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    Editorial

    Acquisitions and More

    ...

    Related CONTENT
    • GLATFELTER
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    Karen McIntyre, Editor07.06.18
    Acquisition activity has picked up in nonwovens recently leaving industry watchers scratching their heads over what this means for the industry going forward. Of course, the industry is no stranger to acquisitions. Many of the largest nonwovens producers in the world—like Berry Global, Ahlstrom and Suominen—reached their stature by acquiring smaller companies that allowed them to complement their existing operations and expand into new frontiers.

    During the past month or so, the nonwovens industry has seen three very different acquisitions among some of its leading manufacturers—all of which will surely change the landscape of the companies affected.

    First Indorama Ventures, a giant chemical conglomerate, said it would acquire Avgol Industries, a move that will allow the company to forward integrate into nonwovens production. The company already owns several makers of polypropylene—Avgol’s largest used raw material. While the purchase of Avgol was no big surprise—its sale has been rumored for years—the deal marks the first time a resin supplier has integrated into nonwovens production. Executives on both sides of the deal say the merger of these companies will help Indorama build on synergies throughout the supply chain and say that it will expedite growth within the health and hygiene markets on both sides of the equation.

    In another acquisition, Pegas Nonwovens added to its global footprint through the acquisition of First Quality Nonwovens and its facilities in the U.S. and China. While it makes sense for Pegas to buy its way into new markets as it seeks to become more global, the choice of First Quality was an interesting one. The company uses much of its output to supply its hygiene business which includes private label diapers, adult incontinence and feminine hygiene items, which surely compete with many of Pegas’ existing customers in these areas. It will be interesting to see how Pegas is able First Quality internal business from its existing customers and effectively deal with this competition.

    Finally, last week Glatfelter, the world’s largest maker of airlaid nonwovens, said it would purchase Georgia-Pacific’s airlaid business in Europe, a move that will give the company nearly a 40% marketshare in Europe. While growth is surely motivation for Glatfelter, which just opened up a large new line in the U.S., the G-P business will really only give the company increased capacity in a market that is already oversupplied and not really give it access to any new technological capabilities.

    It will be interesting to monitor these acquisitions over the next several months, or even years, not only to see how they work out for the companies involved, but to see how they impact the industry as a whole, how they influence the chain of supply and whether or not they will be imitated.


    Karen McIntyre
    Editor
    kmcintyre@rodmanmedia.com
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