“This kind of investment project, which is in the range of €50 million, is truly across the board for us,” says company director Harald Stini.
This week executives met the company’s Reichenbach, Germany site to officially break ground on a new spunlace facility. The investment, the second spunlace line at the site, will bring production from 45 million square meters to 100 million square meters and is the new capacity will largely target customers in automotives and construction and, to a less extent, filtration. The investment, which is on track to be complete in mid 2015, is estimated at €25 million ($36 million).
“We are pleased with the continued strong growth in demand for Tenowo products,” says Klaus Steger, chairman of the board. “In addition to expanding production, we will also be investing in our research and development activities, thus achieving further growth in new market segments.”
Tenowo first entered the spunlace market in 2006 and its first line has reportedly been operating at sold-out status for two years. Unlike most spunlace manufacturers, Tenowo has largely avoided the wipes market, instead choosing to focus on industrial markets.
Beyond the spunlace investment, the company has also announced it will expand production of its needlepunch operations in Hof, Germany and its stitchbonding output in Mittweida, Germany and add a new powder bonding line in Lincolnton, NC. “The U.S. investment will allow us to get better prepared for the automotives market,” Stini explains. “We wants to launch new and improved products.”
While the automotives market in the U.S. is clearly on its radar, Tenowo cannot ignore the potential of China, which already leads the world in car production, and is currently constructing a $15 million line at a new site in Houzoh, China, not far from Shanghai. The line, a combination of needlepunch and chemical bonding technology, was announced last year and is expected to start operation in June. “We have already been doing business in China from Germany for years so we have a customer base but we are finding that more and more Chinese automotives makers are looking for local producers or at least locally made products.”
With group sales holding steady at about $150 million, Stini says he expects the fruits of these investments to start impacting sales in a few years. “The investments won’t translate into growth immediately,” he adds. “With technical applications, it takes one to two years to really trickle down.”