Fibertex Personal Care will establish another production line in Malaysia to service the growing Asian hygiene market. The investment of about DKK 400 million ($58 million) involves the establishment of a new site facility and will expand the company’s capacity in Asia by more than 20% once the production line is up and running in mid 2017.
Fibertex Personal Care already has four production lines in Malaysia, which are all in operation at the existing site in Nilai a little south-east of Kuala Lumpur. The site's latest expansion in 2013 has left no room at this site. Hence, at the end of 2014 Fibertex Personal Care decided to acquire a new site about 25 km south of the existing site. This new site will house the fifth Malaysian line as well as other future expansions can be made.
Currently, Fibertex Personal Care's four Malaysian lines make about 70,000 tons of spunmelt nonwovens, while its Denmark site can make 50,000 tons of material. The company's total output represents about 10% of global spunmelt capacity.
Fibertex Personal Care was one of the first global manufacturers to establish a site in Asia in 2002 and the company continues to benefit from this role. Today, the company is among the three largest suppliers to the region and the largest non Japanese supplier to Japan, says Mikael Staal Axelsen, group CEO of Fibertex Personal Care.
Moreover, there are clear signs that the timing of the investment in the Asian market is right, according to Axelsen. While the
consumption of hygiene products in the West only shows a moderate increase of 1-2%, the picture looks quite different in Asia. A growing number of people in the Southeast Asian countries, China and India are earning an income that enables them to focus more on personal hygiene. This results in an Asian market growing about 10% each year.
"At the new site we will have even more focus on value-added products and the improvement of existing products," Axelsen says. "The consumers and thereby the industry require hygiene products that are lighter, softer and with finer structures, and we have reached an advanced stage in the processing improvement race which becomes more and more predominant in our business."
The announcement came one day after parent company Schouw and Co. announced its third quarter results were positively impacted by better-than-forecast EBITA at Fibertex Personal Care.
