09.01.11
Tel Aviv, Israel
www.avgol.com
2011 Nonwovens Sales: $329 million
Key Personnel: Shlomo Liran, CEO
Plants: Tel Aviv, Israel; Mocksville, NC; Jingmen, City, Hubei Province, China; Uzlovaya, Russia
Processes: Spunbond, meltblown, hydroentangled spunlace
Brands: Zebra, Avspun, Avsoft
Major Markets: Hygiene, medical and construction
The year 2011 went down as a record one in the production and sale of nonwoven fabrics for Israel’s Avgol Nonwovens. The spunbond specialist expects growth to continue as a third production line comes on-stream in China and a fourth U.S. line becomes operational in 2012.
“Avgol’s momentum in investments last year will ensure the strengthening of its business and competitive positioning in the coming years,” says Shlomo Liran, CEO. “Not withstanding these investments, Avgol’s level of leveraging increased moderately and its strong and stable financial position will enable the company to prepare for strategic moves in the market.”
In 2011, sales grew about 18.8% to reach $329 million, due largely to contributions from the group’s second Chinese line, which came on-stream in mid 2010, as well as an adjustment in selling prices caused by raw material price increases. During this period, the company placed special emphasis on improving the operating efficiency of existing production lines at all of its sites to contend with changing market conditions.
With six older lines operating at its Israel headquarters, Avgol operates sites in North Carolina, China and Russia, from which it serves global hygiene markets. Recent investments include a fourth line in North Carolina and a third line in China and executives have hinted at the possibility of a second line in Russia.
“We are seeing another Avgol growth engine in Russia, in light of steadily increasing demands in Russia,” Liran says. “Currently, our production line is running at full capacity.”
Avgol began making nonwovens in Uzlovaya, Russia, in late 2007 to serve emerging markets in Eastern Europe, Russia, the Ukraine and the “-stan” countries.
Meanwhile, in the U.S., Avgol’s fourth line began operation in Mocksville, NC, in August. This new line is adding 15,000 tons of capacity to the site. Combined with another 15,000 tons being added in China, Avgol’s global capacity is increasing nearly 30% this year to reach 140,000 tons.
Avgol first entered the U.S. market in 2001 when it purchased an existing spunbond line from Unifi. The company has continuously added to this site since then, becoming a leading player in the hygiene market in the Americas. The Chinese site was started in 2005 as a joint venture agreement with Hubei Gold Dragon. A second line was added to the site last year and the third line is set to come on-stream later this year.
Sine the establishment of this Chinese arm, Avgol has invested heavily in new lines, also increasing its stake in the company, which will stand at 83-84% after the new line is added. When the third line comes on-stream, production at this site is expected to increase to 40,000 tons.
The cost of the additional Chinese production line was mainly financed by investment in equity from the Chinese partnership, bank financing and/or with a shareholders’ loan. The investment required to set up the new Chinese production line includes an investment of between $10.2 million and $12.4 million by Avgol in the Chinese partnership equity, as well as a $1.1 million investment by the Chinese partner in the partnership equity. The Chinese partnership will raise the remaining $27-30 million of the investment through local bank financing and/or a shareholders’ loan.
“We identified great opportunities in the China/Asia-Pacific markets, which are considered markets with high growth rates in the categories of disposable hygiene products and specifically baby diapers,” says Liran. “The investment in a third production line in China underscores our complete satisfaction with the investments we have made to date in China within the scope of the partnership and prepares the groundwork for driving the sales momentum in response to the already high demands in China.
“This strategic decision is the outcome of the continuing increase in the volume of purchases and the expression of trust in Avgol and in its production lines by our major customers in China, as well as throughout the world,” he continues. “Increasing our production capacity will enable us to give expression to our competitive advantages—global presence, innovation, uncompromising quality and superb service to our customers, and to fortify Avgol’s positioning as a leading and preferred supplier for the long years ahead.”
Noting that there are a number of untapped markets for the hygiene market, like India, which represents about 11% of all infants in the world, Liran told investors that new manufacturing sites are a strong possibility. “Furthermore, we are considering entering additional territories in growing markets with high growth potential,” he says.
Avgol’s momentum and substantial strategic investments in new infrastructure last year, with the establishment of two production lines in China and in the U.S., will strengthen Avgol’s business and competitive positioning and improve profitability in the coming years, Liran concludes.
www.avgol.com
2011 Nonwovens Sales: $329 million
Key Personnel: Shlomo Liran, CEO
Plants: Tel Aviv, Israel; Mocksville, NC; Jingmen, City, Hubei Province, China; Uzlovaya, Russia
Processes: Spunbond, meltblown, hydroentangled spunlace
Brands: Zebra, Avspun, Avsoft
Major Markets: Hygiene, medical and construction
The year 2011 went down as a record one in the production and sale of nonwoven fabrics for Israel’s Avgol Nonwovens. The spunbond specialist expects growth to continue as a third production line comes on-stream in China and a fourth U.S. line becomes operational in 2012.
“Avgol’s momentum in investments last year will ensure the strengthening of its business and competitive positioning in the coming years,” says Shlomo Liran, CEO. “Not withstanding these investments, Avgol’s level of leveraging increased moderately and its strong and stable financial position will enable the company to prepare for strategic moves in the market.”
In 2011, sales grew about 18.8% to reach $329 million, due largely to contributions from the group’s second Chinese line, which came on-stream in mid 2010, as well as an adjustment in selling prices caused by raw material price increases. During this period, the company placed special emphasis on improving the operating efficiency of existing production lines at all of its sites to contend with changing market conditions.
With six older lines operating at its Israel headquarters, Avgol operates sites in North Carolina, China and Russia, from which it serves global hygiene markets. Recent investments include a fourth line in North Carolina and a third line in China and executives have hinted at the possibility of a second line in Russia.
“We are seeing another Avgol growth engine in Russia, in light of steadily increasing demands in Russia,” Liran says. “Currently, our production line is running at full capacity.”
Avgol began making nonwovens in Uzlovaya, Russia, in late 2007 to serve emerging markets in Eastern Europe, Russia, the Ukraine and the “-stan” countries.
Meanwhile, in the U.S., Avgol’s fourth line began operation in Mocksville, NC, in August. This new line is adding 15,000 tons of capacity to the site. Combined with another 15,000 tons being added in China, Avgol’s global capacity is increasing nearly 30% this year to reach 140,000 tons.
Avgol first entered the U.S. market in 2001 when it purchased an existing spunbond line from Unifi. The company has continuously added to this site since then, becoming a leading player in the hygiene market in the Americas. The Chinese site was started in 2005 as a joint venture agreement with Hubei Gold Dragon. A second line was added to the site last year and the third line is set to come on-stream later this year.
Sine the establishment of this Chinese arm, Avgol has invested heavily in new lines, also increasing its stake in the company, which will stand at 83-84% after the new line is added. When the third line comes on-stream, production at this site is expected to increase to 40,000 tons.
The cost of the additional Chinese production line was mainly financed by investment in equity from the Chinese partnership, bank financing and/or with a shareholders’ loan. The investment required to set up the new Chinese production line includes an investment of between $10.2 million and $12.4 million by Avgol in the Chinese partnership equity, as well as a $1.1 million investment by the Chinese partner in the partnership equity. The Chinese partnership will raise the remaining $27-30 million of the investment through local bank financing and/or a shareholders’ loan.
“We identified great opportunities in the China/Asia-Pacific markets, which are considered markets with high growth rates in the categories of disposable hygiene products and specifically baby diapers,” says Liran. “The investment in a third production line in China underscores our complete satisfaction with the investments we have made to date in China within the scope of the partnership and prepares the groundwork for driving the sales momentum in response to the already high demands in China.
“This strategic decision is the outcome of the continuing increase in the volume of purchases and the expression of trust in Avgol and in its production lines by our major customers in China, as well as throughout the world,” he continues. “Increasing our production capacity will enable us to give expression to our competitive advantages—global presence, innovation, uncompromising quality and superb service to our customers, and to fortify Avgol’s positioning as a leading and preferred supplier for the long years ahead.”
Noting that there are a number of untapped markets for the hygiene market, like India, which represents about 11% of all infants in the world, Liran told investors that new manufacturing sites are a strong possibility. “Furthermore, we are considering entering additional territories in growing markets with high growth potential,” he says.
Avgol’s momentum and substantial strategic investments in new infrastructure last year, with the establishment of two production lines in China and in the U.S., will strengthen Avgol’s business and competitive positioning and improve profitability in the coming years, Liran concludes.