Karen McIntyre, senior editor10.02.14
With older lines scheduled to close and no new ones up and running…yet, the global market for airlaid nonwovens continues to be described as “tight,” with pricing levels trending higher than they have in some time and industry watch dogs expect it won’t be long before additional capacity is announced.
The industry’s most recent line is Glatfelter’s latest European investment, which was added in 2010, not long after the company purchased the airlaid business from Concert Industries. When, Concert announced the new line in 2009, executives said the 30%, or 20,000-ton, capacity increase would help it meet demand in Europe and Asia. But, four years later, Glatfelter continues to hone its strategy for growth in Asia, where hygiene growth is estimated at 7-12% per year. While the company has established sales and representation offices in China where employees are busy assessing the market and developing relationships with customers in the region. The company has not yet announced plans to establish a manufacturing base there.
“For now, the company is seeding this market from its operations in Europe, but as this region has the most promise in terms of growth, a more substantial presence could be considered in the future,” says vice president of the company’s advanced airlaid business, Jonathan Bourget. “For now, no definitive plans have been made. We need to better understand the market.”
The market, in China that is, is largely comprised of smaller producers operating Chinese-made lines, although at least two Eastern lines—a Fitesa-owned line that was built using M&J (Oerlikon) technology in Tianjin in 2000 and a 10,000 ton Dan-Web line owned by Qiaohong Nanning. The latter of these lines is reportedly for sale and has been considered by several of the world’s leading producers of nonwovens.
Shut Down Street
Meanwhile, the developed world is expecting the closure of lines from Rexcell/Duni in Sweden slated for this year along with the already closed line from Georgia-Pacific in North America.
“There is definitely a tightening of supply versus demand,” says industry consultant Phil Mango. “It’s getting tighter and there are not a lot of companies who will take the risk and invest in a new line.”
By larger players Mango is referring to G-P and Glatfelter who now command more than 20% of the market each. Meanwhile, smaller players, like McAirlaids with its lines in Germany and Virginia or Rexcell who contribute about 5-6% of global supply, have been scared by history to add a new line, even though market conditions are becoming ripe for some investing.
“It is very difficult to convince these smaller companies to build a new line,” Mango says.
Jens Erik Thordahl, senior airlaid specialist at Campen, says he has a solution for tight capacity in the airlaid market. His company has developed smaller, flexible airlaid lines targeted at converters who would normally source the material from larger producers.
“These converters face challenges because they have to rely on the supply changes of the larger airlaid producers,” he says. “They also have to pay for shipping airlaid materials, which can be expensive and takes extra time.”
The cost savings that converters can reap by investing in these small airlaid lines are so great that the lines pay for themselves after three years, Thordahl says, adding that already one converter in North America has committed to purchase one of his lines.
Campen got into the airlaid business in November 2013 when it formed a partnership with Airlaid Nonwovens Systems and this business operates as a separate division within Campen, which has sold unwinders, slitters and winders for nonwovens. Campen is owned by Varo, who has made hammer mils, drum forming heads and complete lines for airlaid manufacturers for 25 years.
Big Boys Mean Business
Also impacting the airlaid market is the merger of Georgia-Pacific with Buckeye Technologies in mid 2013. Together the two companies have combined airlaid sales of about $400 million as well as a huge fluff and dissolving pulp business to supply this airlaid output. The two came together when G-P, owned by Koch Industries, announced a plan to buy Buckeye for $37.50 per share in cash.
At the time, John Crowe, Buckeye’s chairman and CEO said the transaction would allow stockholders to realize significant value while also representing the next important step in the growth of Buckeye.
Meanwhile, G-P CEO Jim Hannan said Buckeye’s competitive assets and capabilities complement G-P’s existing cellulose business and products. He added that specialty fibers and nonwovens businesses of Buckeye Technologies provide a significant platform for continued growth and success for both companies.
Prior to the acquisition, Buckeye operated a 50,000-ton airlaid line in Gaston, NC, which was added in 2000, as well as two smaller lines in Steinfurt, Germany. The company has slowly and steadily improved its financial position between 2000 and 2013, recovering from a major airlaid overcapacity situation, partially brought on by the aforementioned line in North Carolina.
Among the efforts that Buckeye made to balance its capacity situation was the closure of sites in Cork, Ireland and Delta, British Columbia as well as a strong focus on new product development particularly in the wipes segment.
Meanwhile, G-P, whose strong focus has been on the consumer wipes, moist toilet tissue and away from home markets, operates significantly older assets in Green Bay, WI and has reportedly made plans to shut down one of the two remaining latex airlaid lines there.
While G-P is notoriously close-mouthed on its operations, industry insiders are reporting that much of the airlaid business leadership is now located, or planning to move, to Memphis, TN, Buckeye’s former headquarters.
The combination of the airlaid businesses of G-P and Buckeye makes the company easily the largest manufacturer of airlaid, but Glatfelter is not far behind with sales in 2013 increasing from $246 million to $268 million, and this business continues to improve in health also with earnings up from $4.4 million to $21.5 million between 2012 and 2013.
“It has been a very encouraging journey,” says Bourget. “After the acquisition of Concert we had a bit of a learning curve and we had to make necessary changes to meet expectations but our progress has been very encouraging, thanks to the dedication of our employees and the trust of our customers.”
According to the company, about 82% of its output targets the feminine hygiene market to a large group of multinational companies but other key markets include wipes, homecare and adult incontinence. In fact, the industry rumor mill suspects that it is Glatfelter material that makes the core of Procter & Gamble’s new Always Discreet adult incontinence products, but Glatfelter has refused to comment on this.
However, Glatfleter has been vocal about the development of a new absorbent core material being marketed under the eCore brand name. This pulp-based airlaid substrate contains as high as 85% superabsorbent polymer material and is intended for use in adult incontinence products and baby diapers. Bourget says the product offers a much more efficient use of powers because it reduces usage of SAP by as much as 20% due to the lack of spillage, uniform distribution of powder and significantly improved free swell.
As Glatfelter continues to increase the output of its line in Germany, at least one other European line is scheduled to close later this year. In May 2013, Duni said it would close one of its three airlaid lines in Sweden in a move to exit the hygiene market and focus more narrowly on its tabletop business.
Duni has originally hoped to sell this line and when no buyer came forward postponed the closure as long as possible. This is because the closure would impact 110 jobs, which would add to Sweden’s existing unemployment problem. Finding a buyer was difficult because of the high costs associated with shipping in out of Sweden, according to executives.
Meanwhile, back in the U.S., Domtar continues to use its airlaid business, acquired from EAM in May 2012, to fuel its personal care businesses but is also selling some of this output externally, according to reports.
Domtar purchased the EAM business, once owned by Rayonier, amidst a spate of acquisitions in the personal care segment including Attends adult incontinence and the AHP private label baby diaper business. These acquisitions have helped
The industry’s most recent line is Glatfelter’s latest European investment, which was added in 2010, not long after the company purchased the airlaid business from Concert Industries. When, Concert announced the new line in 2009, executives said the 30%, or 20,000-ton, capacity increase would help it meet demand in Europe and Asia. But, four years later, Glatfelter continues to hone its strategy for growth in Asia, where hygiene growth is estimated at 7-12% per year. While the company has established sales and representation offices in China where employees are busy assessing the market and developing relationships with customers in the region. The company has not yet announced plans to establish a manufacturing base there.
“For now, the company is seeding this market from its operations in Europe, but as this region has the most promise in terms of growth, a more substantial presence could be considered in the future,” says vice president of the company’s advanced airlaid business, Jonathan Bourget. “For now, no definitive plans have been made. We need to better understand the market.”
The market, in China that is, is largely comprised of smaller producers operating Chinese-made lines, although at least two Eastern lines—a Fitesa-owned line that was built using M&J (Oerlikon) technology in Tianjin in 2000 and a 10,000 ton Dan-Web line owned by Qiaohong Nanning. The latter of these lines is reportedly for sale and has been considered by several of the world’s leading producers of nonwovens.
Shut Down Street
Meanwhile, the developed world is expecting the closure of lines from Rexcell/Duni in Sweden slated for this year along with the already closed line from Georgia-Pacific in North America.
“There is definitely a tightening of supply versus demand,” says industry consultant Phil Mango. “It’s getting tighter and there are not a lot of companies who will take the risk and invest in a new line.”
By larger players Mango is referring to G-P and Glatfelter who now command more than 20% of the market each. Meanwhile, smaller players, like McAirlaids with its lines in Germany and Virginia or Rexcell who contribute about 5-6% of global supply, have been scared by history to add a new line, even though market conditions are becoming ripe for some investing.
“It is very difficult to convince these smaller companies to build a new line,” Mango says.
Jens Erik Thordahl, senior airlaid specialist at Campen, says he has a solution for tight capacity in the airlaid market. His company has developed smaller, flexible airlaid lines targeted at converters who would normally source the material from larger producers.
“These converters face challenges because they have to rely on the supply changes of the larger airlaid producers,” he says. “They also have to pay for shipping airlaid materials, which can be expensive and takes extra time.”
The cost savings that converters can reap by investing in these small airlaid lines are so great that the lines pay for themselves after three years, Thordahl says, adding that already one converter in North America has committed to purchase one of his lines.
Campen got into the airlaid business in November 2013 when it formed a partnership with Airlaid Nonwovens Systems and this business operates as a separate division within Campen, which has sold unwinders, slitters and winders for nonwovens. Campen is owned by Varo, who has made hammer mils, drum forming heads and complete lines for airlaid manufacturers for 25 years.
Big Boys Mean Business
Also impacting the airlaid market is the merger of Georgia-Pacific with Buckeye Technologies in mid 2013. Together the two companies have combined airlaid sales of about $400 million as well as a huge fluff and dissolving pulp business to supply this airlaid output. The two came together when G-P, owned by Koch Industries, announced a plan to buy Buckeye for $37.50 per share in cash.
At the time, John Crowe, Buckeye’s chairman and CEO said the transaction would allow stockholders to realize significant value while also representing the next important step in the growth of Buckeye.
Meanwhile, G-P CEO Jim Hannan said Buckeye’s competitive assets and capabilities complement G-P’s existing cellulose business and products. He added that specialty fibers and nonwovens businesses of Buckeye Technologies provide a significant platform for continued growth and success for both companies.
Prior to the acquisition, Buckeye operated a 50,000-ton airlaid line in Gaston, NC, which was added in 2000, as well as two smaller lines in Steinfurt, Germany. The company has slowly and steadily improved its financial position between 2000 and 2013, recovering from a major airlaid overcapacity situation, partially brought on by the aforementioned line in North Carolina.
Among the efforts that Buckeye made to balance its capacity situation was the closure of sites in Cork, Ireland and Delta, British Columbia as well as a strong focus on new product development particularly in the wipes segment.
Meanwhile, G-P, whose strong focus has been on the consumer wipes, moist toilet tissue and away from home markets, operates significantly older assets in Green Bay, WI and has reportedly made plans to shut down one of the two remaining latex airlaid lines there.
While G-P is notoriously close-mouthed on its operations, industry insiders are reporting that much of the airlaid business leadership is now located, or planning to move, to Memphis, TN, Buckeye’s former headquarters.
The combination of the airlaid businesses of G-P and Buckeye makes the company easily the largest manufacturer of airlaid, but Glatfelter is not far behind with sales in 2013 increasing from $246 million to $268 million, and this business continues to improve in health also with earnings up from $4.4 million to $21.5 million between 2012 and 2013.
“It has been a very encouraging journey,” says Bourget. “After the acquisition of Concert we had a bit of a learning curve and we had to make necessary changes to meet expectations but our progress has been very encouraging, thanks to the dedication of our employees and the trust of our customers.”
According to the company, about 82% of its output targets the feminine hygiene market to a large group of multinational companies but other key markets include wipes, homecare and adult incontinence. In fact, the industry rumor mill suspects that it is Glatfelter material that makes the core of Procter & Gamble’s new Always Discreet adult incontinence products, but Glatfelter has refused to comment on this.
However, Glatfleter has been vocal about the development of a new absorbent core material being marketed under the eCore brand name. This pulp-based airlaid substrate contains as high as 85% superabsorbent polymer material and is intended for use in adult incontinence products and baby diapers. Bourget says the product offers a much more efficient use of powers because it reduces usage of SAP by as much as 20% due to the lack of spillage, uniform distribution of powder and significantly improved free swell.
As Glatfelter continues to increase the output of its line in Germany, at least one other European line is scheduled to close later this year. In May 2013, Duni said it would close one of its three airlaid lines in Sweden in a move to exit the hygiene market and focus more narrowly on its tabletop business.
Duni has originally hoped to sell this line and when no buyer came forward postponed the closure as long as possible. This is because the closure would impact 110 jobs, which would add to Sweden’s existing unemployment problem. Finding a buyer was difficult because of the high costs associated with shipping in out of Sweden, according to executives.
Meanwhile, back in the U.S., Domtar continues to use its airlaid business, acquired from EAM in May 2012, to fuel its personal care businesses but is also selling some of this output externally, according to reports.
Domtar purchased the EAM business, once owned by Rayonier, amidst a spate of acquisitions in the personal care segment including Attends adult incontinence and the AHP private label baby diaper business. These acquisitions have helped