09.11.24
Evansville, IN
www.berryglobal.com
2023 Nonwovens Sales: $2.6 billion
Key Personnel
Kevin Kwilinski, chairman and CEO; Curt Begle, president, Health, Hygiene, and Specialties Division
HHS Division Plants
U.S. and Canada: Augusta, KY; Benson, NC; Dalton, GA; McAlester, OK; Mooresville, NC; Nashville, TN; North Bay, Canada; Old Hickory, TN; Statesville, NC; Washington, GA; Waynesboro, VA
Latin America: Atlacamulco, Mexico; Cali, Colombia; Jundiaí, Brazil; Pilar, Argentina; Pouso Allegre, Brazil; San Luis Potosí, Mexico; São José dos Pinhais, Brazil
EMEIA: Aberdare, U.K.; Aschersleben, Germany; Bailleul, France; Berlin, Germany; Biesheim, France; Cujik, Netherlands; Dombühl, Germany; Maldon, U.K.; Neuville-en-Ferrain, France; Tarragona, Spain; Terno d’Isola, Italy
Asia: Nanhai, China; Suzhou, China
In February, Berry Global Group, a multi-national manufacturer of nonwovens with plants around the globe, announced its intent to join forces with Glatfelter Corporation, a maker of airlaid and spunlaced nonwovens, to add value to their shareholders and create innovative polymer and fiber-based solutions to their customers. Under the agreement, which is expected to be finalized later this year, Berry’s Health, Hygiene and Specialties (HHS) segment, which includes its nonwovens and films businesses, will merge with Glatfelter, creating a leading publicly-traded company, to be known as Magnera, in the specialty materials industry.
Together, the two companies, which are both based in the U.S., operate 45 manufacturing sites globally, spanning a range of nonwovens and nonwovens-adjacent technologies focused strongly on healthcare, hygiene, wipes and specialty end markets. Following the deal, Berry shareholders will control 90% of the company. Curt Begel, president of Berry’s HHS business, will serve as CEO of Magnera, while the upper management team will consist of a combination of Berry and Glatfelter executives. Combined revenues are projected at $3.6 billion.
“This announcement is the culmination of a comprehensive review of strategic alternatives to determine the value-maximizing path forward for Berry shareholders,” says Kevin Kwilinski, Berry’s CEO. “We believe these two businesses, in combination, can drive significant value for shareholders with complementary portfolios, positioning each for greater success. Following the completion of the transaction, (Magnera) will become a pure-play provider of innovative, sustainable global packaging solutions, which we believe will deliver even more predictable earnings growth for Berry shareholders. Additionally, we believe HHNF in combination with Glatfelter will thrive as an independent company that is positioned to drive long-term growth with its global brand-owner customers.”
The merger announcement came less than six months after Berry reported, in September 2023, that it would review strategic alternatives for its HH&S segment as part of an effort to focus more squarely on its global packaging business. According to Kwilinski, the deal with Glatfelter was chosen because it is able to create substantial value for Berry shareholders as well as a clear path for the company to capitalize on growth within the nonwovens industry.
While Berry’s nonwovens business has faced challenges in the past 12 months due mainly to the impact of ambitious growth and investment during the Covid-19 pandemic and supply chain challenges, the company expects to see low- to mid-single digit growth in the near term.
“As the industry comes to a little bit of a reset—as you can see from some of the major CPGs—we are seeing much more balanced opportunities from a volume standpoint,” Begel says. “The long-term growth dynamic is to continue to produce innovative products and an improved mix to our customers.”
The combined platforms of the two companies offer complementary sustainable fiber- and polymer-based materials. Glatfelter, as the world’s largest manufacturer of airlaid nonwovens, counts wood-based pulp and cellulose as its key raw materials, while a large portion of Berry’s output is focused on spunmelt nonwovens for healthcare and hygiene applications, which are largely polypropylene-based.
“What each of the companies longed for and didn’t have, we now have and it’s creating an opportunity to bring more solutions to our customers,” Begel adds.
Since acquiring the nonwovens business from Avintiv in 2015, Berry has made two major acquisitions within the packaging side of its business—RPC in 2019 and AET in 2016— that have helped it achieve its goal of creating a global presence and scale to be a more effective competitor on the world stage. Meanwhile, the nonwovens business, with its cyclical nature and intense capital investments, has not fit as well into the company’s overall scope.
“When we make an investment (in HHS), it is much larger in scale,” Kwilinski says. “If we put in an injection line or a thermobonding line, it might be a $10 million investment, but to put in a unit of capacity in the HHS business, it’s more on scale of eight to 10 times that. That created a lumpiness as that capacity comes online and the market is absorbing it, especially if others are making investments at the same time. That created a lot more volatility of earnings and that is the core issue of this business being a part of Berry.”
In recent years, Berry has made several significant investments in its nonwovens business including two state-of-the-art spunmelt lines in Nanhai, China, and a sustainably-focused spunlace line in Cujik, the Netherlands. Additionally, during the Covid-19 pandemic in 2020-2021, Berry added several lines globally dedicated to the production of meltblown nonwovens, the key material used in face masks and respirators.
While these investments have increased Berry’s global capacity, they have also allowed the company to offer new features to its customers across all of its core markets. Within hygiene and healthcare, the two Reicofil lines in China have added capabilities to improve softness, sustainability, barrier, cloth-like appearance, improved visual function and improved cost-effectiveness. In spunlace, the new asset in the Netherlands offers several unique characteristics such as the company’s proprietary Apex technology, which provides best-in-class debossing on any fabric with the flexibility of design to create a range of attributes including visual, tactile and functional performance enhancements. Its central European location also offers reduced transportation-related environmental impact.
For the fiscal year ended 2023, sales within Berry’s Health, Hygiene and Specialties segment decreased from $3.1 billion to $2.6 million. Operating income also decreased significantly during the period. The decreases were primarily attributed to lower selling prices as well as a 7% volume decline, caused by general market softness and customer destocking.
www.berryglobal.com
2023 Nonwovens Sales: $2.6 billion
Key Personnel
Kevin Kwilinski, chairman and CEO; Curt Begle, president, Health, Hygiene, and Specialties Division
HHS Division Plants
U.S. and Canada: Augusta, KY; Benson, NC; Dalton, GA; McAlester, OK; Mooresville, NC; Nashville, TN; North Bay, Canada; Old Hickory, TN; Statesville, NC; Washington, GA; Waynesboro, VA
Latin America: Atlacamulco, Mexico; Cali, Colombia; Jundiaí, Brazil; Pilar, Argentina; Pouso Allegre, Brazil; San Luis Potosí, Mexico; São José dos Pinhais, Brazil
EMEIA: Aberdare, U.K.; Aschersleben, Germany; Bailleul, France; Berlin, Germany; Biesheim, France; Cujik, Netherlands; Dombühl, Germany; Maldon, U.K.; Neuville-en-Ferrain, France; Tarragona, Spain; Terno d’Isola, Italy
Asia: Nanhai, China; Suzhou, China
In February, Berry Global Group, a multi-national manufacturer of nonwovens with plants around the globe, announced its intent to join forces with Glatfelter Corporation, a maker of airlaid and spunlaced nonwovens, to add value to their shareholders and create innovative polymer and fiber-based solutions to their customers. Under the agreement, which is expected to be finalized later this year, Berry’s Health, Hygiene and Specialties (HHS) segment, which includes its nonwovens and films businesses, will merge with Glatfelter, creating a leading publicly-traded company, to be known as Magnera, in the specialty materials industry.
Together, the two companies, which are both based in the U.S., operate 45 manufacturing sites globally, spanning a range of nonwovens and nonwovens-adjacent technologies focused strongly on healthcare, hygiene, wipes and specialty end markets. Following the deal, Berry shareholders will control 90% of the company. Curt Begel, president of Berry’s HHS business, will serve as CEO of Magnera, while the upper management team will consist of a combination of Berry and Glatfelter executives. Combined revenues are projected at $3.6 billion.
“This announcement is the culmination of a comprehensive review of strategic alternatives to determine the value-maximizing path forward for Berry shareholders,” says Kevin Kwilinski, Berry’s CEO. “We believe these two businesses, in combination, can drive significant value for shareholders with complementary portfolios, positioning each for greater success. Following the completion of the transaction, (Magnera) will become a pure-play provider of innovative, sustainable global packaging solutions, which we believe will deliver even more predictable earnings growth for Berry shareholders. Additionally, we believe HHNF in combination with Glatfelter will thrive as an independent company that is positioned to drive long-term growth with its global brand-owner customers.”
The merger announcement came less than six months after Berry reported, in September 2023, that it would review strategic alternatives for its HH&S segment as part of an effort to focus more squarely on its global packaging business. According to Kwilinski, the deal with Glatfelter was chosen because it is able to create substantial value for Berry shareholders as well as a clear path for the company to capitalize on growth within the nonwovens industry.
While Berry’s nonwovens business has faced challenges in the past 12 months due mainly to the impact of ambitious growth and investment during the Covid-19 pandemic and supply chain challenges, the company expects to see low- to mid-single digit growth in the near term.
“As the industry comes to a little bit of a reset—as you can see from some of the major CPGs—we are seeing much more balanced opportunities from a volume standpoint,” Begel says. “The long-term growth dynamic is to continue to produce innovative products and an improved mix to our customers.”
The combined platforms of the two companies offer complementary sustainable fiber- and polymer-based materials. Glatfelter, as the world’s largest manufacturer of airlaid nonwovens, counts wood-based pulp and cellulose as its key raw materials, while a large portion of Berry’s output is focused on spunmelt nonwovens for healthcare and hygiene applications, which are largely polypropylene-based.
“What each of the companies longed for and didn’t have, we now have and it’s creating an opportunity to bring more solutions to our customers,” Begel adds.
Since acquiring the nonwovens business from Avintiv in 2015, Berry has made two major acquisitions within the packaging side of its business—RPC in 2019 and AET in 2016— that have helped it achieve its goal of creating a global presence and scale to be a more effective competitor on the world stage. Meanwhile, the nonwovens business, with its cyclical nature and intense capital investments, has not fit as well into the company’s overall scope.
“When we make an investment (in HHS), it is much larger in scale,” Kwilinski says. “If we put in an injection line or a thermobonding line, it might be a $10 million investment, but to put in a unit of capacity in the HHS business, it’s more on scale of eight to 10 times that. That created a lumpiness as that capacity comes online and the market is absorbing it, especially if others are making investments at the same time. That created a lot more volatility of earnings and that is the core issue of this business being a part of Berry.”
In recent years, Berry has made several significant investments in its nonwovens business including two state-of-the-art spunmelt lines in Nanhai, China, and a sustainably-focused spunlace line in Cujik, the Netherlands. Additionally, during the Covid-19 pandemic in 2020-2021, Berry added several lines globally dedicated to the production of meltblown nonwovens, the key material used in face masks and respirators.
While these investments have increased Berry’s global capacity, they have also allowed the company to offer new features to its customers across all of its core markets. Within hygiene and healthcare, the two Reicofil lines in China have added capabilities to improve softness, sustainability, barrier, cloth-like appearance, improved visual function and improved cost-effectiveness. In spunlace, the new asset in the Netherlands offers several unique characteristics such as the company’s proprietary Apex technology, which provides best-in-class debossing on any fabric with the flexibility of design to create a range of attributes including visual, tactile and functional performance enhancements. Its central European location also offers reduced transportation-related environmental impact.
For the fiscal year ended 2023, sales within Berry’s Health, Hygiene and Specialties segment decreased from $3.1 billion to $2.6 million. Operating income also decreased significantly during the period. The decreases were primarily attributed to lower selling prices as well as a 7% volume decline, caused by general market softness and customer destocking.
