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    Editorial

    All is Well on the Spunmelt Front

    ...

    Karen McIntyre, Editor02.24.10
    Spunmelt. The largest market for nonwovens globally continues to evolve. Despite a global economic crisis that has basically defined the past 12-18 months, new investment continues for this technology on a global scale. In December, PGI, the world's largest spunmelt producer, was the latest company to announce investment in this technology when it said it was adding new custom machines in the U.S. and Asia to better serve the hygiene and healthcare marketplace. In announcing the new lines, PGI executives said they will "employ recent proprietary technological developments to deliver differentiated products to customers that will achieve improved barrier, softness and opacity versus current marketplace capabilities for use in such products as diapers, surgical gowns and drapes."

    This announcement is just the latest in a steady stream of capacity expansion announcements in the spunmelt market. FitesaFiberweb has begun work on a new line in the southeast U.S. as has Companhia Providencia. Both companies say that second lines are part of their North American expansion strategies and will likely follow in the next two to three years. Meanwhile, in Europe, Union Industries is adding a huge, 24,000-ton-per-year line in Italy, and, further east, Avgol is adding a second line in China. Fibertex is expanding its Malaysian operation and a number of Turkish companies are also in expansion mode.

    So why is it that as global economies continue to struggle and credit markets are tighter than they have been in years, these nonwovens manufacturers continue to invest millions and millions of dollars in spunmelt lines?

    Well, the answer probably depends on whom you ask. The optimist would say that global hygiene markets continue to thrive, requiring more spunbond to be made. Meanwhile, the pessimist might say that all of this new capacity is being driven by the nonwovens' manufacturers continued quest to make the lightest product the most efficiently, allowing them to win the price war in the hygiene market but only until someone else comes along with a lower price tag.

    The real answer is probably a combination of these two. While it is true that hygiene has by and large been a fairly recession-proof market—after all, people are still going to diaper their children in bad times— and developing markets continue to offer growth opportunities, it is also true that the hygiene market continues to become more price sensitive. Diaper makers and other manufacturers of disposables have been reluctant to allow price increases, and as most spunmelt producers opt for the same turnkey equipment, success has largely become a matter of offering customers the biggest bang for their buck. One of the ways companies achieve this is by investing in larger, more sophisticated and more efficient lines. This can work for a while, but it will only be a matter of time before someone else offers a lower price.

    As one wise nonwovens executive said recently, "wider machines and lower basis weights should only be a part of the solution," when ensuring the long-term health of your business. Instead, producers should focus on offering a differentiated product that will entice consumers, regardless of the cost. PGI's latest investments, which will reportedly combine Reifenhauser's latest technology with some of PGI's proprietary developments, are a good example of how companies can better tailor their nonwovens output to be more competitive in today's business climate. Of course, it will be a while before we see just how different the products from these new lines are from the competition.

    Karen McIntyre
    Editor
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