The airlaid market, at least in North America, will receive a boost early next year when a long-awaited new production line begins operation in Fort Smith, AR. Being added by Glatfelter, who is already the world’s largest manufacturer of airlaid nonwovens, the new line will add 22,000 short tons of capacity to the market representing the largest single investment in North America in more than 15 years.

“Our plan to build this new facility is in direct response to customer needs for increased capacity in a tightening North American airlaid market,” says CEO Dante Parrini.

The new facility was also the result of a major customer order, according to the company. When it announced the $80 million facility two years ago, Glatfelter indicated that growth in lighter weight hygiene and disposable wipes products—a market already in growth mode, increasing 12% last year—was a priority.

In 2015, feminine hygiene applications dominated Glatfelter’s sales, representing 74%, while wipes comprised less than 10% of sales. CFO John Jacunski recently told analysts that the investment in Arkansas, which will also include a center of excellence, will allow Glatfelter to target wipes without compromising the needs of its feminine hygiene efficiencies.

“(The new line) will bring additional balance to the portfolio which is a good thing and at the same time sends a message to all of our customers that we are willing and able to support their growth,” he says.

With the location not far from wipes maker Rockline’s operation in Springdale, AR, and feminine hygiene manufacturer Kimberly-Clark’s facility in Conway, AR, industry insiders are speculating that the capacity on this new line already has at least two key customers.

A Long Time Coming
North America has not seen significant airlaid investment since the early 2000s when Buckeye (which is now a part of Georgia-Pacific) added a 50,000-ton line in North Carolina around the same time that Concert Industries (a business now owned by Glatfelter) added its two side-by-side lines in Gatineau, Quebec.

What this new line will mean for the rest of the airlaid industry, particularly within North America, remains to be seen. As Glatfelter’s role in the wipes market expands, its main competitor Georgia-Pacific will likely be forced to look for new markets—like feminine hygiene or tabletop—to fill its capacity, much of which is made in Gaston, NC, on a line built by Buckeye Technologies in 2001. This line is mainly focused on wipes, and up until now G-P has had little local competition in airlaid for wipes.

Although airlaid is smaller and more specialized than many other nonwovens technologies, just one single investment can make a lot of influence in the market. While the manufacturers have enjoyed high utilization rates and strong demand for the past couple years, a significant investment like the one in Arkansas can make a big difference.

North America’s other key airlaid manufacturers include Georgia-Pacific and Domtar. Both of these companies use at least some of their airlaid output to fuel their consumer products businesses.

Domtar is a paper specialist that has found its way into the airlaid market through the acquisition of the nonwovens assets of EAM (Engineered Absorbent Materials) including the Novathin Technology. Sources close to Domtar say the company has not been successful using all of the Novathin Technology, which is made in Jessup, GA, internally, despite an aggressive personal care growth strategy, which has included a number of acquisitions in recent years. This has forced Domtar to continue to sell a portion of its output within the feminine hygiene and adult incontinence markets.

However, as sales continue to grow within Domtar’s personal care business—the company reports that many of its key customers are growing their store brand programs—the situation could change at Domtar. The company has indicated plans to increase its advertising and promotional spending to boost its sales in personal care.

In addition to organic growth, Domtar has not been shy in acquisitions. The company has been steadily acquiring brands in feminine hygiene, incontinence and other hygiene areas since 2011. Earlier this year, the company added Butterfly Health, a maker of body liners for sufferers of accidental bowel leakage to its product portfolio. This niche product already uses the EAM absorbent core technology.

Having a technology engine like EAM within personal care has been a powerful tool in allowing the company to build product innovation, and executives credit the airlaid technology for allowing it to boost its innovation profile throughout its hygiene business. A recent example of this was the relaunch of Indasec, Domtar’s Italian light incontinence brand, with the addition of EAM core technology.

“More and more we can find great technology from EAM and incorporate it into the product where we get a consumer benefit, a usage benefit and we can then build product technology that deserves a premium,” CEO John Williams says. “Indasec is the first move in this direction and so far the consumer reaction has been strong.”

To fuel the Indasec restage, Domtar added EAM capabilities to its plant in Toledo, Spain, and moving forward all of its lines will be able to accommodate the EAM technology where necessary.

The increased usage of its own airlaid within its hygiene products makes Domtar the most likely company to add the next North American airlaid line. While there is plenty of room for a line in Domtar’s Greenville, SC, operation, where it makes Attends adult incontinence items, sources feel that acquisition is the company’s top priority for now.

Airlaid Advances
According to new report from industry tracker Smithers Pira, the global airlaid nonwovens market is currently valued at $1.64 billion and is predicted to grow at an annual growth rate of 4% to $2 billion by 2020. Demand for airlaid nonwovens is strong as key markets like adult incontinence, feminine hygiene, wipes and food pads are all growing globally. The consumer desire for thinner, more discreet and comfortable feminine hygiene and adult incontinence pads, and even baby diapers, matches the strength and properties of airlaid nonwovens.

The study shows that there are significant differences in the major regional markets for airlaid nonwovens. North America has the tightest supply of airlaid, with utilization at almost 95%. It is the home of the two largest airlaid producers and the largest airlaid raw material suppliers. North America is already importing some material from Europe, and would have had major supply issues if new capacity were not added by 2020. Meanwhile, Europe, where major producers include McAirlaids and Glatfelter in Germany, Karweb in Turkey, Duni in Sweden and Lucart in France and Spain, has the highest available airlaid supply today, with utilization at only 87.5%.

Asia, meanwhile, is a mixed market for airlaid nonwovens.  There are older lines in Japan, China and Taiwan which are small and relatively slow, but meet local needs, according to Smithers Pira. Utilization today is about 90%, with hygiene being the largest end use. The report adds that there is a real need for airlaid expansion in Asia, which is the fastest growing major region at 8% annual growth for 2015-2020.

And, low utilization rate comes after Duni’s decision to narrow the focus of its airlaid business. In 2013, Duni said it would exit the hygiene business but remain involved in tabletop. After failing to find a buyer for its hygiene-focused airlaid line, Duni announced in September 2014 that it would move this line from Das Långed to Skåpafors and convert it to handle tabletop applications. The Das Långed site was ultimately closed.

Asia, meanwhile, is a mixed market for airlaid nonwovens.  There are older lines in Japan, China and Taiwan which are small and relatively slow, but meet local needs, according to Smithers Pira. Utilization today is about 90%, with hygiene being the largest end use. The report adds that there is a real need for airlaid expansion in Asia, which is the fastest growing major region at 8% annual growth for 2015-2020.