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    Features

    Focus on China

    Companies continue to look to China for growth and nonwovens investment is following

    Focus on China
    Focus on China
    Together with officials from the government, Dr. Frank Heislitz (third from right / CEO of Freudenberg Performance Materials) and Mr. Atsushi Shimoda (chief technical officer of Japan Vilene Company / second from right) inaugurate the new production line.
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    Karen McIntyre, Editor10.11.19
    According to market research group Freedonia Group, nonwovens demand in China is expected to increase 6.9% per year to 4.9 million metric tons in 2022. While economic growth has begun to slow to more sustainable levels, it is expected to remain strong until 2022 and will fuel significant gains in nonwovens demand as the country’s consumer base expands. China has a large export market for goods that contain nonwovens, so healthy growth in nearby markets (e.g., India, Indonesia, Malaysia, Philippines, Vietnam) will also support gains in Chinese nonwovens demand.

    Nonwovens demand in China totaled 3.5 million metric tons in 2017, making it the largest national market in the world. China achieved its leading position over the course of the last decade as part of a broader trend of extremely rapid expansion throughout the country’s economy.

    Some of the reasons for this expansion include rapid increases in per capital GDP over the past four decades since the beginning of its economic reform in 1978. This growth has brought substantial reduction in poverty levels and transformed China into a global manufacturing leader, including in the production of goods containing nonwoven materials.

    During the past 10 years, growth has really accelerated, according to Freedonia. In 2007, the Chinese nonwovens market was slightly smaller than the U.S. market, but by 2017 it was well over twice as large.

    Much of this growth is being driven by aggressive plans from users of nonwovens, particularly in the hygiene, automotives and filtration segments. These companies are looking to cash in on consumers’ rising disposable incomes and thirst for premium products.

    According to executives at Unicharm, a Japanese maker of diapers and other disposable products, continued strong growth in the Chinese baby diaper market has been led by rising demand for high quality, Japanese-made, high value-added disposable diapers and pants-style disposable diapers that are reliable and safe. Unicharm’s strong position in pants-type diapers means it is well-placed to benefit from the current business environment.

    Against that backdrop, Unicharm is introducing Japanese-made Moony pants-type diapers in China and actively investing in marketing in the country. Those efforts are strengthening product brands and Unicharm’s corporate brand, supporting continued strong sales growth through cross-border e-commerce channels and regular import channels. The company aims to maintain that momentum by offering products that address a wide range of different needs and by increasing shipments to regional cities.

    Meanwhile, in the feminine hygiene market, where Unicharm currently holds a marketshare of about 17%, the company says it continues to enjoy strong support from young women in China thanks to its high value-added products, which offer high quality and have cute packaging designs. Also, Unicharm’s online sales are outpacing growth in China’s rapidly expanding e-commerce market. Its online sales have risen to account for about 20% of total sales and it now has the leading position in the online market. Going forward, Unicharm aims to capture the top share in China by rapidly developing sales channels and increasing the number of sales areas where it is the market leader.

    After some initial missteps in the Chinese diaper market, Procter & Gamble reports its diaper sales are back on track in the country thanks to the launch of Pampers Ichibon premium tape style diapers and the upgrade of a premium pants-style product on the market, two moves that were met with great success. The pants products have increased sales 200% to capture the number one spot in the category while the new diaper is already available in 10,000 baby shops and 4800 superstores. These wins have allowed  P&G to grow its marketshare in the Chinese diaper market for the first time in a long time.

    Amidst this success, however, Pampers mid-tier tape style diaper, which comprises 75% of the company’s sales in China, continues to struggle, but the company expects inventory adjustments to help fuel growth here in the coming quarters.

    Likewise, Kimberly-Clark executives recently told investors at Barclay’s fall investors conference that the Chinese market has recently returned to growth after two years of challenges. Crediting factors like a more stabilized market, focus on products that appeal to sophisticated Chinese consumers, and the launch of new products combining softness and fit, CEO Michael Hsu says after driving growth in premium diapers, K-C is now rolling out technology to the mid tiers of the diaper market. Also benefitting the company overall is applying lessons learned in China and applying them to other strong growth markets in the country.

    “Our team is doing a great job of taking best innovation from lead markets like China and Korea and rapidly rolling them out across the region,” Hsu adds.

    According to market tracker Euromonitor, the Chinese baby diaper market is growing at about 9% per year driven largely by volume growth spurred by the relaxation of the one child policy, which increased the birth rate. Additionally, the per capita usage of diapers remains low at 395, meaning there is still significant penetration to be made in the category.

    While this growth is attractive, competition can be fierce in China, particularly among the Japanese manufacturers. Kao was the first company to capitalize on this phenomenon. After noticing how many of its premium diapers Chinese tourists brought home with them, the company began selling its Merries brands locally and soon many of its fellow Japanese manufacturers followed suit.

    Nonwovens Investment Continues
    In response to strong moves from hygiene suppliers in China and throughout Asia, nonwovens producers continue to focus on investment in the region. While these efforts have slowed slightly, new lines continue to be planned.

    Berry Global, the world’s largest nonwovens producer, is putting the finishing touches on its latest spunmelt investment, a 20,000-ton Reicofil 5 spunmelt line located in Nanhai, China. Announced in 2017, the new line will target the Asia-Pacific markets with specialty soft products for hygiene applications. The line should reach commercialization in the fourth quarter.

    Robert Weilminster, president of North America, says: “The new Reicofil technology will allow us to better meet our customer demands with a comprehensive product range.”

    The Nanhai site was built in 2014 to replace an older site originally built there in 1996.

    Outside of hygiene, Berry also added a specialty meltblown line that will produce high efficiency filtration media for the Asian markets. The investment is a part of the company’s Health, Hygiene and Specialties Division and is focused on premium applications in the room air purification, industrial face mask and cabin air filtration markets.

    “The filtration market is growing rapidly and we are excited to expand our capacity to accommodate the growing markets and increased demand. Our commitment is strong to this market and the entire nonwovens space. Our investment in meltblown capacity is the next step in advancing our market leading position in filtration solutions,” says Scott Tracey, president of Berry’s Health, Hygiene, and Specialties Division.

    Also in filtration, Freudenberg Filtration Technologies has expanded its Chinese presence through the purchase of Apollo Air-cleaner Co., Ltd. in China. Apollo is a leading supplier of air and water filtration solutions in China. In 2017, Apollo had around 1000 employees and generated 750 million RMB in sales (approximately €96 million).

    “By purchasing the majority stake in Apollo, we are strengthening our position in China’s rapidly growing market for filtration solutions,” says Mohsen Sohi, Freudenberg Group CEO.

    Air and water filtration solutions are enjoying strong year-on-year growth rates, especially in China, thanks to legislation demanding stricter regulations and increased environmental awareness. Experts estimate that the global market for products of Apollo – filters for room air purifiers, decentralized ventilation systems and water treatment – will have a total value of some $5 billion by the 2022.

    “Apollo is a great fit for Freudenberg,” says  Andreas Kreuter, CEO of Freudenberg Filtration Technologies. “It is an innovative technology company that complements our own portfolio of filtration solutions for indoor air and water purification. The company also has first class production expertise and excellent networks in the industry.”
    The product solutions of Apollo keep air or drinking water free of (ultra) fine particles, dangerous gases, odors and microorganisms and protect health. At its production site in Shunde, China, the company has established high standards for product quality, process efficiency and workplace safety, and is certified to ISO 9001, ISO 14001 and TS 16949.

    Apollo continues as a joint venture between Freudenberg (major shareholder) and the current sole proprietor Apollo Trading Group, Japan, under the name Freudenberg Apollo Filtration Technologies. Freudenberg Filtration Technologies intends to bring its current consumer filtration business into the joint venture.

    Manufacturing, research and development and customer services at both Freudenberg Filtration Technologies and Apollo have benefitted from the transaction. Main examples are the complementary competencies in filter media and gas filtration, which is growing ever more important.

    “For nearly 20 years, Apollo has been offering innovative filtration solutions, improving the quality of life in China,” says Akihisa Yamamoto, CEO of Apollo Trading Group. “The global development and production network and the more extensive portfolio of technological product solutions stemming from this joint venture will primarily benefit our customers.”

    In investment news, Freudenberg has recently completed work on a new production line for car headliners at its Suzhou site in Eastern China. This enables the company to meet the increasing demand for high-quality car headliners in China and South-East Asia. Freudenberg Performance Materials is the specialist for technical textiles of the Freudenberg Group. In China, Freudenberg & Vilene Nonwovens, a joint venture with Japan Vilene Company, Tokyo / Japan, represents the group.

    With the new production line, Freudenberg has increased its annual production of technical textiles in Suzhou by around 8 million m2. Customers will particularly benefit from higher quality of the next generation headliner products. “This investment underscores our long-term commitment to Asia. We want to continue to support our customers in the automotive market with innovative and sustainable solutions that will help them grow,” comments Dr. Frank Heislitz, CEO of Freudenberg Performance Materials.

    Freudenberg & Vilene Company headliners are based on nonwovens and can be finished in various ways to provide additional functionality.

    Apart from excellent surface appearance with good abrasion resistance, outstanding acoustic properties and improved stain resistance, these products contribute to higher comfort in the car interior as well as marked reduction in vehicle weights when combined with other vehicle components. In addition, the company also uses a proportion of recycled products in the manufacture of its products. In this way, Freudenberg helps its customers to reduce their environmental footprint.

    “Freudenberg & Vilene Company offers its customers innovative products ensuring consistently high quality,” explains Heislitz. Freudenberg & Vilene Company first introduced printed headliners to the market in 2010, thus capturing a special customer need. Already in 2016, the company invested in an additional production line.
    In Asia and China, Freudenberg & Vilene Company enjoys long-standing relationships with Asian OEMs, where it holds a leading position in the market. A cornerstone of this success has been the ability to create numerous headliner innovations.

    Alongside the production of products for car interiors, Freudenberg & Vilene company’s product portfolio includes industrial nonwovens for the apparel industry, industrial ventilation and other technical applications.

    Meanwhile, local Chinese companies continue to invest as well. In September, machinery supplier Andritz received an order from Zhejiang Yanpai Filtration Technology in China, for three needlepunch lines to be installed at its site in Tiantai. Start-up of the lines, which will produce high-quality needlepunched filter felts, is planned from the fourth quarter of 2019 to the first quarter of 2020.

    The Andritz needlepunch lines will enable Yanpai to obtain high output and also minimize the downtime required. Yanpai is one of the leading producers of nonwoven filters for dust and air treatment. Established in 1990, Yanpai was at the forefront in development of new industrial filtration fabrics. Yanpai is a leading company in the production of woven filter fabrics and one of the world’s major manufacturers of nonwoven needle felt products. The company mainly manufactures filter fabrics for solid/liquid separation.



    Kao Honors Bostik
    Kao China granted the Excellent Proposal award to Bostik during Kao China’s Vendor Summit in July in Shanghai. Johan Hommersom and Tata Wu accepted the award on behalf of Bostik.

    The Excellent Proposal Award is granted to Kao’s top vendors who made technical and commercial proposals dedicated to improving quality, performance and cost. Kao is collaborating with Bostik, a world-leading adhesive supplier, to drive value for end consumers.

    “I feel greatly honored to receive the Excellent Proposal Award from Kao China on behalf of Bostik,” says Hommersom. “Bostik will make continuous efforts to support our customers to achieve smarter values and outputs.”
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