01.01.07
Location: Tel-Aviv, Israel
Sales: $229 million
Description: Key Personnel
Shuki Goldwasser, chairman; Nir Peleg, CEO; Achai Bonneh, director of technology
Plants
Tel Aviv, Israel; Mocksville, NC; Jingmen City, Hubei Province, China; Uzlovaya, Russia
ISO Status
ISO 9002 Certified
Processes
Spunbonded, meltblown
Brand Name
Zebra
Major Markets
Hygiene, medical, construction, agriculture, furniture, upholstery
One company growing by leaps and bounds is Tel Aviv, Israel-based Avgol Nonwoven Industries, which doubled its profits last year and bumped its 2006 sales up a substantial 40% to reach the $229 million mark. Gross profit rose to $55 million, representing nearly 24% of turnover last year. Meanwhile, operating profit rose 105% and net profit doubled to $15 million, which increased the company’s cash to just under $25 million.
As much as 75% of Avgol’s revenue comes from two main customers—Tyco International and Procter & Gamble. Based on its standing orders for these two companies, Avgol’s orders backlog for 2007-2008 totals $340 million (the annual average is similar to revenue from the two companies in 2006).
Avgol attributes its 23% year-to-year internal growth to an overall strategy announced in the mid-90s to make a solid commitment to the hygiene market. “When everyone else was trying to get out of hygiene, we sat down in it,” explained company spokesperson Dennis Durkin. “We decided to make it our focus and to do it better than anybody else. We’ve been able to answer the call for lower basis weights and we’ve made investments and added equipment to make this happen.” He added that the company’s existing lines have been fully utilized since 2005. “We’ve been sold out for five years. However, we are keeping our promises. When customers grow, they expect you to grow with them. And we plan to do just that.”
A recent example of this growth initiative is Avgol’s plan to expand its Mocksville, NC manufacturing facility by adding a fourth Reicofil spunmelt machine. Scheduled for start-up during the second quarter of 2008, the fourth line follows the company’s second line, which was added in October 2004, and its third line, which was added in September 2005. Avgol acquired the North American factory in June 2001.
Currently, the Mocksville, NC site operates three Reicofil SSMMS production lines. The factory has been running at full capacity for the last five years. The total additional investment for the fourth line is approximately $30 million for the spunmelt machine and all related auxiliary and finishing equipment.
Clearly Avgol’s investment plans extend beyond the North American region, with the company unveiling the location of a new Russian spunmelt facility that will start production in the fourth quarter of 2007. Based in Uzlovaya, which is in the Tulia region of Russia and 200 km south of Moscow, the new line will boast a capacity of 10,000 metric tons of SMMS material. The breakdown of the machine’s output will be 80% hygiene and 20% industrial applications, which will supply local markets.
Additionally, Avgol operates five spunmelt lines in Israel as well as another at a joint venture operation (with Hubei Goldkinglong Investment Stock Co. Ltd.) 300 miles southwest of Shanghai, China. According to Mr. Durkin, the Chinese facility continues to grow with more local business being added.
All of this expansion continues to widen Avgol’s geographical base, with 60% of its overall output (including China) coming from outside of Israel. Meanwhile, the remaining 40% of products are manufactured in Israel, with half of that amount supplying the U.S. market. Only a minimal amount of nonwovens produced within Israel serve the domestic market while the rest is used to supply European customers. “We now have more capacity on the ground in North America than in Israel,” pointed out Mr. Durkin. “And in Europe, we are garnering more business than ever before.”
Wrapping up, Mr. Durkin described Avgol as a great competitor with top-of-the-line standards and assets. “What we do, we do first class. We may be plain vanilla but we are Häagen-Dazs vanilla. From a technology standpoint, we are very strong and we’ve worked hard to solve problems in a market that a lot of people wanted nothing to do with.”
Moving forward, the company plans to continue to grow its base market where it can exploit technological possibilities such as elastomerics. Avgol will focus on the production of increasingly sophisticated products at lower basis weights to meet customer requirements. “This is who we are and who we will continue to be. We’re taking it around the world now. It’s a small idea that grew big.”
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Sales: $229 million
Description: Key Personnel
Shuki Goldwasser, chairman; Nir Peleg, CEO; Achai Bonneh, director of technology
Plants
Tel Aviv, Israel; Mocksville, NC; Jingmen City, Hubei Province, China; Uzlovaya, Russia
ISO Status
ISO 9002 Certified
Processes
Spunbonded, meltblown
Brand Name
Zebra
Major Markets
Hygiene, medical, construction, agriculture, furniture, upholstery
One company growing by leaps and bounds is Tel Aviv, Israel-based Avgol Nonwoven Industries, which doubled its profits last year and bumped its 2006 sales up a substantial 40% to reach the $229 million mark. Gross profit rose to $55 million, representing nearly 24% of turnover last year. Meanwhile, operating profit rose 105% and net profit doubled to $15 million, which increased the company’s cash to just under $25 million.
As much as 75% of Avgol’s revenue comes from two main customers—Tyco International and Procter & Gamble. Based on its standing orders for these two companies, Avgol’s orders backlog for 2007-2008 totals $340 million (the annual average is similar to revenue from the two companies in 2006).
Avgol attributes its 23% year-to-year internal growth to an overall strategy announced in the mid-90s to make a solid commitment to the hygiene market. “When everyone else was trying to get out of hygiene, we sat down in it,” explained company spokesperson Dennis Durkin. “We decided to make it our focus and to do it better than anybody else. We’ve been able to answer the call for lower basis weights and we’ve made investments and added equipment to make this happen.” He added that the company’s existing lines have been fully utilized since 2005. “We’ve been sold out for five years. However, we are keeping our promises. When customers grow, they expect you to grow with them. And we plan to do just that.”
A recent example of this growth initiative is Avgol’s plan to expand its Mocksville, NC manufacturing facility by adding a fourth Reicofil spunmelt machine. Scheduled for start-up during the second quarter of 2008, the fourth line follows the company’s second line, which was added in October 2004, and its third line, which was added in September 2005. Avgol acquired the North American factory in June 2001.
Currently, the Mocksville, NC site operates three Reicofil SSMMS production lines. The factory has been running at full capacity for the last five years. The total additional investment for the fourth line is approximately $30 million for the spunmelt machine and all related auxiliary and finishing equipment.
Clearly Avgol’s investment plans extend beyond the North American region, with the company unveiling the location of a new Russian spunmelt facility that will start production in the fourth quarter of 2007. Based in Uzlovaya, which is in the Tulia region of Russia and 200 km south of Moscow, the new line will boast a capacity of 10,000 metric tons of SMMS material. The breakdown of the machine’s output will be 80% hygiene and 20% industrial applications, which will supply local markets.
Additionally, Avgol operates five spunmelt lines in Israel as well as another at a joint venture operation (with Hubei Goldkinglong Investment Stock Co. Ltd.) 300 miles southwest of Shanghai, China. According to Mr. Durkin, the Chinese facility continues to grow with more local business being added.
All of this expansion continues to widen Avgol’s geographical base, with 60% of its overall output (including China) coming from outside of Israel. Meanwhile, the remaining 40% of products are manufactured in Israel, with half of that amount supplying the U.S. market. Only a minimal amount of nonwovens produced within Israel serve the domestic market while the rest is used to supply European customers. “We now have more capacity on the ground in North America than in Israel,” pointed out Mr. Durkin. “And in Europe, we are garnering more business than ever before.”
Wrapping up, Mr. Durkin described Avgol as a great competitor with top-of-the-line standards and assets. “What we do, we do first class. We may be plain vanilla but we are Häagen-Dazs vanilla. From a technology standpoint, we are very strong and we’ve worked hard to solve problems in a market that a lot of people wanted nothing to do with.”
Moving forward, the company plans to continue to grow its base market where it can exploit technological possibilities such as elastomerics. Avgol will focus on the production of increasingly sophisticated products at lower basis weights to meet customer requirements. “This is who we are and who we will continue to be. We’re taking it around the world now. It’s a small idea that grew big.”
"