In May 2018, one of the world’s largest nonwovens producer was created through the marriage of the companies once known as Pegas Nonwovens and First Quality Nonwovens. The two companies joined forces after R2G, the Czech-based private equity firm that had acquired Pegas a few months earlier purchased First Quality Nonwovens.
At the time of the FQ acquisition, Michael Smrek, CEO of R2G said, “We believe strongly in the nonwovens business. This transaction will enable us and our group companies to support our global customers across four continents. Post transaction, we will have state-of-the-art production facilities and unrivalled know-how and R&D expertise to ensure that our customers benefit from the premium products we offer and the joint innovation and synergies that this combination will bring. When we acquired Pegas, we said that this was the first step to building a global platform. This transaction is the second step and we look forward to now investing into our global platform and the people that have made the production companies a success.”
Together, the two companies now made about 250,000 tons of nonwovens at sites in Pennsylvania, China, Egypt, the Czech Republic and soon South Africa. Total sales will be in the $550-600 million, making the company, which changed its name to PFNonwovens in June, one of the largest suppliers of spunmelt nonwovens to the hygiene market in the world.
As it settles into its role as a global leader in spunmelt nonwovens, PF continues to expand. The company has begun installation of a new production line in South Africa which is expected to begin commercialization later this year and a new semi-commercia production line in Znojmo-Přímětice is progressing according to schedule and, is expected during the third quarter of 2019, the company reported during its third quarter earnings call in October.
From what R2G has revealed, investment will likely continue for the company who has pledged to truly globalize this business moving forward. Nonwovens Industry spoke to financial controller Jan Zidek on the company’s place in the nonwovens industry, the current climate in spunmelt and what’s on the horizon for PF Nonwovens.
NWI: Please discuss the spunmelt market in general. Does it continue to be healthy? Are there opportunities for growth?
JZ: Yes, there are opportunities for growth and we can pride ourselves on having been able to grasp the opportunities. We are now installing two new production lines and we believe there will be room for additional investments in the future.
NWI: What benefits does PFNonwovens offer to the spunmelt market? How did the merger of Pegas and FQN add value to customers in both companies?
JZ: We believe PFNonwovens will become a truly global leader in the spunlaid nonwovens segment providing services across four continents. We are convinced that our customers will benefit from the merger and we hope to bring them new opportunities to expand and deepen the current business relationship. PFNonwovens combined research and development will provide new solutions, such as new products, new applications and also optimization of production-operational parameters. With our global presence we will be able to roll out these solutions across all markets to give our customers a competitive edge and overall we will be better positioned to support their business growth.
NWI: Now that you are a very international company with sites in US, Czech, China, Egypt and South Africa, what are some other areas you would like to explore for future growth?
JZ: At the moment we want to focus on consolidation of our current sites, maximizing their output and efficiency. Therefore we are currently not exploring opportunities to enter other areas.
NWI: How will you achieve this growth? Through investment, acquisition, or both?
JZ: In 2019, we will launch two new production lines, one in South Africa and one in the Czech Republic. We have enough space to further develop our current sites . So this will most likely be our way forward at least in the near future. Favorable market conditions and successful negotiations with our major clients will determine into which locations we will be investing first.
NWI How are the needs of your customers in the hygiene market changing? How is PF able to meet these changes?
JZ: Customers are ever more demanding in terms of performance of the materials and price conscious at the same time. We therefore constantly need to provide them with new solutions and find ways how to satisfy their needs while offering competitive prices. To meet these challenges we rely primarily on the combined capabilities and experience of our now global R&D team.
NWI: Have you currently added new products or new technologies to meet the needs of the global hygiene market? Explain.
JZ: This is a sensitive topic to answer. However, we have already published that we are about to install a production line in the Czech Republic which will feature a new type of technology. This new technology utilizes proven bicomponent technologies, offers a wide range of fibre types and fibre profiles, while enabling the use of input raw materials different to those that we currently process. A significant element of this technology is also the nonwoven textile bonding system, which is an alternative to the presently used conventional systems. Due to its development potential, we place great expectations into this technology and believe that it will help us to achieve significant successes in research, testing and subsequent commercialisation of new products with applications for current as well as new markets.