and multibonded airlaid

Brand Names
Vicell, Vizorb, Unicore, Duocore, Walkisoft, Airspun

Major Markets
Feminine hygiene, baby diapers, adult incontinence products, premoistened wipes, moist tissue, medical, tabletop, wipers, filtration, food packaging, household cleaning products

Last year the big news from airlaid specialist Buckeye Technologies, Memphis, TN, was the completion of a 50,000 ton-per-year airlaid line in Gaston, NC—the largest in the world. This year the question is how to get all of this added capacity onto the market amidst unfavorable conditions caused by such factors as overcapacity and a soft global economy. Still, executives are confident that, in time, the market for airlaid materials will receive a boost from new applications and improved market conditions.

“Current business conditions in airlaid nonwovens are very difficult,” explained Kris Matula, senior vice president, nonwovens. “The rate of new capacity addition has substantially outpaced the growth in demand for airlaid materials, making it extremely challenging to earn an acceptable return. There is hope for a turnaround, but it’s a ways out and will require successful development of new end use applications for airlaid materials.”
 
During the past three to five years, growth in the airlaid business has been fueled by an increasing use of airlaid materials in feminine hygiene products. As this growth slows, success in new areas, such as disposable household wipes, moist toilet tissue, food pads and baby diapers will be key, according to executives.
 
“New wipes continue to hit the shelves, and it’s a growing business—it’s not huge, but it’s nice,” explained Howard Cannon, vice president, nonwovens sales. “As for wet toilet paper, the jury is still out on how big it will get or how fast it will grow.”
 
Food pads is another promising growth area for airlaid, which has been replacing multiply tissues and fluff pulp pads in meat, fish and poultry packaging. Several features of airlaid materials, such as better absorbency, higher integrity and built-in barrier properties, make them preferred for food packaging. Addi­tionally, the ability to engineer multiple functions into a single composite structure can substantially reduce the complexity of finished product converting operations.  “Many of our materials are able to do it all—acquire, distribute and store fluids,” said Michael Brown, absorbent products sales. “We add as much functionality to our products as possible to reduce the complexity of customers’ business.”
 
While Buckeye executives do not expect this market to mirror feminine hygiene in size or scope, it does have the potential to become a meaningful area for airlaid growth. As airlaid tends to be more expensive than traditional food packaging materials, such as tissue, delivering the right balance between performance and cost is a must.
 
Despite the headway seen in some emerging markets for airlaid, a slower growth environment continues to make this industry challenging for all of its players. In response to this, Buckeye will not bring its aforementioned 50,000 ton-per-year airlaid machine fully on­stream during the past 12 months. “Any time you start up a new facility, it’s very expensive,” Mr. Cannon opined. “Due to our current industry conditions, we have chosen to ramp up the machine really slowly.”
 
This slow start-up so far has meant that Buckeye is moving only one project at a time onto the new line, which is operating five days a week. Still executives remain optimistic about the machine, which features several capabilities not offered by smaller machines. These include the number of heads, embossing options, the amount of powder dosing and how it packs sheets. “We are pleased with the machine and how it is currently operating,” Mr. Matula continued. “Our customers are uniformly pleased with the superior performing, high quality materials they are receiving from the new line.”
 
The company has also slowed its pace of capital investment. Buckeye’s plan to add a second airlaid line to its Cork, Ireland facility, put on hold in 2001, has not been revisited, and additional expansion plans have not been examined. “Our current focus is on streamlining our operations and reducing costs,” Mr. Cannon remarked. “We in­vested a lot of capital in the past two years and are now focused on executing our operations with excellence.”
 
One investment that has paid off for Buckeye is its purchase of Stac-Pac festooning technology, which is now installed on all of its airlaid lines. Buckeye purchased the technology from KT Holdings, Winnipeg, Canada, for a reported $25 million in 2000, and currently about 25% of its roll goods are packaged in bales, using the technology, rather than rolls. The benefits of folding technology include longer run times, reduced shipping costs, less storage space and the ability to deliver extremely narrow width materials. Furthermore, if the diaper industry chose to convert to an airlaid core, this type of technology would be necessary because core material is too thick to be rolled cost effectively.
 
The technology behind Stac-Pac is so important that Buckeye has been busy defending its patent in both Canada and Germany. In March, the Utility Model Division of the Germany Patent and Trademark Office reaffirmed the patent by rejecting Falken­hagen, Germany-based Concert GmbH’s bid to cancel its validity. The ruling was the latest step in a patent infringement lawsuit filed by Buckeye against Concert Industries, Vancouver, British Columbia, Canada, and its German subsidiary in November 2000. In December, Buckeye announced it had won its infringement lawsuit, prohibiting Concert from producing or selling Stac-Pac-folded bales of material without Buckeye’s permission. While Concert has filed an appeal against this decision, Buckeye has taken the battle a step further by filing a pending Stac-Pac infringement suit against Concert. A ruling on this motion is expected to be handed down in 2003.
 
“We now have a very strong legal position supporting our folding technology,” Mr. Cannon explained. “Stac-Pac technology gives us one more avenue to further differentiate our products and services from those of other airlaid suppliers.”
 
As Buckeye waits for airlaid to receive the boost its needs to enter a more promising period of growth, it will focus on streamlining its operations, new product initiatives and technology and development efforts to be poised for success when the time comes.
 
“Our strategy is to deliver superior performing, differentiated products and services that afford our customers a competitive advantage in the marketplace,” Mr. Matula said.  “During the past few years we have made significant investments in technology, our facilities and our people to achieve this objective. We are confident these investments will pay great dividends in the future.”
Location: Memphis, TN

Sales: $225 billion

Description: ´╗┐Key Personnel
Kris Matula, senior vice president, nonwovens and corporate strategy; Chip Aiken, senior vice president, manufacturing—nonwovens; Susan Crenshaw, vice president nonwovens and absorbent fiber product development; Marko Rajamma, vice president, nonwovens sales—Europe and the Middle East; Hank Hall, manager, nonwoven sales—Americas and Far East

Plants
Delta, British Columbia, Canada; Cork, Ireland; Steinfurt, Germany; Gaston, NC

Processes
Latex bonded, thermal bonded and multibonded airlaid

Brand Names
Vicell, Vizorb, Unicore, Duocore, Walkisoft, Airspun

Major Markets
Feminine hygiene, baby diapers, adult incontinence, premoistened wipes, moist tissue, medical, tabletop, wipers, filtration, food packaging, household cleaning products

As the airlaid market continues to face a global overcapacity situation, its largest producer, Buckeye Technologies, Memphis, TN, continues to focus on market development. While current markets for airlaid are performing well, new markets need to be developed to fill the thousands of tons of capacity brought onstream in North America in the late 1990s early 2000s, according to executives.
 
“Our performance has improved but business conditions remain extremely difficult,” explained Kris Matula, senior vice president of nonwovens and corporate strategy for Buckeye. “We’ve seen some positive momentum in the past several months but I would say it’s just starting to turn around.”
 
While the airlaid market still faces significant overcapacity issues around the world, this problem has subsided to some degree in the past year. Particularly Europe, where Buckeye operates plants in Cork, Ireland and Steinfurt, Germany, is seeing a more balanced supply-and-demand picture than North America, where Buckeye operates in Delta, British Columbia, Canada and Gaston, NC. While no known airlaid capacity is planned for either region at this time—either by Buckeye or its competitors—new lines are planned in China, which would further outpace demand. “If these plans move forward, this will only add to the current oversupply situation and further depress already difficult business conditions in the region,” Mr. Matula explained. “Today, there is no economic basis for investing in additional airlaid capacity in China or anywhere else around the globe.”
 
For Buckeye’s airlaid material, key markets include absorbent cores, premoistened wipes, moistened tissue, mops and tabletop products. While these markets are seeing steady growth, executives admit that new major market applications are needed. One major market that has received a lot of speculation from the airlaid industry is disposable baby diapers, which happens to be the world’s largest market for nonwovens. The conversion by a major diaper manufacturer to a pre-formed airlaid core would easily swallow up all the excess capacity challenging the market today. Currently, this switch is about economics, not feasibility, as diaper companies weigh the investments and rewards of reconfiguring their lines to accept airlaid cores. “The product performance attributes have been proven but the economic catalyst is the missing piece of the puzzle,” added Hank Hall, manager, nonwoven sales Americas and Far East.
 
Buckeye was at the forefront of the companies that contributed to the overcapacity situation by making large-scale capacity expansions a few years ago when it started up a 50,000-ton-per-year airlaid line in Gaston, NC. While ramping up this line, which came onstream in July 2001, has admittedly taken longer than expected, Buckeye never expected to sell out the line in one step. “Our decision to install a large line was driven by the need to generate sufficient economies of scale to penetrate new market applications,” said Michael Brown, manager, North American nonwoven sales.  “We are steadily ramping up production on the new line, and our customers are uniformly pleased with its advanced capabilities.”
 
The Gaston line brought Buckeye’s airlaid capacity to 135,000 tons, reaffirming its spot as the world’s largest airlaid producer. As the market leader, Buckeye spends significant resources on research and development. These efforts are split between work on improving products for existing markets and creating new markets for airlaid nonwovens. While no details were released, executives did admit that new markets for airlaid, outside of hygiene, would be forthcoming in the near future.

Another area receiving a lot of press is Buckeye’s Stac-Pac™ folding technology. Since acquiring this technology from KT Industries, Winnipeg, Canada, for a reported $25 million, this technology has been applied to all of Buckeye’s airlaid facilities.  Stac-Pac is an innovative system for folding and packaging high loft nonwoven materials into compressed rectangular bales.  Stac-Pac packaging allows the efficient supply of extremely narrow width materials and enables customers to feed high speed converting lines with an uninterrupted flow of materials.  Stac-Pac also cuts down on shipping costs and storage space.  Currently, about 25% of airlaid produced by the company is folded using Stac-Pac.
 
The importance of Stac-Pac to Buckeye is clearly evident in its efforts to defend the technology against patent infringement in both North America and Europe. After years of defending itself against efforts made by competitor Concert Industries and its German subsidiary, Buckeye is now in a place where this proprietary position is secure, according to executives  In June, the European Patent Office rejected Concert’s opposition and reaffirmed the validity of the patent.
 
On the corporate front, Buckeye Technologies is under new leadership. Former CEO Robert Cannon, who led the buyout of Procter & Gamble’s pulp business that formed Buckeye Technologies, retired in June. In his place, is David Ferraro, former president and chief operating officer. Additional personnel changes included the naming of John Crowe as president and COO, the appointment of Kris Matula as senior vice president of nonwovens and corporate strategy and R. Howard Cannon as senior vice president of wood cellulose. So far, the new management team has been looking at how the company can operate its business even more effectively in the future.  “Continuous improvement is a way of life for our company,” Mr. Matula concluded.  “Our future direction is clear, we intend to continue to strengthen our position as the leading supplier of value-added cellulose-based specialty products.”
Location: Memphis, TN

Sales: $217 MILLION

Description: Key Personnel
Doug Dowdell,  vice president, nonwovens; Chip Aiken, senior vice president, manufacturing; Susan Crenshaw, vice president of nonwovens product development; Hank Hall, sales manager of nonwovens sales—Americas and Far East; Marko Rajamaa, vice president of nonwovens sales—Europe and the Middle East; Laurence Li, nonwovens division technology manager

Plants
Delta, British Columbia, Canada; Steinfurt, Germany; Gaston, NC

Processes
Latex bonded, thermal bonded and multibonded airlaid

Brand Names
Vicell, Vizorb, Unicore, Duocore, Walkisoft, Airspun

Major Markets
Feminine hygiene, baby diapers, adult incontinence, premoistened wipes, moist tissue, medical, tabletop, wipers, filtration, food packaging, household cleaning products

Despite speculation that airlaid is losing business to spunlaced nonwovens in the North American wipes business, Buckeye Technologies, the world’s largest airlaid producer, is reporting sales in the wipes segment at an all-time high. Particularly in the personal care segment, business is booming for the Memphis-based company.
 
“Growth is being driven by our next-generation wipe substrates,” said Hank Hall, sales manager for the Americas and Far East. “It’s a different wipe than what we have offered in the past. It’s strong, softer and bulkier.”
 
While some branded wipes have been converted to spunlaced, Buckeye is confident that airlaid will remain the preferred substrate in North America.  In fact, business is significantly better than it was a year ago and while the North American airlaid market is still experiencing overcapacity issues, Buck­eye is starting to see the light at the end of the tunnel.
 
“In the wipes market, our ability to use improved raw materials in our substrates gives us a competitive advantage,” said Michael Brown, manager of North American nonwovens sales. “Our customers are finding that these products provide the strength, bulk, and feel that give them an advantage in the marketplace.”  

In March, Buckeye announced it would close its Cork, Ireland facility in July. All production at the site will be shifted to other Buckeye facilities in Canada, the U.S. and Germany.
 
Buckeye opened the Cork site in 1998 to increase its European presence. In 2001, the company scrapped plans to add a second line to the facility, blaming the decision on global overcapacity. The benefits of closing the site, which employed 83 people, will be realized in the October-December quarter and full-scale savings will be achieved by the end of 2005.   
 
Buckeye operates two lines each at its Steinfurt, Germany; Delta, British Columbia and Gaston NC facilities.  The Gaston facility, which includes Buckeye’s newest line, is continuing to fill capacity. “Tonnage is increasing regularly in Gaston,” said Mr. Brown. “It’s still not operating at full capacity, but the machinery utilization is improving. That machine is really the future of our business.”
        
As the market leader in airlaid nonwovens,—capable of producing 104,000 tons of airlaid material per year—Buckeye is well aware of how important new market development will be to the health of its industry in the future.
        
To achieve this, Buckeye recently chartered a business development team dedicated to exploring new markets for airlaid nonwovens. Non-traditional applications and markets will be investigated using its state-of-art airlaid pilot line.
 
And, other efforts like these have allowed Buckeye’s airlaid business to record growth in recent years. As growth continues, the health of the airlaid industry should improve."
Location: Memphis TN

Sales: $226 million

Description: Key Personnel
Doug Dowdell, senior vice president, Nonwovens; Chip Aiken, senior vice president, manufacturing; Susan Crenshaw, vice president of Nonwovens Product Development; Hank Hall, sales manager of Nonwovens Sales—Americas and Far East; Marko Rajamaa, vice president of Nonwovens Sales-Europe and the Middle East; Laurence Li, Nonwovens Division Technology Manager

Plants
Delta, British Columbia, Canada; Steinfurt, Germany; Gaston, NC

Processes
Latex bonded, thermal bonded and multibonded airlaid

Brand Names
Vicell, Vizorb, Unicore, Duocore, Walkisoft, Airspun

Major Markets
Feminine hygiene, baby diapers, adult incontinence, premoistened wipes, moist tissue, medical, tabletop, wipers, filtration, food packaging, household cleaning products.

Sales have continued to rise for Buckeye Technologies, Memphis, TN, as the airlaid specialist continues to work to fill capacity. Demand is growing thanks to the premium wipes market in North America. “Consumers like the performance airlaid provides and we continue to improve the substrate through product innovation,” said Michael Brown, sales manager.
     
In fact, the company is so bullish about wipes it has invested in the capability to make these products in its Steinfurt, Germany site. Wipes produced there will target the European market, which has not yet seen airlaid wipes on any large scale. Early interest from potential customers indicates there is vast potential for premium airlaid wipes in Europe.
 
“Just 18 to 24 months ago, the premium wipe market was in its infancy in North America, and today it is a strong market segment,” said Hank Hall, nonwovens sales manager—Americas and Far East. “There is no reason why we can’t reach the same success in Europe.”
 
Beyond Europe, Buckeye is reporting healthy business conditions in Asia, especially in markets demanding high quality substrates.
 
Also interesting to Buckeye is Central and Eastern Europe, which has largely been served by the Steinfurt site. These are emerging markets that offer opportunities, however, these markets are not large enough to justify capital expenditure for adding capacity.
    
While geographical expansion is important, it will be new market applications that will lead to future success for Buckeye, whose key markets now include feminine hygiene, wipes, floor mops and tabletop applications. “The key for us will be new applications,” Mr. Hall said. “We have a significant amount of resources and people going into product development, and we intend to be successful.”
 
Among these resources is a pilot line in Memphis, TN, which allows customers to sample new products. And, while new niche or customer-specific products are developed regularly, a large and new-to-airlaid market is the ultimate goal.

Location: Memphis, TN

Sales: $241 million

Description: Key Personnel
Marko Rajamaa,  vice president, Nonwovens; Chip Aiken, senior vice president, nanufacturing;  Mike Brown,  Non­wovens Sales Manager—Americas and Far East; Norbert Busch,  nonwovens sales manager—Europe and the Middle East; Laurence Li, nonwovens division technology manager

Plants
Delta, British Columbia, Canada; Steinfurt, Germany; Gaston, NC

Processes
Latex bonded, thermal bonded and multibonded airlaid

Brand Names
Vicell, Vizorb, Unicore,
Duocore, Walkisoft, Airspun

Major Markets
Feminine hygiene, baby diapers, adult incontinence, premoistened wipes, moist tissue, medical, tabletop, wipers, filtration, food packaging, household cleaning products.

Sales have continued to grow for Buckeye Technologies as it continues to expand its airlaid nonwovens into new markets and grow its role in existing markets. In 2005, the Memphis, TN-based company reported sales of $240.8 million compared to $226.4 million the year before.
 
“Sales are strong and we have been able to increase prices to help with increasing manufacturing costs, but these prices have not kept up,” said sales manager Michael Brown.
 
In terms of end use markets, a large portion of Buckeye’s airlaid output continues to serve the specialty wipes market.  
 
“Even though a lot of spunlace capacity has come osntream, the impact of this on our business has really been minimal,” Mr. Brown said.   “Our wipes business has never been stronger”.
 
Last year, Buckeye began supplying specialty wipes into Europe, where spunlace has traditionally been the preferred susbstrate, and while this market has not resulted in explosive growth for Buckeye, which operates an airlaid line in Steinfurt, Germany, it has become a nice market for Buckeye.
 
Meanwhile, Buckeye's other core business, feminine hygiene, continues to be strong.  Beyond that, new markets for airlaid is a major initiative.   “New applications are a major focus for us and we are investigating a number of interesting opportunities” Mr. Brown said. “We have to look into other new areas to increase our business and hopefully our margins'.
 
In fact, new product development is so important to Buckeye that in February it established a new marketing organization within the company to bring new products to market on an accelerated schedule. The division is being led by Jeff Cook, with the support of Susan Crenshaw and Hank Hall, who formerly served as nonwovens sales manager for the Americas and Far East."
Location: Memphis, TN

Sales: $259 million

Description: Key Personnel
Marko Rajamaa,  senior vice president, nonwovens; Chip Aiken, senior vice president, manufacturing;  Mike Brown,  nonwovens sales manager—Americas and Far East; Norbert Busch,  nonwovens sales manager—Europe and the Middle East; Laurence Li, nonwovens division technology manager

Plants
Delta, British Columbia, Canada; Steinfurt, Germany; Gaston, NC

Processes
Latex bonded, thermal bonded and multibonded airlaid

Brand Names
Vicell, Vizorb, Unicore, Duocore, Walkisoft, Airspun

Major Markets
Feminine hygiene, baby diapers, adult incontinence, premoistened wipes, moist tissue, medical, tabletop, wipers, filtration, food packaging, household cleaning products

Continuing its turnaround is airlaid producer Buckeye Technologies, a company that has steadily been fighting back from a severe overcapacity situation that rocked the entire airlaid segment in 2001. The Memphis, TN-based company has been able to steadily increase its sales and earnings thanks to both organic growth as well as new market development, according to sales manager Michael Brown. “The trend has been improving for Buckeye and for airlaid in general,” he said.
 
During the year ended June 30, Buckeye’s nonwovens sales, increased to nearly $259 million compared to $241 million the prior year. At the same time, operating income in the segment increased from $16 million to $21 million.
 
While Buckeye is doing better at filling up the excess capacity, the company maintains that there is still some available, especially in North America. “We are full but we have capacity remaining because we only staff our sites to fill our market needs,” Marko Rajamaa, senior vice president of nonwovens, said. “Even in Europe, we have some capacity remaining, although it’s a tighter situation than in the U.S.”
 
Buckeye executives credit a couple of factors for this turnaround. For one, timing played a role and it has been a natural market evolution to absorb the capacity. This was helped of course by Buckeye’s decision three years ago to shutter its Cork, Ireland facility—as well as similar moves by Buckeye competitors.
 
Wipes continue to be a strong market for Buckeye. In fact, the company’s role in the market has only grown as airlaid has become more competitive with spunlace amidst raw material increases and other pressures facing spunlace manufacturers.
 
And, while the baby wipes market has been characterized by razor thin margins forcing Buckeye to really step up its efficiency, there are still pockets of this segment—as well as other wipes areas—where value and innovation are rewarded. “In the businesses we are in, we are actually making money,” said Mr. Rajamaa. “It wasn’t always that way.”
    
Meanwhile, the diaper core market—once considered the holy grail for airlaid producers—is not on Buckeye’s radar except for some smaller, niche applications such as premature and swim style diapers.
 
In investment news, Buckeye recently made significant improvements to its older line in Gastonia, NC to make it more market capable, according to executives. This meant adding new fiber capacity, modernizing the equipment, and improving the quality of the line, which came onstream in 1993.
 
One advantage Buckeye has had over competing technologies is that pulp has escaped some of the price increases found in other raw materials such as viscose or polypropylene, the key ingredients in spunlace and spunbond nonwovens. “As a renewable material, pulp is not subject to the same fluctuations as viscose and other oil-based raw materials,” Mr. Rajamaa said.
Location: MEMPHIS, TN

Sales: $263 million

Description: Key Personnel
Marko Rajamaa, senior vice president; Chip Aiken, senior vice president, manufacturing; Mike Brown, nonwovens sales manager—Americas and Far East; Norbert Busch, nonwovens sales manager—Europe and the Middle East

Plants
British Columbia, North Carolina, Steinfurt, Germany

Processes
airlaid

Sales were up slightly for airlaid producer Buckeye Technologies. The Memphis, TN-based company reported that sales increased from $258 million to $263 million for the year ended June 30. Corporate sales, including both airlaid and specialty fibers, increased 7.3% to $825 million; however operating income decreased $7.1 million on lower nonwovens sales as well as lower volumes caused by energy outages in the company’s Perry, FL cellulose plant.
 
Chairman and Chief Executive Officer John Crowe said, “Fiscal year 2008 was an outstanding year for Buckeye. Building on the momentum from 2007, we achieved a variety of significant performance milestones, including our highest ever sales revenue, debt below $400 million and EPS up 52% over the prior year. Due to the unprecedented cost escalation we have experienced over the past six months, we have implemented additional price increases and surcharges, which went into effect July 1. While oil and natural gas prices have moderated from recent peaks, we are still facing rising cost trends for energy, raw materials, chemicals and transportation in the July-September quarter compared to the April-June quarter.”
 
Currently, Buckeye’s airlaid business—with plants in Delta, British Columbia, Canada, Gaston, NC and Steinfurt, Germany—represents about one-third of Buckeye’s total corporate sales and mainly targets the feminine hygiene, wipes and floor mops, tabletop, napkins, place mats, incontinence items and food pad markets.
 
By region, 43% of Buckeye’s sales are in North America, 38% in Europe, 9% in Asia, 4% in South America and 6% throughout the rest of the world.
 
In January 2008, Buckeye announced it would reduce shifts and the number of employees at its Delta facility near Vancouver, Canada. According to the company, this facility was negatively impacted by the strength of the Canadian dollar as well as high transportation costs, which have made it difficult to meet the pricing requirements of a key customer.
 
Buckeye operates two lines in Delta, capable of making about 30,000 tons of material. The same amount can be made in Steinfurt while its Gaston line can make up to 60,000 tons of airlaid nonwovens. Meanwhile, Buckeye’s facility in King, NC contains a converting operation producing airlaid nonwovens and wetlaid paper into wipes.
 
On the corporate front, Buckeye continues to strive to reduce its environmental footprint both by reducing its energy costs and lessening its all-around global footprint. Already the company has completed the second year of a three-year energy savings project at its wood fibers facility in Florida, which is saving more than 200,000 barrels of #6 fuel oil annually. And, more recently, the company has formed a strategic growth team, which includes outside expertise responsible for evaluating and developing options to support our corporate objective of executive profitable growth strategies.
 
Among its cost-savings efforts was a plan, announced in January, to reduce shifts and the number of employees at its Delta facility near Vancouver, British Columbia, Canada. The reduction in shifts, from seven to five, as well as the reduction of 20-25 employees was the result of the company being hit by the strength of the Canadian dollar as well as high transportation costs, which have made it difficult to meet pricing requirements of a key customer. “Despite this reduction in business, the demand for our airlaid nonwoven products remains solid, and we are committed to re-establishing growth and improving the financial performance of this business,” said Mr. Crowe.
Location: MEMPHIS, TN


Sales: $240 Million


Description: Key Personnel
Marko Rajamaa, senior vice president, Nonwovens; Mike Brown, Nonwovens sales manager—Americas and Far East; Norbert Busch, Nonwovens sales manager—Europe and Middle East

Plants
British Columbia, North Carolina, Steinfurt, Germany

Processes
Airlaid

Despite a slight decline in its nonwovens sales, Buckeye Technologies has a lot to be proud of. The Memphis, TN-based manufacturer of airlaid nonwovens and specialty fibers exceeded its goals when it came to paying down debt and has generally held its own despite the economic crisis, said sales manager Michael Brown.

“A lot of our customers have not been as affected by the economic crisis as others. Some have actually seen some business growth,” he said. “It’s really kept our business strong.”

The market in general has started favoring airlaid because prices are more stable in its chief raw material, wood, he said.

“Pulp also plays into the whole sustainable raw material issue,” Mr. Brown said. “Our products main component is a renewable resource and this is something that is attractive to our customers as a selling point.”

Approximately 50% of Buckeye’s airlaid output targets the wipes market with the remaining serving feminine hygiene and tabletop applications. While the airlaid supply-to-demand ratio has significantly improved in the past several years, there is still excess.  “There are only so many customers for airlaid,” Mr. Brown said adding that Buckeye spends a lot of time and effort looking at new markets for its airlaid business.

This business includes a large, 30,000-ton-per-year line, which was added earlier this decade, as well as a smaller, recently upgraded line in Gaston, NC, two lines in Vancouver, BC, and two lines in Steinfurt, Germany. While the company has not invested in new lines since it added the 30,000-ton line in 2001, it recently spent quite a bit of money to upgrade the smaller line in Gaston to allow it to make different types of specialty products. “We want to do more things on that line,” Mr. Brown explained.

Buckeye also recently opened a sales office in Beijing to better serve its customers in Asia and also explore possibilities for future growth.
Location: Memphis, TN

Sales: $247 million

Description: Key Personnel
Marko Rajamaa, senior vice president, Nonwovens; Michael Brown, Nonwovens sales manager—Americas and Far East; Norbert Busch, Nonwovens Sales Manager—Europe and Middle East

Plants
British Columbia, Canada, North Carolina, Steinfurt, Germany

Processes
Airlaid

Nonwovens sales continues to climb at Memphis, TN-based airlaid specialist Buckeye Technologies. The company reported that sales were $247 million for the year ended June 30, 2010 compared to $240 million for the same period 2009. At the same time, operating income continued to grow, reaching nearly $17 million compared to $12 million the year before. With plants in British Columbia, Canada, Gaston County, North Carolina and Steinfurt, Germany, Buckeye is a major supplier to the disposable wipes market where about 50% of its output is targeted. Other key markets include feminine hygiene and tabletop applications. Additionally, new product development continues to be a strong focus for the company. Last year, it invested signficantly in a small North Carolina line to allow it to make more types of specialty products.
Memphis, TN
www.bkitech.com
2011 Nonwovens Sales: $239 million

Key Personnel: Marko Rajamaa, senior vice president, Nonwovens; Michael Brown, nonwovens sales manager—Americas and Far East; Norbert Busch, nonwovens sales manager—Europe and Middle East

Plants: North Carolina; Steinfurt, Germany

Processes: Airlaid

Buckeye Technologies announced record sales for fiscal year 2012 even as its nonwovens business reported lower shipments. While total corporate sales increased 2% to reach $895 sales, the nonwovens division said sales were down from $264 million to $239 million for the year. Income within nonwovens decreased from $13.7 million to $11.7 million.

“Fiscal year 2012 was another year of record sales and earnings,” says chairman and CEO John Crowe. “During the year, we continued to generate significant cash flow, allowing us to invest in high rate of return capital projects, return cash to our shareholders through dividends and share repurchases and essentially eliminate our debt. With a strong operating performance and actions taken to address underperforming assets, we delivered a return on invested capital (ROIC) in fiscal year 2012 of 16.5%, well above our cost of capital. While Buckeye is well positioned to continue to increase shareholder value, we believe that global economic uncertainty may generate a headwind for us in fiscal 2013.”

As 2012 comes to a close, Buckeye will complete its plan, announced in June 2011, to close its Delta, British Columbia, Canada facility. When the closure was announced, Buckeye executives said the decision was made because it no longer made sense to operate the facility because of its unfavorable location relative to customers and raw material suppliers, as well as low capacity utilization. In 2010, the company had consolidated the site, which had been open since 1997, from a two-line operation to one, but this measure failed to make the facility cost effective.

Since the announcement was made, Buckeye has been transferring output from the Delta site. While some will go to Steinfurt, Germany, the bulk has gone to Buckeye’s plant near Charlotte, NC.

Once the Delta closure is complete, Buckeye will operate only two sites—one in North Carolina where it operates a massive line with a capacity of 50,000 tons per year and another in Steinfurt, Germany. Buckeye had operated a facility in Cork, Ireland but closed that site in 2004.

In more recent divestment news, Buckeye sold its Merfin converting business in January 2012 to National Tissue Company, LLC and sold its Cotton Linter Pulp production in Brazil in June. At the time of these sales, executives announced proceeds would benefit strategic operations.

While nonwovens has not seen full blown capacity expansion recently, the company remains intent on its growth. One area where the company is quite bullish is in the flushable wipes market. In 2011, Buckeye launched a flushable wipe substrate— AIRspun Flushable. This airlaid nonwoven substrate is designed for use in moist toilet tissue applications, a market Buckeye views as a strong growth prospect.

“AIRspun Flushable was designed to meet the performance criteria of our customers including the flushability guidelines set forth by the nonwovens industries associations in North America and Europe,” Crowe says. “Additionally, the product is made predominantly with our own fluff pulp cellulose from renewable materials, so it fits well with our continued sustainability efforts.”

Meanwhile, in personnel news, in July the company announced it was restructuring its executive management team following the announced resignation of president and COO Kristopher Matula, as well as the closure and sale of companies like Merfin.

Steven Dean, senior vice president and CFO, has been promoted to executive vice president, CFO; Douglas Dowdell, senior vice president, Specialty Fibers, has been promoted to executive vice president, Specialty Fibers. Terrence Reed, vice president, Human Resources, has been promoted to senior vice president,
Human Resources.
Memphis, TN
www.bkitech.com
2012 Nonwovens Sales: $228 million
 
Key Personnel: Marko Rajamaa, senior vice president, nonwovens; Michael Brown, nonwovens sales manager—Americas and Far East; Norbert Busch, nonwovens sales manager— Europe and Middle East
 
Plants: North Carolina; Steinfurt, Germany
 
Processes: Airlaid
 
This will be the last year Buckeye will appear on its own in this report. In April 2013, the company announced it would be acquired by Georgia-Pacific, also a major player in the airlaid nonwovens and pulp markets, and this deal was approved as a merger agreement by stockholders in August.
 
Upon closing of the transaction, Buckeye will become an indirect, wholly owned subsidiary of Georgia-Pacific. Buckeye stockholders will receive $37.50 per share in cash.
 
“This transaction enables our stockholders to realize significant value, while also representing an important next step in the growth of Buckeye Technologies,” says John Crowe, chairman and CEO. “We are pleased that Georgia-Pacific recognizes the significant value of our company’s special and unique assets, talented employees, and research and development capabilities. Georgia-Pacific’s acquisition of Buckeye will provide our company and our employees with exciting future growth opportunities. We will continue to execute on our business plan in partnership with a committed new owner that has a long history of delivering superior business performance through its dedication to operational excellence and innovation.”
 
During the year ended June 30, 2013, Buckeye reported its nonwovens sales decreased from $239 million to $228 million due to the sale of the company’s Merfin Converting business in January 2012. Operating income nearly doubled from $11 million to $22 million thanks to a large reduction in fixed manufacturing costs from the closure of Buckeye’ Delta, B.C. airlaid facility in December 2012.
 
Buckeye announced it would close the Delta site in June 2011, saying it no longer made sense to operate the facility because of its unfavorable location relative to customers and raw material suppliers as well as low capacity utilization. In 2010, Buckeye consolidated the site by closing one of its two lines but this measure failed to make the facility cost efficient.
 
Output at the Delta site has been transferred to Buckeye’s two existing sites—one in North Carolina and one in Steinfurt, Germany.