01.01.08
Location: PARANA, BRAZIL
Sales: $225 million
Description: Plant Location
São Jose Pinhais-Paraná, Brazil
Key Personnel
Herminio Freitas, CEO; Rubens Sardenberg, CFO; Cleber dos Santos, sales and marketing director; Romeo Bregant, industrial director
Processes
Spunbonded, SMS, meltblown, laminated nonwovens, printed nonwovens
Brand Names
Kami
Major Markets
Hospital, agriculture, bedding, towel and coverlet, table mat, hygiene, baby diapers
The big news at Companhia Providencia, Brazil’s largest nonwovens producer, is a recently announced plan to enter the U.S. market with two new production lines. In late July, the company’s board of producers approved the formation of a U.S. subsidiary containing two production lines capable of making 40,000 tons of material annually. Additionally, the board approved a memorandum of understanding with equipment supplier Reifenhauser, who is supplying the first two lines, to purchase up to four lines before 2012. Executives said the plan to enter the U.S.—currently all of Providencia’s nonwovens production is in Brazil—improves its logistics by positioning itself near its U.S. customers and optimizes its chances for growth in the U.S.
“We have about a dozen customers in the U.S. currently and with the high fuel and transportation costs, we have decided it makes sense to make the product locally instead of shipping it,” said Cleber dos Santos.
Executives plan to announce more information—including an exact location and business structure—of the new entity within the next month.
Meanwhile, in Brazil, the company recently completed construction on its ninth production line, which manufactures low basis weight spunmelt nonwovens. The new line not only increases Providencia’s capacity, it also gives it exposure to new products and markets, namely the medical market.
The new line is based on Reicofil 4 technology and it adds 20,000 tons of material to the company’s operation. Like all of its more modern lines, the new line will mainly target hygiene applications, the company’s core market but it contains technology to expand in other markets such as medical, filtration and automotive.
Line number nine is the latest in a string of investments made by Providencia during the past several years. While capital investment has traditionally been the company’s growth strategy, the most recent of these came in the form of acquisition. In June 2007, Providenica acquired a Brazilian competitor Isofilme for an undisclosed sum. The purchase included a 3.4 meter Reifenhauser Reicofil 4 SSMS line, located in Pouso Alegre, Minas Gerais, Brazil. This line was started in May 2006. According to Mr. Frietas, the line is now fully dedicated to hygiene applications; industrial businesses served by Isofilme has been transferred to older Providencia lines.
According to Mr. Freitas, the addition of its most recent line and the Isofilme business will together help his company grow its sales 28% in 2008 as it awaits the establishment of its U.S. operation. Currently exports represent about half of its business with all of Latin America and North America considered important markets for the company.
Also making headlines for Providencia is its new ownership. In February 2007, the company was purchased by a group of four equity funds led by AIG Capital Partners, Inc., a member company of AIG Global Investment Group. The purchase price was reportedly $433 million (R$930 million) Other investors included Governança e Gestão (“GG Investimentos”), Banco Espírito Santo (“BES”) and the Constantino Family. The company was then sold through an initial public offering in August 2007. According to Mr. Freitas, the move from a family-owned company to a private entity and finally to a publicly traded firm has forced it to look at things more professionally as it must respond to shareholders and be accountable for its performance. Mr. Reitas took over the company in late 2006, replacing a member of the Starostik family who previously owned Companhia Providencia.
Since taking over as head of Providencia following the company’s new ownership, Mr. Freitas has been changing the company’s structure by taking a more market-focused approach on a global basis, he said. “We are trying not to be so regional,” Mr. Freitas explained. “This is a trend because markets can be truly different animals.”
Sales: $225 million
Description: Plant Location
São Jose Pinhais-Paraná, Brazil
Key Personnel
Herminio Freitas, CEO; Rubens Sardenberg, CFO; Cleber dos Santos, sales and marketing director; Romeo Bregant, industrial director
Processes
Spunbonded, SMS, meltblown, laminated nonwovens, printed nonwovens
Brand Names
Kami
Major Markets
Hospital, agriculture, bedding, towel and coverlet, table mat, hygiene, baby diapers
The big news at Companhia Providencia, Brazil’s largest nonwovens producer, is a recently announced plan to enter the U.S. market with two new production lines. In late July, the company’s board of producers approved the formation of a U.S. subsidiary containing two production lines capable of making 40,000 tons of material annually. Additionally, the board approved a memorandum of understanding with equipment supplier Reifenhauser, who is supplying the first two lines, to purchase up to four lines before 2012. Executives said the plan to enter the U.S.—currently all of Providencia’s nonwovens production is in Brazil—improves its logistics by positioning itself near its U.S. customers and optimizes its chances for growth in the U.S.
“We have about a dozen customers in the U.S. currently and with the high fuel and transportation costs, we have decided it makes sense to make the product locally instead of shipping it,” said Cleber dos Santos.
Executives plan to announce more information—including an exact location and business structure—of the new entity within the next month.
Meanwhile, in Brazil, the company recently completed construction on its ninth production line, which manufactures low basis weight spunmelt nonwovens. The new line not only increases Providencia’s capacity, it also gives it exposure to new products and markets, namely the medical market.
The new line is based on Reicofil 4 technology and it adds 20,000 tons of material to the company’s operation. Like all of its more modern lines, the new line will mainly target hygiene applications, the company’s core market but it contains technology to expand in other markets such as medical, filtration and automotive.
Line number nine is the latest in a string of investments made by Providencia during the past several years. While capital investment has traditionally been the company’s growth strategy, the most recent of these came in the form of acquisition. In June 2007, Providenica acquired a Brazilian competitor Isofilme for an undisclosed sum. The purchase included a 3.4 meter Reifenhauser Reicofil 4 SSMS line, located in Pouso Alegre, Minas Gerais, Brazil. This line was started in May 2006. According to Mr. Frietas, the line is now fully dedicated to hygiene applications; industrial businesses served by Isofilme has been transferred to older Providencia lines.
According to Mr. Freitas, the addition of its most recent line and the Isofilme business will together help his company grow its sales 28% in 2008 as it awaits the establishment of its U.S. operation. Currently exports represent about half of its business with all of Latin America and North America considered important markets for the company.
Also making headlines for Providencia is its new ownership. In February 2007, the company was purchased by a group of four equity funds led by AIG Capital Partners, Inc., a member company of AIG Global Investment Group. The purchase price was reportedly $433 million (R$930 million) Other investors included Governança e Gestão (“GG Investimentos”), Banco Espírito Santo (“BES”) and the Constantino Family. The company was then sold through an initial public offering in August 2007. According to Mr. Freitas, the move from a family-owned company to a private entity and finally to a publicly traded firm has forced it to look at things more professionally as it must respond to shareholders and be accountable for its performance. Mr. Reitas took over the company in late 2006, replacing a member of the Starostik family who previously owned Companhia Providencia.
Since taking over as head of Providencia following the company’s new ownership, Mr. Freitas has been changing the company’s structure by taking a more market-focused approach on a global basis, he said. “We are trying not to be so regional,” Mr. Freitas explained. “This is a trend because markets can be truly different animals.”