Location: Vancouver, Canada

Sales: $70 million

Description: Key Personnel
Dieter Peter, Chairman & CEO; Rolf Hoevelmann, president and COO of Europe; Jay Whitman, vice president, CFO and secretary; Miles Lauzon, executive vice president of manufacturing, COO of Americas; Ken Squires, vice president, customer service  

Gatineau, Quebec; Thurso, Quebec; Charleston, SC; Falken­hagen, Germany

ISO Status
2001 certification of ISO 9001, Falkenhagen

Airlaid, thermal bonding, chemical bonding, hybrid bonding, hydro compression bonding

Brand Names
CelluWeb, SmartCore

Major Markets
Feminine hygiene, adult incontinence, baby diapers, swimwear, training pants, wipes—premium baby, household, specialty industrial, homecare, food packaging, medical, tabletop

Despite continuing problems in the global airlaid market, particularly on the commodity side, Concert Industries, Vancouver, British Columbia, Canada, has undergone a series of initiatives to improve its business in recent months. After spending the past several years expanding its operations—in 2001 the company spent more than $61 million (CDN$95 million) on new assets and investments—the company continues to focus on streamlining its business and targeting the 83,000 metric tons in annual rated capacity of airlaid materials it produces each year into existing and new end use markets.
So far this strategy has worked. The company’s total roll goods sales increased 27% in 2001 to reach $70 million (CDN$109 million). Much of this sales increase can be attributed to the capacity expansion at its Concert GmbH facility in Falkenhagen, Germany, which was completed in 2000 and  fully reflected in the 2001 results, as well as the global expansion of Concert’s new facility in Gatineau, Quebec in May. The backbone of the new 310,000 square foot facility in Canada is two 2.7 meter wide airlaid lines with a total 38,000 metric tons of annual rated capacity. Additionally, the company has fully incorporated ACI, Charleston, SC, which was purchased in May 2000 for a reported $19 million, into its overall business. Executives expect Concert’s sales to grow even higher in 2002, partially through a three-year $17 million (CDN$27 million) sales contract with a North American consumer products company. Finalized in June, this contract enlists Concert to provide advanced airlaid materials from the Gatineau site. Concert chairman and CEO Dieter Peter called this contract the culmination of a strong effort from the company’s sales team and said it represents the broadening of airlaid material’s opportunities.
The wipes market continues to be a strong growth area for airlaid materials, particularly in North America where they are the preferred substrate for many applications. Other areas of interest to Concert include feminine hygiene, adult incontinence, food packaging and filtration.
While executives remain optimistic about the future, the current state of the airlaid market has brought some difficulties for Concert. The weakened economy, coupled with excess capacity and pricing pressures in the commodity sector of the airlaid market, led Concert to initiate temporary plant shutdowns in January and February. Three of Concert’s four North American operating lines were shut down for rotating two-week periods beginning in mid January. The lines resumed normal operation in late February and are now operating 80 hours per week. The company continues to monitor the North American airlaid market and will adjust operating schedules as required.
While the airlaid market continues to be a challenge in North America, executives expect this situation to abate by the end of 2002 as the market continues to absorb excess capacity, the economy improves and the new lines in Canada become more efficient and take on more of Concert’s core airlaid business. Concert executives expect the company also to benefit from the significant amount of activity currently going on in its product development groups. The company has completed a number of new product trials and has others in progress that are expected to result in new sales opportunities in late 2002 and 2003.
Executives also definitely expect the North American plants to benefit from  improvements to its operations. Now that the Gatineau site is complete, a significant portion of Concert’s Thurso production was relocated there to take better advantage of Gatineau’s larger economies of scale. Meanwhile, Thurso will be responsible for smaller and more specialized production runs. Concert is reportedly developing existing markets that will take advantage of Thurso’s unique ability to produce complex airlaid materials.
The European airlaid market has not bore the same problems as North America. In fact, demand is outpacing production levels at Concert’s site in Falkenhagen, Germany, which was upgraded in late 2001. The improvements, which caused a short scheduled shutdown in December 2001 of one of the facility’s two production lines, are expected to improve operating efficiencies and lower waste, leading to improved profitability in 2002.
In addition to capital improvements, acquisitions and new market penetration, Concert has been revamped in terms of key personnel. In January, the company appointed Rolf Hoevelmann as its new president. Mr. Hoevelmann, who most recently served as general manager of Concert GmbH, has worked for the company since 1996 and was instrumental in the start-up of the German subsidiary. February was marked by additional staff changes at Concert. Rusty Ables was named general manager for AA-Tech Systems and AA-Tech Canada, Concert’s 100% owned advanced airlaid technology engineering subsidiaries. Also at this time, Morten Hansen was named vice president of research and development for Concert’s Omega airlaid products; Ludwig Langer was named vice president, global quality assurance coordinator and Scott Barton was appointed to the position of vice president of information technology. Most recently, Jay Whitman was named chief financial officer of Concert in July. He replaced Carey Edwards who left the company to pursue personal interests.
In corporate news, Concert completed equity financings exceeding CDN$50 million. The majority of these funds were used to consolidate its subsidiaries into one cohesive group. After purchasing a 24.9% stake in its German subsidiary, Concert GmbH, in June 2001, and a 47.5% stake in Concert Airlaid, Gatineau, Quebec, in July 2001, Concert achieved full ownership of the German facility in February. The purchases have allowed Concert to achieve its goal of fully owning all of its subsidiaries. This new ownership structure allows for strong ties between management and operating teams and with customers, according to executives. It not only facilitates improvements in operating efficiencies by sharing best practices but also the accomplishment of its global strategies and future objectives.
Also, in May, Concert offered, by way of public offering, 8.5% convertible debentures for gross proceeds of $25 million. The company will reportedly use the proceeds of this sale to fund the development and installation of two second generation (Gen_2) festooners at its Falkenhagen site. Festooners allow airlaid materials to be packaged in bales rather than rolls and is the preferred method of packaging thicker materials due to storage space and transport costs, according to executives.
Concert was always in the forefront of the development of festooning technology for airlaid applications and has developed its first generation (Gen_1) and now the advanced Gen_2 festooner, according to company executives. The Gen_2 festooners are expected to overcome a patent dispute Concert is currently involved in with its main competitor and will allow Concert to offer festooned materials worldwide to all airlaid material converters.
Location: Quebec, Canada

Sales: $82 million

Description: Key Personnel
Raoul Heredia, president

Gatineau, Quebec; Thurso, Quebec; Charleston, SC; Germany


Major Markets
Wipes, feminine hygiene, diapers

It’s been a tough year for airlaid specialist Concert Industries, Quebec, Canada. The company has grappled with overcapacity in its core markets, credit problems and an unsuccessful patent battle related to festooning technology with one of its chief competitors.
In August, the company addressed these problems by filing for protection under its creditors arrangement act and announcing in increase in its operating line of credit. The filing affected Concert’s manufacturing sites in Quebec and South Carolina; the company’s German facility was not affected.
In announcing these measures, Concert officials attributed several factors to its recent troubles. For one, a significant amount of airlaid capacity came onstream in 2001, making it difficult for Concert to get fair prices for its materials. Concert was a key contributor to this overcapacity situation in 2001. That year, the company installed two side-by-side lines in Gatineau, Quebec, with a combined capacity of 38,000 metric tons. Also affecting Concert’s bottom line was a worldwide economic slowdown, oversupply, continued losses at its Charleston plant and an unexpected change in the product mix of one of its major customers.
To remedy the situation, Concert is seeking potential buyers of the Charleston, SC site it purchased with ACI in 2000. If a buyer cannot be found, it will be closed and its equipment will be transferred to other facilities. Also, the company headquarters will be relocated from Vancouver, B.C., to Gatineau, Quebec and a special committee of the board of directors will examine these issues.
Another measure taken by Concert this year was the appointment of turnaround specialist Raoul Heredia as president. Mr. Heredia served as CFO of Peerless Carpet Corporation. During his tenure with Peerless, he undertook a reorganization of the company that eventually led to its sale. Former president and founder Dieter Peter continues to serve Concert as company chairman.
Location: Gatineau, Quebec, Canada

Sales: $117 MILLION

Description: Key Personnel
Raoul Heredia, president

Gatineau, Thurso, Quebec, Germany


Major Markets
Wipes, feminine hygiene, diapers

Despite continued financial problems, airlaid producer Concert Industries was able to grow its sales nearly 40% in 2003, to reach CDN$162.8 million ($117 million).
This significant sales growth was attributed to the fact that 2003 was Concert’s Gatineau facility’s first full year of operation. The Gatineau site was built in 2001 to house two side-by-side airlaid lines with a combined capacity of 38,000 tons. It is unclear how much of that capacity is currently being utilized. Beyond Gatineau, Concert also attri­buted continued success of its European operations to the rise in sales.
Sharp sales increases, however, have not added up to earnings success for the company. In 2003, the company recorded a net loss of $167 million, which largely related to write downs and refinancing related to North America. Chief among these is the closure of a facility in Charleston, SC, which was purchased from ACI in 2000 and the relocation of the company’s corporate headquarters from Vancouver to Quebec.
Also contributing to these problems have been pricing pressures within the North American airlaid market. In August 2003, these pressures resulted in Concert’s filing for protection from its creditors arrangement under CCAA Proceedings. This order included Concert’s North American operations; its European business was not affected by the situation. Concert’s most recent announcement regarding CCAA indicated that this order was effective until September 30. Until that time, all operations are being considered under a restructuring measure, according to reports.
In announcing this update, Concert also indicated that it had narrowed its 2004 second quarter loss from CDN$5.9 million during the same period of last year to CDN$0.9 million last year. Meanwhile, sales continued to their climb, up nearly 18% to CDN$45.7 million this year. Additionally, gross margins were able to increase 49.2% thanks to increased volumes and improved productivity and fixed expenses dropped significantly on ramped-up product development efforts and reduced overhead costs.
Location: Gatineau, Quebec

Sales: $117 million

Description: Key Personnel
Tony Molluso, CEO

Gatineau, Thurso, Quebec, Germany


Major Markets
wipes, feminine hygiene, diapers

Under new management is airlaid specialist Concert Industries. The Gatineau, Quebec-based company was purchased in full by Brascan Asset Management’s Tricap Fund on December 31, 2004 after more than 18 months of economic uncertainty. The company’s Canadian operations had been in Companies’ Creditors Arrangement Act protection, similar to U.S. bankruptcy protection, prior to the Brascan purchase.
In April, Brascan brought in turnaround specialist Tony Molluso as president and CEO of Concert, who has been charged with returning the company to profitability by year’s end. “Brascan spent a year, or more than a year, looking at Concert before buying it,” he said. “Obviously, they see something good in this business. Otherwise, they wouldn’t have spent $100 million on it.”

Among Concert’s winning qualities is its strong focus on airlaid nonwovens. All of its 80,000 tons of output, located at three plants in Gatineau and Falkenhagen, Germany, comprise airlaid. In spite of its troubles reaching profitability, Concert has been able to significantly grow its sales in recent years. Now a privately held company, Concert does not reveal its sales and earnings figures, but prior to the Brascan purchase, in 2003, sales increased some 40% as new capacity in Gatineau came onstream.
And, the airlaid market in general has benefited from some capacity reductions—Concert’s closure of its Charleston, SC facility and competitor Buckeye Technologies’ shutdown of a Cork, Ireland line—as well as picked-up demand for the substrate. Now experts say that pricing levels in airlaid are more balanced than they’ve been in several years.
“Airlaid has not only recovered from an economic standpoint,” Mr. Molluso said. “You have to see how important airlaid technology is to Kimberly-Clark and Procter & Gamble. Considering we are the only company strictly producing airlaid nonwovens, that’s got to mean something.”
Currently, about 75% of Concert’s airlaid output in the U.S. serves the feminine hygiene market with the remaining largely targeting disposable wipes. In Europe, feminine hygiene is even more important to the company, representing a reported 95% of sales.
Mr. Molluso said that branching into new areas will be a large part of Concert’s recovery plan. One key area will be the household wipes segment where cost efficiency and flexibility can rival competition in the spunlaced market. “We are beefing up product development, technology and marketing efforts for new products,” he added. “Especially with spunlace being so volatile due to plastic and oil prices, airlaid can have a definite advantage.”
In addition to displacing competing technologies, new markets such as tabletop, which is already booming in Europe, show great potential in North America.
“We have 80,000 tons of capacity and it’s our job to fill up those lines,” Mr. Molluso said.
Getting Concert back on track, for the long term, is expected to take three to five years, according to Mr. Molluso, but the good news is Brascan remains committed to growing this business. And, for now this business is healthy and ready to grow.

“We have just come out of CAA protection and the good thing is we have no debt,” Mr. Molluso. “We have no interest payments or huge burden over our heads so we can focus on building the business. We believe opportunities will present themselves and we will have an organization that is flexible and focused enough to take advantage of them as they happen.”
Location: Gatineau, Quebec

Sales: $110 million

Description: Key Personnel
Tony Molluso, CEO

Gatineau & Thurso, Quebec, Canada; Falkenhagen, Germany


Major Markets
Wipes, feminine hygiene, homecare

It’s been a good year for Concert Industries. Less than two years since the once-strapped airlaid producer was purchased by Brookfield Asset Management’s (formerly Brascan) Tricap Fund, Concert has been able to return its Gatineau operation, which contains two side-by-side airlaid lines, to profitability.
According to CEO Tony Molluso, Concert achieved its goal, several months ahead of schedule, by drastically changing the way it does business. For one, it started running its machines only when customer demands warranted it; for another, it exited businesses that were not profitable. These changes meant a workforce reduction of 30% but executives hope to hire back workers as Concert continues to grow its business.
“We had to really rationalize our business,” Mr. Molluso said. “We took out several millions of dollars worth of product that didn’t make us any money so now we are making less product but what we are making we are making money on.”
Under its prior ownership, Concert used to run its line 24/7 but was left with excess product, which was either stored indefinitely in a warehouse or, even worse, wasted. Now, the company works closely with its customers to forecast their needs and runs its machines on an as-needed basis.
Another major initiative was a reduction in its consumer wipes business, an area where Concert’s technology cannot fetch the price it deserves. While, Concert still targets wipes, the percentage of its business targeting this market has dropped from 20% to 5%.
“Our machines were made for fem care and home care products so that’s what we are making. We still have some wipes business but it’s sporadic, not something that we do on a regular basis,” Mr. Molluso said.  “Wipes are generic products that sell cheaply and don’t make any money. What is the sense of committing machine time to this area when we can commit it to profitable businesses?”
Restoring profitability also meant idling a smaller airlaid line in Thurso, Quebec, an action that could be reversed if Concert’s business continues to grow. In fact, expansion is a definite plan for Concert’s future as the company’s European operation in Falkenhagen, Germany is completely sold out.
“We are able to serve our North American needs from Gatineau so we didn’t need to keep running Thurso,” Mr. Molluso said. “But, we have to definitely add capacity to Falkenhagen because you cannot achieve topline growth when you are operating at a sold-out status.”
Concert executives are currently examining strategies for this growth, which come in the form of an acquisition, a plant expansion or even a greenfield location in a completely new area.
“Returning to profitability was one year ahead of schedule,” Mr. Molluso said. “This gives us a little more time and resources to decide our next move. We are not just looking for ways to fill up our lines, we are looking at specific products that highlight our technology.”
Location: Gatineau, Quebec, Canada

Sales: $132 million

Description: Key Personnel
Corporate: Pierre McNeil, acting president and chief executive officer; Rolf Hövelmann,  senior vice president and COO;Don Habbick, chief financial officer. European Operations: Rolf Hövelmann, managing director of Concert Europe GmbH and AAT Systems GmbH ; Jorg Schlautmann, managing director, sales, R&D and quality; Torsten Gartner, managing director, manufacturing & business systems. Canadian Operations: Barry Downing, vice president and general manager; Ken Squires, director of sales; Alain Mercier, director of operations

Canadian Operations
Gatineau, QC

Airlaid capability for thermal, latex, multi- and hydrogen-bonded. Festooner capacity for finishing and packaging.

Feminine hygiene, home care, food pads and premium wipes.

European Operations
Falkenhagen, Germany

Airlaid capability for thermal, latex, multi and hydrogen-bonded. Festooner capacity for finishing and packaging

Feminine hygiene, premium wipes, food pads, home care, table top, adult incontinence and cosmetic towels.

Nearly three years after its purchase by Brascan Asset Management’s Tricap Partners Ltd., Gatineau, Quebec, Canada-based Concert Industries is continuing its evolution into a leader in the global specialty airlaid market. Thanks to a successful turnaround of its Gatineau operations and consistent top performance from its German facility in Falkenhagen, Concert has mastered operational excellence and is well positioned for growth opportunities, according to executives. In 2006, the company’s sales were approximately CDN150 million and this figure is set to increase further as Concert’s Gatineau operation continues to increase its capacity.
The bulk of Concert’s airlaid output targets the feminine hygiene market but other applications include specialty wipe products, food pads, adult incontinence, tabletop and a number of other niche areas, according to the director of sales of the Canadian operations, Ken Squires. “Concert is putting more emphasis on new niche markets that we think could represent significant value,” he said. As it increases its focus on new markets, Concert has also made the strategic decision to exit markets—such as commodity consumer wipes—that have proven unprofitable, instead putting more resources behind markets where it has a proven track record such as feminine hygiene.
“The feminine hygiene segment is our largest end use market. We will maintain and strengthen our preferred supplier status to the largest global airlaid customers by continuing to offer the industry’s highest level of technical expertise,” said acting president and CEO Pierre McNeil. Mr. McNeil, a Tricap veteran, was named acting CEO earlier this year following the sudden death of CEO Tony Molluso, the man credited with much of Concert’s turnaround.
“(The impact of Tony’s death) was hard but we did not lose any momentum because the team under him was so strong,” Mr. McNeil said. “Though this facilitated my transition into the CEO role, Tony’s presence and positive attitude is still missed. He had a very good network in the industry and a really good sense of how to grow the business.”
Since taking over Concert, TriCap has focused on returning the company, which had been severely hit by overcapacity issues affecting the global airlaid market, to profitability. Efforts included the shutdown of a smaller operation in Thurso, Canada as well as a turnaround at Concert’s Gatineau facility where two large airlaid lines were added in 2001. According to Mr. McNeil, at one point one of these lines was barely operational as the company shifted its production cycle to meet market demand. Recently, however, production has been increasing steadily at the facility as Concert enjoys gains in its existing market and taps new areas for growth.
“In Gatineau, our challenge in the last two years has been to make the operation viable for the future,” Mr. McNeil said. “These changes have meant a significant reduction in the workforce and running machines more efficiently and effectively. Under these circumstances the team has done a great job to improve quality, drive costs down, properly define the product segments, increase capacity utilization, reduce waste and rebuild credibility with key customers. Today, we are pleased to announce that Gatineau is increasing employment levels and we have the lines running at high levels of capacity utilization.”
Recent investments in Gatineau include a newly upgraded festooner, which is delivering strong results, running at high levels of utilization. Concert is reportedly considering additional festooner improvements to drive further sales from existing and future customers interested in our leading-edge finishing and packaging technology.
Meanwhile, Concert’s European facility, located in Falkenhagen, Germany, has been operating at full capacity thanks to strong demand from the company’s European customers.
“Few companies can rival Germany’s reliable and complementary team,” said Mr. McNeil. “They are in control of the key operational processes and are always looking ahead in terms of improving the process and the products to match the needs of our customers. Specialty airlaid is a technically demanding market area due to the complex qualification process and the need for close product development relationships with our customers. Falkenhagen is at the forefront in this market. With such strengths we consider the Germany operations well-positioned for further rapid growth.”
In fact, the Falkenhagen operation is performing so well that Concert executives have admitted that expansion is definitely a possibility in the near term. “Concert’s primary focus is to maximize the capacity of our current operations and consider expansion where we see market growth, including Europe, Asia, the U.S. and the Middle East,” Mr. McNeil said. “We are also considering other regions such as South America where Brookfield has a strong presence.”  
Moving forward, Mr. McNeil’s main goal is to continue the momentum started by Mr. Molluso and maintain the success Concert has seen since its acquisition by TriCap.
“With the turnaround of Concert complete, my assignment to the role of acting CEO is in essence to keep the momentum and to continue growing the company. My focus has been on the future strategic direction of the business—how we grow this business from its current base—and I am very pleased with the way it’s turning out,” he said. “The results I have seen so far are very much in line with the goals we set for the company: to focus on product development, to meet our key customers’ needs and to reassure them that Concert is here for the long term.”

Sales: $212 million

Description: Key Personnel
Corporate: Pierre McNeil, president and chief executive officer; Rolf Hövelmann,  executive senior vice president and COO; Don Habbick, chief financial officer ;Barry Downing, vice president.
European Operations: Rolf Hövelmann, managing director of Concert Europe GmbH and AAT Systems GmbH; Jorg Schlautmann, managing director, sales, R&D and quality; Torsten Gartner, managing director, manufacturing & business systems.
Canadian Operations: Barry Downing, vice president and general manager; Ken Squires, vice president director of sales; Alain Mercier, vice president director of operations

Airlaid capability for thermal, latex, multi- and hydrogen-bonded. Festooner capacity for finishing and packaging.

Feminine hygiene, home care, food pads and premium wipes

Processes/Falkehagen, Germany
Airlaid capability for thermal, latex, multi and hydrogen-bonded. Festooner capacity for finishing and packaging

Feminine hygiene, premium wipes, food pads, home care, table top, adult incontinence and cosmetic towels.

Sales continue to rise for Gatineau, Quebec-based Concert Industries—a company that five years ago was in such dire straits it was forced to seek protection under the Canadian version of Chapter 11. That was before the company was purchased by Tricap Partners, a restructuring fund under the management of Brookfield Asset Management, which has put the company through a successful turnaround program. This program included the closure of certain assets as well as the exit of unprofitable businesses.
“Our sales have increased significantly during the past two years and are now in excess of CDN $225 million,” said CEO Pierre McNeil. “The productivity of both of our plants has grown significantly at the same time as we have brought several new products forward at both plants to meet our customers increasing demands.”
While Concert has room for growth in Gatineau, its operation in Falkenhagen, Germany has been operating at a sold-out status and Concert has responded to this growth by increasing output of its two side-by-side lines in Gatineau, Quebec and starting a large-scale investment at its German operations.. “Global demand for airlaid continues to grow each year,” Mr. McNeil said. “Currently, the supply situation is tighter in Europe than in North America, which is why the company chose Europe for its next expansion.”
Representing a €60 million investment, the European expansion will be the site’s third airlaid line. The expansion will increase Concert’s overall annual production capacity by 30% when it comes onstream in September 2009 and will add about 100 jobs to the facility, which is Concert's largest airlaid site.
The expansion will help the company meet existing and future growing demand of customers in Europe and Asia, and will also enable it to better serve its customers in North America from its production facility in Gatineau, Quebec.
“Our German plant has done an exceptional job at adding capacity through productivity improvements year over year. However, demand in the region and adjacent regions has increased at such a rapid pace that it was forecast that we would not be able to meet demand without adding an additional line in 2009,” Mr. McNeil said.
Meanwhile, Concert has several global customers who have operations in Asia. “In some cases our customers request a standard global product while others have adopted a more regional product focus.” Each of these situations provides Concert with interesting opportunities in this growing market.
In terms of end-use markets, Concert’s key focus is personal care including feminine hygiene and adult incontinence items for both the branded and private label markets. Other areas of interest include household cleaning applications and food pads, as well as emerging niche applications.
“Our R&D efforts are focused both on new products within our existing key markets and on applications where airlaid is not currently being used,” he said. “Both these markets represent significant potential tonnage in the coming year. In terms of niche markets, we currently sell into the construction and filtration markets.”
As it awaits its new German line to be complete, Concert will continue to focus on growth in both traditional and emerging markets, Mr. McNeil concluded.
“Growth is certainly the right term for Concert these days,” he said. “We continue to partner with our key customers globally, who rely on us to deliver top quality products today as well as be their development partner for many of their key initiatives in the future. We place a high priority on quality and innovation with our products, processes and services in order to meet our sophisticated customers’ evolving needs.”

Sales: $230 Million

Description: Key Personnel
Corporate: Pierre McNeil, president and chief executive officer; Rolf Hovelmann, executive senior vice president and COO; Don Habbick, chief financial officer; Barry Downing, vice president
European operations: Rolf Hovelmann, managing director; Jorg Schlautmann, managing director, sales, R&D and quality; Torsten Gartner, managing director, manufacturing & business
Canadian operations: Barry Downing, vice president and general manager; Ken Squires, vice president, director of sales; Alain Mercier, vice president, director of operations

Airlaid capabilities for thermal, latex, multi and bonded; festooner capacity for finishing and packaging

Feminine hygiene, home care, food pads and premium

Airlaid capabilities for thermal, latex, multi and bonded. Festooner capacity for finishing and packaging

Feminine hygiene, premium wipes, food pads, tabletop, adult incontinence and cosmetic towels

As it waits for its new European line to come onstream, Concert Industries, Gatineau, Quebec, continues to focus on serving markets that see the value of highly engineered products including feminine hygiene, adult incontinence and some specialized wipes areas. “As the innovation leader, Concert is constantly developing new materials for its existing end use segments as well as for new applications and markets,” said company CEO Pierre McNeill.

“Concert invests significant resources in research and development and continuously seeks to enter new segments that would benefit from a sophisticated airlaid material.”

With 2008 sales hitting the $230 million mark, Concert expects levels to reach $270 million this year as it continues to gain marketshare within the specialty personal hygiene markets and continues to expand as its customers move into new regions.

Based in Canada, Concert operates two lines in Gatineau as well as a European facility in Falkenhagen, Germany. While the company has room for growth in North America, it is currently awaiting the completion of a new line in Falkenhagen to ease undercapacity concerns in Europe and other regions. Representing a €60 million investment, the European expansion will be the site’s third airlaid line and will increase its annual production capacity by 30%. The new line will serve the European market as well as emerging markets in the Middle East, Africa and Asia.

“Concert is keen on growing in emerging regions as the growing middle classes in these regions increasingly demand modern personal hygiene products,” Mr. McNeill said. “Concert’s customers are aggressively growing in the emerging regions and Concert is well positioned to support them in their growth initiatives.”

Meanwhile, more developed regions—namely North America and Western Europe—continue to recover for the global economic crisis. While volumes in the personal hygiene market remained largely stable—as expected—customers did manage their working capital levels to generate liquidity. This impacted Concert’s sales to some extent in late 2008 and early 2009 but more recently orders have begun to grow again. Europe, meanwhile, entered the recession behind North America and has likewise been slower to come out of it . “However, both markets have seen stable demand in personal hygiene products and as a result, Concert has been able to weather the recession without significant negative impacts to its business,” Mr. McNeill said.

Keeping its business strong is nothing new for Concert. During the past several years, the company—which is owned by Tricap Partners, a restructuring fund under the management of Brookfield Asset Management—has worked hard to stay healthy. This has included the closing of some North American lines, exiting unprofitable businesses, such as the consumer wipes market, and focusing on serving markets that see the value in highly-engineered airlaid products.
Location: York, PA

Sales: $350 million

Description: Key Personnel
George Glatfelter, CEO; Dante Parrini, executive vice president and COO; Jonathan Bourget, vice president and general manager  Advanced Airlaid Materials; Lionel Bitton, general sales manager, Advanced Airlaid Materials

Plant Locations
Canada, Germany, France, U.K.

Airlaid, wetlaid

This year, the airlaid producer formerly known as Concert Industries is under new ownership. In February 2010, specialty paper manufacturer Glatfelter bought the Gatineau, Quebec-based company for a reported $235 million, representing the largest acquisition in the company’s history. The airlaid business now functions as a third business unit within Glatfelter—Advanced Airlaid Materials—which comprises about 15% of total sales.
“If you look at Glatfelter’s business model, we focus on being a product leader in niche areas,” explained Dante Parrini, executive vice president and COO of Glatfelter. “Concert was a world leader in the feminine hygiene market, and we were very impressed with what Concert had achieved on its own and felt the size and scope of Glatfelter could enhance this. We are here to stay and we have the capital to help the business grow in the future.”
In January, Mr. Parrini will succeed George Glatfelter as the company’s next CEO.
Glatfelter has spent the last decade working to build its business by expanding into new areas largely through acquisitions rather than Greenfield investments, which present the challenge of introducing incremental capacity into the market. Through acquisition, Glatfelter has not only bought existing capacity but also gained intellectual property and know-how.
“This is our fifth acquisition since 1998 and it is consistent with our strategy to build on areas where we are already a leader,” Mr. Parrini said. “We had been looking to expand more into engineered fiber-based materials and we looked at a lot of options. We already knew the nonwovens industry because of our wetlaid operations in Europe, and we view airlaid as a good adjacent technology to our existing businesses.”
Beyond the acquired business, Glatfelter operates a diverse specialty papers business that includes, among other things, a sizeable wetlaid nonwovens business in Germany, France and the U.K. Core applications for this business, which was valued between $100-150 million last year include tabletop applications and surgical masks.
During the past several years, Concert—under the ownership of Brookfield Asset Management—had successfully embarked upon a turnaround program that not only relieved it of the financial burdens that led to a bankruptcy filing in 2004 but also well positioned it for the future. Today, the core business ofthe Fal­kenhagen, Germany and Gatineau, Canada facilities is in the feminine hygiene market but both sites are also growing in many other areas such as adult incontinence, food pad, tabletop and wipes. Much of the output is already contracted through 2013 and some 80% of current revenue is attached to raw material price pass-throughs, which allows the company to raise and lower prices depending on its supplier base.
In the fourth quarter of 2009, Concert began ramping up a third state-of-the-art European airlaid line, representing a $70 million investment in Falkenhagen, Germany. The new line added 18,000 tons to the company’s global capacity and now brings Glatfelter’s total airlaid output to 84,000 tons.
“We have studied the nonwovens market for decades and we are well aware of airlaid’s past challenges but we are now seeing a better balance between supply and demand,” Mr. Parrini said.
By adding the strength of Concert’s airlaid business to Glatfelter’s existing knowledge in specialty papers and other technologies, the company is hoping to capitalize on synergies across all of its business units, which in addition to advanced airlaid include composite fibers and specialty papers.
“We are identifying programs and projects all the time but even our customers are looking at our synergies and coming up with their own ideas. Already we are having a lot of success in branding the businesses and presenting it as Glatfelter,” said Lionel Bitton, general sales manager for Glatfelter Advanced Airlaid Business unit in the Americas.

York, PA
2011 Nonwovens Sales: $538 million

Key Personnel: Dante Parrini, chairman and CEO; John Jacunski, senior vice president and CFO; Christopher Astley, vice president, corporate strategy; Jonathan Bourget, vice president and general manager, Advanced Airlaid Materials; Martin Rapp, vice president and general manager, Composite Fibres

Plants: Canada, Germany, France, U.K., Philippines

Processes: Airlaid, wetlaid

With the integration of Concert Industries completed, Glatfelter has seen strong growth, despite a turbulent economic environment, thanks in part to increased volumes in the feminine hygiene market, which is the company’s core business.

As some other airlaid companies have faltered, closing plants or teetering on the brink of bankruptcy, Glatfelter has seen volumes increase 18% from 2009-2010 and 7.5% from 2010-2011. Profitability has almost doubled from 2010 to 2011, and results in the first half of 2012 are again 55% higher than those in the first half of 2011.

Jonathan Bourget, vice president and general manager, Advanced Airlaid Materials, notes that the company mostly operates in the mature markets of North America and Europe, which have only been growing about 2%. “We’ve been very fortunate to be able to grow faster than the market within a weak economic environment. This is testimony to the trust our customers have put into us.”

The company reported $252 million in airlaid sales for 2011, about 82% coming from feminine hygiene. “That’s been growing pretty healthfully, thanks to private label growth, particularly in North America,” says Bourget. “Private label in general, including Europe, has some very good traction to it nowadays. I think there is recognition from the private label industry that there’s no better way to imitate the leaders than to use the same raw materials. So they come to us and we try to find solutions for them.”

Like most companies in the nonwovens industry, Glatfelter has an eye on emerging nations, which offer great potential for future consumption. Bourget noted that usage rates of feminine hygiene products in North America and Western Europe are about 170 grams per capita, while just 70 grams per capita in the Asia-Pacific region. “There’s just a massive opportunity for penetration in this market,” he says, adding that some major players in the industry have launched educational campaigns to promote awareness among developing nations.

Meanwhile, Glatfelter has increased its exposure to the wipes market in North America. The company offers an array of basis weights along with a broad manufacturer competency within different segments.

In addition to feminine hygiene and wipes for the personal care industry, other important airlaid markets for Glatfelter include home care, food pads and adult incontinence.

As for the company’s composite fibers business (wetlaid), Glatfelter reported $476 million in sales in 2011. The company has continued to build on its market leading position in single-serve coffee and tea products, growing shipping volumes by 9%. The business segment’s profitability has been increasing significantly (20% over the previous year).

Alongside food and beverage (60% of wetlaid sales), other important markets include metallized (20%), composite laminates (11%) and technical specialties (9%).

Bourget notes that Glatfelter’s goal is to continue growing these two divisions, expanding geographical and market presence over the foreseeable future and capitalizing on the strong relationships that exist with global market makers.
York, PA
2012 Nonwovens Sales: $683 million
Key Personnel:Dante C. Parrini, chairman and CEO; John P. Jacunski, senior vice president and CFO; Christopher W. Astley, vice president, corporate strategy; Jonathan A. Bourget, vice president and general manager, advanced airlaid materials; Martin Rapp, vice president and general manager, composite fibers
Plants: Canada, Germany, France, U.K., Philippines
Processes:Airlaid, Wetlaid
The acquisition of a major manufacturer of wallcovering materials is proof that Glatfelter continues to focus on growth markets. In March, the maker of airlaid and wetlaid nonwovens sealed a deal to acquire Dresden Papier, a leading producer of nonwoven wallpaper base materials and a supplier to most of the world’s largest wallpaper manufacturers. Previously owned by Fortress Paper, a Vancouver, B.C., Canada company, Dresden is based in Heidenau, Germany, near Dresden, where it operates a state-of-the-art, 60,000 metric ton operating facility solely dedicated to the wallcovering market.
At the time of the reported €160 million ($210 million) acquisition CEO Dante Parrini described the acquisition as a continuation of Glatfelter’s focus on adding industry leading nonwoven product lines to its composite fi bers business. The nonwoven based wall covering market is projected to grow 10% per year in coming years, outpacing demand for traditional paper products.
“We see a lot of growth potential for the wallpaper market, particularly in areas like China and South Korea,” says Martin Rapp, vice president and general manager of composite fibers.
Dresden Papier, soon to be rebranded into Glatfelter Dresden GmbH, is now a part of Glatfelter’s composite fibers business, which has been earmarked as a strong growth area for the company as it lessens its reliance on specialty papers.
Since 2006, Composite Fibers, along with the company’s Advanced Airlaid materials business, which was acquired from Concert Industries in 2010, have grown to represent 43% of the group’s sales compared to 30%. Specialty papers meanwhile, which once comprised 70% of sales, now account for 57% of Glatfelter’s business. This shift comes as a result of the company’s strategy of exposing itself to growth businesses, according to Parrini.
In 2012, Glatfelter continued to improve its position on both sides of its nonwovens business—composite fibers containing its wetlaid assets and advanced airlaid. Wetlaid sales grew 4-5% largely in technical and industrial applications such as wipes, furniture and tea bags while airlaid volumes increased 7%, largely driven by advances in feminine hygiene and wipes.
According to Jonathan Bourget, vice president and general manager of advanced airlaid materials, Glatfelter’s airlaid operations, including operations in Canada and Germany, continue to see their supply tighten, leading the company to begin investigating smart ways to increase its global output.
“Strength in airlaid is being driven by downgauging, relying on less material usage in terms of basis weight and the simultaneous increase of square meter volume,” says Bourget.
Also driving growth is the need for market development largely in the personal care segment. “These markets are large enough and rich enough that they are constantly looking at new products,” says Bourget. “I think there is a shift in consumer taste that is promoting new product development in airlaid.” 
Glatfelter entered the airlaid business through the acquisition of Concert in 2010 as part of a strategy, begun in the early 2000s, to transform itself from a traditional paper company into a global provider of engineered materials and specialty paper-related products.
While the airlaid business has been in the headlines Glatfelter’s wetlaid operations also continue to grow. The considerable boost from the Dresden acquisition should add about $150 million in sales and $38 million in earnings to the operation.
Apart from wallcoverings the composite fibers business unit is developing rapidly in the electrical segment. Last year the company made a significant investment into a dedicated machine in France. In addition Glatfelter is partnering with DreamWeaver to make a new generation of high performance affordable separators targeted for energy storage devices such as lithium-ion batteries. This partnership will allow DreamWeaver to leverage Glatfelter’s state-of-the art inclined wire capabilities and expertise in making advanced fiber-based engineered materials.
Glatfelter continues to optimize the use of its eight inclined-wire machines to produce a diverse range of products including, nonwoven energy storage materials for the capacitor and lead-acid battery markets. These new fi ber-based materials possess superior porosity and excellent web uniformity in low basis weight and thickness.
“DreamWeaver’s technology is a natural fit, allowing us to extend our presence in the growing energy storage market with innovative and proprietary technology,” says Rapp.
York, PA
2014 Nonwovens Sales: $731 million

Key Personnel

Dante Parrini, chairman and CEO; John Jacunski, executive vice president and CFO; Christopher Astley, senior vice president & business unit president, Advanced Airlaid Materials; Martin Rapp, senior vice president & business unit president, Composite Fibers 

Canada, Germany, France, UK, Philippines 

Airlaid, wetlaid

Glatfelter continues to make progress in both increasing earnings and marketshare within its engineered fibers-based businesses. The company manufactures wetlaid nonwovens for food and beverage and wall covering applications through its Composite Fibers business unit (CFBU) and airlaid nonwovens for the feminine hygiene, adult incontinence and specialty wipes through its Advanced Airlaid Materials business unit (AMBU). Last year, total nonwovens sales were about $731 million.

Glatfelter’s Advanced Airlaid Materials business unit reported its best year since being acquired from Concert Industries in 2010 and has steadily improved its performance. Last year’s sales were $281.7 million, an increase of 5% over 2013 thanks to demand for airlaid in the adult hygiene and specialty wipes market, particularly in North America. Meanwhile its profits increased 18% during the same period.

According to the company, the majority of airlaid sales, 77%, are done within the feminine hygiene market to a handful of customers, but in 2014 adult incontinence sales charted the most growth, from $5 million to $17 million thanks to the successes of a major customer.

In 2015, Glatfelter plans to introduce a product specifically for the adult care market, and executives said that hygiene markets in general continue to be the best match for Glatfetler’s airlaid technology.

“Our Advanced Airlaid Materials business will continue to focus on new product development and innovation to support our existing core hygiene markets, as well as penetration of adjacent markets,” says Christopher Astley, senior vice president & business unit president, Advanced Airlaid Materials. “This will complement our continued efforts to support more efficient and effective production and delivery of our products to customers.  Given its unique functional qualities as well as its use of highly sustainable and biodegradable cellulose fibers, we expect the application of airlaid to continue to grow in both developing and emerging regions of the world.”

Glatfelter operates five airlaid lines in Germany and Canada, which together make about 100,000 tons of materials of nonwovens per year. While the market has repeatedly been described as tight, so far Glatfelter has made no plans to add another line and is instead focusing on optimizing its current production levels to increase volumes.

“As one of Glatfelter’s platforms for growth, Advanced Airlaid Materials continues to evaluate both organic and inorganic growth opportunities in the marketplace,”  Astley says.

One significant opportunity is in core materials. Last year, Glatfelter began promoting  its eCore engineered core and Icore integrated core materials within the hygiene market. Both are pulp-based airlaid substrates that contain as high as 85% superabsorbent polymer (SAP) and create an end product that is significantly thinner and more discrete than existing diapers and other absorbent devices while reducing costs associated with SAP spillage.

The product offers a much more efficient use of powders. It reduces usage of SAP by as much as 20% due to reduced spillage, uniform distribution of powder and improved free-swell. “Innovation continues to be a key capability of our Advanced Airlaid Materials business and we continue to develop and refine material platforms that will be useful to our customers and their markets,” Astley says. “Both our eCore and iCore platforms are aimed to support the global hygiene markets as customers seek to differentiate themselves in the broader marketplace.”

With lines in North America and Europe, Glatfelter has recently taken some steps to broaden its reach in Asia where hygiene growth, estimated between 7-12% depending on the subregion, is outpacing more developed regions. Glatfelter has opened a full-fledged sales and representative office in China, where it currently has several employees assessing the market and developing relationships with customers in the region. So far no plan for a manufacturing investment in this region has been announced.

“As we consider opportunities for growth, Advanced Airlaid Materials continues to evaluate a number of emerging markets, including Asia,” Astley says. “As disposable income and consumer education increase, we expect broader growth in emerging markets will continue. Contemplating growth in emerging markets will be balanced with the opportunities we believe still exist in the more developed markets of the world.”

Turning toward Composite Fibers, this business unit makes wetlaid nonwovens for applications in the food and beverage market as well as the wall covering market. In 2014, sales decreased slightly in food and beverage but increased sharply in wall coverings, a market Glatfelter entered in 2013 through the acquisition of Dresden Papier, a leading producer of nonwoven wallpaper-based materials. Based in Heidenau, Germany, this business operates a state-of-the-art 60,000 metric ton operating facility solely dedicated to wall coverings. In 2014, wall covering sales contributed nearly $150 million to Glatfelter’s total revenues.

Acquisitions like the airlaid business and Dresden Papier are in sync with Glatfelter’s strategy of exposing itself to grow businesses and boost its share of its engineered and fiber-based businesses, which now represent about half of sales. The next leg in this strategy will reportedly be expansion into the dispersible wipes market. The company is reportedly investing $4 million in developing a substrate to target this market through its Composite Fibers business.
York, PA
2015 Nonwovens Sales: $589 million

Key Personnel
Dante Parrini, chairman and CEO; John Jacunski, executive vice president and CFO; Christopher Astley, senior vice president & business unit president, Advanced Airlaid Materials; Martin Rapp, senior vice president & business unit president, Composite Fibers

Canada, Germany, France, U.K., Philippines

Airlaid, wetlaid

The big news from airlaid specialist Glatfelter is the company’s decision to build a new airlaid line in the U.S. The York, PA-based company announced in December 2015 it would invest  $80 million in a new production facility for its Advanced Airlaid Materials business (AMBU). In March, the company revealed it would be built in Fort Smith, AK.

“Our Advanced Airlaid Materials business is a global growth platform that has a unique opportunity to capitalize on increasing and unmet demand in North America for the materials used in lighter-weight hygiene and disposable wipes products,” says Dante Parrini, chairman and CEO. “Our plan to build this new facility is in direct response to customer needs for increased capacity in a tightening North American airlaid market.”

The new facility, which is currently under construction, is expected to have an annual capacity of approximately 22,000 short tons, which will increase the company’s total global airlaid materials capacity to 129,000 short tons. The investment, which was only finalized after a customer committed to purchase a significant amount of the capacity, will establish a specialty asset base in the U.S. and create a center of excellence for other lighter basis weight products. It will be complete in early 2018.

“We are planning to locate this facility in close proximity to several key customers and highly efficient transportation routes in the southern U.S., as well as where we have additional access to a high-quality, skilled workforce,” says Chris Astley, senior vice president and business unit president, Advanced Airlaid Materials.

The new line will be housed in a former Mitsubishi Power Systems building in Fort Smith, where Glatfelter will create up to 83 highly skilled manufacturing jobs.

Glatfelter’s new Fort Smith facility will supply products to a variety of customers, including those who support the broader wipes and hygiene markets.

“We are truly excited to partner with the people of Fort Smith and Arkansas because we know that investing here makes great business sense for our company,” Astley says. “Locating here benefits our business in a number of ways.  It will enable us to expand our capacity to meet our customers’ growing demand for our advanced airlaid products, provide us with closer proximity to key suppliers and customers and link us to highly efficient transportation routes across the South.  Equally important, it will allow us to tap into the area’s high quality workforce.”

In addition to the new Fort Smith facility, Glatfelter has 12 production facilities located across the U.S., Canada, Germany, France, the U.K., and the Philippines. The company, headquartered in York, PA, employs more than 4300 people worldwide. 

Glatfelter’s most recent airlaid investment was a new line in Falkenhagen, Germany in 2010. In addition to the Falkenhagen site, which now contains three airlaid lines, Glatfelter has two airlaid lines in Quebec, Canada. Together these five lines make about 100,000 tons of nonwovens per year.

In 2015, airlaid sales decreased from $281 million to $244 million due to currency fluctuations. The feminine hygiene markets accounted for the majority, 74% of sales, and customers include a few large, leading consumer products companies. The airlaid wipes market, while a smaller business for Glatfelter, is growing steadily, increasing from $16 to $23 million between 2014 and 2015 and the new airlaid line will continue to boost sales in this category. Other key markets include adult incontinence and home care.

Glatfelter’s Composite Fibers business, which contains wetlaid nonwovens production, for the food and beverage wallcoverings and other specialty markets, also was impacted by currency fluctuations, decreasing in U.S. dollar terms from $617 million to $541 million. 

The largest market within this business, representing about $274 million in sales is food and beverage, which primarily serves the single serve coffee and tea market. Another important business is wallcoverings, a business that was acquired from Dresden Papier inn 2013. While wallcoverings remains an important area for Glatfelter, sales in this segment have been adversely affected by socioeconomic conditions in Russia and the Ukraine, since the beginning of 2015.

In addition to its Advanced Airlaid and Composite Fibers business, Glatfelter operates a third, larger business segment Specialty Papers, which does not include any nonwovens operations. In 2015, sales of this segment were $875 million, representing about half of corporate sales. This segment has not been growing as rapidly as the other two units, largely due to Glatfelter’s strategy of increasing its exposure to engineered and fiber based businesses like nonwovens.