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Companhia Providencia


Location: Parana, Brazil

Sales: $46 Million

Description: Plant Location
São José dos Pinhais-Paraná, Brazil

Key Personnel
Milan Starostik, chairman, Ana Seles Starostik, commercial director; William Starostik, marketing director, Romeo Bregant, industrial director; Vicente Batista de Lima, financial and administrative director, Wagner Carvalho, sales manager

ISO Status
ISO 9002

Processes
Spunbonded, SMS, melt blown

Brand Name
Kami

Major Markets
Hospital, agriculture, bedding, towel and coverlet, table mat, hygiene, baby diapers

With worldwide roll goods sales totaling $46 million, Companhia Providência, Curitiba, Paraná, Brazil, is the only South American roll goods producer to earn a spot in this year’s Top Company ranking. The company experienced a drop in sales from last year’s total of $110 million due to lighter basis weights of its spunbond material. “Our clients were used to consuming one million square meters of nonwoven material at 17 gpsm, but with the new S+S+S line, they continued to consume one million square meters, but used 13 gpsm instead of 17 gpsm,” said company chairman Milan Starostik. “Obviously, this favors the client over the company; however, our clients are very satisfied and will not buy spunbond material from another supplier.”
 
This consumer loyalty coupled with the efforts of Mercosur, the South American trade customs union, served as initiative for Companhia Providência to increase exports of its spunbonded nonwovens to Central America and the U.S. Mercosur comprises Argentina, Brazil, Paraguay and Uruguay. According to INDA’s Vision 2002: Part 2 report, Mercosur is a market with 219 million people and produces a total of 88,000 tons of nonwovens per year, with 68,400 tons coming from spunbonded material. Mercosur plays an important role for Companhia Providência because it tends to be more active in Brazil and Argentina, according to Mr. Starostik.  “The other countries that are included in Mercosur—Paraguay and Uruguay—have little income derived from nonwovens sales,” he explained. “Mercosur can generate more sales, especially to Argentina. Unfortunately, with Argentina’s current economic crisis, it is impossible to export to them.  Before this crisis, we were exporting more than $3.5 million worth of products to Argentina. But now our exports to Argentina are nearly at zero. We are exporting about $400,000 to Argentina.”
 
Twenty-six percent of the company’s products are exported, with 20% distributed throughout almost all countries in South and Central America and 6% to the U.S. The company sells its roll goods throughout different locations in Brazil; São Paulo and Rio de Janeiro comprise 70% of the company’s sales, while 20% are distributed throughout Southern Brazil and 10% in Northern Brazil. With a capacity of 32,000 tons, Companhia Providência has six current operating Reicofil polypropylene spunbonding lines, according to Mr. Starostik. Additionally, 60% of the company’s sales comes from its spunbond technology while 40% comprises SMS material. The company’s largest target market is medical, making up 70% of its roll goods sales, followed by bedding with 20% and agriculture with 10%.
 
The company’s capacity of 32,000 tons will soon be boosted with the addition of a seventh Reicofil line. Production is expected to begin by the end of this year. The new Reicofil SSMMSX line will allow the production of breathable film and textile laminated film and will offer advantages to customers. “The new line will benefit the clients that use more resistant products and will make it easier to produce products with lower levels of thickness,” said Mr. Starostik. “This new line can bring us 100% sales results by increasing our production from 1800 tons per month to 2000 tons per month.”    
 
Speaking more broadly, Mr. Starostik is uncertain as to what the future has in store for the nonwovens industry because of pending trade agreements that may change the company’s exporting policies. Companhia Providência is hoping that the pending ALCA (Area de Libre Comercio de Las Americas), part of the Free Trade Area of the Americas (FTAA), will help support the future economy, especially in the Northern, Southern and Central American regions.  “The ALCA agreement may make exports and imports between the three Americas easier,” Mr. Starostik opined.  “We do not have any specific information on the ALCA agreement yet. At the moment, we do not have export restrictions to the U.S., because today the U.S. customs tariffs are at a low price with our products.”  Companhia Providência executives will have a while to wait and see how the ALCA agreement pans out—it is projected to be completed anywhere from 2005 to 2015.  
 
In the meantime, the sluggish economy combined with the uncertainty of the future with trading agreements give executives at Companhia Providência wavering thoughts of the nonwovens industry’s future success. “Right now, the nonwovens industry is stable and growing at a rate of approximately 8% a year, for our company. This was mainly because of our exports to Argentina earlier in the year, but we believe that the nonwovens business’ big moment has already passed,” Mr. Starostik said.
Location: Curitiba, Paran·, Brazil

Sales: $58 million

Description: Key Personnel
Milan Starostik, chairman, Ana Seles Starostik, commercial director; William Starostik, marketing director, Romeo Bregant, industrial director; Vicente Batista de Lima, financial and administrative director; Cleber dos Santos, export director, Wagner Carvalho, Sales Manager

Plant Location
São Jose Pinhais-Paraná, BrazilISO Status: ISO 9002

Processes
Spunbonded, SMS, meltblown, laminated nonwovens

Brand Names
Kami

Major Markets
Hospital, agriculture, bedding, towel and coverlet, table mats, hygiene, baby diapers

Feeling the strains of economic crises throughout Latin America and into North America is roll goods producer Companhia Providencia, Curitiba, Paraná, Brazil. As the region’s largest roll goods producer, this company is well aware that economic conditions need to turn around before nonwovens consumption will pick up in Latin America.
 
“The growth has been much faster in past years than it has been recently,” explained international business director Cleber dos Santos. “A lot of this relates to the buying power of people. When people are scared about their jobs, they tend not to spend as much money.”
 
Currently more than 70% of Companhia Providencia’s estimated 46,000 tons of spunmelt nonwovens capacity targets hygiene and medical applications, mainly disposable baby and adult diapers. Sales in these regions have been flat during recent economic crises.
 
These crises have made filling capacity on Providencia’s seventh production line, completed in February 2003, more difficult than with past lines. The five-beam Reicofil SSMMS line, which is reportedly capable of producing 1800-2000 tons of material a month, is now running with success, according to Mr. dos Santos.
 
Providenciá has continued a tradition of installing a new production line every two years. Whether or not this practice will continue, meaning the next line would be operational in 2005, depends largely on economic recovery and the ability of the company to fill capacity on its newest line.
 
Currently all of Providencia’s seven lines feature spunmelt technology and are located in Paraná. In the past, executives have felt that having all of its lines containing similar technology and be located in the same spot, maximized the company’s resources, but as the logistics of the market have changed in recent years so have the requirements for market leadership. “Everyday, the logistics of the market are becoming more of a major factor in our cost structure,” Mr. dos Santos explained. “How this will shape the future is still a question mark.”
 
Currently, Providenciá has no plans to diversify its technology base or to expand outside of Brazil, but if the markets it serves demands, Providencia will analyze this possibility.  Representing more than 90% of its sales base, Latin America is clearly the company’s strongest market. In fact, the remaining 10% of sales target North America only in an effort to move excess capacity that Latin America cannot absorb on its own.
 
Unlike North America and Europe, the Latin American hygiene market contains a variety of large and small players, which have given Providenciá the strength of a diverse customer base. This has kept the company from relying too much on one single customer, keeping it more independent in terms of decision making.
 
“We consider ourselves a technologically driven company so our mission is to always offer a premium product,” Mr. dos Santos explained. “With a strong customer base, you can get premium prices for premium goods. You can’t always do that when you are relying only on one customer.”
Location: Curitiba, Paran·, Brazil

Sales: $60 MILLION

Description: Plant Location
São Jose Pinhais-Paraná, Brazil

Key Personnel
Milan Starostik, chairman, Ana Seles, Starostik, commercial director; William Starostik, marketing director, Romeo Bregant, industrial director; Vicente Batista de Lima, financial and administrative director, Wagner Carbalho, sales manager

ISO Status
ISO 9002

Processes
Spunbonded, SMS, meltblown

Brand Names
Kami

Major Markets
Hospital, agriculture, bedding, towel and coverlet, table mat, hygiene, baby diapers

The construction of its eighth line is the big news at Brazilian roll goods producer Companhia Providencia. Announced in April, the new line is a 3.2-meter-wide, two-beam Reicofil 4 line, which Companhia Providencia purchased from Reifenhauser. The Reicofil 4 is the most flexible of Reifen­hauser’s spunmelt line was was chosen to help the company diversify its product line.
 
Currently 70% of Providencia’s nonwovens output targets the hygiene market but executives feel this share could decrease with the advent of the new technology.
 
Still, hygiene will continue to remain important to Com­panhia Providencia, a producer of only spunmelt nonwovens. This business has profited from executives expertise in spunmelt technology as well as the presence of three laminating lines onsite. These lines allow Companhia Providencia to produce cloth-like backsheets which have achieved significant  popularity among diaper producers and consumers in the past several years.
 
“We try to offer more than just straight spunmelt,” said international business director Cleber dos Santos. “These capabilities allow us to  create a full line of products—backsheets, topsheets, everything.”
 
Companhia Providencia’s most recent investment, a five-beam Reicofil SSMMS line capable of producing 1800 to 2000 tons of material a month, came onstream in February 2001 and is already  sold out, as are the company’s six other lines. Growth is coming from export sales, which represent between 60-70% of total sales. Key regional markets include South, North and Latin American countries beyond Brazil, but local sales continue to grow. This growth is expected to step up once economic problems in the country are fully resolved.
 
In the past, Companhia Providencia has upheld a tradition  of putting in a new line every two years, but don’t expect a technology other than spunmelt from this company. In fact, the company’s attributes to its success to a centralized focus on one core technology in one common location.
 
“We are fully focused on spunbond polypropylene and that has helped us leverage the business. We couldn’t have done this with multiple technology and that’s why we have done so well,” said Mr. dos Santos. “It’s going to be a better future.” 
 
Among the advantages of  Companhia Providencia’s pro­ducts, which are sold under the Kami brand name, are their softness, stability and uniformity, which can be attributed to the company’s skilled workforce. “Anyone can run a Reifenhauser line,” Mr. dos Santos said. “But, not everyone can add quality. What has supported our growth is the people using our material are consistently very happy with it.”
Location: Parna, Brazil

Sales: $60 million

Description: Plant Location
São Jose Pinhais, Paraná, Brazil

Key Personnel
Milan Starostik, chairman; Ana Seles Starostik, commercial director; Romeo Bregant, industrial director; Vicente Batista de Lima, financial and administrative director; Cleber dos Santos, export director; Wagner Carvalho, sales manager

ISO Status
ISO 9002

Processes
Spunbonded, SMS, SSMMS, SSS, meltblown, laminated nonwovens, breathable laminated, and printed nonwovens

Brand Names
Kami

Major Markets
Hospital, agriculture, bedding, towel and coverlet, table mat, hygiene, baby diapers

Brazil’s Companhia Providencia has responded to the growing demand for nonwovens in Latin America by starting up its eighth production line during the second quarter of 2005. The new line, a Reicofil IV, brought total capacity to 60,000 metric tons per year, and is capable of running both hygiene and industrial roll goods. Plans are underway  to add more printing capacity during third-quarter 2005 with a new multicolor line that will provide the company with the capability to print nonwovens for the hygiene market.
 
Providencia maintains a market leadership position in Latin America as the largest producer of spunbonded polypropylene. Despite the rising price of oil, Providencia and other Brazilian producers enjoy some impact insulation since oil-producing Brazil is self-sufficient in demand and is balanced in foreign oil trade. Providencia’s sales are “very solid in the domestic market, despite the ups and downs of the local economy,” said Cleber dos Santos, Providencia’s export director, in Curitiba, Paraná.
 
Exports have come to represent a substantial portion of sales for Providencia, through growth in both Latin America and North America. “Because Providencia has been recognized as a strong company, in terms of updated technology and its financial situation, it has been selected as a long term supplier by major customers,” he says. “We expect to have more growth in capacity in the future, both to maintain our market position and to support the expansion plans of our customers,"" he added.
 
Mr. dos Santos noted that sales growth has accelerated as per capita income rises in the region. Total gross domestic product per capita in Latin America is expected to rise to $4159 this year, compared with $3846 in 2004, according to July projections by the Latin America economic analysis team led by Michael Gavin at UBS Warburg, Stamford, CT. At the same time per capita income is rising, inflation in the region is expected to slow to 5.7%, down from 6.7% in 2004, the UBS team predicts.
Location: Parana, Brazil

Sales: $220 million

Description: Plant Location
São Jose Pinhais-Paraná, Brazil

Key Personnel
Milan Starostik, chairman, Ana Seles, Starostik, commercial director; William Starostik, marketing director, Romeo Bregant, industrial director; Vicente Batista de Lima, financial and administrative director, Cleber dos Santos, export director; Wagner Carvalho, sales manager

Processes
Spunbonded, SMS, meltblown, laminated nonwovens

Brand Names
Kami

Major Markets
Hospital, agriculture, bedding, towel and coverlet, table mat, hygiene, baby diapers

As it finalizes plans for a ninth production line, Companhia Providencia continues to focus on the hygiene market. With all eight of its existing production lines centered on spunmelt technology, the Parana, Brazil-based company—Brazil’s largest nonwovens producer—continues to add value to its operation through printing and laminating capabilities. “We are not a commodity supplier of nonwovens,” said Cleber dos Santos, export director. “We add a lot of a value to our goods and make specialties for the hygiene market.”
 
This added value has allowed Providencia to achieve higher returns on its spunmelt nonwovens. In 2005, the company’s sales reached $220 million, up from $200 million the year before. Continuing this momentum could prove difficult, according to Mr. dos Santos, as the hygiene market continues to increase its competitiveness and adds pressure to pricing levels. Between 50-70% of Providencia’s output targets hygiene applications, mainly in the Americas.
 
“The Latin American hygiene market is still growing,” Mr. dos Santos continued. “We are seeing good initiatives in terms of better products in South America, compared to major markets like the U.S. Companies are converting to cloth-like backsheet and other improvements.”
 
Additionally, Providencia is re­sponding to demands for more innovative features such as alternative colors and printing applications and better hand, improved softness and elastomeric products. Last year, Providencia upped its printing capabilities with the addition of a new multicolor line giving it the ability to print nonwovens for hygiene products.
 
Providencia’s ninth line will add 15-20,000 metric tons to its operation, making its total capacity 70,000 tons when it comes onstream during the second quarter of 2007. This line, like its eighth line—which came onstream during the second quarter of 2005—will be based on Reicofil 4 technology. It will add to the company’s hygiene business but also expand its efforts in the medical market, according to Mr. dos Santos.
 
Beyond hygiene, Providencia targets industrial markets such as agriculture and bedding with output from its older lines, which make  heavier weight products. “Compared to hy­giene, the growth in these areas is much more conservative. Basically, we have good years and bad years and the situation varies from one year to the next,” Mr. dos Santos said.
 
Geographically speaking, Provi­dencia’s are more or less split in half between exports and imports but its entire business is served from its one plant in Parana. Diversifying its manufacturing base, however, could be the next step in Providencia’s growth strategy but Mr. dos Santos refused to elaborate on attractive locations for his company’s potential expansion."
Location: Parana, Brazil

Sales: $225 million

Description: Plant Location
São Jose Pinhais-Paraná, Brazil

Key Personnel
Herminio Freitas, CEO; Rubens Sardenberg, CFO;  Cleber dos Santos, sales and marketing director, Romeo Bregant, industrial director

Processes
Spunbonded, SMS, meltblown, laminated nonwovens, printed nonwovens

Brand Names
Kami

Major Markets
Hospital, agriculture, bedding, towel and coverlet, table mat, hygiene, baby diapers

Under new ownership is Companhia Providencia, Parana, Brazil. In February, the maker of spunmelt nonwovens was purchased by a group of four equity funds led by AIG Capital Partners, Inc., a member company of AIG Global Investment Group. The purchase price was reportedly $433 million (R$930 million) Other investors included  Governança e Gestão (“GG Investimentos”), Banco Espírito Santo (“BES”) and the Constantino Family.
 
“Providência is a first-rate company with state-of-the-art technology and superior product quality. We recognized the opportunity to partner with a successful organization that is on the forefront of  expanding internationally by increasing its exports to several markets in the U.S. and Latin America,”  said Fernando Borges, CEO of AIG Capital Investments do Brazil.  “AIG Capital Partners believes that with the expected industry growth and Providência’s dominant market position and share of the market, the company will be able to achieve strategic vision, bringing it to an even higher competitive level.”   
 
Following the ownership change, Herminio Reitas was named CEO of the company, replacing a member of the Starostik family who previously owned Companhia Providencia. Other than that, according to executives, few changes have been implemented at the company, which is anticipating the start up of its ninth line in December 2007. The new line, based on Reicofil 4 technology, will add 15,000-20,000 tons of new capacity to the operation, bringing its total output to 70,000 tons, according to sales director Cleber dos Santos.
 
Like Providencia’s eighth line, which came onstream in mid-2005, the new line will mainly target the hygiene market but its flexibility will enable it to also expand the company’s role in other technical  markets such as medical, filtration and automotive.
 
In addition to this new construction, Providencia is also expanding through the purchase of Brazilian competitor Isofilme in June for an undisclosed sum. The acquisition included Isofilme’s 3.4-meter Reifehauser Reicofil 4 SSMS line, which is located in Pouso Alegre, Minas Gerais, Brazil. The line was started by Isofilme in May 2006.
 
During the past decade, Providencia has been growing its sales enough to add a new line every two years and currently has its entire base of operation at its Parana, Brazil headquarters.
 
Currently, Providencia’s sales are split equally between its local Brazilian market and the remainder of the Americas and the majority of its business is conducted in the hygiene segment. Despite problems facing hygiene such as competition, pricing problems and raw material increases, the company has been able to maintain sales growth by focusing on value-added products. For example, the company operates lamination and printing lines to offer diversified products to its customers that they are willing to pay a premium for. “Product development is very important to us,” Mr. dos Santos said. “We are trying to stay away from the commodity markets.”
 
Additionally, Providencia finds success by forging strong relationships with its customers. “We have long-term relationships with a big base of customers to keep our share in the business,” Mr. dos Santos said. “We make sure we don’t do anything wrong. We are very selective when it comes to new product development and we work hard to keep our costs down.”
 
With about 70% of its sales in hygiene, Providencia also takes advantage of Reifenhauser technology’s attributes for industrial, medical and agricultural applications. Here the company is also able to apply value-added features to its products.
 
Recently, Providencia has been taking these efforts a step further by focusing on new product development, not only based on customer demands. “Our latest initiative is to develop specific new products to follow market trends instead of just responding to the needs of our customers,” Mr. dos Santos said. “We want to provide products before our customers realize they need them, this is a process that will take time, a new way of thinking inside the company.”
 
And for now, Providencia’s number one mission is to transition itself from a family-owned company to a professional one. “The new owners saw us as a strong company, a leader in the region, a good investment, and that is what they are getting,” Mr. dos Santos concluded.
Location: PARANA, BRAZIL

Sales: $225 million

Description: Plant Location
São Jose Pinhais-Paraná, Brazil

Key Personnel
Herminio Freitas, CEO; Rubens Sardenberg, CFO;  Cleber dos Santos, sales and marketing director; Romeo Bregant, industrial director

Processes
Spunbonded, SMS, meltblown, laminated nonwovens, printed nonwovens

Brand Names
Kami

Major Markets
Hospital, agriculture, bedding, towel and coverlet, table mat, hygiene, baby diapers

The big news at Companhia Providencia, Brazil’s largest nonwovens producer, is a recently announced plan to enter the U.S. market with two new production lines. In late July, the company’s board of producers approved the formation of a U.S. subsidiary containing two production lines capable of making 40,000 tons of material annually. Additionally, the board approved a memorandum of understanding with equipment supplier Reifenhauser, who is supplying the first two lines, to purchase up to four lines before 2012. Executives said the plan to enter the U.S.—currently all of Providencia’s nonwovens production is in Brazil—improves its logistics by positioning itself near its U.S. customers and optimizes its chances for growth in the U.S.
 
“We have about a dozen customers in the U.S. currently and with the high fuel and transportation costs, we have decided it makes sense to make the product locally instead of shipping it,” said Cleber dos Santos.
 
Executives plan to announce more information—including an exact location and business structure—of the new entity within the next month.
 
Meanwhile, in Brazil, the company recently completed construction on its ninth production line, which manufactures low basis weight spunmelt nonwovens. The new line not only increases Providencia’s capacity, it also gives it exposure to new products and markets, namely the medical market.
 
The new line is based on Reicofil 4 technology and it adds 20,000 tons of material to the company’s operation. Like all of its more modern lines, the new line will mainly target hygiene applications, the company’s core market but it contains technology to expand in other markets such as medical, filtration and automotive.
 
Line number nine is the latest in a string of investments made by Providencia during the past several years. While capital investment has traditionally been the company’s growth strategy, the most recent of these came in the form of acquisition. In June 2007, Providenica acquired a Bra­zilian competitor Isofilme for an undisclosed sum. The purchase included a 3.4 meter Reifenhauser Reicofil 4 SSMS line, located in Pouso Alegre, Minas Gerais, Brazil. This line was started in May 2006. According to Mr. Frietas, the line is now fully dedicated to hygiene applications; industrial businesses served by Isofilme has been transferred to older Providencia lines.
 
According to Mr. Freitas, the addition of its most recent line and the Isofilme business will together help his company grow its sales 28% in 2008 as it awaits the establishment of its U.S. operation. Currently exports represent about half of its business with all of Latin America and North America considered important markets for the company.
 
Also making headlines for Providencia is its new ownership. In February 2007, the company was purchased by a group of four equity funds led by AIG Capital Partners, Inc., a member company of AIG Global Investment Group. The purchase price was reportedly $433 million (R$930 million) Other investors included Governança e Gestão (“GG Investimentos”), Banco Espírito Santo (“BES”) and the Constantino Family. The company was then sold through an initial public offering in August 2007. According to Mr. Freitas, the move from a family-owned company to a private entity and finally to a publicly traded firm has forced it to look at things more professionally as it must respond to shareholders and be accountable for its performance. Mr. Reitas took over the company in late 2006, replacing a member of the Starostik family who previously owned Companhia Providencia.
 
Since taking over as head of Providencia following the company’s new ownership, Mr. Freitas has been changing the company’s structure by taking a more market-focused approach on a global basis, he said. “We are trying not to be so regional,” Mr. Freitas explained. “This is a trend because markets can be truly different animals.”
Location: PARANA, BRAZIL


Sales: $225 Million


Description: Key Personnel
Herminio Freitas, President and CEO; Eduardo Feldmann, CFO; Alexandre Domeque, commercial director; Romeo Bregant, industrial director

Plant Locations
São Jose Pinhais-Paraná, Brazil, and Pouso Alegre-Minas Gerais, Brazil

Processes
Spunbonded, SMS, meltblown, laminated nonwovens, printed nonwovens

Brand Names
Kami, Protect, Protect Advanced, Protect Ultra, Kami-Soft

Major Markets
Medical, agriculture, furniture and bedding, towel and coverlet, hygiene, filtration, wipes

With its U.S. expansion plan on hold, for now, Brazil’s largest nonwovens producer Companhia Providencia continues to focus on diversifying its business. With all 10 of its lines based on Reicofil spunmelt technology, currently about three-quarters of its business caters to the hygiene business. This percentage is expected to decrease as other markets, namely medical, continue to improve their positions.

In July 2008, the nonwovens producer who currently operates all 10 of its lines in Brazil, said it would establish a U.S. subsidiary in Statesville, NC. The company's board of directors has approved a plan to establish this subsidiary with the goal of creating a twoline nonwovens operation that will make an estimated 40,000 tons of nonwovens per year.

Representing a $120 million investment for the company, the lines were initially slated to be operational by June 2010 but economic factors have delayed that plan. Now, executives predict that construction of line one, which has not yet started, will likely be complete by the end of 2010, while the timeline for line two will depend on performance of the first line.

“We need to see signs before we make the decision to begin construction,” said CEO Herminio Freitas. “Until then, everything is in place, the engineering, the financing, the machines are ordered. We are ready.”

Currently, about half of Companhia Providencia’s sales are conducted outside of Brazil, with North America being one of its key export markets. The North American expansion was intended to reduce logistical costs and better position itself with its customer base in North America.

Meanwhile, in Brazil Companhia Providencia’s tenth production line came onstream in April 2008 featuring the flexibility needed to help the company target the medical market. To further boost its role within medical, Companhia Providencia established a new medical fabrics division to help it take advantage of the newest production line as well as the company’s existing capabilities in cast films, breathable films, printing and laminating. Providencia has developed certified blood and viral barrier products that pass ASTM F-1670 and ASTM F-1671 standards, as well as SMS products that have received European certifications for EN 13795-2, EN 868-2, and EN ISO 11607-1.

In 2008, medical fabrics sales comprised just 3% of total sales for Providencia but the goal is to improve this share to 10% in the short term. “The medical market is an established and dynamic market that is changing as patient protection standards change and we wanted to take part in this business,” Mr. Freitas said. “But we did not want to enter the market as a ‘me-too’ business.”

Providencia’s technology efforts are largely centered on offering the same level of protection as competing products only at lower basis weights. Other investments have focused on specialty hygiene applications as the company has upped its printing and laminating capabilities allowing it to offer printed fabrics, breathable films and other items to hygiene producers. In the long-term, executives hope these specialty applications will comprise 18% of its hygiene sales.

“We have been able to grow in South America because we are able to supply higher quality, state-of-the-art products in this region,” Mr. Freitas explained. “We will continue to focus on these specialty, high standard products to grow our sales in South America and elsewhere.”
Location: Parana, Brazil

Sales: $225 million

Description:
Plant Locations
São José dos Pinhais-Paraná, Brazil and Pouso Alegre-Minas Gerais, Brazil

Key Personnel
Herminio Freitas, president and CEO; Eduardo Feldmann, CFO;  Alexandre Domeque, commercial director; Romeo Bregant, engineering and technology director; Fernando Becker, operational director

Processes
Spunbonded, SMS, meltblown, laminated nonwovens, printed nonwovens

Brand Names
Kami, Protect, Protect Advanced, Protect Ultra, Kami-Soft

Major Markets
Medical, agricultural, furniture and bedding, towel and coverlet, hygiene, filtration, wipes

The year 2009 ended with Companhia Providência moving forward on a planned U.S. expansion, which was originally announced in 2008 but put temporarily on hold due to global economic problems. Today, the $80 million investment in Statesville, NC is on track to be up and running during the first half of 2011.
The new line will add 20,000 tons of spunbond capacity to Providencia’s total output. It is the first U.S. investment for the company, which currently operates 10 lines in Brazil, which serve markets throughout the Americas.
Providência announced its intention to enter the U.S. market in June 2008 but construction was subsequently postponed when the global economic crisis hit. At the original announcement, executives said there would be not one but two lines added to the site to help Providência to better serve the U.S. market, where it is already doing considerable business but so far plans only one line have been publicly finalized.
Executives are confident that there is room for this new capacity in the North American market where competitors FitesaFiberweb and PGI are also in the midst of spunbond investments.
“The North American capacity total is now around 600,000 tons per year and Providencia’s capacity for this line is only 20,000 tons per year,” explained president Herminio Freitas. “Currently, we export nearly 10% of total capacity or 8000 tons per year.”
Based in Paraná, Brazil, Companhia Providência is Brazil’s largest nonwovens producer. In 2009, sales dipped slightly, 4.8%, to R$401 million due to weakness in the first half of the year. Conditions started to improve during the second half.
In Brazil, Providencia’s latest production line, the company’s 10th, came onstream in April 2008, giving the company the flexibility to target the medical market.  To further boost its role in medical, the company established a new medical fabrics division to help it not only take advantage of the new line’s capabilities but also from existing capabilities including cast films breathable films, printing and laminating. The company has already developed a number of certified blood and viral barrier products with the goal of ultimately growing its medical business to represent 10% of its total business.
Diversification, in fact, in medical and other markets, is a key component of Providencia’s strategy. All 10 of its current lines, as well as the one being built in North America, are based on Reicofil technology, and three-quarters of its business caters to the hygiene business. Expansion into new markets, as well as the completion of its North American operation, are two key tenets of the company’s growth strategy moving forward.
“Prospects for 2010 are for an increase in sales volumes and operations running at full capacity given that nonwoven products are sold as a raw material for non-durable consumer goods. In turn, the sale of such goods is directly related to monthly household income which has been reporting growth for some time and should continue this trend in the coming years.”

Paraná, Brazil
www.providencia.com.br
2011 Nonwovens Sales: $260 million

Key Personnel: Herminio Freitas, president and CEO; Eduardo Feldmann, CFO; Alexandre Domeque, commercial director; Romeo Bregant, engineering and technology director, Fabio Kryzanovski, operational director

Plants: Sao Jose dos Pinhais-Parana, Brazil; Pouso Alegre-Minas Gerais, Brazil; Statesville, NC

Processes: Spunbond, SMS, meltblown, laminated nonwovens, printed nonwovens

Brands: Kami, Protect, Protect Advanced, Protect Ultra, Kami-Soft

Major Markets: Medical, agricultural, furniture and bedding, towel and coverlet, hygiene, filtration, wipes

With a new line up-and-running in Pouso Alegre, Brazil, and another one set to come on-stream in Statesville, NC, Brazil’s Companhia Providencia is poised to increase its global output by 40% (40,000 tons) this year, reaffirming its spot among the top spunmelt manufacturers in the world.

This expansion comes after significant growth has already been recorded by the Paraná-based company. In 2011, Providencia reported sales grew 16.2% to $260 million thanks largely to an 11.7% volume increase.

These increases can be attributed to the start-up of Providencia’s first U.S. line, based in Stateville, NC, which came on-stream in late 2011. The new line not only added 20,000 tons to the company’s operations, it also established its first manufacturing base outside of Brazil. In announcing the formation of a U.S. base in 2010, Providencia said the site would ease the strain on its Brazilian operations in meeting supply to North America, which already accounted for 20% of sales.

And, it appears the new line has been a success, already reaching record outputs. A second line is already on schedule to be completed by the end of 2012, bringing another 20,000 tons to the North American markets, according to company documents.

Meanwhile, back in Brazil, Providencia completed work on a second production line in Puoso Alegre in June, 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 products segments.

Executives described the investment as a means to bolster its South American operations. “By the end of 2012, the region will account for more than 70% of the company’s production capacity,” says Herminio Freitas, CEO.

The Brazilian nonwovens segment has grown by an average of 10% over the past five years, greater than the 5% growth reported in the overall economy.

“We chose Pouso Alegre because it is a site which 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, Brazil. While the company invested ambitiously in this site in the late 1990s and early 2000s, adding a new line nearly every other year, a line has not been added at this site recently as Providencia has instead focused on expansion elsewhere in Brazil and in North America.

As the company continues to invest in Brazil and the U.S., the former continues to be its largest market, representing about 60% of sales. This figure is expected to decrease as U.S. investments come on-stream, bringing the percentage of domestically made goods down. Still, the company expects growth to remain the strongest throughout Latin America.
Paraná, Brazil
www.providencia.com.br
2012 Nonwovens Sales: $273 million
 
Key Personnel: Herminio Freitas, president and CEO; Eduardo Feldmann, CFO; Alexandre Domeque, commercial director; Romeo Bregant, engineering and technology director, Fabio Kryzanovski, operational director
 
Plants: Sao Jose dos Pinhais-Parana, Brazil; Pouso Alegre-Minas Gerais, Brazil; Statesville, NC Processes: Spunbond, SMS, meltblown, laminated nonwovens, printed nonwovens
 
Brands: Kami, Protect, Protect Advanced, Protect Ultra, Kami-Soft
 
Major Markets: Medical, agricultural, furniture and bedding, towel and coverlet, hygiene, filtration, wipes
 
With a new line up and running and a steady rise in sales, Companhia Providencia, Sao Jose dos Pinhais, Brazil is poised for even further growth moving forward. The maker of spunmelt nonwovens reported a whopping 15.8% increase in sales in 2012, which was largely attributed to new investments both in Brazil and the U.S.
 
In March, the company completed work on its second U.S. line in Statesville, SC, a move that adds 20,000 tons of U.S. capacity and doubles the size of the site, which was opened in early 2011 as part of a move to boost Providencia’s U.S. sales and alleviate the strain on the company’s Brazilian operation.
 
According to the company, this latest line fulfills a need for high tech products destined to the disposable hygiene market including infant and geriatric diapers, sanitary pads and others and for medical use such as aprons and surgical fields. The line, which represents a $60 million investment and is known as Kami 13, was expected to reach its maximum capacity within six months, according to Hermínio de Freitas, Companhia Providência’s CEO.
 
“We’re optimistic with the business increase in the U.S.,” Freitas says. “The evolution in our first line, inaugurated in January 2011, was very positive. Providencia has a total productive capacity of 140,000 tons of nonwoven/year.”
 
Beyond the U.S. site, Providencia operates two sites in Brazil where it added its 11th line in Pouso Alegre in June 2012. This new line added 20,000 tons to the group’s capacity and has been meeting domestic need in the disposable hygiene and medical products segment.
 
This line was the third at Providencia’s Pouso Alegrea site, which is logistically well placed to receive raw materials and rapidly meet the needs of the customers. Elsewhere in Brazil, Providencia operates an eight-line site in Sao Jose dos Pinhais, which received an investment in the shape of a new line nearly every other year in the late 1990s and early 2000s.
 
As the company continues to invest in Brazil and the U.S., South American sales continue to represent the lion’s share of sales, with domestic sales comprising about 60% of Providencia’s total revenues. This figure is expected to decrease as U.S. investments come onstream.