Nonwovens Industry
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Freudenberg


Location: Weinheim, Germany

Sales: $1.4 Billion

Description: Key Personnel
Christoph Josefiak, managing director, spokesman; Arnold Weghmann, managing director, technical; Walter Schwarz, managing director, North America; Ludger Neuwinger-Heimes, managing director, finance and administration; Dr. Andreas Kreuter, Friedhelm Brandau and Dr. Gerhard Schaut general managers, interlinings; Lee Sullivan, general manager, tufts; Dr. Jörg Sievert, general manager, filter; Bill Casey, general manager, hygiene; Dr. Harald Stini and Helmut Beck, general managers, technical nonwovens, including shoe components

Plants
Weinheim, Germany; Neuenburg, Germany; Kaiserslautern, Germany; Greetland, U.K.; Barcelona, Spain; St. Omero, Italy; Cape Town, South Africa; San Martin/Buenos Aires, Argentina; Jacarei, Brazil; Suzhou, China; Yang-Mei Tao-Yuan, Taiwan; Tayuan, Taiwan; Durham, NC; Lowell, MA; Hopkinsville, KY; Pyungtaek, South Korea (Korea Vilene Company)

Processes
Drylaid staple fiber, wetlaid, spunbonded, melt blown, electrostatic spun microfiber, stitchbonded, needlepunched, thermal bonded, chemical bonded, water entanglement

ISO Status
All locations are ISO 9001; locations serving the automotives industry are QS 9000 certified. Most plants are certified according to ISO 14001

Brand Names
Vilene, Viledon, Vilmed, Pellon, MicronAir, Vlieseline, Vildona, Fliselina, Lutradur, Lutrasil, Evolon and others

Major Markets
Apparel interlinings, filtration, medical, protective clothing, automotive interior trim, electrical insulation, electrical specialties, home furnishings, industrial wipes, hygiene, shoe components, coating substrates, carpet backings, landscape fabrics, geotextiles, agriculture, furniture and bedding, industrial nonwoven specialties

Freudenberg Haushaltsprodukte KG
Postfach 81 02 46
D-68202 Mannheim, Germany
Telephone: 49-621-8773-0
Fax: 49-621-8773-50-18

Key Personnel
Hans-Georg Franke, managing director, chairman; Alexander Moker, managing director, logistics; Gerhard Schmitt, managing director, finance and administration; Klaus Peter Meier, managing director, sales and marketing

Plants
Augsburg, Germany; Arnhem, The Netherlands; Norrköping, Sweden; Roncello, Italy

Processes
Drylaid, thermal bonded, chemical bonded, needlepunched

Brand Names
Vileda, Wettex, Enka, Patito, Roll-o-matic

Major Markets
Household wipes and cleaning instruments, scourers, gloves

Freudenberg Politex Group
Str. Prov. Novedratese, 17/a
I-22060 Novedrate (CO), Italy
Telephone: 39-031-793-111; Fax: 39-031-793-202
E-mail: mk@politex.it
Web: www.freudenbergpolitex.com

Key Personnel
Achille Locatelli, chairman and CEO; Riccardo Sollini, managing director, finance and administration; Bernhard Klein, managing director, technical; Francesco Sancassani, marketing and sales manager (roofing division); Conrad Mauritz, marketing and sales manager (wadding division)

Plants
Novedrate, Italy; Pisticci, Italy; Colmar, France; Lodz, Poland; Macon, GA

Processes
Drylaid carded and/or needlepunched and/or chemical bonded, spunbonding, thermal bonding, chemical bonding

ISO Status
Main locations are ISO 9002 certified

Brand Names
Drenotex, Polifill, Terbond, Texbond

Major Markets
Roofing, geotextiles, wadding for furniture and garments

The past several months have been busy ones for Freudenberg, Weinheim, Germany, marked by the appointment of a new managing director, the implementation of structural and organizational changes and the launch of a three-year, E40 million capital improvement plan. In March, Christoph Josefiak was named managing director of the world’s largest roll goods producer after serving as technical manager for Freudenberg’s Household Products group. Former managing director Hermann Eidel reportedly left Freudenberg by mutual agreement.
 
As managing director, Mr. Josefiak’s key focus has been to improve customer orientation within the group. “Only when we have learned that the customer comes first, always and without exception, can we be even more successful in the market,” Mr. Josefiak explained. “This is of course a common truth, but it has to be lived by.”
 
Mr. Josefiak is also concentrating on honing the company’s focus on its core product ranges and strategic businesses and improving Freudenberg’s efficiencies to strengthen its profit margins.
 
In response to the soft global economy, Freudenberg has initiated structural and organizational changes that give more responsibility to its five key divisions—Interlinings, Filtration, Hygiene/Medical, Technical Nonwovens and Tufts. These units are now not only responsible for product development, marketing, sales and services but also for production and the plants and lines themselves. “Through these measures, we hope to achieve reduction of costs and an intensive degree of growth in competence and a considerable improvement in customer relationships,” Mr. Josefiak explained. “These are factors that are essential for market success.”
  
In further efforts to defend itself against economic conditions, in May Freudenberg announced plans to invest more than E40 million during a three-year period to modernize and restructure its facilities. Approximately half of the new machine lines included in the plan will be installed in Freudenberg’s Weinheim facility, making this site truly state-of-the-art. Additionally, this plan will lead to the company’s individual production sites specializing in certain products rather than manufacturing a complete product range. In Europe, the Weinheim plant will produce materials for interlinings and filtration media while the Kaiserslautern, Germany site will manufacture products for the Tufts, Filtration and Hygiene/Medical segments. The Neuenberg and Parets plants’ capabilities will comprise technical nonwovens and the Greetland, U.K. site will be responsible for hygiene and medical items production. Freudenberg’s Colmar, France site will be dedicated to producing the company’s Evolon microfiber nonwovens.
 
During the first phase of reorganization, which is expected to be complete by the end of 2004, Freudenberg’s European interlinings business will be consolidated in Weinheim, where one new base line and a new printing line will be built and two existing base lines will be modernized. Additionally, a new production line for various types of filtration media will be built and seven older lines will be shut down. In Parets, two new base lines will replace two older base lines, which will be closed. The increased efficiency of the new and modernized machines will require less manpower and subsequently affect 300 jobs, according to reports.
 
While the initial stages of the plan emphasize Freudenberg’s European operations, company executives expect the changes to have far-reaching global effects. Future investments will center on all world regions.
 
The main thrust behind this improvement is defending Freu­denberg against weakened market conditions, particularly in the nonwovens industry. As the largest roll goods producer in the world, Freudenberg is taking steps to ensure its dominance in the future. The entire nonwovens industry is currently going through a difficult situation, caused by worldwide problems being experienced in the garment industry, a key market for nonwovens, according to executives. Another factor is the general weakness of the world economy, the negative effects of which have spread to Asia and South America.
 
Despite these economic troubles, Freudenberg has been able to maintain its leading position through its strong brands, superior customer service practices and other quality improvements. By segment, interlinings—Freudenberg’s largest end use area—was affected by sharp drops in the North American apparel industry caused by regional shifts in the business. Furthermore, in Asia demand has been substantially reduced, creating competitive price pressures in the industry. This however has not kept Freudenberg from strengthening its positions there through consolidated sales and marketing forces and through the integration of the activities of the Korea Vilene Company, which has previously marketed nonwoven interlinings under the Xetex brand. The Asian interlinings business is now unified under Freudenberg and Vilene Interlinings Far East with a single sales agent of its own in each country.
 
Also in Asia, the business activities of Korea Vilene are now fully integrated into Freudenberg. Initially created to target the interlinings market, the scope of this venture has expanded to include filtration, automotive and hygiene in various Asian markets. New investments within the segment include an air through bonding line to expand hygiene materials as well as the creation of a separate filter converting company to manufacture automotive and industrial filters.
 
Additionally, Freudenberg has initiated new investments in its Suzhou, China facility as well as starting capabilities in Pyungtaek, South Korea for the production of 3P materials. The group’s competitive basis in Asia with local production, competent partners and an extensive sales and service network provides it with sufficient power to strengthen its competitive position in the Asian market, according to executives.
 
As the worldwide interlinings business continues to face overcapacity issues, Freudenberg will reorganize its production landscape on a global basis and approximately 50% of the above mentioned capital improvement plan will be dedicated to its interlinings business.
 
Meanwhile, the company’s Tufts business continued to experience strong growth due to the global acceptance of spunbond polyester material, particularly in the North American automotive industry. Despite this optimistic situation, aggressive purchasing practices in the automotives industry have continued a trend toward price erosion. While the automotives industry has begun to expand in 2002, it is not expected to reach the full thrust of activity recorded in 1999 and 2000.
 
In general, Freudenberg executives see an overcapacity situation in spunbond polyester materials, which was aggravated by a soft global economy in 2001. This is especially the case in Asia, where supply is outpacing increasing demand, and the result has been products developed in Asia being exported into Europe and North America. Although basic demand for spunbond polyester is expanding, the major issue affecting the nonwovens business is the temporary oversupply situation in the market, but the general opinion is that this will moderate as capacity and demand balance one another out, according to executives.
 
One noteworthy item in Freudenberg’s Tufts division is the start up of a new spunbond line in its Durham, NC facility, which came onstream ahead of schedule in December. Representing a $40 million investment, the new line features technology improvements that deliver greater uniformity, higher production speeds and lower costs. The added capacity generated through the new line was desperately needed by the plant, which was struggling to meet total demand. The new line will produce approximately 100 million meters of product and will lead to a temporary overcapacity situation for the division.
 
Freudenberg’s Hygiene/Medical segment experienced strong growth in 2001, and sales growth is expected to continue throughout 2002 as the company moves into its second full year of production on its thermal bonding line in North America. The world hygiene market is growing steadily, and nonwovens are expected to remain an important element of the next generation of disposable products. The challenge for Freudenberg and for the hygiene industry as a whole is to provide differentiated products, according to the company.
 
Another business segment that has escaped the ill effects of a soft economy is filtration. Growth in this segment has primarily stemmed from higher demands for fine filtration products created by increased environmental concerns, health awareness, stringent limit values for pollutants and the sick building phenomenon. This trend of increased filtration requirements led Freu­den­berg to expand its product portfolio in the area of ASHRAE (American Society of Heating, Refrigerating and Air Condition Engineering) filters and media containing activated carbon for the adsorption of odors. Filters for odor removal are available for general HVAC (heating, ventilation and air conditioning) applications, industrial process and cabin air filtration for automotives. To reaffirm the importance of filtration as a strategic business, Freudenberg is investing more than E15 million in new base and converting lines in Kaiserslautern. These new production lines will significantly increase the manufacturing capacity for filters and will help Freudenberg better service its customers in the area of industrial air filtration, liquid filtration and cabin air filtration, according to executives.
 
Freudenberg’s fifth core segment, Technical Nonwovens, has been restructured to include its shoe components business and also comprises the company’s battery separators, cable wrappings and electrical insulation segments. The consolidation of this business segment has allowed Freudenberg to act globally in all of its essential market segments.
 
The year 2001 was also marked by divestments for Freu­denberg. The company’s synthetic leather production was brought to a close and its abrasive business was sold. In order to compensate for sales lost through the closure of these two businesses, Freudenberg has been focusing more closely on the strength of its nonwovens business, a measure that has already generated higher sales.
 
In terms of product development, one area of continuing interest for Freudenberg is Evolon, a continuous filament spunlaced material featuring good drapability, soft feel, high tensile strength, excellent comfort properties and good launderability. These features can be can be further enhanced by a variety of finishing treatments—impregnating, coating, printing, dyeing, embossing, brushing, buffing, calendering, flocking and laminating. Since its introduction in 1999, Evolon technology has expanded and the material is now available in weights ranging from 100-170 gpsm. Company executives expect technology deve­lop­ment to continue, eventually making Evolon available in weights as low as 60 gpsm. These lower weights will ultimately lead to more market potential for Evolon.
 
Freudenberg can produce about 1500 tons of Evolon per year on one line in Colmar, France and is presently working on debottlenecking that line to increase its capacity. Once this project is complete, a second Evolon-producing line, called Evolon II, will be commissioned. “A new Evolon company has been founded and will be fully responsible—besides production—for generating sales in the various markets,” Mr. Josefiak said. “We are convinced that Evolon will continue to grow and will sell into different technical applications during the course of the next year.”
 
Another area of interest for Freudenberg is its joint venture agreement with Japan Vilene, Tokyo, Japan. Named Freudenberg Vitech, the venture targets the automotive headliner facing market in North America. The company recently completed construction on a line capable of producing 16 million square meters of needlepunched materials in Hop­kins­ville, KY. The added capacity responded to a growing demand for needlepunched materials in the North American automotives market, where nonwovens continue to replace other materials.
 
In addition to its roll goods business, in December, the Freudenberg Group established a venture to recycle PET beverage bottles with the Rethmann Group, Selm, Germany, a deal that will ultimately strengthen its nonwovens business. The venture will recycle beverage bottles to produce PET for Freudenberg’s nonwovens production at the company’s plants in Italy and Rethmann’s facilities in Taiwan and the Netherlands as well as at a new facility in Kaiserslautern, Germany. During the process, the bottles are reduced to flakes by means of washing, shredding and sorting, and the flakes can be extruded to form chips by putting them through a further process. In this way, high quality raw materials are created, and Freudenberg will subsequently use them to manufacture nonwovens for carpet backing, roofing sheets, shoe insoles, car headliners, vehicle engine insulation and filters. The new company employs 200 people and is expected to achieve sales of E65 million.
 
In the future, Freudenberg will continue to provide innovative products and solutions to its customers by concentrating solely on their core requirements. It is this strategy that has allowed Freudenberg to be a nonwovens leader in the past and it is this strategy that will guide it in the future. “Within the divisions, innovation will be the main driving force behind growth in the future,” Mr. Josefiak said. “Cost leadership arising from our reorganization will also help us to expand our market shares.”

Freudenberg Politex
Unfavorable conditions caused by a slowdown in the economy were reported by Freudenberg Politex, Novedrate (CO), Italy. These conditions caused difficulties in both Freudenberg Politex’s main businesses, roofing and waddings. These difficulties included weakened demand as well as increased competition. Despite these conditions, the company was able to maintain 2000 sales levels in 2001.
 
The roofing business expanded  its sales in emerging markets to offset weakened demands in developed markets such as Western Europe and North America. Other positives included increased penetration in the U.S. market for fiberglass reinforced nonwovens for roofing applications.
 
The waddings business was characterized by a market slowdown begun during the second half of 2001, which led to reduced sales volumes in both Italy and Poland, the two areas where the group has operations. In response to the slowdown in traditional markets, Freudenberg Politex looked to expand into new market areas. Among these efforts was the promotion of a sound absorbing product, which has found several applications in the construction market. Additionally, a new padding material for the garment industry was launched in Spring 2002.
 
In terms of investments, Freudenberg Politex has been focusing on innovating its manufacturing process. To achieve this, the group added a line in Colmar, France and converted a line in Pisticci, Italy in 2001. Both lines produce spunbonded nonwovens with fiberglass reinforcements. In the U.S., Freudenberg Politex constructed a high speed line for the production of glass reinforced staple nonwovens at its Macon, GA facility in April 2002.
 
Looking ahead, Freudenberg Politex will continue to focus on developing products with superior technical quality as well as expansion into emerging markets. The development of new polyester products to replace traditional backings as well as investment in qualified products for demanding markets are two key strategies that are expected to benefit the group in the future. “For the long term, within a presumable framework of persisting strong competition and price pressure, Freudenberg Politex is expected to grow as a consequence of the projected investments in the expansion of production capacity and the development of new innovative products,” predicted chairman Riccardo Sollini.

Location: Weinheim, Germany

Sales: $1.4 billion

Description: Key Personnel
Thomas Kehl, managing director, spokesman; Christoph Josefiak, managing director, technical; Walter Schwarz, managing director, North America; Andreas Kreuter and Gerhard Schaut general managers, interlinings; Lee Sullivan, general manager, tuft; Jörg Sievert, general manager, filter; Bill Casey, general manager, hygiene; Harald Stini and Helmut Beck, general managers, technical nonwovens including shoe components

Plants
Weinheim, Germany; Neuenburg, Germany; Kaiserslautern, Germany; Greetland, U.K.; Barcelona, Spain; St. Omero, Italy; Cape Town, South Africa; San Martin/Buenos Aires, Argentina; Jacarei, Brazil; Suzhou, China; Yang Mei Tao-Yuan, Taiwan; Tayuan, Taiwan; Durham, NC; Lowell, MA; Hopkinsville, KY; Pyungtaek, South Korea (Korea Vilene Company)

Processes
Drylaid staple fiber, wetlaid, spunbonded, meltblown, electrostatic spun microfiber, stitchbonded, needlepunched, thermal bonded, chemical bonded, water entanglement

ISO Status
All locations are ISO 9001 and 14001; locations serving the automotive industry are QS 9000 certified.

Brand Names
Vilene, Viledon, Vilmed, Pellon, MicronAir, Vlieseline, Vildona, Fliselina, Lutradur, Lutrasil, Evolon and others

Major Markets
Apparel interlinings, filtration, medical, protective clothing, automotive interior trim, electrical insulation, electrical specialties, home furnishings, industrial wipes, hygiene, shoe components, coating substrates, carpet backings, landscape fabrics, geotextiles, agriculture, furniture and bedding, industrial nonwoven specialties

Freudenberg Politex
Novedrate (CO) Italy
39-031-793-111
mk@politex.it
www.freudenbergpolitex.com
Total Sales: $163.2 million

Key Personnel
Riccardo Sollini, president and CEO; Bernhard Klein, managing director, technology and production; Achille Locatelli, technical counselor; Francesco Sancassani, marketing and sales (roofing division); Conrad Mauritz, marketing and sales (wadding division); Ing. Massimo Migliavacca, technology & production; Riccardo Forni, finance, administration, IT&S

Plants
Novedrate (CO), Italy, Pisticci (MT), Italy, Colmar, France; Lodz, Poland; Macon, GA

Processes
Drylaid carded and/or needlepunched and/or chemical bonded, spun bonding, thermal bonding, chemical bonding

ISO Status
Main locations are ISO 9002 certified

Brand Names
Terbond, Texbond, Polifill, Polifill T3, Ecozero

Major Markets
PET spunbonded nonwovens, needlepunched and chemi­cally/thermally bonded, standard or reinforced with MD glass filaments; PET staple fiber nonwovens, needlepunched and chemically bonded, standard or reinforced with MD glass filaments;  Construction: Thermobonded PET panels for thermal and acoustic insulation; Waddings for furniture and garment: PET high loft nonwovens, resinated, thermobonded, calendered and/or needlepunched

The continuation of a large-scale reorganizational/improvement plan has defined 2002 and the early part of 2003 for the world’s largest roll goods pro­ducer, Freudenberg, Weinheim, Germany. The company has been busy implementing phase one of this plan, which was announced in May 2002, and planning phase two, which is expected to begin in the near future, according to executives.
 
Included in phase one, representing a $40 million investment, is a plan to modernize and restructure Freudenberg’s facilities in Europe and North America. The plan has streamlined the company’s five key divisions—interlinings, filtration, hygiene/medical, technical nonwovens and tuft—to operate fully independently of one another. Now each division is fully responsible not only for product development, marketing, sales and services but also for production and the plants and the lines themselves.
 
The company’s largest site, located in Weinheim, Germany, now houses Freudenberg’s European interlinings business as well as its filtration media businesses. To accommodate this consolidation, the company added a printing line, modernized two existing base lines for interlinings and added a new production line for various types of filtration media at the site. Meanwhile, in Parets, Spain, which now houses the technical business, the company replaced two base lines, a move that increased efficiency. Also under the new plan, the Kaiserslautern, Germany site, now manufactures products for the tuft, filtration and hygiene/medical segments; the Neuenburg, Germany, operation also houses the technical nonwovens and the Greetland, U.K. facility is responsible for hygiene and medical production. Freudenberg’s Colmar, France site will be dedicated to producing the company’s Evolon microfiber nonwovens.
 
In the U.S., this plan has led to the transfer of production lines from Lowell, MA to more modern facilities in Durham, NC and Hopkinsville, KY. The transfer mainly affected products targeting automotive and home furnishing applications. The Lowell site still houses the division’s research and development and marketing operations as well as production for the semiconductor polishing pads segment and select converting capabilities.
 
According to company executives, the improvements are running ahead of schedule and are expected to be complete sometime next year. Already, the plan, which was intended to defend Freudenberg against weak market conditions, has led to cost reductions and quicker times to market for Freudenberg. “Our customers recognize that we are striving to be more oriented toward them in terms of flexibility and speed,” explained managing director Thomas Kehl. “We have demonstrated a commitment to the industry and our customers believe in us.”
 
While no firm plans for the second phase of Freudenberg’s improvement plan have been announced, executives expect that they will continue the efforts made in phase one by bringing similar initiatives to more far-reaching global areas. For instance, future projects could enhance Freudenberg’s operations outside Europe and North America including Cape Town, Africa; San Martin/Buenos Aires, Argentina; Jacarei Brazil; Suzhou, China; Yang-Mai Tao-Yuan, Taiwan; Tayuan, Taiwan and Pyungtaek, South Korea.
 
Also making headlines for Freudenberg this year was the appointment of Mr. Kehl as the company’s new managing director in February. Before joining Freudenberg, Mr. Kehl held positions as the head of technical fibers at KoSa and a managing position for the spunbond division at Hoechst Celanese. High on Mr. Kehl’s list of priorities is completing the restructuring plan to help the company complete its ultimate goal of becoming a more customer-driven company. “We want to be more flexible to our customers’ needs,” Mr. Kehl explained.  Under the plan, Freudenberg’s five key divisions will operate independently while still falling under the company’s corporate umbrella. This way each division is able to operate independently while still profiting from the advantages and synergies of a large company.
 
Freudenberg’s largest segment, interlinings, has been impacted by shrinking markets and pricing pressures in the U.S. and Europe as well as an overall shift in the apparel industry to China. Together with Japan Vilene Company (JVC) Freudenberg operates a strong sales network within China. Executives are clearly confident that a place for interlinings still exists in the western world. Nearly half of the new lines commissioned under phase one of Freudenberg’s restructuring plan will target interlinings.
 
Also boosting Freudenberg’s interlining business was the introduction of the new adhesive system, called PowerDot, earlier this year. PowerDot adhesive system is expected to complement Freudenberg’s state-of-the-art adhesive technology and reinforce its strong position in the apparel interlinings and embroidery business.
 
Freudenberg’s most recent acquisition is the Comfortemp brand from Frisby Technologies, Winston-Salem, NC. Comfortemp is a line of dynamic, climate-control materials developed by Frisby for insulation, home furnishings and linings for apparel and footwear. Freudenberg’s interest in Comfortemp dates back to July 2001 when the company partnered with Frisby to manufacture Comfortemp Nonwovens. Under this agreement, Freudenberg made the nonwoven material while Frisby manufactured and sold it. “The purchase gives us access and rights to certain brands,” Mr. Kehl explained. “It is part of our plan of growing in interlinings and shoes.”
 
Also central to Freudenberg’s business strategy is tuft, its polyester-based spunbond business. Targeting mainly the automotive, carpet broadloom and tire industries, tuft operates facilities in Durham, NC, Kaiserslautern, Germany and Tayuan, Taiwan. Luckily, polyester-based spunbond has not seen the overcapacity and price erosion problems that are prevalent in polypropylene technology and tufts has remained a growth area for Freudenberg. The most recent expansion in this segment was in December 2001, when a $40 million line came onstream in Durham. To date, this 100-million-meter machine is running at full capacity and the company is currently debottlenecking existing lines to increase its annual output.
 
The hygiene/medical business has profited greatly by the company’s restructuring efforts. These efforts have given the division the ability to react to market trends quickly, which is important in this competitive market. While this market is always a challenge, Freudenberg has been making steps to be more innovative in its efforts to meet customer demands.
 
In recent years, the filtration segment has become increasingly important to Freudenberg due to heightened concerns over fresh air among consumers. “It’s an important growth business, a core business, and it always has been,” Mr. Kehl explained. “We’ve always had a strong position there.”
 
Among Freudenberg’s efforts in this segment is an expanded portfolio in the area of ASHRAE (American Society of Heating, Refrigeration and Air Condition Engineering) filters and media containing activated carbon for the adsorption of odors. Additionally, filtration for odor removal are available for general HVAC (heating, ventilation and air conditioning) applications, industrial process and cabin air filtration for automotives.
 
During the past several years, Freudenberg’s MicronAir filters business for automotive interior filtration has seen its share of ups and downs as market preferences have impacted this segment both positively and negatively. Increased interest in making air filtration devices standard in new vehicles provides a boost to the business in the late 1990s, but this success was temporarily halted when economic conditions weakened in 2001 and 2002. More recently, this business has been revitalized as consumers have become more interested in breathing fresher air. Freudenberg has responded to this trend by investing $25 million in a new plant for MicronAir cabin air filters in Kaiserslautern, Germany. Announced in October, this new site is adding 61 new jobs to the site and increasing production significantly. Freudenberg has forward integrated to produce the entire filter, which comprises a nonwoven material with an activated carbon layer, at the site.
 
The latest news from the filtration segment came in May when a partnership with Pneumafil Corporation, Charlotte, NC, was announced. This worldwide marketing partnership is designed to supply inlet filtration systems to the gas turbine marketplace and combines the performance and reliability of Freudenberg air filtration media with Pneumafil’s knowledge of the design and manufacture of inlet filtration systems for the power generation, process and offshore environments. The partnership is expected to enhance each company’s portfolio and enable them to offer inlet filtration solutions worldwide.
 
The fifth division, technical, includes Freudenberg’s activities in the shoe, battery separator, cable, automotive, building and geotextile markets. “The technical textiles segment has always been a segment of industrial growth, outpacing growth in all other textile applications,” Mr. Kehl explained. “Basically nonwovens can replace any other more expensive, higher performance products. You name it and nonwovens has its place.”
 
While these segments are not without price sensitivity and competition, they are generally regarded as areas where innovation can claim a fair price.
 
In addition to its five key segments, Evolon is also an important business for Freudenberg. Introduced in 1999, this continuous filament spunlaced materials features good drapability, soft feel, high tensile strength, excellent comfort properties and good launderability. Because of its uniqueness, Freudenberg opted not to include it into one of the five divisions and instead broke it out from the rest of the nonwovens business. Among the areas where Evolon has already gained acceptance are protective apparel, home and functional textiles, automotive interiors and synthetic leather. Currently, Evolon is produced on one line in Colmar, France, but a feasibility study on adding a second line is currently underway. Other plans for Evolon include reducing its weight to below 100 gpsm, which will ultimately open up additional applications for the technology.
 
Turning toward the overall nonwovens industry, Mr. Kehl admitted that it is not without its problems, which include stiff competition and overcapacity. However, there is no industry without its problems, in his opinion, and he is confident that growth will continue in nonwovens. For Freudenberg, growth will mainly come in the filtration, tufts and technical segments however its other two key segments, interlinings and hygiene/medical will not be ignored.
 
“In the next five years, I hope to see us as a leaner company with great strength in customer orientation,” Mr. Kehl predicted. “Our focus will be enhanced and we will be a by far larger business than we are today.”
 Achieving these goals will mean making choices for the company. Freudenberg will pay close attention to market trends to gauge when and where growth is most attainable. And, while Freudenberg has done some forward integrating in recent years, it has no intention of becoming a consumer product company, a trend that has been rocking the nonwovens industry in recent years. “We have no interest in developing branded products for the consumer markets,” Mr. Kehl explained. “What we are willing to do is to work with partners but we have no intention to sell directly to the consumers. That is not our target in the nonwovens business.”
 
Instead, forming partnerships, licensing agreements, acquisitions and new products will be the primary means by which businesses will be expanded. “You have to make choices,” Mr. Kehl concluded. “You can’t grow at the same speed in all segments at the same time. You have to focus on the areas you think are important at a particular time.”

Freudenberg Politex
Continued stagnancy in worldwide economies led to a contraction of demand as well as pricing pressures for Freudenberg Politex, Novedrate, Italy, a supplier of polyester nonwovens in the roofing industry and voluminous nonwovens in the furniture and garment industries. To counter these trends, Freudenberg Politex improved product quality standards in both roofing and waddings. This strategy led to a 10% increase in the group’s sales volumes in the worldwide roofing market.
 
The group is able to develop products with superior technical quality by continuously research both standard spunbonded and staple polyester nonwovens as well as those reinforced with fiberglass filaments. One particular area of success was in the development of a patented process whereby polyester mats are reinforced in the machine direction with fiberglass filaments. Through this process, the company’s Texbond R staple product is formed. The inclusion of fiberglass stabilizes the polyester mat, which is often stretched during manufacturing. The fiberglass keeps the polyester from shrinking back when exposed to heat on the roof. This product, which is used for modified bitumen style roofing applications, was first created by Freudenberg Politex through a patented process in the early 1990s. Since then 100% of its U.S. lines and a big portion of its European business have incorporated fiberglass.
 
Freudenberg Politex added a second high speed line in its Macon facility to produce the reinforced staple polyester mats Texbond R in March 2002. Also, in Europe Freudenberg Politex is adding a line to increase the production capacity of reinforced spunbonded, Terbond R, in Pisticci, Italy. Announced in April 2003, the new line will be able to produce 10,000 tons of the material per year when it comes onstream in 2004. Output will target worldwide markets.
 
In addition to capital investment, market orientation and technical know-how have contributed to the development of other new products such as polyester panels for acoustical and thermal insulation in the Ecozero family, which are suitable for different technical applications, from the insulation of walls and ceilings in the building industry to acoustic insulation.
 
Other important new products for Freudenberg Politex have been Polifill T3 and Polifill T3 Urban, new paddings for technical sportswear and premium garments. These three-layer thermoregulated fillings were successfully launched in late 2002 and early 2003 and have already brought good results.
 
In the future, Freudenberg Politex will further strengthen its position through innovation and the launch of new products in construction, while the wadding division will continue its campaign for the development of sales of the new products. This will lead to increased sales in both business areas.

Location: Weinheim, Germany

Sales: $1.4 BILLION

Description: Key Personnel
Management Board: Stephan Tanda, president and CEO,  Christoph Josefiak, managing director of technical; Walter Schwarz, managing director, North America; Georg Brasch, managing director, finance and administration.
Worldwide Divisions: Andreas Kreuter and Gerhard Schaut general managers of interlinings; Lee Sullivan, general manager of tuft; Jörg Sievert, general manager of filter.

Plants
Weinheim, Germany; Neuenburg, Germany; Kaiserslautern, Germany; Greetland, U.K.; Colmar, France; Barcelona, Spain; St. Omero, Italy; Cape Town, South Africa; San Martin/Buenos Aires, Argentina; Jacarei, Brazil; Suzhou, China; Changchun, China; Yang Mei Tao-Yuan, Taiwan; Tayuan, Taiwan; Durham, NC; Lowell, MA; Hopkinsville, KY; Pyungtaek, South Korea (Korea Vilene Company)

Processes
Drylaid staple fiber, wetlaid, spunbonded, meltblown, electrostatic spun microfiber, needlepunched, thermal bonded, chemical bonded, water entanglement

ISO Status
All locations are ISO 9001 and ISO 14001 certified; locations serving the automotive industry are QS 9000 certified; 25% of the plants are OSHAS 18001 certified

Brand Names
Vilene, Viledon, Vilmed, Pellon, MicronAir, Vlieseline, Vildona, Fliselina, Lutradur, Lutrasil, Evolon

Major Markets
Apparel interlinings, apparel outer fabrics, filtration, medical, protective clothing, automotive interior trim, electrical insulation, electrical specialties, home furnishings, industrial wipes, hygiene, shoe components, coating substrates, carpet backings, landscape fabrics, geotextiles, agriculture, furniture and bedding and industrial nonwoven specialties

Sales have remained steady at the world’s largest nonwovens producer Freudenberg, Weinheim, Germany. While executives won’t release firm sales figures, they confirmed that Nonwovens Industry estimates of $1.4 billion were on track for 2003, showing relatively no growth compared with 2002.
 
In May, Freudenberg announced that it had finished reconfiguring its portfolio, which included the divestment of companies with sales totaling E400 million. Within the nonwovens business, these companies were in markets such as floppy discs, abrasives and synthetic leather. Executives said they are pleased that internal growth has been able to offset the losses incurred through the sale of these businesses. Freudenberg is now focusing on reinforcing its core businesses, among which nonwovens is paramount.
 
Investment was also a part of this reconfiguration plan. In the nonwovens segment, the acquisition of the remaining 50% of its joint venture company, Freudenberg Politex in Italy, a European leader in spunbond polyester-based roofing materials, was central to strengthening core businesses.
 
In addition, Freudenberg Nonwovens is set to benefit from a corporate restructuring program, designed to meet customer demands more quickly. Announced in 2002, phase one of this project revamped Freudenberg’s European and North American businesses by streamlining its five divisions—hygiene and medical, tufts, interlinings, filtration and technical nonwovens—to operate with increased customer focus. Each division is now fully responsible not only for product development, marketing, sales and services but also for production and the plants and the lines themselves.
 
To achieve this plan, Freudenberg had to invest some $40 million in new lines and improvements in many of its facilities. These upgrades, scheduled to be completed by early 2005, include a new printing line, modernization of two existing base lines and a new filtration line in Weinheim, which now houses Freudenberg’s interlinings and filtration businesses. Meanwhile, the Parets, Spain facility now houses the technical business. To accommodate this, Freudenberg replaced two base lines to increase efficiency. Freudenberg’s Kaiserslautern, Germany site now manufactures products for the tuft, filtration and hygiene/medical segments; the Neuenburg, Germany operation also houses technical nonwovens and the Greetland, U.K. facility is responsible for hygiene and medical production. Freudenberg’s Evolon microfiber nonwovens are being made in Colmar, France.
 
In the U.S., lines have been transferred from Lowell, MA to Durham, NC and Hopkinsville, KY. This transfer mainly affected products targeting home furnishings and automotive applications. Some of the division’s research and development departments as well as production for semiconductor polishing pads and select converting capabilities are still housed in Lowell.
 
The improvements are designed largely with the customer in mind. “The improvements will allow each of our five divisions to be more focused and to respond to customer demands more quickly,” said Stephan Tanda, management board president and CEO.
 
While so far no specific improvements have been made at Freudenberg’s facilities beyond Europe and North America. moves toward increased regional self-sufficiency are being made, according to Mr. Tanda. “The divisional structure is not as defined in our smaller facilities, but in principle, it’s still true,” he said. “All of our locations are growing with their markets and they are expanding as their markets expand.”
 
The largest market for Freudenberg continues to be interlinings, which was really at the core of the improvement plan. Much of the improved and rationalized capacity affected under the plan centered on interlinings, proof that despite this market’s continued movement toward Asia, executives remain confident that there is a place in Western Europe for interlinings. Still, the  business has been adjusted to the reality that so much of this business is moving from Europe and North America into Asia.
This has, to some degree, been achieved through Freudenberg’s long relationship with Japan Vilene, which has allowed it to match its Asian capacity to the market’s needs and to give its products a cost structure comparable to products made by local producers.

In Freudenberg’s spunbond polyester, or tufts, business, reductions in  nonwovens’ deniers are improving performance characteristics. Key markets for these materials included automotives, carpet broadloom and tire industries. Recent advancements include Perform, a technology allowing deeper molding and lower temperatures in automotive applications. Manufactured in Taiwan, North Carolina and Germany, Freudenberg’s tufted nonwovens are posting good growth in Europe, the U.S. and Asia thanks to strong demand in a range of markets.
 
Freudenberg has avoided severe pricing problems in the hygiene and medical segments, both markets notorious for margin pressure, by staying away from commodity markets such as spunbond nonwovens for hygiene topsheets and hydroentangled fabrics for baby wipes. “We are not interested in competing with off-the-shelf equipment,” Mr. Tanda said. “We choose to perform well in specialty applications that fit with our corporate strategy.” Additionally, recent restructuring efforts have given the division the ability to react quickly to market trends, important in competitive markets.
 
Increasing in importance to Freudenberg is filtration which is growing in both automotives and industrial areas. In China, this market  is set to benefit from a recent joint venture between Freudenberg, Japan Vilene and Chinese partners. Called Freudenberg & Vilene Filter (Changchun) Co. Ltd, the new company has acquired the filtration business of Changchun Autofilter company and operates out of this former car and truck filter supplier’s manufacturing sites, which employ about 300 people.
 
This joint venture is supplying motor and cabin air filter housings as well as filter elements to leading automotive manufacturers in North and Western China. The move reinforces Freudenberg and Japan Vilene’s strategy of actively participating in the growth of the Chinese automotives industry and expand the availability of the micronAir filters for passenger cars and trucks.
 
This joint venture, announced in May 2004, follows another partnership formed in July 2003 with Pneumafil Corporation, Charlotte NC, to supply inlet filtration systems to the gas turbine marketplace. This partnership combines the large global scope of Freudenberg’s filtration business with Pneumafil’s expertise in the design and manufacture of inlet filtration systems for the power generation, process, and offshore environments. Freudenberg, through its Viledon brand of air filtration products, has been supplying the gas turbine marketplace with superior quality air filtration products for more than 40 years. Pneumafil has been supplying this market with inlet filtration systems since 1976.
 
Freudenberg’s fifth division, technical, includes everything from automotives to battery separators and cable to shoe components. These markets allow Freudenberg to explore a variety of niche applications requiring a high level of value-added service. As this segment grows, it adds a significant amount of business opportunities to Freudenberg. “Our various customers in the technical area serve a variety of specialties and niche markets that allow us to offer value-added products,” Mr. Tanda said. “This really broadens our product scope.”
 
These five businesses are not equal in size but they are equal in importance to Freudenberg. The company’s goal is to continue to grow across all of its divisions to keep its portfolio diverse. In addition to these five segments, Evolon, Freu­denberg’s continuous filament spunlaced nonwoven, is an important part of its business plan. Launched in 1999, Evolon’s good drapability, soft feel, high tensile strength, excellent comfort properties and good launderability make it ideal for many applications, including apparel, medical and wipes. It was not included in any of Freudenberg’s five core divisions because it differs so much from other products in its portfolio.
 
Currently, Evolon is produced on one line in Colmar, France, but plans for a second line are being considered. Executives expect this material to play a key role in Freudenberg’s future. “Evolon is really growing one application at a time,” said Mr. Tanda.

“We are seeing a lot more areas for the material, but it’s a matter of honing it or adding value to meet those needs.”
 
With facilities all over the world, Freudenberg has long had a presence in many developing countries including Cape Town, South Africa; San Martin/Buenos Aires, Argentina; Jacarei, Brazil; Suzhou, China; Yan-Mai Tao-Yuan, Taiwan; Tayun, Taiwan and Pyungtaek, South Korea. These facilities are growing with their respective markets and adapting to changes in market trends. Like all of Freudenberg’s plants,  these facilities are becoming more self-sufficient and customer focused. “We have observed some significant growth in developing countries, and we are considering continuing growth a great challenge in developed areas,” Mr. Tanda said.
 
A good example of this strategy can be seen in the Chinese filter agreement with Japan Vilene. Freudenberg has decided to manufacture finished products in an effort to gain share in a somewhat untapped market. Mr. Tanda said observers can look for similar initiatives across all of Freudenberg’s divisions in developing and developed regions alike. “Success for us will come through differentiated technology and tremendous diversity both when it comes to roll good production, finishing and converting,” Mr. Tanda said. “We use our broad set of industry expertise to follow the growth of our customers.”
 
Freudenberg has remained the largest nonwovens producer in the world for decades, but this title is without merit for the company whose keen interest is growth, both in sales and earnings. “Being the largest nonwovens producer is not as important as operating a healthy business,” Mr. Tanda explained.

Its growth will continue through sustained growth efforts, both organically and through acquisition. Restructuring efforts have consumed significant company resources in the past two years, and once this phase is complete, these resources will be applied elsewhere—ensuring that Freudenberg’s nonwovens business remains, Mr. Tanda said.

The Freudenberg Politex Group
Strada  Provinciale  Novedratese, 17/a
22060 Novedrate (CO), Italy
39-031-793-111
mk@politex.it
www.freudenbergpolitex.com

Plants
Novedrate, Italy; Pisticci, Italy; Colmar, France; Lodz, Poland; Macon, GA

Key Personnel
Riccardo Sollini, President & CEO; Bernhard Klein, managing director, chief technology officer; Riccardo Forni, chief financial officer; Francesco Sancassani, business director; Richard Shaw, business director North America; Massimo Migliavacca, technical director

Processes
Drylaid carded and/or needlepunched and/or chemical bonded, spunbonding, thermal bonding, chemical bonding

ISO Status
Main locations are ISO 9001 and ISO 14001 certified.
Plants in Italy are OSHAS 18001 certified.

Brand Names
Terbond, Texbond, Polifill, Polifill T3, Ecozero, PhonoPAR, VeloPAR, AcquaPAR, ReflexPAR

Major Markets
Roofing: PET spunbonded nonwovens, needlepunched and chemically/thermally bonded, standard or reinforced with MD glass filaments; PET staple fiber nonwovens, needlepunched and chemically bonded, standard or reinforced with MD glass filaments. Building Materials: Thermal bonded PET panels for thermal and acoustic insulation, anti-crazing membranes for external walls, supports for the waterproofing of roofs, also coupled with aluminum, underflooring system for sound absorption. Padding materials for furniture and garment: PET high loft nonwovens, resinated, calendered, thermal bonded, and/or needlepunched.

Total Nonwovens Sales: $ 206.2 million  

The Freudenberg Politex Group has six production locations—two sites in Novedrate, Italy, where it is headquartered, one in Pisticci, Italy, one in Colmar, France, one in Lodz, Poland and one in Macon, GA (with Freudenberg Texbond). Freudenberg Politex is a world leader in the production of high-tenacity staple and spunbond polyester nonwovens, mainly used as reinforcements for bituminous roofing membranes, a core business. Other core markets include special polyesters for building materials and high loft nonwovens for furniture and apparel products.
 
In 2003, sales in the roofing business continued to grow, on the strong housing market. As a result FPV closed the year with a 9% growth in sales volumes, strengthening its worldwide share in the polyester roofing market.
 
To boost its construction business, FPV introduced in the first half of 2004 a new range of finished products. These include Velopar polyester nonwoven reinforcements that are flexible, lightweight and versatile; PhonoPar polyester nonwovens coupled with a synthetic protective film for use under floors; AcquaPar polyester nonwovens with special synthetic films to protection under roofs and foundations and ReflexPar, which added the benefits of a reflective surface to polyester for use under roofing tiles.
 
These specialty products, together with existing Ecozero for thermo-acoustic insulation, are expected to help FPV expand into a new market segment complementary to the core roofing business. This expansion will be helped by several capital expansion plans. A new reinforced spunbond line is set to come onstream in Pisticci early next year. Also, construction of a PET bottle recycling plant, with start-up expected in the first half of 2005, was begun in Colmar. The plant will have a capacity of 24,000 tons per year of recycled polyester flakes and will meet the needs not only of the Colmar plant but also FPV’s other global sites. Also included in this investment is the addition of an upstream integrated production cycle, similar to ones already installed in Novedrate and Pisticci.
 
FPV has been able to continue its growth into 2004 and expects results for the full year to be strong. This strength will be led by further increases in the core roofing business, as well as promising developments in the new segment of special polyester nonwovens for applications such as building materials in the construction industry.
 
Freudenberg Haushaltsprodukte KG
Mannheim, Germany
Telephone: 49-621-8773-0

Key Personnel
Hans-Georg Franke, president; Klaus-Peter Meier, EVP marketing, sales, product development; Alexander Moker, EVP materials management, Production; Gerhard Schmitt, EVP  finance, administration, HR

Plants
Augsburg, Germany; Arnhem, The Netherlands; Norrköping, Sweden; Roncello, Italy; Salo, Finland

Processes
Dry laid, thermal bonded, chemical bonded, needlepunched

Brand Names
Vileda, Wettex, O-Cedar, Roll-O-Matic, Enka, Patito,

Major Markets
Household wipes and cleaning instruments, scourers, gloves, mechanical laundry care

Location: Weinheim, Germany

Sales: $1.4 billion

Description: Key Personnel
Management Board: Stephan Tanda, president and CEO, Christoph Josefiak, managing director of technical; Walter Schwarz, managing director, North America; Georg Brasch, managing director, finance and administration
Worldwide Divisions: Andreas Kreuter and Gerhard Schaut general managers of interlinings; Bill Casey, general manager of tuft; Jörg Sievert, general manager of filter

Plants
Weinheim, Germany; Neuenburg, Germany; Kaiserslautern, Germany; Greetland, U.K.; Colmar, France; Barcelona, Spain; St. Omero, Italy; Cape Town, South Africa; San Martin/Buenos Aires, Argentina; Jacarei, Brazil; Suzhou, China; Changchun, China ; Nantong, China; Yang Mei Tao-Yuan, Taiwan; Tayuan, Taiwan; Durham, NC; Hopkinsville, KY; Pyungtaek, South Korea (Korea Vilene Company)

Processes
Drylaid staple fiber, wetlaid, spunbonded, meltblown, electrostatic spun microfiber, needlepunched, thermal bonded, chemical bonded, water entanglement

ISO Status
All locations are ISO 9001 and ISO 14001 certified; locations serving the automotive industry are QS 9000 certified; 25% of the plants are OSHAS 18001 certified

Brand Names
Vilene, Viledon, Vilmed, Pellon, MicronAir, Vlieseline, Vildona, Fliselina, Lutradur, Lutrasil, Evolon, Comfortemp, Novolon

Major Markets
Apparel interlinings, apparel outer fabrics, filtration, medical, protective clothing, automotive interior trim, electrical insulation, electrical specialties, home furnishings, industrial wipes, hygiene, shoe components, coating substrates, carpet backings, landscape fabrics, geotextiles, agriculture, furniture and bedding and industrial nonwoven specialties

With sales holding steady at $1.4 billion last year, Freudenberg Nonwovens, Weinheim, Germany, continues its reign as the world’s largest roll goods producer. The business highlights in 2004 include double-digit growth in Asia and Latin America as well as the roll out of some interesting new direct-to-market products in the filtration market, according to president and CEO Stephan Tanda.
 
Additionally, this spring Freudenberg completed its $40 million corporate restructuring program, announced in 2002, which was designed to meet customer demands more quickly. In a nutshell, the plan streamlined the company’s five divisions—interlinings, filter, tuft, hygiene/medical and technical nonwovens—to operate with increased customer focus. At the heart of this plan was reconfiguring the divisions to be responsible for product development, marketing, sales and services as well as for production and the plants and the lines themselves. Now, each Freudenberg facility is responsible for serving specific market segments rather than offering a full range of products. To achieve this, Freudenberg had to install new equipment and transfer some older equipment.
 
In Europe, the reconfiguration plan called for the replacement of two base lines in Kaiserslautern, Germany, which are now responsible for the tuft, filtration and hygiene/medical segments, the addition of a new printing line and a new filtration line as well as the modernization of two existing base lines in Weinheim, Germany, which now houses the interlinings and filtration businesses. Also as a result of the restructuring, Freudenberg’s Parets, Spain and Neuenberg, Germany facilities house the technical business, and the Greetland, U.K. facility is responsible for hygiene and medical products. Freudenberg’s Evolon microfiber nonwovens are made in Colmar, France.
 
Meanwhile, in the U.S., lines have been transferred from the Lowell, MA facility, which was closed by the end of 2004, to Durham, NC and Hopkinsville, KY. The transfer affected products targeting home furnishings and automotive applications.
 
Also included in the reconfiguration was the implementation of Six Sigma manufacturing practices across the entire group. This system enables Freudenberg to work on improving yields daily and has already led to a 10% capacity increase, according to Mr. Tanda.
 
Beyond North America and Europe, Freudenberg has announced plans to build a new line in Jacarei, Brazil, the facility’s fourth. “We are seeing good growth in Latin America and it is particularly a good time for growth in the hygiene segment there,” Mr. Tanda explained. Freudenberg’s Latin American operation also includes a plant in San Martin/Buenos Aires, Argentina.
 
In Asia, Freudenberg’s most recent expansion effort is a new spunbond line in Taiwan, announced in June. The 12,000-ton-per-year polyester spunbond line is set to start up by the end of 2007 in Ta-Yuan, Taiwan, where it will join a similar line. According to executives, the new line will enable Freudenberg to increase its production capacity for tuft backing substrates and enhance its global supply flexibility to its customers. The added capacity is expected to meet demand for the polyester-based products for the next eight to 10 years.
 
Another business being boosted in Asia is interlinings. In May, Freudenberg strengthened its position here through the purchase of Nantong Hymo Co., Nantong, Jiangsu Province. Purchased through Freudenberg’s joint venture with Japan Vilene, Freudenberg Vilene International, Nantong Hymo is the market leader in shirt interlinings in China as well as one of the leading finishing companies for woven and weft interlinings in China. It was established in 1985 and is today renowned in China and beyond for its high quality finishing technologies as well as for its exceptional service level and delivery reliability, according to Freudenberg. In 2004, Nantong Hymo generated $22 million in sales, produced more than 30 million square meters of interlinings and employed 292 employees.
 
The acquisition will extend the leading market position of Freudenberg & Vilene as dedicated suppliers to the garment industry and further speed its growth in Asia, the world’s  largest textile region. After completion of the acquisition, Freudenberg & Vilene’s interlining business will have some 1000 employees throughout Asia, will operate five factories—in Suzhou, China, Nantong, China, Seoul, Korea, Yang-Mei, Taiwan and Chennai, India—and will generate sales of $150 million.
 
Also reinforcing Freudenberg’s position in the Chinese interlinings market is its decision to add a fourth line in its Suzhou, China facility.
 
These investments follow the creation of a joint venture, announced in May 2004, in the filtration segment. Freudenberg, Japan Vilene and Chinese partners have formed Freudenberg & Vilene Filter (Changchun) Co. Ltd., which acquired the filtration business of Changchun Autofilter Company. This venture is supplying motor and cabin air filter housings as well as filter elements to leading automotive manufacturers in Northern and Western China and is helping fuel Freudenberg’s position in the Chinese automotives market, particularly with its micronAir cabin filters.
 
“Asia is growing across the board and we are positioning ourselves to benefit from it,” Mr. Tanda said. “We are increasingly becoming a global company with German roots.”
 
Globalization efforts have occurred throughout Freudenberg’s five business segments, which are now structured to span the globe. This view of each market allowed Freudenberg to respond quickly when the interlinings segment was hit by the U.S. textile industry’s migration to China. Not only did the aforementioned Chinese investment strategy begin, but also a downsizing of the North American facility was instigated, including the closure of a Nashville, TN-based customer service center. Europe continues to be in an in-between stage, according to Mr. Tanda, with some textile brands still manufacturing goods locally and others sourcing them from Asia.
 
Freudenberg’s tuft business, encompassing its spunbond polyester output, has been growing steadily at 2-3% annually but concerns over escalating raw material prices continue to be an issue, particularly in the automotives segment where price increases are hard to pass on. In fact, the automotives industry’s unwillingness to absorb price increases has led to the closure of several tier one and tier two suppliers, a situation that concerns Freudenberg executives. “You have to really watch payment schedules and monitor the financial health of your customers,” Mr. Tanda said.
 
In hygiene and medical, Freudenberg has avoided pricing issues by concentrating on more sophisticated, value-added products such as topsheets, barrier leg cuffs, acquisition layers and textile backsheets as well as products for incontinence and feminine hygiene and nonwovens for wound care applications.
 
Increasing in importance to Freudenberg is the filtration market, where it continues to roll out products and announce investment strategies to grow its business worldwide. On the new product front is micronAir Proline Diesel, which filters diesel particles out of the interior air of automotives. While only 40% of cars in the U.S. are equipped with interior filtration products, they have become standard on European and Japanese cars. Expansion of this market in the U.S. has reportedly been hindered by OEMs’ unwillingness to invest in features that are not safety-related or designed to increase the comfort or aesthetic qualities of the car. GMC’s Suburban and Tahoe sports utility vehicles are examples of two cars that once used a cabin air filtration system but now do not.
 
Now, Freudenberg is hoping to boost awareness of the benefits of these systems through a public relations effort designed to increase the role of its micronAir cabin filters in the U.S. The company has teamed with Detroit-based Bianchi Public Relations to work with OEMs to show them how the benefits of an interior filtration system outweigh their cost, often $10 or less. Bianchi will also promote consumer awareness of these systems. According to a consumer study conducted by The Doring Company on behalf of Freudenberg, some 82% of consumers said they would pay for the added value of an interior filtration system.
 
Freudenberg’s fifth segment, technical nonwovens, includes a wide range of smaller niche and specialty applications. In North America major areas of interest include fire blockers for the mattress industry—driven by state and federal regulations—window shades, automotive interior applications and hoodliners, while in Europe cable wraps, battery separators, automotive interiors, fiber-reinforced plastics and acoustics are showing promising activity. “These differentiated products can command some very attractive prices,” Mr. Tanda explained. “As our customers differentiate and expand their products, so can we.”
 
Speaking of product differentiation, Freudenberg continues to focus on its Evolon continuous filament spunlaced nonwoven. Launched in 1999, Evolon’s good drapability, soft feel, high tensile strength, excellent comfort properties and good launderability make it ideal for many applications. According to Mr. Tanda, recent progress has been made in the specialty wipes, antimite bedding, technical packaging and artificial leather markets as well as in four or five other undisclosed markets. “We are really examining one application at a time because each is so highly technical and requires a lot of development,” he said.
 
Currently, Evolon is produced on one line in Colmar, France, which continues to have plenty of available capacity for future growth.
 
Another focus beyond Freudenberg’s five key segments is Novolon, a new technology that can transform a two-dimensional substrate into a three-dimensional product to improve performance in outdoor gear, bedding, medical, filtration media and household cleaning applications. These fabrics are currently being made on a start-up line at Freudenberg’s Durham, NC facility, which deep molds both woven and nonwoven substrates to achieve the effect.
 
While officials expect that new technologies, like Evolon and Novolon, will be important to the future of the company, a focus on innovation throughout all business segments will ensure continued growth for this nonwovens leader, according to Mr. Tanda. And, as other companies grapple with capacity issues, Freudenberg can continue to focus its efforts on new products and technologies. “We have been able to escape some of the problems in the industry,” Mr. Tanda explained. “We don’t buy off-the-shelf equipment so we have avoided some of the capacity issues that have been plaguing the industry.”

Location: Weinheim, Germany

Sales: $1.4 billion

Description: "Key Personnel
Management Board: Stephan Tanda, president and CEO, Dr. René Wollert, CFO; Walter Schwarz, managing director, North America; Georg Brasch, managing director, supply chain and restructuring; Worldwide Divisions: Andreas Kreuter and Gerhard Schaut general managers of interlinings; Bill Casey, general manager of tuft and Jörg Sievert, general manager of filter

Plants
Weinheim, Germany; Neuenburg, Germany; Kaiser—slautern, Germany; Greetland, U.K.; Colmar, France; Barcelona, Spain; St. Omero, Italy; Cape Town, South Africa; San Martin/Buenos Aires, Argentina; Jacarei, Brazil; Suzhou, China; Changchun, China ; Nantong, China; Yang Mei Tao-Yuan, Taiwan; Tayuan, Taiwan; Durham, NC; Hopkinsville, KY and Pyungtaek, South Korea (Korea Vilene Company)

Processes
Drylaid staple fiber, wetlaid, spunbonded, meltblown, electrostatic spun microfiber, needlepunched, thermal bonded, chemical bonded, water entanglement

ISO Status
All locations are ISO 9001 and ISO 14001 certified; locations serving the automotive industry are QS 9000 certified; 25% of the plants are OSHAS 18001 certified

Brand Names
Vilene, Viledon, Vilmed, Pellon, MicronAir, Vlieseline, Vildona, Fliselina, Lutradur, Lutrasil, Evolon, Comfortemp, Novolon, Vitech, Celestia, Soundtex

Major Markets
Apparel interlinings, filtration, medical, protective clothing, automotive interior trim, electrical insulation, electrical specialties, home furnishings, industrial wipes, hygiene, shoe components, coating substrates, carpet backings, landscape fabrics, geotextiles, agriculture, furniture and bedding and industrial nonwoven specialties


Sales grew slightly for the world’s largest roll goods producer in 2005. Sales declines in Europe and the U.S., caused largely by the continued shifting of garment production into Asia, were offset by gains in Asia and Latin America, according to company spokesman Christof Schroeder.
 
In order to stave off increased raw material costs and competitive pressure in the automotive and textile markets, in October Freudenberg initiated a restructuring of its German nonwovens facilities. The plan will save Freudenberg €30 million from a combination of wage concessions, increases in weekly work hours, shift of labor intensive operations to Eastern Europe and staff cutbacks. The moves are designed to safeguard the German sites in the long term. “We have to operate more efficiently at our German sites and concentrate primarily on high technology production divisions there,” said Stephan Tanda, president and CEO of Freudenberg Nonwovens. “If we want to keep our German sites—and that is our firm resolve—then there is no alternative to the measures we have announced.”
 
The cutbacks in Germany involve 250 jobs in Weinheim,, 50 positions in Kaiserslautern and a further 20 in Bochum, Germany, so the total number of jobs to be cut is 320. Kaiserslautern, in particular, will benefit from the restructuring; a technology center at the site will be devoted to high technology automotive cabin air filter and spunbond production, which will create 58 news jobs at the site.
 
The difficulties that led up to this restructuring effort were largely caused by external factors including raw material cost increases of some €15 million per year. At the same time, considerable competitive pressure in the market has resulted in lower sales revenues, particularly in key European markets such as automotive and textiles, according to the company.
 
The impact of these factors have been cushioned to some degree by Freudenberg’s $40 million corporate restructuring program, announced in 2002 and completed last year, which was designed to meet customer demands more quickly by streamlining the company’s five divisions—tufts, hygiene/medical, filter, interlinings and technical nonwovens—to operate with increased customer focus. The plan called for a reconfiguration of the divisions to make them self-sufficient in product development, marketing, sales and services as well as responsible for the production and the plants and the lines. Now each Freudenberg facility is responsible for specific market segments rather than offering a range of products at each site. In Europe, the Kaiserslautern, Germany site is re­sponsible for the tuft, filtration and hygiene/medical divisions, Weinheim, Germany houses the interlinings and filtration businesses and the Parets, Spain and Neuenberg, Germany sites house technical nonwovens. The Greetland, U.K. facility is responsible for hygiene and medical products and Colmar, France holds Freudenberg’s Evolon business. The reconfiguration also called for the addition and replacement of lines throughout Europe.
 
In the U.S., lines have been transferred from the Lowell, MA facility, which was closed in late 2004, to Durham, NC and Hopkinsville, KY.
 
While the restructuring has not impacted Freudenberg’s operations beyond North America and Europe, the company has been focusing on these areas, which present strong growth prospects. In Latin America, Freudenberg has started a new line in Jacarei, Brazil, the facility’s fourth, to grow its hygiene business there. Freudenberg also has a plant in San Martin/Buenos Aires, Argentina.
 
In Asia, a new 12,000-ton-per-year spunbond line is set to come onstream in Taiwan in the first quarter of next year. Based on polyester technology, the new line will enable Freudenberg to increase its production capacity for tuft backing substrates and enhance its global supply flexibility to its customers. The added capacity is expected to meet demand for the polyester-based products for the next eight to 10 years.
 
In addition to capital investment, Freudenberg has been boosting its Asian business through acquisition. In May 2005, Freudenberg strengthened its position in China’s apparel interlinings business through the purchase of Nantong Hymo Co., in Nonton, Jiangsu Province. Nantong Hymo was the market leader in shirt interlinings in China as well as one of the leading finishing companies for woven and weft interlinings in China. It was established in 1985 and has become renowned in China for its high quality finishing technologies as well as for its exceptional service level and delivery reliability. In 2004, Nantong Hymo generated $22 million in sales and produced more than 30 million square meters of interlining materials.
 
The acquisition of Nantong Hymo has grown Freudenberg’s Asian interlinings business to now include more than 1000 employees throughout Asia where it operates five factories—in Suzhou, China, Nantong, China, Seoul, Korea, Yang-Mei, Taiwan and Chennai, India. It now generates sales of approximately $150 million in Asia.
 
Also in Asia, Freudenberg formed a joint venture in 2004 in the filtration segment. Freudenberg, Japan Vilene and Chinese partners formed a company called Freudenberg & Vilene Filter (Changchun) Co. Ltd., which acquired the filtration business of Changchun Autofilter Company. This venture is supplying motor and cabin air filter housings as well as filter elements to leading automotive manufacturers in North­ern and Eastern China and is helping fuel Freudenberg’s position in the Chinese automotives market, particularly with its micronAir cabin air filters.
 
By division, Freudenberg’s tuft business, which is centered around polyester spunbond technology, has witnessed strong sales in Asia but has been challenged by rising raw material prices, which have been hard to pass along to customers, as well as by the chapter 11 status of one of its key customers. On the plus side, however, the division is set to benefit  from new fine fiber polyester spunbond technology being installed in Kaiserslautern, Ger­many. This new line will start up during the first quarter of next year and will target a broad range of fine fiber durable polyester spunbond markets.
 
Increasing its importance to Freudenberg is the filtration market, where it continues to roll out products and announce investment strategies to grow its business globally. While sales growth continues in Latin America and North America, this division has seen heavy pricing pressures in Europe, particularly in Germany, amidst higher raw material costs.
 
Freudenberg continues to see movement of its interlinings business into Asia, a situation being remedied to some degree by its investment in Nantong Hymo, which has resulted in lower European and U.S. sales and a boosted Asian business. Freudenberg’s new product Vilene X!treme, which is being billed as the world’s first super elastic interlining with softness, resiliency, multifunctionality and good care properties, has received positive feedback from the market.
 
In hygiene and medical, Freudenberg continues to avoid mass production in commodity segments and instead has targeted niche applications such as topsheets, barrier leg cuffs, acquisition layers and textile backsheets as well as products for incontinence and feminine hygiene and nonwovens for wound care applications. These segments allow Freu­denberg to offer, and be rewarded for, innovation and value.
 
Freudenberg’s fifth segment, technical nonwovens, includes a wide range of smaller niche and specialty applications. In North America, major areas of interest include fire blockers for the mattress industry— driven by state and federal regulations—window shades, automotive interior applications and hoodliners, while in Europe, cable wraps, battery separators, automotive interiors, fiber-reinforced plastics and a­coustics are showing promising activity.
 
Beyond its five key divisions, Freudenberg continues to focus on two key specialty products—Evolon and Novolon. Evolon, made from continuous filament spunlaced nonwovens, features good drapabilty, soft feel and high tensile strength, making it ideal for many applications such as specialty wipes, antimite bedding, technical packaging and artificial leather. According to Mr. Schroeder, sales of this material are still below expectation, but the company is making good progress in a number of products. Meanwhile, Novolon, a technology that can transform a two-dimensional product into a three-dimensional object, is still in its development stage, being made on a start-up line in Durham, NC.

Location: Weinheim, Germany

Sales: $1.4 billion

Description: Key Personnel
Management Board: Bruce Olson, president and CEO, Dr. René Wollert, CFO; Georg Brasch, managing director; Worldwide Divisions: Dr. Heino Freudenberg and Gerhard Schaut, general managers of interlinings; Bill Casey, general manager of tuft, Dr. Jörg Sievert and Dr. Andreas Kreuter, general managers of filter, Christian Marx, general manager Nonwovens Europe, Juan Charlos Borchardt, general manager Latin America

Plants
Weinheim, Germany; Neuenburg, Germany; Kaiserslautern, Germany; Greetland, U.K.; Swindon U.K.; Colmar, France; Barcelona, Spain; St. Omero, Italy; Cape Town, South Africa; San Martin/Buenos Aires, Argentina; Jacarei, Brazil; Suzhou, China; Changchun, China; Nantong, China; Yang Mei Tao-Yuan, Taiwan; Tayuan, Taiwan; Durham, NC; Hopkinsville, KY and Pyungtaek, South Korea (Korea Vilene Company); Mumbai, India; Chennai, India

Processes
Drylaid staple fiber, wetlaid, spunbonded, meltblown, electrostatic spun microfiber, needlepunched, thermal bonded, chemical bonded, water entanglement

ISO Status
All locations are ISO 9001 and ISO 14001 certified; locations serving the automotive industry are QS 9000 certified; 25% of the plants are OSHAS 18001 certified

Brand Names
Vilene, Viledon, Vilmed, Pellon, MicronAir, Vlieseline, Vildona, Fliselina, Lutradur, Lutrasil, Evolon, Comfortemp, Vitech, Celestia, Soundtex

Major Markets
Apparel interlinings, filtration, medical, protective clothing, automotive interior trim, electrical insulation, electrical specialties, home furnishings, industrial wipes, hygiene, shoe components, coating substrates, carpet backings, landscape fabrics, geotextiles, agriculture, furniture and bedding and industrial nonwoven specialties

Sales increased slightly for the world’s largest nonwovens producer Freudenberg, Weinheim, Germany as the company continued to streamline its business and prepare it for the future under the direction of new chairman Bruce Olson. A former senior vice president at chemical manufacturer Rockwood Specialties, Mr. Olson replaces Stephan Tanda, who left the company in March to join Dutch chemical company DSM.
 
At the center of Freudenberg’s growth efforts is a restructuring program, announced in October 2005, affecting its German operations as well as a plan to streamline its North American businesses.
 
In Germany, Freudenberg reduced its workforce throughout its facilities in Weinheim, Kaiserslautern and Bochum in a move that will save an estimated €30 million annually. Meanwhile, in North America, Freudenberg has reduced the number of corporate layers within its business to speed the decision-making processes within its specific market areas. Instead of looking at its business through different technologies, Freudenberg North America is now grouping together its tuft businesses by the industries they serve. The result has been the formation of two groups—Automotive Business and Building Products Systems. “As we add new capacity, we think this structure is a better way to go to market,” said global general manager of Freudenberg’s tufts business, William Casey. “It allows us to take all of our technologies to market in one group.”
 
Mr. Casey took over responsibility for North America, in addition to his role at the helm of Freudenberg’s spunbond polyester tufts business, when North America president and CEO Walter Schwarz left the company in January.
 
Additional factors positively impacting Freudenberg’s business include €7 million upgrade to its wetlaid nonwovens line in Neuenburg, Germany and continuing growth in Asia, where it operates a number of joint venture and stand-alone enterprises.  Negative influences include continuing raw material concerns and pressure on the North America automotives market.
 
Freudenberg continues to focus on five global segments—tufts, filtration, interlinings, hygiene and medical and technical.
 
Freudenberg’s tuft division is set to benefit from the addition of a new fine denier line in Kaiserslautern, Germany that will allow it to make products with a number of polymers and shapes and essentially target a range of new market areas. Additionally, Freudenberg opened a new spunbond polyester line in Taiwan in March, which will allow it to expand capacity of its existing products. With 12,000 tons of capacity, the new line is Freudenberg’s largest of this technology and will mainly serve the Asian markets, according to executives.
 
Freudenberg’s filter division has benefited from the introduction of several new products, all based on in-house nonwovens technology, such as full synthetic media for oil and fuel filtration, new dust removal cartridges for air pollution control, new rigid filters and new pocket filters for the HVAC markets and new micronAir cabin air filters for the collection of fine dust. “All of these new products fall into Freudenberg’s core strategy to strengthen its market position in the global filtration market,” said company spokesman Christof Schroeder.
 
MicronAir cabin filtration systems for automotive interiors continue to be a bright spot for Freudenberg as their usage continues to grow throughout the world, activity that has been fueled by the establishment of new converting centers in Mexico, India and Slovakia, bringing it closer to customers.
 
Still, this segment is not without its problems. “The pricing pressure in the cabin air filter segment is extremely strong due to the strong requests from the automotive industry,” Mr. Schroeder explained. Freudenberg has responded to this pressure by offering a great variety of cabin air filters, which differ in price and quality and offer the customers the most suitable solutions.”
 
Meanwhile, in Asia Freudenberg’s filter business continues to benefit from its joint venture, formed in 2004 with Chinese partners, called Freudenberg & Vilene Filters, which acquired the filtration business of Changchun Autofilter Company. This venture is supplying motor and cabin air filter housings as well as filter elements to leading automotive manufacturers in Northern and Eastern China and is helping fuel Freudenberg’s position in the Chinese automotives market.
 
Another segment experiencing Chinese growth is interlinings, which has followed the apparel industry’s migration to Asia. While the sharp declines of this business in developed regions has slowed down, the shift to Asia is still ongoing and Freudenberg has responded to this through the acquisition of Nantong Hymo Co., a market-leading manufacturer of interlinings in China.  Since its acquisition in May 2005, Nantong Hymo has allowed Freudenberg’s Asian interlinings business to include more than 1000 employees throughout Asia where it operates five factories—in China (two), Korea, Taiwan and India.
 
In hygiene and medical, Freudenberg continues to avoid mass production in commodity segments and instead has targeted niche applications such as topsheets, barrier leg cuffs, acquisition layers and textile backsheets as well as products for incontinence and feminine hygiene and nonwovens for woundcare applications.
 
The fifth segment, technical, includes a wide range of smaller niche and specialty segments. One of these areas, battery separators, has benefited from the acquisition of SciMat, Ltd., Swindon, U.K.,  a world leader in finishing of battery separators.
 
Another strong market for Freudenberg is bedding and mattress, an area that has appeared on the radars of many nonwovens producers since antiflammability legislation was passed in the U.S. last year and enacted earlier this summer. For its part, Freudenberg offers a full range of tops, sides and bottoms of mattresses that allows bedding manufacturers to achieve the antiflammability standards issued by the Consumer Product Safety Commission that mattress materials not combust when subjected to heat for a set amount of time.
 
“We provide services that our customers would not be able to achieve certification without,” explained Mr. Casey, calling flame blocker mattresses a large market for nonwovens with high margins. “It’s really a challenge to do business in this marketplace because it’s taken so long for these regulations to come to light.”
 
Beyond, Freudenberg’s five key divisions is its Evolon business, which was first established in 1999 when the company began making the continuous filament spunlace nonwovens on a line in Colmar, France. Since then, the company has been quietly focusing on reducing the weight of this material, which features attractive drape and easy launderability, and promoting its benefits in markets that may not typically use nonwovens. Now, the company is finally looking realistically at plans for a second Evolon production line, probably in 2010, although the size and location of this new line has not been finalized.
 
“We are seeing Evolon as a great replacement for printable PVC,” Christof Schroeder said. “It is cost competitive and can take a lot of printing.” Additionally, the acoustical benefits of Evolon have made it popular in the automotives market.
 
Freudenberg’s Novolon technology, which can transform a two-dimensional woven or nonwoven substrate into a three-dimensional product to improve performance in a number of applications, is now being used by sister company Freudenberg Household Products, Augsburg, Germany, to produce household wipes.
 
Meanwhile, on the global front, Freudenberg continues its aggressive growth strategy throughout the world. In addition to investment in its Asian interlinings, filtration and tufts businesses, the company has recently taken steps to beef up its Latin American presence through a new joint venture with Ted Rad Cuyo (TRC), an Argentinean fiber supplier, called Bicomfiber S.A. Established in June, the new company will produce different types of bicomponent fibers for multiple purposes and applications.  TRC, the main shareholder of the new company, is one of the most important producers of polypropylene fiber for the hygiene market in Latin America. “We are proud of the new venture, which enlarges our involvement within the market in Latin America,” said Guillermo Kraves, president of TRC.
 
Freudenberg Nonwovens Latin America is the nonwovens regional market leader in non-commodity businesses. “We will continue to deliver different types of added value products to our customer. The raw material sourcing is a key part of our growth strategy,” said Juan Carlos Borchardt, president of Freudenberg Nonwovens Latin America. ""With this new joint venture we will be able to offer a complete package of different materials for the markets where we are presently active, being better prepared for the new challenges to come.”
 
Bicomfiber will be headquartered near Buenos Aires, Argentina, with an annual capacity exceeding 10,000 tons.
 
And, in a move to help it expand in Eastern Europe, Freudenberg Politex, its roofing and construction unit, opened the group’s first Russian plant in the Zavolzhie, Nizhniy Novgorod region in late 2006. The plant produces nonwoven backing for roofing membranes that have better insulation properties and a service life two to three times longer than that of the roofing boards used to date. This is the world’s largest and most modern production facility of its kind, according to the company.
 
The new plant belongs to the Freudenberg Politex Business Group headquartered in Novedrate, Italy. Some €15 million has been invested in the project, which was completed in the space of two years and has brought 40 jobs.
 
When announcing the new plant, Freudenberg executives referred to the region as a great growth area for a number of Freudenberg businesses and while further plans have not been announced for the region, executives have hinted that these are imminent.


Location: WEINHEIM, GERMANY

Sales: $1.45 billion

Description: Key Personnel
Management Board: Bruce Olson, president and CEO; René Wollert, CFO; Thomas Reibelt, CTO
Worldwide Divisions: Dr. Heino Freudenberg, general manager of interlinings; Dr. Jörg Sievert and Dr. Andreas Kreuter, general managers of filter; Christian Marx, general manager Spunlaid; Juan Charlos Borchardt, general manager Southern Hemisphere,;Helmut Beck, general manager industrial nonwovens

Plants
Weinheim, Germany; Neuenburg, Germany; Kaiser­slautern, Germany; Greetland, U.K.; Swindon U.K.; Colmar, France; Barcelona, Spain; St. Omero, Italy; Cape Town, South Africa; San Martin/Buenos Aires, Argentina; Jacarei, Brazil; Suzhou, China; Changchun, China; Nantong, China; Yang Mei Tao-Yuan, Taiwan; Tayuan, Taiwan; Durham, NC; Hopkinsville, KY and Pyungtaek, South Korea (Korea Vilene Company); Mumbai, India; Chennai, India

Processes
Drylaid staple fiber, wetlaid, spunbonded, meltblown, electrostatic spun microfiber, needlepunched, thermal bonded, chemical bonded, water entanglement

ISO Status
All locations are ISO 9001 and ISO 14001 certified; locations serving the automotive industry are QS 9000 certified; 21 out of 23 plants are OSHAS 18001 certified

Brand Names
Vilene, Viledon, Vilmed, micronAir, Vlieseline, Vildona, Fliselina, Lutradur, Lutrasil, Evolon, Comfortemp, Vitech, Celestia, Soundtex

Major Markets
Apparel interlinings, filtration, medical, protective clothing, automotive interior trim, electrical insulation, electrical specialties, home furnishings, industrial wipes, hygiene, shoe components, coating substrates, carpet backings, landscape fabrics, geotextiles, agriculture, furniture and bedding and industrial nonwoven specialties

Sales rose just 2% for the world’s largest roll goods producer Freudenberg Nonwovens. The Weinheim, Germany-based company reported that economic problems in the U.S. are impacting sales throughout the world and does not expect to see sales grow much more in 2008, according to CEO Bruce Olson.
 
“Two or three months ago, I would have been more optimistic about growth but we are starting to see negative effects in both the U.S. and in other regions—as a result of economic problems in the U.S.,” he said. “How we do going forward will depend on how severe the economic recession gets on a worldwide basis.”
 
While Mr. Olson declined to comment on his company’s earnings, he did say that there has been a serious erosion of profitability within the nonwovens industry during the past 18 months, which he blames largely on difficulty among producers to pass on raw material and energy price increases. “We are putting a lot of effort into raising prices. I am spending more and more of my time working with my sales people to more quickly and effectively implement price increases.”
 
Freudenberg Nonwovens announced its most recent price increase in early July when it said it would raise sales prices for its nonwoven products immediately due to raw material prices that have risen in excess of 25% since the beginning of 2008. According to executives, the decision to increase prices has been taken only after a number of other streamlining efforts have been executed.
 
Among these efforts was the closure of two lines in Freudenberg’s Hopkinsville, KY facility. One line produces staple fiber/binder bonded nonwovens and the other is an adhesive web operation. Both serve the North American automotive market and Freudenberg blamed the closures on declining production volumes as well as decreased profitability. Materials made on the two lines were supplying commodity materials for automotives and profitability in this area had deteriorated to the point where it made no point to participate. About 15-20% of the output on these lines was transferred to Durham, NC.
 
Following the shutdown, Freudenberg’s Filtration Division will continue its production in Hopkinsville, as will Freudenberg Vitech, L.P., which serves the North American automotive market. The spunlaid and staple fiber operations in Durham, NC will continue to serve the North American interlining, industrial and building products segments as well as the automotive market. While no plans have been finalized, Mr. Olson said efficiency levels in the Durham facility, which was once dedicated largely to interlinings, are being examined. With this business faltering in the U.S., the site is now oversized.
 
As it deals with challenges like raw material prices and improving efficiencies, Freudenberg’s business is not without its bright spots such as its European automotive business and some industrial nonwovens applications relating to infrastructure improvements, according to Mr. Olson. By region, Europe continues to outperform the U.S. while Asia is doing well from a sales standpoint; however, the effects of the negative U.S. economy are beginning to be felt around the world.
 
Set to benefit Freudenberg’s global nonwovens business is a new operational structure, a major priority of Mr. Olson’s since he joined the company in June 2007. Established in January 2008, the new structure consolidated the tuft division with the spunlaid activities of the hygiene and Evolon divisions into a new spunlaid division, which is now being headed by Christian Marx. Additionally, the staple fiber operations of the technical nonwovens and hygiene divisions were consolidated into the new global industrial nonwovens division, which is now headed by Helmut Beck. Freudenberg’s Interlining business, not affected by the restructure, forms the company’s third division under the leadership of Dr. Heino Freudenberg.
 
Due to the special regional conditions in Latin America and South Africa, Freudenberg’s nonwovens operations in those countries have been merged into one division headed by Juan Carlos Borchard. This division contains staple fiber and industrial application interests in the southern hemisphere. According to Mr. Olson this group was kept separate because it had been operating so successfully on its own prior to the restructure.
 
The new structure reportedly gives clearer accountability over who manages production assets throughout the business. “I found quite a complicated matrix where accountability wasn’t particularly clear as to who was responsible for production assets,” Mr. Olson explained. “From my perspective, we are now seeing production quality yields and seeing other improvements from having clearer accountability for assets.”
 
For instance, grouping tuft with the spunlaid divisions of hygiene and Evolon—the brand name for Freudenberg’s microfiber and bicomponent microfilament technology—made sense because the technologies share production lines. Under the old structure, it was unclear who was responsible for capital improvement and yield improvement projects on shared lines, such as one known internally as PK6, which makes microfiber products as well as Tuft products and underwent a major upgrade in 2007.
 
“Before the restructure, the tuft business was in charge of PK6 and the operators of this line had no incentive to use capacity from PK6 for Evolon even though it’s all spunlaid technology,” Mr. Olson explained. By grouping together the divisions, these operators are now more encouraged to devote output to microfiber applications, a profitable technology for Freudenberg.
 
Evolon is also made on a pilot size line in Colmar, France. Since its introduction in 1999, Freudenberg has been growing Evolon in a number of areas, many of which are new to the nonwovens industry. With more capacity on PK6 centering on this technology, executives expect it to expand even further, most likely to the point that larger investment supporting the technology will need to be made in the 2010-2012 time period, according to Mr. Olson.
 
Among the many applications for Evolon is signage. In fact, banners using Evolon were used by Palexpo at INDEX 2008 in Geneva, Switzerland. Selected in particular for its certified flame-retardant and unique matte look, Evolon was used in an attention-grabbing signage application comprising large, four-sided cubes measuring up to 130cm by 260 cm. Printed to display important directional information to the show’s 520 exhibitors and almost 12,500 visitors, each cube was suspended at a prominent point from the ceiling of the 50,000 square meter exhibition hall. Geneva-based Palexpo used its internal production capability to print and cut the Evolon material.
 
In announcing the restructuring, Freudenberg also said it would spin off its filter division in January 2009 to become a separate business group within the Freudenberg Group of companies. This decision has evolved from Freu­denberg’s business model, which favors small entrepreneurial companies. “It’s not unusual for Freudenberg to carve out a segment like that,” Mr. Olson said. “It’s been the experience that it grows more quickly based on that structure.”
 
Currently, a converting operation within Freudenberg’s nonwovens group, the filtration division converts nonwovens into finished filter products, which are sold to OEMs or, in some cases, directly on the retail market. When spun off, the division will be Freudenberg’s 15th subgroup company, not to mention one of Freudenberg Nonwovens’ largest single customers.
 
Filtration has grown significantly in recent years thanks not only to new product introductions but also to increased demand for cleaner air and water. One particularly nice growth area for Freudenberg has been its micronair filters, which began targeting car interior filtration and has now expanded into office machine filtration with the introduction of micronAir office  Fine Dust Filter. This consists of environmentally-neutral, fully recyclable nonwovens in a triple-layer construction, one layer of which contains electrostatically charged microfibers. Together, these layers permanently bind even the finest breathable ultra-fine particles, irrespective of their specific chemical compositions. With a filtering performance of well above 94%, the micronAir office printer filter captures even the smallest respirable particles.
 
Also benefiting Freudenberg’s filtration business is the acquisition of Spasciani Air Filter SpA in Milan. This takeover further expands Freudenberg Nonwovens' filter business and strengthens its operations in the European filter market. Spasciani Air Filter manufactures filters for general HVAC (Heating, Ventilation and Air Conditioning) and for industrial process ventilation. The company has around 50 employees in its Milan site.
 
In addition to adding to Freudenberg’s HVAC offerings, the acquisition gives the filtration division an Italian manufacturing facility from which to supply its Viledon cassette filters. “The takeover of Spasciani Air Filter operations will provide our customers with a seamless expansion of our one-source, air filter portfolio,” said Dr. Jörg Sievert, managing director of the filtration division.
 
Meanwhile, Freudenberg’s interlining division, once a core business, continues to face stiff competition in Asia as apparel production in the U.S. and Europe is increasingly being outsourced there. Freudenberg makes nonwoven ma­terials for interlinings in five factories in China, Korea, Taiwan and India and has nearly 1000 employees there. Still, as local companies have become more sophisticated in their production, it has become more difficult for foreign companies—like Freudenberg—to compete.
 
In addition to localization challenges, the interlining business has been negatively impacted by economic pressures, which have decreased clothing sales around the world.
 
On the industrial side, Freudenberg has been boosting this business with a number of new investments including a €7 million upgrade to a wetlaid line in Neuenberg, a new needlepunch line for automotive interior applications in China as well as increased production for filter media in Korea.
 
“These are three major investments we are currently undertaking,” Mr. Olson explained. “If you look at our capital budget, we tend to invest where it makes sense to expand but also invest quite a bit to improve our process technologies for better yields and higher speeds—all of the things you do when faced with a market with deteriorating margins.”
 
Freudenberg’s spunlaid division continues to face challenges in some areas while growing in new areas such as microfiber and fine filament technology. In its continued effort to develop new markets for its nonwovens, Freudenberg has commercially launched a post consumer recycled product range in the U.S. These PCR products are now available in a variety of weights and widths for all market segments and have similar product properties as all other high quality Lutradur products.
 
The PCR polyester nonwoven products are made using PCR chips made from recycled polyester bottles that are being collected and reclaimed everyday throughout the country. Each square yard of the 85-gram nonwoven fabric contains one PET bottle that is not being sent to a landfill.


Location: WEINHEIM, GERMANY

Sales: $1.45 billion

Description:

Key Personnel

Management board: Bruce Olson, president and CEO; Rene Wollerg, CFO; Thomas Reibelt, CTO. Worldwide Divisions: Heino Freudenberg, managing director interlinings; Jörg Sievert and Andreas Kreuter, managing directors of filter (as of Jan 1, 2009: Managing Directors Freudenberg Filtration Technologies); Thomas Reibelt, managing director Spunlaid; Juan Charlos Borchardt, managing director Southern Hemisphere; Helmut Beck, managing director industrial nonwovens

Plants
Weinheim, Germany; Neuenburg, Germany; Kaiserslautern, Germany; Greetland, U.K.; Swindon U.K.; Littleborough/UK; Colmar, France; Barcelona, Spain; St. Omero, Italy; Cape Town, South Africa; San Martin/Buenos Aires, Argentina; Jacarei, Brazil; Suzhou, China; Changchun, China; Nantong, China; Yang Mei Tao-Yuan, Taiwan; Tayuan, Taiwan; Durham, NC; Hopkinsville, KY; Pyungtaek, South Korea; Chennai, India

Processes
Drylaid staple fiber, wetlaid, spunbonded, meltblown, electrostatic spun microfiber, needlepunched, thermal bonded, chemical bonded, water entanglement

ISO Status
All locations are ISO 9001 and ISO 14001 certified; locations serving the automotive industry are QS 9000 certified; 21 out of 23 plants are OSHAS 18001 certified

Brand Names
Vilene, Viledon, Vilmed, micronAir, Vlieseline, Vildona, Fliselina, Lutradur, Lutrasil, Evolon, Comfortemp, Vitech, Celestia, Soundtex

Major Markets
Apparel interlinings, filtration, medical, protective clothing, automotive interior, electrical insulation, electrical specialties, home furnishings, industrial wipes, hygiene, shoe components, coating substrates, carpet backings, landscape fabrics, geotextiles, agriculture, furniture and bedding and industrial nonwoven specialties

The global economic crisis is in reality just the latest, albeit very serious, challenge confronting the Nonwovens Industry, according to Freudenberg Nonwovens. Many segments of the industry had been experiencing significant pressure on operating margins since the 2006-2007 timeframe brought on by rising raw material and energy costs which, despite generally strong volume growth, were difficult to pass on in the form of higher pricing due to excess production capacity.

The collapse in the demand for nonwovens, which began during the second half of 2008 and greatly accelerated during the first quarter of 2009, created an even more urgent need for restructuring, portfolio management and cost control measures.

Fortunately, Freudenberg Nonwovens had defined and begun implementing many of these measures during 2008 following the completion of its strategic planning process earlier in the year. This, to some extent, has helped Freudenberg get ahead of the curve in responding to the 20-25% decline in sales which it has experienced during the first half of 2009. This sharp decline in sales, which has been more or less experienced across the diverse portfolio of segments in which Freudenberg is active, does appear to have reached a “stable” bottom during the last few months.

“It is much too early to predict when we will actually begin to see a sustainable recovery in demand,” said Bruce Olson, CEO and president of Freudenberg Nonwovens. “Nevertheless, I am confident that Freudenberg Nonwovens will emerge from the current economic crisis as a stronger and more focused producer, given the adjustments we are making to both our business portfolio and cost structure.”

Reacting to the lower demand for nonwovens in the U.S., Freudenberg has moth-balled a polyester production line in Durham, NC in response to a significant decline in demand from its automotive customers. In Europe, FV has taken the decision to consolidate polyester capacity onto a newer and larger production line by shutting down an older and less efficient line. A commoditized segment of the polypropylene hygiene market is under review and potential adjustments to production capacity and cost structures at Freudenberg’s facility in Kaiserslautern, Germany are being analyzed. With regard to FV’s global spunlaid production capacity footprint, it is worth mentioning the significant investment Freudenberg made to increase polyester capacity at its Taiwan Spunlaid joint venture. This new line, PT 2, came onstream during the second half of 2007 and is helping Freudenberg to drive the profitable growth of its Asian-Pacific business that is taking place despite the current global economic crisis.

“With regard to spunlaid technology, we will continue to invest to lower production costs and improve both the uniformity and performance our polyester product line,” Mr. Olson explained. “As an example, we have developed a new spinning process in Asia for bicomponent polyester fibers, which allows us to change the surface appearance of our products in a way that will open up a number of new applications for our spunlaid polyester products.”

In addition, Freudenberg is working hard to incorporate higher and higher quantities of PCR (post-consumer recycled) polyester flakes into its products to meet the growing demand for “green,” sustainable Nonwovens. A good example of this is Lutradur Eco product line that has been recently launched in the U.S. and has qualified for LEEDS points. Last but not least, FV will continue to invest in the development of new fine-fiber and microfilament technologies that can significantly increase the market for our spunlaid products.

“We have made a significant investment to convert one of our polypropylene spunlaid lines in Kaiserslautern into a line capable of producing a wide range of fine-fibre products that we currently have under development” said Mr. Olson. The interest in the Evolon microfilament technology continues to grow to the point where the company will likely need to consider an investment to expand its production capacity during the next 12-18 months.

As noted above, consequent portfolio management has played an important role in making certain that Freudenberg Nonwovens will emerge from the current economic crisis as a stronger and more-focused supplier to the Nonwovens industry. The first part of this process was to identify those businesses within the portfolio which could not be restructured quickly or were cost-effective enough to meet the profitability targets we have set for ourselves in order to divest or close these businesses as quickly as possible. A good example of this was the company’s decision to close at the end of the first quarter of 2009, the staple-fiber production facility in Durham, NC, which had been stagnating and declining in profitability for several years.

However, portfolio management involves much more than just the divestment and/or closure of non-performing businesses. It also entails identifying those businesses within the portfolio that offer good chances for future profitable growth and making certain that adequate resources are being invested in a focused way to help nurture and scale up these businesses. Fine-fiber and microfilament spunlaid products are good examples of such businesses. In addition, Freudenberg sees good chances to expand the supply of staple fiber products to meet the growing demand in the automotive interiors, personal hygiene, medical, battery separator and electro-cable market segments.

“We also expect to continue investing to move downstream by adding more and more value to our base products through finishing and converting” Mr. Olson concluded. “This already plays an important role in our supply of products to the battery industry. A more recent example is the investment we made in a new facility in Littleborough, U.K. to support production of our adsorptives line which are products finished with activated-carbon technology that find use in medical and a variety of technical applications.”

At the beginning of 2009, Freudenberg spun off its filter division into a separate business group within the Freudenberg Group of companies, called Freudenberg Filtration Technologies. This decision evolved from Freudenberg’s business model, which favors small entrepreneurial companies.

Sales: $1.53 billion
 
Location: Weinheim, Germany
 
Description: Key Personnel 
Management Board: Bruce Olson, CEO; René Wollert, CFO; Frank Heislitz, CTO 
 
Plants 
Weinheim, Germany; Neuenburg, Germany; Kaiserslautern, Germany; Greetland, Swindon, Littleborough, UK; Colmar, France; Parets, Spain; Sant’Omero, Italy; Cape Town, South Africa; San Martin/Buenos Aires, Argentina; Jacarei, Brazil; Suzhou, China,; Nantong, China; Yang Mei Tao-Yuan, Taiwan; Tayuan, Taiwan; Durham, NC; Hopkinsville, KY and Pyungtaek, South Korea; Chennai, India 
 
Processes 
Drylaid staple fiber, wetlaid, spunbonded, meltblown, electrostatic spun microfiber, needlepunched, thermal bonded, chemical bonded, water entanglement 
 
ISO Status 
All locations are ISO 9001 and ISO 14001 certified; locations serving the automotive industry are TS 16469 certified; 21 out of 23 plants are OSHAS 18001 certified 
 
Brand Names 
Vilene, Viledon, Vilmed, micronAir, Vlieseline, Vildona, Fliselina, Lutradur, Lutrabond, Lutrasil, Lutraflor, Evolon, Comfortemp, Celestia, Soundtex 
 
Major Markets 
Apparel, automotive interiors, energy, filtration, geotextiles, home & industrial furnishings, medical, personal care 
 
The world’s largest nonwovens producer, Freudenberg, reported increased sales in 2010, thanks to a strong recovery in the global economy. The group’s nonwovens business area combines Freudenberg Nonwovens, Freudenberg Politex, focused on the construction industry, and Freudenberg Filtration Technologies, Freudenberg’s filtration business, which was spun off from Freudenberg Nonwovens in January 2009. 
 
Based in Weinheim, Germany—with plants all over the world—Freudenberg Nonwovens develops, produces and markets nonwovens for a wide range of applications. Nonwovens made by Freudenberg are used as interlinings in the apparel industry as well as applications in the energy market such as battery separators and water blocking tapes for electrical cables. Other markets include medical—focused on traditional wound care applications and ostomy filters—as well as personal care where nonwovens are used in a number of diaper and feminine hygiene applications. Freudenberg Nonwovens also serves the automotive market with products for interior applications such as primary backings for tufted carpets and headliners. 
 
“Freudenberg Nonwovens was positively impacted during 2010 by the stronger-than-expected recovery in the overall global economy which drove an increase in sales of about 15%,” says CEO Bruce Olson. “We also experienced a significant improvement in operating profits due to this strong increase in sales and the positive impact of restructuring and portfolio management measures which were implemented during 2008 and 2009. In this sense, we have experienced both a cyclical and structural recovery in our overall performance.” 
 
To continue these positive results, Freudenberg Nonwovens has been implementing a new organizational structure during the last two to three years that will likely take another one or two years to fully implement. The model has the company moving toward a more regional business unit structure supported by a matrix of strategic marketing units. The regional business units are fully accountable for the operating results within their regions and the marketing units are responsible for the development and global implementation of strategy in the major markets upon which the company focuses. 
 
“Because of the significant differences in process technology and markets served between our spunlaid and staple fiber businesses, we are establishing separate regional business units for each,” Olson explains. 
 
Core markets for Freudenberg Nonwovens’ spunlaid business include automotive interiors, filtration and home and industrial furnishings. In the automotive interiors market, the key factor driving demand for spunlaid nonwovens is the number of automobiles being built on a global basis. Because tufted-carpet systems tend to be used in larger, “luxury” models, the build rate of these types of automobiles is particularly important. In the filtration market, Freudenberg supplies material to its sister company Freudenberg Filtration Technologies where the main use is cabin air filters for the automotive OEM and OES segments. In the home and industrial furnishings market, the major application is a primary backing for carpet tiles. Carpet tiles are used in commercial and institutional buildings as an alternative to broadloom carpets and other flooring systems. 
 
After a couple of tough years, executives report recovery across most segments for spunlaid nonwovens, particularly the automotive interiors and home and industrial furnishings markets. In late 2010, this rebound influenced the company to restart a spunlaid line in Durham, NC, USA, which had been moth-balled during the recent global economic crisis. Additionally, Freudenberg Nonwovens has done some debottlenecking on its newest spunlaid line in Taiwan, which was started up in 2007. Due to the continued strong growth being forecasted in the Asian region, plans to install a third production line in Taiwan are being examined. 
 
“We have invested in the debottlenecking of PT 2 because this line, as well as PT 1, is completely sold out,” Olson adds. “We are currently doing pre-engineering work on a third line for Taiwan (PT 3). We will make a final decision on the timing for this investment no later than the end of this year.” 
While the spunlaid regional business unit in Asia is the smallest of Freudenberg’s three global units, it is growing much more quickly than the larger European and North American units. 
 
In Europe, Freudenberg Nonwovens continues to operate several spunlaid lines. As in the US, Freudenberg Nonwovens was forced to temporarily idle a polyester spunlaid line in Europe amidst the economic downturn but got that line running again in March 2010. Meanwhile, the company continues to review its presence in a number of markets, particularly those deemed to be commoditized. The company has exited polypropylene commodity markets for hygiene but continues to focus on niche hygiene markets as well as automotives, carpet backings and geotextiles. 
 
Also included in Freudenberg’s Spunlaid division is Evolon, the company’s brand name for its specialty, bicomponent microfilament spunlaid product—which continues to perform well in many technical areas. Currently, producing the material in Colmar, France, the company is looking into ways to debottleneck and expand the capacity of this line to support growth in a number of markets. 
 
Growth opportunities also exist in the staple fiber business. Major opportunities in this business include automotive headliners, battery separators, water blocking tapes for cable wrap, advanced wound care, ostomy bag filters and acquisition and distribution layers for baby diapers and feminine hygiene items. 
 
In tufted automotive interior carpet systems, Freudenberg Nonwovens continues to have a leading position supplying spunlaid primary and secondary backings. To defend itself against lower cost needlepunch carpet systems, Freudenberg has introduced the patented Lutraflor system which is a composite spunlaid/needlepunch staple fiber construction offering better performance and significant weight reduction versus current needlepunch carpet flooring systems. 
 
Asia continues to be a growing market in a number of staple fiber application areas. The company has joint ventures with Japan Vilene in Hong Kong, China, Taiwan and Korea. While these ventures were initially started to help serve customers in the apparel market, they have expanded to serve a number of other markets. 
 
Freudenberg’s largest market continues to be apparel and, despite migration from the US and Europe to Asia, it continues to be strategically important. Freudenberg Nonwovens has a strong presence in China where it has been making staple fiber nonwovens and other interlining materials for many years, operating a wholly-owned subsidiary there since 1998. 
 
“Freudenberg has established itself as the leading, full-line interlining solution provider in Asia for the branded, value-driven global apparel producers who have outsourced production from Europe and the US,” Olson says. “We believe the migration to Asia has reached an equilibrium point and may begin to reverse itself, particularly as it relates to ‘speed-fashion’ producers, due to rapidly increasing labor costs and the demand to serve local markets quickly. We do not expect a full-scale reversal of the migration trend.” 
 
From a product standpoint in the apparel market, Freudenberg has been focusing most of its attention on broadening its product line beyond nonwovens for ladieswear, which is where the company started. Efforts continue in broadening and strengthening product line offerings for the shirt segment of the apparel market. In the past 12-18 months, Freudenberg has added significant technical, sales and marketing resources in the menswear segment to help it develop new and improved canvas and weft-inserted products and substantially increase sales. 
 
Apparel is not the only area where Asian growth is a focus. In fact, through a stream of joint ventures and wholly-owned subsidiaries throughout the region, Freudenberg has a strong foothold in this important emerging economy. 
 
“Because we have been active for so long in Asia and have benefitted from joint venture partners such as Japan Vilene Company and Far Eastern, we have not really faced many cultural challenges in penetrating the Asian market,” Olson says. “We have also worked very hard at developing and promoting local people into key management roles rather than trying to run our businesses with too many German and Japanese expats.” 
 
Focusing on exploiting its businesses globally will continue to help Freudenberg Nonwovens grow its business moving forward. Additionally, the company will rely on diversity, flexibility and adding value in the long term. “Given the relative maturity of the technology for producing nonwoven base materials, we will continue to diversify our business portfolio to become a global provider of performance technical textile solutions,” Olson concludes. “In this regard, we will place more and more focus on adding value through the downstream converting of base technical textile materials which we will source using clear ‘make versus buy’ criteria.”
Weinheim, Germany
www.freudenberg-nw.com
2011 Nonwovens Sales: $1.48 billion

Key Personnels: Bruce Olson, CEO; René Wollert, CFO; Frank Heislitz, CTO

Plants: Weinheim, Germany; Neuenburg, Germany; Kaiserslautern, Germany; Greetland, U.K.; Swindon, U.K.; Colmar, France; Parets, Spain; Milano, Italy; Hong Kong, China; Suzhou, China; Jiangsu, China, Moriyama, Japan; Sashima, Japan; Tokyo, Japan; Mahape, India; Chennai, India; Pyungtaek, South Korea; Yang Mei Tao-Yuan, Taiwan; Tayuan, Taiwan; San Martin/Buenos Aires, Argentina; Durham, NC; Hopkinsville, KY; Jacarei, Brazil; Cape Town, South Africa

Processes: Drylaid staple fiber, wetlaid, spunbonded, meltblown, electrostatic spun microfiber, needlepunched, thermal bonded, chemical bonded, water entanglement

ISO Status: All locations are ISO 9001 and ISO 14001 certified; locations serving the automotives industry are TS 16469 certified; 21 out of 23 plants are OSHAS 18001 certified

Brands: Celestia, Comfortemp, Evolon, Lutradur, Lutrasil, Soundtex, Vildona, Viledon, Vilene, Vilmed, Vlieseline

Major Markets: Automotive, apparel, energy, filtration, geotextiles, home and industrial furnishings, medical, personal care

As the leading nonwovens producer with a hand in many major markets, Freudenberg continues to make strategic investments that will expand its global reach while also strengthening its current capabilities. Divided into three separate business groups that operate independently (Freudenberg Nonwovens, Freudenberg Politex and Freudenberg Filtration Technologies), the group is on the cutting edge of the nonwovens industry, raking in €1.14 billion ($1.48 billion) in total nonwovens sales in 2011.

Freudenberg Nonwovens sales grew 4.8% in 2011 to €663.7 million. While sales in interlinings and industrial nonwovens were stagnant, the company’s spunlaid business in Europe, the U.S. and Asia developed well, according to the company.

“Overall, we are pleased with our performance in the 2011 financial year,” says René Wollert, CFO, Freudenberg Nonwovens. “However, all divisions had to cope with rising raw material prices. Furthermore, the disastrous earthquake in Japan impacted business in Asia, particularly regarding products for the automotives industry. These difficulties were compounded by the continuing euro crisis, which is affecting sales in Europe in particular.”

Regarding specific nonwovens markets, Wollert says the global interlinings business is suffering from consumer restraint in all regions, requiring further capacity adjustments, especially in Europe and Asia. “After a very good first six months in 2011, Industrial Nonwovens felt the effects of the EU financial crisis in some segments during the second half of the year,” he adds. “Efforts continue to harness the growth potential in the energy sector (particularly in regards to separators for lithium-ion batteries) and for various new technical specialties.”

The company’s spunlaid business has grown in all areas, particularly following the recovery of the automotive industry. “The rise in raw material prices had a negative influence on profitability as market prices could only offset a share of the higher raw material cost,” Wollert notes.

The Interlinings Division continues to expand its menswear business, extending its product range and investing further in sales expertise. The company established a new sales company in Italy with Marelli & Berta Interfordere in 2011, looking to strengthen its position as a market leader in the menswear segment and the larger apparel industry with innovative products such as Viltec, which was patented in 2011, as well as two other patented innovations that will come to market in 2012 and 2013.

Meanwhile, Wollert says the polyester spunlaid business in Europe, Asia and the U.S. continues to be very strong. In Asia in particular there is significant growth potential for spunlaid applications triggered by rising demand. “A new product range for sports shoes has reinforced the market position in Asia,” Wollert says. “Business with environmentally-friendly spunlaid products is also growing in North America and Europe as the automotive sector recovers. The business group has been very successful in developing ‘green’ products based on recycled polyester. A new award-winning generation of automotive carpets with significant weight-saving potential named Lutraflor has been launched.”

Significant investments are planned in capacity extension of polyester spunlaid in Asia and a debottlenecking of the company’s Evolon operation in Colmar, France.

Regarding other future prospects, Wollert says the energy sector is a key future market for Freudenberg and Industrial Nonwovens is investing in forward-looking technologies. For example, a coating line for lithium-ion battery separators was commissioned last year. “Momentum on industrial nonwovens markets has become significantly more dynamic as a result of the increasing numbers of electric cars,” notes Wollert. “Growing orders for fuel cell components such as gas diffusion layers also call for process optimization and investments.”

The company commissioned its coating plant for lithium-ion battery separators at the end of last year. However, competition in battery separators for Ni MH cells is intensifying, particularly in Asia, adds Wollert. “We are currently developing new separators for lithium-ion batteries with product characteristics that significantly enhance the safety and operating life of the lithium-ion cells.”

The company also invested in a new cable coating plant in Spain—a signal for further growth in Europe.

In the medical sector, Freudenberg Nonwovens is working on developments for advanced wound care. “Modern wound management seeks to keep the wound moist in order to accelerate the healing process. This presents a very demanding challenge for the nonwovens used in such treatments,” says Wollert.

Regarding hygiene, Freudenberg Nonwovens laid the foundations for further growth in this sector in 2012 with two new hygiene lines in Korea, which were successfully commissioned in April 2011. By the second half of 2011 the capacity utilization rate was already very good, says Wollert. “In the hygiene sector, Freudenberg is focusing on special acquisition/distribution layer products based on staple fiber technology.”

Recognizing broad potential in developing markets, Freudenberg continues to grow its presence in key regions. “We are continually expanding our activities in China and India and will be providing these markets, which have an increasing demand for state-of-the-art technical solutions, with locally manufactured products,” says Wollert. Other future markets of interest include Indonesia, Brazil and, in the mid-term, Russia, he adds.

Freudenberg Nonwovens is also addressing the issue of sustainability “with great vigor,” says Wollert. “We are developing environmentally-friendly products and our carbon footprint already plays a role in our production processes. Lutraflor, for example, which is used for automotive carpeting and produced using a deep-draw process, is manufactured without any chemical additives and is extremely lightweight. Another new development is natural fiber-based nonwovens used in side panel applications in the automotive industry.”


Freudenberg Politex
Novedrate, Italy
www.freudenbergpolitex.com

Sales for Freudenberg Politex in 2011 reached €223 million, compared to €204 million in 2010. “In a very challenging global environment we closed 2011 with satisfactory results in terms of sales and market shares, maintaining a minimum level of profitability,” says Richard Shaw, president and CEO. “We were able to partially compensate for the dramatic raw materials price increases thanks to different actions focused on process optimization and cost savings, in addition to unavoidable sales price increases.”

In the past few years the company has carried out rationalization projects in all its facilities, in particular in European plants. In addition, the company has installed a spunbond line in its Russian factory in Nizhniy Novgorod region, which will come on-stream in September 2012.

As a whole, the construction market remains very slow in most regions Freudenberg Politex operates. “In particular the trend of new construction is negative in most mature countries and the demand for roofing reinforcements is mainly fed by repair and renovation works,” says Shaw. “The situation is deteriorating particularly in Mediterranean countries, slowing down also in Central Europe. Northern Europe and North America are performing better but are also somehow flat, while in growing economies the market is sustained by new constructions following the need of modernization.”

The company says demand for sustainable products has contributed to the further growth of environmentally friendly construction materials. “This is why our efforts in research and product development are continuously focused on alternative raw materials and finished products, which allow us to offer solutions providing advanced technical performances, but also allowing the building sector to contribute to environmental protection,” says Federico Pallini, business director.

As Freudenberg Politex moves forward, top considerations will include customer orientation, innovation and technical leadership, as well as environmental stewardship.


Freudenberg Filtration Technologies
Weinheim, Germany
www.freudenberg-filter.com

In 2011 Freudenberg Filtration Technologies brought in €258 million in sales, compared to €241 million for 2010. Positioning itself for future growth in the filtration sector, Freudenberg Filtration Technologies India Private Ltd. signed an agreement earlier this year to acquire the business of Pyramid Filters Private Ltd. Based in Pune, Freudenberg Filtration Technologies India provides highly efficient industrial and automotive filter elements and systems, as well as globally patented system solutions for capacity and efficiency enhancement in gas turbines and compressors. Pyramid Filters develops and produces air filter elements and systems for cleanroom applications in the pharmaceutical, medical, food and chemical industries.

At the time of the acquisition, Andreas Kreuter, managing director of the global Freudenberg Filtration Technologies Group, said, “Founded in 1998, Pyramid Filters enjoys an excellent reputation in India, thanks to a comprehensive HEPA filter range and renowned services. Based on Pyramid’s strong market position, we will be able to add new products to our already broad portfolio and offer our customers further services.”

In February 2011, Freudenberg Filtration introduced Viledon Hydrotexx ECO, green filtration media made with post-consumer recycle (PCR) polyester. Extending the lifecycle of an original product for reuse into another application, PCR comes from converting used polyester bottles into a raw material that can be fed into the manufacturing process. About 23% of all polyester bottles in the U.S. are recovered through recycling and reprocessing.

According to the company, Hydrotexx ECO was designed to respond to the green-minded consumers in the Pool & Spa marketplace. The product has additional potential applications in air and liquid filtration, pleat media, pre-filter and composite support substrates.
Weinheim, Germany 
www.freuenberg-nw.com 
2012 Nonwovens Sales: $840 million 
 
Key Personnel: Bruce Olson, CEO; Dr. René Wollert, CFO; Dr. Frank Heislitz, CTO 

Plants: Weinheim, Germany; Neuenburg, Germany; Kaiserslautern, Germany; Greetland, U. K.; Swindon, U. K.; Littleborough, U. K. Colmar, France; Parets, Spain; Sant‘ Omero, Italy; Cossato, Italy; Hong Kong, China; Suzhou, China; Nantong, China; Chennai, India; Pyungtaek, South Korea; Yang Mei, Taiwan; Tayuan, Taiwan; San Martin/Buenos Aires, Argentina; Durham, NC; Jacarei, Brazil; Cape Town, South Africa 
 
ISO Status: All locations are ISO 9001 and ISO 14001 certified; locations serving the automotives industry are TS 16469 certified; all sites are OHSAS 18001 certified. 
 
Processes: Drylaid staple fiber, wetlaid, spunbonded, meltblown, needle-punched, thermal bonded, chemical bonded, water entanglement 
 
Brands: Celestia, Comfortemp, Evolon, Lutradur, Lutrasil), SoundTex, Vildona, Viledon, Vilene, Vilmed, Vlieseline, Marelli & Berta 
 
Major Markets: Automotive interiors, apparel, energy, geotextiles, building interiors, medical, hygiene and special applications. 
 
The varied slate of investments announced recently by the world’s largest nonwovens producer include an expansion of the company’s proprietary microfiber Evolon technology in Colmar/France and the creation of a recycling unit in Kaiserslautern, Germany. Additionally, Freudenberg Nonwovens, Weinheim, Germany, has continued to focus on new product development and recent introductions have included Vildona airliner 2.0 for waterproof and breathable shoe soles and uppers, Viledon battery separators and Lutradur ECO made with Repreve. 
 
“Business has been stable and on plan,” says General Manager of North America, John McNabb.“I think the industry in general has recovered.” 
 
Freudenberg’s Nonwovens business operates in a number of markets including consumer products for shoe and hygiene applications, battery separators, automotives and medical products where it produces products made through a number of technologies including polyester spunlaid, drylaid staple fiber, electrostatic spun microfiber (Evolon, needlepunch, thermal bonded, chemical bonded and water entanglement in plants located around the world. 
 
In recent years, Freudenberg has expanded its offerings of products made from post consumer recycled (PCR) materials through its Lutradur Eco product range. 
 
“Freudenberg is the leading spunbond company to offer post consumer recycled materials in its products,” McNabb says. “For us, this has been driven by a desire to be green, not a lower cost products.” 
 
At IDEA 2013 in April, Freudenberg introducing its eco-friendly nonwoven product Lutradur ECO, made with Repreve recycled PET resin. Repreve is a brand made with recycled materials, including plastic bottles. Unlike any other recycled ingredients, Repreve is made with the highest quality standards in the industry, and certification and verification that ensure product integrity. Lutradur ECO has the same outstanding product properties such as dimensional stability, high temperature resistance, non-fray properties and surface uniformity, only it’s better for the planet thanks to Repreve. Lutradur® ECO is suitable for many applications, including wall covering substrates, carpet backing, landscape and geotextiles, green roof systems, building and construction, coating and printing substrates and many other end uses. 
 
Freudenberg’s commitment to being green can also be seen through its commitment to achieving zero landfill status at as many of its global plants as possible since 2004. Calling it a “constant effort,” McNabb reports that Freudenberg has been steadily decreasing its landfill contributions by recycling internal waste back into its products. 
 
These efforts are sure to be enhanced through an investment, completed this year, in a new unit that allows excess materials, rejected during the production, to be reused down to the last fiber. This investment, located in Kaiserslautern, Germany, is valued at €700,000.“At Kaiserslautern, we have been recycling rejected materials such as start-up material and edge strips for many years. Nevertheless, the new unit represents a quantum leap in our everyday work. This unit will allow us to improve the quality of our products and to offer our customers even better solutions, explains Steffen Reuther, the production manager responsible for operation of the new plant. In the new unit, material from production is melted cooled and chopped into small pieces to form a granulate. The chips are returned during the manufacturing process and used to make nonwovens.“This production loop allows us to use raw materials more effectively. It also makes a contribution to environmental protection,” Reuther says. The Kaiserslautern plant makes spunlaid nonwovens for construction, hygiene products and carpet industries as well as horticulture products. 
 
In other investment news, in May, Freudenberg announced it would to expand its Evolon business in Colmar, France, the site of the company’s original Evolon investment. Evolon is manufactured through a globally patented technology combining the spinning of filaments with splitting through hydroentanglement. Since its development in the late 1990s, Evolon has been successful in a number applications including high tech cleaning cloths, automotives and, most recently medical areas. The latest expansion to this technology, is scheduled to be complete by October. The company is reporting the investment at €5 million. 
 
“Once the new production line is complete, we will combine various base materials and create new products through hydroentanglement,” says Ulrich Jahn, plant manager at Colmar. 
 
Freudenberg’s interlinings business, once its primary business, continues to perform well in Asia. Products from Freudenberg Nonwovens are number one in the menswear segment. The production site in Nantong serves the markets in South and Southeast Asia. However the technology continues to face competition from woven and weft products. While the company has followed this trend by increasing its woven and weft sales, restructuring measures have been required. The first measures have already been initiated at the Weinheim facility and in Italy, the Interlinings business at Marelli & Berta, has been realigned. 
 
Speaking of reorganization, Freudenberg Nonwovens disposed its production lines in Kaiserslautern, Germany to Freudenberg Filtration Technologies in late 2011, allowing the division to better concentrate on core businesses in 2012. These include carpet applications and automotive products. 
 
Looking forward, Freudenberg Nonwovens expects market conditions to remain difficult for the next two years. Nevertheless, the group will continue to work on making process improvements, realigning its interlinings division and reinforce the local R&D departments for innovations. Within the industrial nonwovens division, the focus is on generating growth with innovative products and market niches. In South America a very high performing nonwoven to improve liquid management has been launched for hygiene applications. One market niche gaining traction is urbanization and energy storage, which have driven Freudenberg researchers to develop high performance separators for lithium-ion batteries. This ultrathin nonwoven contains a special surface coating, which outperforms conventional separator materials in terms of thermal and mechanical stability. These separators provide the needed improvements in battery technology that play a key role in the safety, reliability and service life of large Lithium-ion batteries. 
 
Meanwhile, Freudenberg’s Vildona Airliner 2.0 has exceeded all expectations as a shoe insole. The technology is based on a substrate, in this case a spunlace nonwoven, in which a superabsorbent polymer is anchored using a chemical reaction. Freudenberg has already partnered with a leading Turkish brand Greyder as well as the Deichmann group.

 
Freudenberg Politex 
Novedrate, Italy 
www.freudenberg-politex.com 
2012 Nonwovens Sales: $289 million 
 
Sales for Freudenberg Politex declined slightly to €217 million ($289 million) as sales in the group’s core business, roofing reinforcements dropped by 2.9%. Sales in construction materials, a smaller segment for the division, grew 10.3% year-on-year. 
 
Reporting a difficult situation in the construction segment of Western Europe, the company saw demand for roofing reinforcements in these regions mainly driven by repairs and renovations. At the same time, the group saw sales grow in Russia, Turkey and the Middle East as infrastructures were modernized and expanded. 
 
Freudenberg Politex operates sites in the U.S., China, France, Italy, Poland and Russia. In Russia, the company’s factory in the Nizhniy Novgorad was expanded with a second line, which came onstream in September 2012. The investment, which was valued at €20 million, will help Freudenberg Politex serve the growing Russian market with a complete range of fiber and spunbond roofing reinforcements. 
 
Looking ahead, Freudenberg Politex does not expect any major changes in the market situation of Europe and North America and does not expect any increase in production volumes in these regions. Instead, the company will focus on expanding its footprint, through manufacturing assets and new products, in developing regions. 
 
 
Freudenberg Filtration Technologies 
Weinheim, Germany 
www.freudenberg-fi lter.com 
2012 Nonwovens Sales: $373 million 
 
On the back of increases in all regions and market segments, Freudenberg Filtration Technologies continued its growth trajectory of the previous two years, growing sales by 8.8% to €280.9 million ($373 million). Sales developed particularly well in North America and China. 
 
Higher energy, raw material and transport costs were offset by sales growth, price increases, productivity improvements and technological innovations. 

This group’s position in the BRIC countries (Brazil, Russia, India and China) was successfully expanded in 2012. In India, Freudenberg Filtration Technologies acquired part of the business of filter manufacturer Pyramid Filters Private Ltd., a manufacturer of air filter elements and systems for process-critical cleanroom applications in the pharmaceutical, medical, chemical and food industries.

Additionally, a subsidiary was established in Nizhiniy Novgorod, Russia in early 2013 to help boost momentum in the Russian industrial filter market and in Chengdu, China, a new site making micronAir automotive filters and Viledon industrial filters began operation.
 

Demand in the industrial filter space was generally described as good, but volatile. Freudenberg Filtration Technologies launched innovative products such as the particularly energy-efficient Viledon eMaxx cassette filters for use in gas turbines, Viledon sinTexx Plus filter cartridges for dust removal and high performance filters for room air purifiers

 

In new product news, the group added gas phase filtration technology for the pulp and paper, petrochemicals and mining industries. Investment in a production line for high temp filters has also opened up opportunities for the surface technology segment.

 

Global sales of micronAir cabin air filters to both OEMs and in the aftermarket remained at a good level. Freudenberg Filtration Technologies won major orders for new vehicle platforms where series production is scheduled to begin in the next few years.

 

In the next couple of years, Freudenberg hopes to evolve from a supplier of high quality filter products to an all-round partner for holistic, energy efficient filtration solutions. Already, significant progress has been made in India, NorthAmerica and Europe.