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.
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)
Drylaid staple fiber, wetlaid, spunbonded, meltblown, electrostatic spun microfiber, needlepunched, thermal bonded, chemical bonded, water entanglement
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
Vilene, Viledon, Vilmed, Pellon, MicronAir, Vlieseline, Vildona, Fliselina, Lutradur, Lutrasil, Evolon
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
Novedrate, Italy; Pisticci, Italy; Colmar, France; Lodz, Poland; Macon, GA
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
Drylaid carded and/or needlepunched and/or chemical bonded, spunbonding, thermal bonding, chemical bonding
Main locations are ISO 9001 and ISO 14001 certified.
Plants in Italy are OSHAS 18001 certified.
Terbond, Texbond, Polifill, Polifill T3, Ecozero, PhonoPAR, VeloPAR, AcquaPAR, ReflexPAR
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
Hans-Georg Franke, president; Klaus-Peter Meier, EVP marketing, sales, product development; Alexander Moker, EVP materials management, Production; Gerhard Schmitt, EVP finance, administration, HR
Augsburg, Germany; Arnhem, The Netherlands; Norrköping, Sweden; Roncello, Italy; Salo, Finland
Dry laid, thermal bonded, chemical bonded, needlepunched
Vileda, Wettex, O-Cedar, Roll-O-Matic, Enka, Patito,
Household wipes and cleaning instruments, scourers, gloves, mechanical laundry care