01.01.10
Location: Znojmo, Czech Republic
Sales: $160 million
Description: Key Personnel
Milos Bogdan, managing director; Frantisek Klaska, technical director; Frantisek Rezac, commercial director, Ales Gerza, financial director; Rostislav Vrbacky, production director
Plants
Znojmo, Bucovice, Czech Republic
Processes
Spunbond, meltblown, SMS, BiCo
Major Markets
Hygiene, agriculture, healthcare, ecology, furniture, building, protective apparel, industrial
Sales decreased 13.5% at Eastern Europe’s largest nonwovens producer last year, due to the rapid decline of polymer prices beginning in late 2008, which translated into lower selling prices, according to Frantisek Rezac, CEO of Pegas Nonwovens, Znojmo, Czech Republic.
Despite this decrease, Pegas was able to achieve only slightly lower EBITDA during 2009 thanks to a significant upswing in the first quarter of 2009 when the company benefitted from the positive effect of the price pass-through mechanism and the successful sale of inventory held over from the end of 2008. In the second half of 2009, the company experienced a higher than expected increase in input prices, which impacted its operational results, the impact of which were minimized thanks to improved production efficiency, strong sales and optimization measures, according to executives.
With nearly 90% of its output sold in the hygiene market, Pegas was lucky enough to avoid most of the effects of the global economic crisis. “The demand for hygiene products is non-cyclical and compared to other market segments, it was/is relatively unaffected by economic developments,” Mr. Rezac said. “This demand inelasticity was confirmed in 2009 as well, during the economic downturn, where growth in volumes continued regardless of external factors.”
In fact, business and future expectations has been so good that Pegas decided earlier this year to move forward with the construction of a new line, which will become commercial during the second half of next year.
According to executives, the line—the company’s ninth—will be a Reicofil 4 type production line designed to make materials for the hygiene market but it will have the flexibility targeting other applications. Additionally, the line will add up to 20,000 tons of capacity to the company’s current capacity. “The line, which will be Pegas’ most technologically advanced yet, will strengthen the position of the company as the technological leader in the field of nonwoven textile production and enable Pegas to be even more focused on ultralight materials, new bicomponent applications and other advanced materials,” said Mr. Rezac. Pegas hopes to bring products featuring the capabilities to the market between 2012 and 2014.”
Currently, sales to the hygiene industry represent an 89% share of Pegas’ sales. Of these, 69.1% were to the commodity segments of the hygiene market while the rest of its sales to the hygiene market comprised lightweight and bicomponent materials for the hygiene segment. “Advanced materials, which are difficult to produce, remains the highest priority for the company. With respect to customer needs, there have been no significant shifts recently, however in the future we could expect additional movement to advanced products. Customers seek lighter materials due to raw materials expenses reduction. Also our partners cooperate with us on improvements of properties of materials, such as softness, elasticity, extensibility, etc,” Mr. Rezac said.
For now, the company will continue to meet these goals with Reicofil technology. All eight of its current lines—as well as its ninth currently under construction—are based on the German spunmelt technology and the company attributes a lot of its success to Reicofil’s efficiency, flexibility and dependability. That’s not to say however, that Pegas is not closely monitoring other machinery offerings.
A close eye on the market, its demands and its offerings, are just a part of Pegas’s future growth strategy. Additionally, the company will grow its capacity, work on fostering close relationships with its customers and suppliers and focus on technologically advanced products, all while maintaining a solid financial performance, Mr. Rezac continued.
With most of its sales in Europe—60% in Western Europe alone—Pegas will continue to serve its customers from its plants in the Czech Republic. Moving forward, new growth in demand is expected to come from Central and Eastern Europe, the Middle East, including Turkey, and Africa. While Pegas continues to only make nonwovens in Czech Republic-and no plans for international expansion have been made—Pegas does continue to monitor investment opportunities outside the Czech Republic, whether through acquisition or Greenfield construction.
Sales: $160 million
Description: Key Personnel
Milos Bogdan, managing director; Frantisek Klaska, technical director; Frantisek Rezac, commercial director, Ales Gerza, financial director; Rostislav Vrbacky, production director
Plants
Znojmo, Bucovice, Czech Republic
Processes
Spunbond, meltblown, SMS, BiCo
Major Markets
Hygiene, agriculture, healthcare, ecology, furniture, building, protective apparel, industrial
Sales decreased 13.5% at Eastern Europe’s largest nonwovens producer last year, due to the rapid decline of polymer prices beginning in late 2008, which translated into lower selling prices, according to Frantisek Rezac, CEO of Pegas Nonwovens, Znojmo, Czech Republic.
Despite this decrease, Pegas was able to achieve only slightly lower EBITDA during 2009 thanks to a significant upswing in the first quarter of 2009 when the company benefitted from the positive effect of the price pass-through mechanism and the successful sale of inventory held over from the end of 2008. In the second half of 2009, the company experienced a higher than expected increase in input prices, which impacted its operational results, the impact of which were minimized thanks to improved production efficiency, strong sales and optimization measures, according to executives.
With nearly 90% of its output sold in the hygiene market, Pegas was lucky enough to avoid most of the effects of the global economic crisis. “The demand for hygiene products is non-cyclical and compared to other market segments, it was/is relatively unaffected by economic developments,” Mr. Rezac said. “This demand inelasticity was confirmed in 2009 as well, during the economic downturn, where growth in volumes continued regardless of external factors.”
In fact, business and future expectations has been so good that Pegas decided earlier this year to move forward with the construction of a new line, which will become commercial during the second half of next year.
According to executives, the line—the company’s ninth—will be a Reicofil 4 type production line designed to make materials for the hygiene market but it will have the flexibility targeting other applications. Additionally, the line will add up to 20,000 tons of capacity to the company’s current capacity. “The line, which will be Pegas’ most technologically advanced yet, will strengthen the position of the company as the technological leader in the field of nonwoven textile production and enable Pegas to be even more focused on ultralight materials, new bicomponent applications and other advanced materials,” said Mr. Rezac. Pegas hopes to bring products featuring the capabilities to the market between 2012 and 2014.”
Currently, sales to the hygiene industry represent an 89% share of Pegas’ sales. Of these, 69.1% were to the commodity segments of the hygiene market while the rest of its sales to the hygiene market comprised lightweight and bicomponent materials for the hygiene segment. “Advanced materials, which are difficult to produce, remains the highest priority for the company. With respect to customer needs, there have been no significant shifts recently, however in the future we could expect additional movement to advanced products. Customers seek lighter materials due to raw materials expenses reduction. Also our partners cooperate with us on improvements of properties of materials, such as softness, elasticity, extensibility, etc,” Mr. Rezac said.
For now, the company will continue to meet these goals with Reicofil technology. All eight of its current lines—as well as its ninth currently under construction—are based on the German spunmelt technology and the company attributes a lot of its success to Reicofil’s efficiency, flexibility and dependability. That’s not to say however, that Pegas is not closely monitoring other machinery offerings.
A close eye on the market, its demands and its offerings, are just a part of Pegas’s future growth strategy. Additionally, the company will grow its capacity, work on fostering close relationships with its customers and suppliers and focus on technologically advanced products, all while maintaining a solid financial performance, Mr. Rezac continued.
With most of its sales in Europe—60% in Western Europe alone—Pegas will continue to serve its customers from its plants in the Czech Republic. Moving forward, new growth in demand is expected to come from Central and Eastern Europe, the Middle East, including Turkey, and Africa. While Pegas continues to only make nonwovens in Czech Republic-and no plans for international expansion have been made—Pegas does continue to monitor investment opportunities outside the Czech Republic, whether through acquisition or Greenfield construction.