2006 top nonwovens manufacturing report.Alphabetical Listing (company--ranking/ last year's ranking) Ahlstrom--6/6 Albis--36/ * Asahi Kasei--16/12 Avgol--18/25 BBA--4/4 British Vita--17/14 Buckeye--8/9 Colbond--15/8 Companhia Providencia 9/40 Concert Industries--26/27 DuPont--2/2 Fibertex--13/16 Foss Manufacturing--27/18 Freudenberg--1/1 Georgia-Pacific--21/21 Hollingsworth & Vose--14/13 Jacob Holm--31/32 Japan Vilene--11/10 Johns Manville--7/7 Kimberly-Clark--3/3 KNH--39/39 Kuraray--38/37 Lantor--40/41 Lydall--25/24 Mitsui Chemicals--24/23 Orlandi--27/28 Owens-Corning--10/11 Pegas--19/30 PGI--5/5 Precision Custom Coatings--37/38 Propex Fabrics--11/35 Polyfelt--30/22 Sandler AG--2 1/15 Suominen Nonwovens--33/29 Textilgruppe Hof--31/31 Toray Saehan--29/36 Toyobo--21/19 Union Industries--35/ * Unitika--34/34 Western Nonwovens--19/20 * new to this year's survey THE TOP COMPANIES REPORT 2006 1 Freudenberg Nonwovens Weinheim, Germany www.freudenberg.com $1.4 billion Key Personnel Management Board: Stephan Tanda, president and CEO, Dr. Rene Wollert, CFO; Walter Schwarz, managing director, North America; Georg Brasch, managing director, supply chain and restructuring; Worldwide Divisions: Andreas Kreuter and Gerhard Schaut general managers of interlinings; Bill Casey, general manager of tuft and Jorg Sievert, general manager of filter Plants Weinheim, Germany; Neuenburg, Germany; Kaiser--slautern, Germany; Greetland, U.K.; Colmar, France; Barcelona, Spain; St. Omero, Italy; Cape Town, South Africa; San Martin/Buenos Aires, Argentina; Jacarei, Brazil; Suzhou, China; Changchun, China ; Nantong, China; Yang Mei Tao-Yuan, Taiwan; Tayuan, Taiwan; Durham, NC; Hopkinsville, KY and Pyungtaek, South Korea (Korea Vilene Company) Processes Drylaid staple fiber, wetlaid, spunbonded, meltblown, electrostatic spun microfiber, needlepunched, thermal bonded, chemical bonded, water entanglement ISO Status All locations are ISO 9001 and ISO 14001 certified; locations serving the automotive industry are QS 9000 certified; 25% of the plants are OSHAS 18001 certified Brand Names Vilene, Viledon, Vilmed, Pellon, MicronAir, Vlieseline, Vildona, Fliselina, Lutradur, Lutrasil, Evolon, Comfortemp, Novolon, Vitech, Celestia, Soundtex Major Markets Apparel interlinings, filtration, medical, protective clothing, automotive interior trim, electrical insulation, electrical specialties, home furnishings, industrial wipes, hygiene, shoe components, coating substrates, carpet backings, landscape fabrics, geotextiles, agriculture, furniture and bedding and industrial nonwoven specialties SALES GREW SLIGHTLY FOR THE WORLD'S largest roll goods producer in 2005. Sales declines in Europe and the U.S., caused largely by the continued shifting of garment production into Asia, were offset by gains in Asia and Latin America, according to company spokesman Christof Schroeder. In order to stave off increased raw material costs and competitive pressure in the automotive and textile markets, in October Freudenberg initiated a restructuring of its German nonwovens facilities. The plan will save Freudenberg 30 million [euro] from a combination of wage concessions, increases in weekly work hours, shift of labor intensive operations to Eastern Europe and staff cutbacks. The moves are designed to safeguard the German sites in the long term. "We have to operate more efficiently at our German sites and concentrate primarily on high technology production divisions there," said Stephan Tanda, president and CEO of Freudenberg Nonwovens. "If we want to keep our German sites--and that is our firm resolve--then there is no alternative to the measures we have announced." The cutbacks in Germany involve 250 jobs in Weinheim,, 50 positions in Kaiserslautern and a further 20 in Bochum, Germany, so the total number of jobs to be cut is 320. Kaiserslautern, in particular, will benefit from the restructuring; a technology center at the site will be devoted to high technology automotive cabin air filter and spunbond production, which will create 58 news jobs at the site. The difficulties that led up to this restructuring effort were largely caused by external factors including raw material cost increases of some E15 million per year. At the same time, considerable competitive pressure in the market has resulted in lower sales revenues, particularly in key European markets such as automotive and textiles, according to the company. The impact of these factors have been cushioned to some degree by Freudenberg's $40 million corporate restructuring program, announced in 2002 and completed last year, which was designed to meet customer demands more quickly by streamlining the company's five divisions--tufts, hygiene/medical, filter, interlinings and technical nonwovens--to operate with increased customer focus. The plan called for a reconfiguration of the divisions to make them self-sufficient in product development, marketing, sales and services as well as responsible for the production and the plants and the lines. Now each Freudenberg facility is responsible for specific market segments rather than offering a range of products at each site. In Europe, the Kaiserslautern, Germany site is responsible for the tuft, filtration and hygiene/medical divisions, Weinheim, Germany houses the interlinings and filtration businesses and the Parets, Spain and Neuenberg, Germany sites house technical nonwovens. The Greetland, U.K. facility is responsible for hygiene and medical products and Colmar, France holds Freudenberg's Evolon business. The reconfiguration also called for the addition and replacement of lines throughout Europe. In the U.S., lines have been transferred from the Lowell, MA facility, which was closed in late 2004, to Durham, NC and Hopkinsville, KY. While the restructuring has not impacted Freudenberg's operations beyond North America and Europe, the company has been focusing on these areas, which present strong growth prospects. In Latin America, Freudenberg has started a new line in Jacarei, Brazil, the facility's fourth, to grow its hygiene business there. Freudenberg also has a plant in San Martin/Buenos Aires, Argentina. In Asia, a new 12,000-ton-per-year spunbond line is set to come onstream in Taiwan in the first quarter of next year. Based on polyester technology, the new line will enable Freudenberg to increase its production capacity for tuft backing substrates and enhance its global supply flexibility to its customers. The added capacity is expected to meet demand for the polyester-based products for the next eight to 10 years. In addition to capital investment, Freudenberg has been boosting its Asian business through acquisition. In May 2005, Freudenberg strengthened its position in China's apparel interlinings business through the purchase of Nantong Hymo Co., in Nonton, Jiangsu Province. Nantong Hymo was the market leader in shirt interlinings in China as well as one of the leading finishing companies for woven and weft interlinings in China. It was established in 1985 and has become renowned in China for its high quality finishing technologies as well as for its exceptional service level and delivery reliability. In 2004, Nantong Hymo generated $22 million in sales and produced more than 30 million square meters of interlining materials. The acquisition of Nantong Hymo has grown Freudenberg's Asian interlinings business to now include more than 1000 employees throughout Asia where it operates five factories--in Suzhou, China, Nantong, China, Seoul, Korea, Yang-Mei, Taiwan and Chennai, India. It now generates sales of approximately $150 million in Asia. Also in Asia, Freudenberg formed a joint venture in 2004 in the filtration segment. Freudenberg, Japan Vilene and Chinese partners formed a company called Freudenberg & Vilene Filter (Changchun) Co. Ltd., which acquired the filtration business of Changchun Autofilter Company. This venture is supplying motor and cabin air filter housings as well as filter elements to leading automotive manufacturers in Northern and Eastern China and is helping fuel Freudenberg's position in the Chinese automotives market, particularly with its micronAir cabin air filters. By division, Freudenberg's tuft business, which is centered around polyester spunbond technology, has witnessed strong sales in Asia but has been challenged by rising raw material prices, which have been hard to pass along to customers, as well as by the chapter 11 status of one of its key customers. On the plus side, however, the division is set to benefit from new fine fiber polyester spunbond technology being installed in Kaiserslautern, Germany. This new line will start up during the first quarter of next year and will target a broad range of fine fiber durable polyester spunbond markets. Increasing its importance to Freudenberg is the filtration market, where it continues to roll out products and announce investment strategies to grow its business globally. While sales growth continues in Latin America and North America, this division has seen heavy pricing pressures in Europe, particularly in Germany, amidst higher raw material costs. Freudenberg continues to see movement of its interlinings business into Asia, a situation being remedied to some degree by its investment in Nantong Hymo, which has resulted in lower European and U.S. sales and a boosted Asian business. Freudenberg's new product Vilene X!treme, which is being billed as the world's first super elastic interlining with softness, resiliency, multi-functionality and good care properties, has received positive feedback from the market. In hygiene and medical, Freudenberg continues to avoid mass production in commodity segments and instead has targeted niche applications such as topsheets, barrier leg cuffs, acquisition layers and textile backsheets as well as products for incontinence and feminine hygiene and nonwovens for wound care applications. These segments allow Freudenberg to offer, and be rewarded for, innovation and value. Freudenberg's fifth segment, technical nonwovens, includes a wide range of smaller niche and specialty applications. In North America, major areas of interest include fire blockers for the mattress industry--driven by state and federal regulations--window shades, automotive interior applications and hoodliners, while in Europe, cable wraps, battery separators, automotive interiors, fiber-reinforced plastics and acoustics are showing promising activity. Beyond its five key divisions, Freudenberg continues to focus on two key specialty products--Evolon and Novolon. Evolon, made from continuous filament spunlaced nonwovens, features good drapabilty, soft feel and high tensile strength, making it ideal for many applications such as specialty wipes, antimite bedding, technical packaging and artificial leather. According to Mr. Schroeder, sales of this material are still below expectation, but the company is making good progress in a number of products. Meanwhile, Novolon, a technology that can transform a two-dimensional product into a three-dimensional object, is still in its development stage, being made on a start-up line in Durham, NC. 2 DuPont Nonwovens Wilmington, DE www.dupont.com $1.35 billion Key Personnel Matt Trerotola, vice president and general manager DuPont Nonwovens; Mahesh Mansukhani, global business director-Tyvek/Typar and Nigel Budden, global business director-Sontara Richmond, VA (Tyvek); Old Hickory, TN (Sontara, Suprel, Softesse); Luxembourg (Tyvek, Typar); Asturias, Spain (Sontara) and Shenzhen, China (Tyvek and Sontara converting facility) ISO Status All plants ISO 9002 certified; Luxembourg facility also 9001 certified Processes Flash spun (Tyvek), spunbond (Typar), spunlaced (Sontara), Advanced Composite Technology, Hybrid Membrane Technology Brand Names Tyvek, Tychem, Sontara, Suprel, Softesse, ComforMax, Typar (worldwide except North, Central and South America) Major Markets Construction, health care, protective apparel, industrial, filtration, absorbents, home furnishings, envelopes, geotextiles, graphics, packaging, footwear UNDER NEW LEADERSHIP this year is DuPont Nonwovens. In October 2005, Matt Trerotola replaced Mark Vergnano as vice president and general manager of the division, which reported sales in the $1.35 billion range last year, a 6-7% increase. Mr. Trerotola has continued to focus on leveraging DuPont's position as a value leader across all of its end use categories, which range from construction to medical gowns to protective apparel to, most recently, filtration. "We consider ourselves a value leader so we are focused on delivering value and getting paid for that value," he said. "This has been difficult as raw material and other logistical costs rose so rapidly. Margins have been squeezed and we have had to pass along these costs to our customers. But, we continue to focus on bringing value to the market through new technology." Despite these challenges, DuPont Nonwovens has been able to remain strong. While its goal of double-digit top line growth was not met in 2005, due largely to a late-in-the-year slowdown, executives say the division is on track to achieve this goal in 2006. One core strategy moving DuPont Nonwovens forward is the division's continued focus on selective barrier technology. "When you think about our technology, we have many products that are successful because of their selective barrier solutions," said Mr. Trerotola, referring to Tyvek house-wrap and medical packaging products and Sontara medical gowns, to name a few. "We have had a strong position with these selective barrier solutions and now we are seeing the opportunity to add new markets and technologies." Among these markets are filtration and energy storage, two areas DuPont is targeting with its newest innovation in selective barriers. Hybrid Membrane Technology (HMT) is a combination of submicron fibers and high surface area that delivers an optimal balance of flux-barrier performance. In the spring of 2006, DuPont started up a production line in Korea, on which to make the new material. HMT is allowing DuPont to expand its presence in filtration markets, presenting strong growth opportunities for nonwovens, because of its ability to uniformly trap submicron particles, such as bacteria, while maintaining high flow rates," said Sandra Van Wormer, president, Hybrid Membrane Venture. Additionally, energy storage applications will benefit from the fabric's high uniformity. "The application possibilities are many," Ms. Van Wormer said. "DuPont is working to bring HMT value to customers in a variety of areas that require a selective barrier." The Korean investment represents DuPont's commitment to meeting global market needs. Elsewhere in Asia, DuPont operates a nonwovens joint venture in China as well as converting assets in China and Japan. For now DuPont can satisfy Asian demand with its existing technologies from facilities in North America and Europe but has been plowing other resources into Japan, China, India and Korea, the four Asian countries earmarked for future growth. Beyond Asia, Eastern Europe and Latin America are other hot spots for growth. DuPont largely serves Eastern Europe from its West European operations in Luxembourg and Spain, while in Latin America, its joint venture with footwear supplier Cipatex, initially designed to open up opportunities in the footwear arena, continues to expand. "The bulk of our production is in North America and Europe," Mr. Trerotola explained. "But, we are constantly looking at all of our segments from a global basis. Europe and the U.S. are our largest businesses, but we now have a substantial Asian business and a small but fast growing South American business." Tyvek The DuPont Tyvek business, based on flashspun nonwovens technology, continues to perform well as evidenced by the division's recent announcement it would increase production output at both of its major facilities--in Richmond, VA and Luxembourg. While Mahesh Mansukhani, global business director, Tyvek, would not elaborate on the scope of the Richmond expansion, which is set to come onstream within 18 months, he did reveal that the additional Luxembourg capacity would result in a 15-20% global Tyvek capacity increase by 2008. "It shows that we have a strong belief that we will continue to grow much in the same way we have been," he said. In recent years, Tyvek has grown a steady 6-7% annually, thanks to gains in construction, protective apparel and medical packaging as well as in smaller areas such as envelopes, graphics and other niche applications. In the construction segment, DuPont Tyvek has countered slower market growth in Europe and Asia as well as recent slowdowns in the U.S. housing market with new product introductions such as Metallized Tyvek, which is incorporated into Tyvek AtticWrap and ThermaWrap to reflect heat, helping reduce heat build-up in the summer and heat loss in the winter. "Construction is a major contributor to the growth of Tyvek, but we have a nice pipeline across all of our segments," Mr. Mansukhani explained. "A lot of our success has to do with our ability to introduce new products that give customers new opportunities and new reasons to use Tyvek." Meanwhile, protective apparel has benefited from synergies that exist between Tyvek and other DuPont brands, such as Nomex and Kevlar. DuPont Personal Protection, a division encompassing the protective product brands, has been able to offer a range of protective solutions. These offerings have expanded to garments that protect from multiple hazards. For example, Thermopro utilizes nonwovens knowledge along with Tychem and Nomex experience, is the first garment to meet NFPA standards for both flash fire and chemical protection. The Tyvek medical packaging business has benefited from the introduction of Asuron, which offers the same high microbial protection and physical characteristics as Tyvek 1073B while delivering substantial improvements such as wider heat-seal window, better printability and bar code readability, a more homogenous appearance and broader regional production capabilities. The development of Asuron and other new products using Tyvek illustrates how dynamic this technology is, according to executives. "The thing about Tyvek is that it provides a combination of attributes that allow it to bring a number of qualities for many applications," Mr. Mansukhani said. "Competitors have tried and been able to do fantastic things with one attribute of this fabric, but not one has been able to achieve all of them in one substrate." In addition to the major markets for Tyvek, there are a number of smaller niche markets which DuPont officials were unwilling to reveal. "We don't want to lose our competitive advantage. These smaller niche markets are our growth engine. These are the markets we want to turn into the next major category for us," Mr. Mansukhani said. Sontara The DuPont Sontara business unit generally falls into two segments, medical fabrics and diversified fabrics, which includes wipes and home furnishings, among others. In 2005, both segments achieved double-digit growth despite somewhat flat sales in industrial wipe categories. The DuPont Medical Fabrics business includes several brands: Softesse spunlaced material, Suprel advanced composite fabric and Acturel films. The type of fabric largely depends on the type of medical procedure. Suprel, launched in 2003, was DuPont's first new polymer technology. Combining the softness of polyethylene with the barrier protection of polyester, Suprel meets two key needs of the medical community--comfort and protection. "We have been very excited about Suprel," said Scott Gettelfinger, North American business manager. "This year, we are seeing significant adoption rates thanks to the value combination offered to nurses and surgeons who are looking for the best combination of comfort and protection." As the medical community becomes more cognizant of infection prevention protocol, so has its willingness to pay higher price levels for the right protection for personnel and patients alike. For its part, DuPont has been working with distribution partner Medline to educate medical purchasers about the value proposition of Suprel and Softesse. "The combination of protection and comfort allows nurses and surgeons to perform at a better level and provide better healthcare," Mr. Gettelfinger explained. Suprel tends to go into higher end medical garments such as Aurora surgical gowns, Orthomax drapes, Aurora Surgical drapes and DuPont Isolation gowns, which at the same time offer improved barrier protection and increased breathability for the medical market. Meanwhile, DuPont's Softesse, a spunlace offering for the medical market, continues to perform well as the medical communities of emerging regions increase their conversion from reusable gowns to single use, a trend brought on by infection control awareness. "We are seeing increases in inventories signaling the adoption of single-use gowns globally," Mr. Gettelfinger said. "This is just the result of natural market evolution." Beyond medical, DuPont spunlaced nonwovens have enjoyed significant penetration in the wipes segment, particularly in areas where high absorbency and low linting of Sontara are valued. One major coup for the DuPont wipes business is its role in an automobile surface preparation system, which contains both wet and dry wipes to prepare an automotive surface prior to painting. "We are the only company that can combine our in-depth know-how of the automotive refinish paint process and the performance needed for associated wiping products, ultimately delivering a better paint job." And, despite reports of commoditization in consumer wipes, DuPont executives commented that there are still opportunities where value can be appreciated in this segment. "The new spunlace lines coming onstream are targeting a broader consumer and hygiene market than we are, so they are not necessarily a direct a threat to us," Mr. Gettelfinger said. "We choose to play in areas where our technology is appreciated and valued." Turning back to the company's Advanced Composite Technology, three years after its launch into the medical market, this technology is expanding into new areas such as construction, landscape fabrics and protective apparel where it is valued for its flexibility. "Being able to bring new products to our existing customers by offering additional value to them is our ultimate goal, and we are achieving this with our new technology," Mr. Gettelfinger said. In fact, DuPont is only at the tip of iceberg where this technology is concerned and the mixing of different polymers into one substrate will allow DuPont to target a number of markets currently not on the nonwovens radar. "If you look at the history we have in technology from a polymer standpoint, it is limited," Mr. Trerotola said. "We have instead offered value in coating or other techniques. But, with our new pipeline we are moving to technologies that have more polymer flexibility. This is very exciting for DuPont because we have a lot of polymers. It is really a joining of two strengths, and it has allowed us to think about transforming into a much broader area than what is considered a traditional nonwoven." Expanding into new realms will allow DuPont to both expand its offerings in markets it currently works in and beyond, Mr. Trerotola added. "We are leveraging the DuPont vision into markets we already know a lot about and we are looking at new market areas to target their unmet needs. We have three strategic priorities. We want to bring the power of DuPont to our customers; we want to explore synergies, not just with our customers but within our businesses, and we want to take advantages of similar value chains within our company." 3 Kimberly-Clark Dallas, TX www.kimberly-clark.com $1.2 billion Key Personnel Thomas Falk, chairman and CEO; Rosalind Brewer, president, Global Nonwovens Operations and Technology and Mark Foreste, vice president, Partnership Products Business Plants Corinth, MS; Balfour, NC; Lexington, NC; LaGrange, GA; Neenah, WI ISO Status Certification achieved in Lexington, NC and LaGrange, GA; other facilities in progress Processes Spunbond, meltblown, SMS, BOW, hydroentangled and Coform Brand Names Accord fabrics, Blockit protective fabric, Breeze facemask media, Cyclean filtration media, Dustop protective fabric, Evolution 4 protective fabric, Fathom filtration media, Intrepid filtration media, Matrix protective fabric, Noah protective fabric, Powerloft filtration media and QuieTech acoustic media Major Markets Filtration, acoustics, furniture, hygiene, industrial, medical, packaging, protective, sorbents, textile linings and wet wipes FOR KIMBERLY-CLARK, ONE of the world's largest roll goods producers, 2005 was a good year with external material sales exceeding the company's expectations. "We were up over last year and certainly saw a considerable improvement from 2004 to 2005 across all major markets," reported J.C. Sneyd, director of marketing and sales for K-C's nonwovens business. "We enjoyed nice growth in all of our segments. It's an exciting time for us and everyone feels good about the direction we're heading in." The company largely attributes last year's growth in external material sales to the strong performance of the producers and converters it supplies. "I have to credit our customers for this growth. Although we added some new customers, our existing customers did very well last year and this organic growth was instrumental in our upwards sales trend," Mr. Sneyd said. The percentage of K-C's total nonwoven capacity targeting external markets remains at about, 15% while 85% is used internally to supply the company s huge consumer and medical products businesses and leading brands such as Huggies disposable diapers and training pants, Depend adult incontinence products and Kotex sanitary protection items. The ratio of K-C's nonwovens usage to internal/external business areas has been fairly steady for quite a few years in spite of capacity increases and the fact that its machines are kept evergreen. Commenting on the state of the global nonwovens industry, Mr. Sneyd pointed to the commoditization of spunbond and meltblown fabrics as an obvious trend. K-C's response to this has been continued product differentiation with more focus on attribute uniqueness. "There are a lot of people investing in commodity-grade products. Spunbond, SMS and plain vanilla meltblown have become fairly commoditized and it's then just a question of who can sell it at the lowest price. We, on the other hand, tend not to concentrate on the generics but instead on differentiation through unique products. One key reason our customer base has been so loyal to us is precisely because of the uniqueness of the products we provide. This is where our growth is. This has been an important strategy for the sales of our external materials business for some time and we've been pleased with our results," he said. Capital improvements and expansions were ongoing last year at K-C's worldwide facilities, including some upgrades to nonwovens facilities as well as at select consumer mills that have been targeted for growth. Mr. Sneyd declined to offer further details on these initiatives. K-C is also continuing to make progress with previously announced plans to aggressively reduce costs by streamlining manufacturing and administrative operations primarily in North America and Europe. The efforts are expected to create a more competitive platform for growth and margin improvement. To date, employees have been notified about workforce reductions and other actions at 19 of the approximately 24 facilities slated for sale, closure or streamlining as part of cost reduction initiatives. The cost-cutting moves are designed to save between $300 and $350 million annually in the face of increased global competition. These competitive improvement initiatives have done little to slow the consumer products business at K-C, which rolled out several new product innovations in 2005 and 2006. New personal care products extend both the Pull-Ups brand and the Huggies Clean team toiletries line. In June K-C launched two new solutions for potty training--new Pull-Ups training pants with Cool Alert and Pull-Ups Night Time training pants. Pull-Ups training pants with learning designs have vibrant underwear-like graphics and designs that fade when wet. Also new this year is the Cottonelle for Kids product line, the first-ever combined dry bath tissue and moist wipes system designed to help parents teach good bath room and hygiene habits. In its professional sector, 2005 brought on the introduction of a full line of facemasks, coveralls and other protective gear targeting both the "do-it-yourself" segment and the even faster growing "do-it-for-me" professional market. Later this year, K-C Professional will unveil a cut-and chemical-resistant version of its successful Kleenguard Purple Nitrile gloves. In addition to new product development, further globalization and expansion into emerging markets continues to be an effective strategy for K-C's consumer products business. In developing and eemerging markets, personal care sales continue to rise, in fact, K-C has posted double-digit growth for seven quarters in a row. Another recent consumer product highlight is the inaugural shipment of Gen2 RFID-tagged cases of products to Wal-Mart. This next step in the implementation of RFID technology is a result of K-C's extensive research and testing on the compatibility of Gen2 hardware and software with conveyor, packaging, logistics and shipping systems in the company's dedicated Auto-ID research lab in Neenah, WI. Kimberly-Clark has been a pioneer and proponent of using RFID technology to address and improve two of the retail industry's toughest business challenges--out-of-stocks and global standardization of supply chain systems. This initial roll-out and use of Gen2 hardware and software is K-C's first step in fully incorporating the Gen2 platform. K-C's nonwovens business unit--formerly known as the Nonwoven Fabrics Business--changed its name this year to Kimberly Clark Partnership Products. The new name is a reflection of the company's capabilities outside of the roll goods arena. "We not only supply roll goods, we are also active in providing converted solutions for our customers," said Mr. Sneyd who explained that K-C converts some of its own products and outsources some converting projects as well. The name change is also part of an effort by the business unit to differentiate itself from companies that strictly sell commodity roll goods. "We have developed some very unique products, which companies are taking to market. We are interested in selling unique roll goods that target specified application areas. In every case, either the products themselves or the materials are patent protected," Mr. Sneyd said. He added that converted products are a fairly significant growth area for K-C where the company supplies many new customers. "Roll goods also continue to grow for us," he added. "In fact, in the segments we participate in, we are growing faster than the market itself," he added. Heading into 2007, K-C is optimistic and looks forward to reaping the benefits of future partnerships with key industry players. "We have enjoyed very good success in providing unique roll goods and one-of-a-kind finished products," Mr. Snedy concluded. "We are going to continue to experience growth through our partnerships with large-scale, highly recognizable companies, which are a very key part of our success." 4 BBA Fiberweb Old Hickory, TN www.bbafiberweb.com $1.1 billion (619m [pounds sterling] BBA Fiberweb--Industrial North America Old Hickory, TN BBA Fiberweb--Hygiene Americas Simpsonville, SC Plants Bethune, SC; Green Bay, WI; Gray Court, SC; Griswoldville, MA; Queretaro, Mexico; Old Hickory, TN; Sao Jose dos Campos, Brazil; Simpsonville, SC; Washougal, WA Processes Airlaid, chemical bonded, caustic entanglement, thermal bonding, hydroentanglement, meltblown, sorbent composites, spunbond PP, Spunbond PET, PP and PET bicomponent Brand Names Reemay, Korma, Liberty, Qualiflo, Starweb, AQF, Securon, Terram, Typar, Softex, Sofspan, Webril, Novonette, Biobarrier, Bidim, Linopor, UltraFlo Major Markets Construction and ground contact, consumer care, filtration, hygiene, medical and protective markets, industrial specialties, sorbent materials BBA Fiberweb--Asia-Pacific Kowloon, Hong Kong Plants Tianjin, China; Rayong, Thailand Processes Airlaid, chemical bonded, caustic entanglement, thermal bonding, hydroentanglement, meltblown, sorbent composites, spunbond PP, PET bicomponent Brand Names Reemay, Korma, Starweb, AQF, Securon, Terram, Typar, Softex, Sofspan, Webril, Novonette, Biobarrier, Bidim, Linopor, UltraFlo Major Markers Construction and ground contact, consumer care, filtration, hygiene, medical and protective markets, industrial specialties, sorbent materials BBA Fiberweb-Europe Trezzano Rosa, Italy Plants Biesheim, France; Aschersleben, Germany; Berlin, Germany; Trezzano Rosa, Italy; Pontypool, U.K.; Norrkoping, Sweden; Al-Khobar, Saudi Arabia (JV); Port Elizabeth, South Africa (JV), Peine, Germany; Peregallo di Lesmo, Italy, Terno d'Isola, Italy, Alicante, Spain Processes Airlaid, chemical bonded, caustic entanglement, thermal bonding, hydroentanglement, meltblown, sorbent composites, spunbond PP, PP and PET bicomponent Brand Names Reemay, Korma, Starweb, AQF, Securon, Terram, Typar, Softex, Sofspan, Webril, Novonette, Biobarrier, Bidim, Linopor, UltraFlo Major Markets Construction and ground contact, consumer care, filtration, hygiene, medical and protective markets, industrial specialties, sorbent materials THE BIG NEWS FROM BBA FIBERWEB is its parent parent's decision to demerge the nonwovens producer and grant it a separate listing on the London Stock Exchange. The May announcement that BBA Group would demerge the Fiberweb division, which reported a sales increase of 12% to 619 million [pounds sterling] ($1.1 billion) in 2005, came after an earlier announcement that it was exploring means to separate nonwovens in an effort to focus on its core aviation services business. According to reports, a demerger was favored over a sale when BBA failed to fetch the appropriate price for the nonwovens division. BBA received a number of offers to buy Fiberweb but decided that the demerger and separate listing of Fiberweb were in the best interest of its shareholders. As the company works towards its demerger, growth continues to be a chief concern. In November, the company announced it would expand its Norrkoping, Sweden facility through a $25 million investment. Under construction currently is a new 20,000-meter Reifenhauser 4 spunbond production line, which will largely focus on the hygiene market. The new line will replace older technology and add nearly 50% additional capacity to the Norrkoping site. Executives called the 5.2m wide production line a cost leader in the industry, which will enable the large-scale production of high quality, ultra-lightweight fabrics for the personal care industry. The Swedish investment comes on the heels of doubling spunbond manufacturing capacity in BBA Fiberweb's plant in San Jose Iturbide, Mexico in 2005-2006, and 50% capacity increases for industrial fabrics at facilities in Germany and in Brazil. These latest investment decisions are part of an accelerated drive by Fiberweb to build further competitive advantage through manufacturing. Further moves to rationalize older capacity and add leading-edge technology may be expected in the Americas and Europe shortly, with expansion in Asia also a high priority for Fiberweb. Commenting on the investment, Fiberweb's CEO Daniel Dayan said, "I am delighted that we can accelerate the implementation of our strategy in hygiene and industrial markets with this investment. Fiberweb is going to remain a market leader in its chosen segments--competitive in standard products and leading in innovation. Our Swedish site has been a crucial component of our unique worldwide production network and this investment secures its future as an outstanding supplier to Northern European customers. As we look forward to the pending separation from BBA, Fiberweb can be seen continuing to develop its business; serving customers and delivering excellent returns for shareholders." Also set to benefit BBA's hygiene division is a recent initiative to restructure its hygiene business in the Americas. This plan called for the closure of several older production lines as well as the consolidation of BBA's Simpsonville, SC site into a smaller area. In June BBA shut down two production lines--a narrow SMS line and a narrow spunbond line--in its Washougal, WA facility, while in July the company closed an SMMMS barrier line, a spunbond line and a portion of a pilot line in Simpsonville, SC. Two other production lines at the Simpsonville site are continuing operation normally and the division headquarters and support structure will remain at the site with offices consolidating among fewer buildings. "The closure of these production lines is a difficult but essential step to ensure that our operations are capable of competing effectively in this very demanding market" said Dave Rousse, president, BBA Fiberweb Hygiene/Medical Americas Division. "These moves follow the decision last year to close our Toronto facility and move the two machines to more strategic sites. The reconditioned Reicofil 3 line going to Mexico is now in production. We are also moving ahead with a warehouse expansion at our Green Bay, WI facility, commercializing a new specialty calendar on Line 3 at our Washougal, WA facility, enhancing our fiber handling capability at Bethune, SC and we are exploring several other promising investment options for Simpsonville and other sites. We regret the impact that closures have on affected individuals and communities. Once we have completed this difficult restructuring, we are optimistic that we will have created a significantly more robust business." Meanwhile, BBA has expanded its airlaid business with the construction of a new line at its Korma facility near Monza, Italy. The line, representing a $20 million investment, will include the next generation of flexible and modular airlaid technology developed by M&J Fibretech, a division of Neumag. This will be BBA's second airlaid line. In 2001, the company started its first airlaid operation in Tianjin, China. Despite its ambitious investment plans, BBA continues to struggle, like many nonwovens producers, with raw material prices. In 2005, pricing levels drove Fiberweb operating profits down 10% to 44 million [pounds sterling], and executives are reporting continued pressures ahead. However, the restructuring of the North American hygiene business as well as other cost-saving measures are expected to help this situation. Not feeling the brunt of the raw material prices increases so sharply is Fiberweb's industrial division, which serves such major markets as construction, filtration, sorbents and other specialty areas. Among the company's industrial markets is filtration where its Reemay brand product has been successful in the pool and spa market while allowing the company to expand the breadth of its filtration media offerings. Additionally, the company's Typar housewrap product continues to perform well in the construction sector thanks to its combination of strength, tear resistance, moisture vapor properties and ease of use. BBA has been adding new products to its Typar line to build on the strength of its housewrap product with a range of target-specific products such as flashing and a coastal wrap. Also, helping out BBA's growth is the acquisition of Tenotex in 2004. The addition of this key supplier to the European wipes market has helped BBA expand its role there and gave it a competitive edge in many key industrial markets. Likewise, Technofibra, acquired in 2003, gives BBA Fiberweb access to a number of new technologies and markets. 5 Polymer Group, Inc. Charlotte, NC www.polymergroupin.com $948 million Key Personnel James Schaeffer, chief executive officer; Willis (Billy) Moore, III, chief financial officer; Mike Hale, vice president and general manager--U.S. Nonwovens; Fernando Espinosa, vice president and general manager--Latin America; Jay Cheng, vice president and general manager-China; Bill Spencer, vice president general manager-Canada; Rick Ferencz, vice president, engineering and development; Bob Dale, vice president, sales and marketing--U.S, nonwovens and Dennis Norman, vice president-strategic planning and communication Plants Landisville, NJ; Rogers, AR; Benson, NC; Gainesville, GA; North Little Rock, AR; Mooresville, NC; Waynesboro, VA; Clackamas, Oregan; Clear field, Utah; Guntown, Mississippi; Kingman, Kansas; Magog, Quebec; North Bay, Ontario; Neunkirchen, Germany; Cuijk, The Netherlands: San Luis Potosi, Mexico; Buenos Aires, Argentina; Bailleul, France; Nanhai, China; Suzhou, China; Cali, Colombia; Molnlycke, Sweden ISO Status Landisville, NC; Rogers, AR; Vineland, NJ; Benson, NC; Gainesville, GA; North Little Rock, AR; Mooresville, NC; Waynesboro, VA, Nanhai, China, Buenos Aires, Argentina; San Luis Potosi, Mexico, Molnlycke, Sweden and Cuijk, The Netherlands are ISO 9002 certified Processes Spunbonded meltblown, SMS, composites, through air bonded, adhesive bonded, resin bonded, thermal bonded, spunlaced, airlaid, apertured film, film laminates, sonic laminated, extruded polyolefins, thermal laminated, Apex, other proprietary fabric forming, surfacing and binding systems Brand Names Apex, Agriban, Agribon, Amira, Aquapex, Bonlinn, Bonsec, Chicopee Cares, Chix, Chux, Comfortlace, Comfortsilk, Duralace, Durapex, Dura-Tex, Freeswell, Isolite, Keybak, Kiara, Masslin, Matline, Medisoft, Multi-Strike, PolyBreathe, Poly-Safe, Quat-Safe, Provira, Reticulon, Reforel, Softlin, Soft-Touch, SuperSoft, TopSwell, Thermoform, Thermospost Ultra Dryloft, Titan, Ultra-Ply, Xiora Major Markets Agriculture, apparel, automotive, battery separator, flame retardant materials, cable wrap, filtration, home furnishings, hygiene, industrial, industrial and marine sorbents, medical, packaging, thermal barriers, wipes for cleanroom, food service and specialty end uses, consumer wipes, household wipes CONTINUING ITS STREAK OF SUCCESS has been PGI Nonwovens. Among the highlights of this diversified roll goods producer during the past 12 months are the start up of a new line in Mooresville, NC, the relocation of its corporate headquarters from Charleston, SC to Charlotte, NC and continued investment in its Latin American and Chinese businesses. In 2005, PGI achieved sales of $948 million, continuing an upward trend begun three years ago when sales clocked in between $750-$780 million, and the company is on track to top $1 billion as new machines in North Carolina, Latin America and Asia come onstream and start contributing to the bottom line. "Our growth last year does not even reflect upcoming investments," explained CEO James Schaeffer. "The new line in Mexico is included into this but most of it was attributable to increased sales off of existing lines from new programs and new products. We grew our sales the old fashioned way. We earned it." Among the company's recent initiatives was the establishment of a new corporate headquarters in Charlotte. Located in Charlotte's Harris Corners Business Park, the headquarters brings together about 100 employees in senior leadership, finance, purchasing, human resources, sales, customer service, information technology and other administrative positions. PGI relocated employees from the former headquarters in North Charleston and offices in Mooresville and Raleigh, NC and Dayton, NJ to establish the centralized location. The Charlotte office puts the company closer to its customers and manufacturing operations and aims to increase operational efficiencies and foster greater collaboration across the company. With a new headquarters in place, PGI is poised to continue the steady growth stream started three years ago. Growth will largely be achieved through a string of new lines that came onstream in early 2006. In the U.S., PGI held a ribbon-cutting ceremony commemorating the completion of a fourth spunmelt line in Mooresville, NC to meet demand for products in this region. The line, a Reifenhauser Reico IV spunmelt line, is specifically designed for enhanced flexibility. It can make high quality, fine denier materials that are softer and lighter than products available from conventional technology and have improved barrier properties. Also new to PGI's spunmelt business is a line in a new plant in Suzhou, China, which is currently ramping up to make PGI China's largest spunmelt maker as well as the country's only vertically integrated producer of finished medical fabrics. Located near Shanghai, the new plant contains a multi-beam Reifenhauser spunmelt line, targeting medical and hygiene applications, as well as a finishing line capable of making treated medical fabrics that meet the highest quality standards. Creating this operation, according to PGI executives, was the result of its medical converter customers' movement into Asia. PGI has also expanded its technology base at its current facility in Nanhai, China, where it operates one sold-out spunbond and one sold-out spunmelt line, with an advanced chemical bonding line serving hygiene and medical markets. This allows PGI China to make sublayer products for the hygiene market previously available only in its U.S. and European operations. "The Asian market is getting more sophisticated," Mr. Schaeffer said. "We like the fact that a good percentage of our products that we make there are staying there. Some come back as finished medical products but the lion's share is intended to be consumed in Asia." And to give its Asian business a cohesive structure, PGI this year established an Asian headquarters near the Suzhou site, bringing its manufacturing plant together with administrative functions under one roof. "The new Asian headquarters will facilitate greater collaboration and cooperation among our teams, and also puts the leadership for the Asian business in the same location as our newest manufacturing site," said Jay Cheng, vice president and general manager, PGI Asia. Finance operations, headed by PGI Asia's new financial director Z.Q. Zhan, as well as information technology, sales and marketing and administrative support, will also be based at this office in the growing Shanghai region. Meanwhile, Latin America, which has been a strong growth area for PGI for some time, is home to the company's most recently announced investment--a new spunmelt line at the Dominion Nonwovens Sudamerica (DNS) joint venture facility in Buenos Aires, Argentina. The new wide-width, multi-beam spunmelt line will more than double the capacity of the joint venture facility to meet growing demand for its products in South America and to better serve its customers in the region. It will produce more than 15,000 metric tons of nonwovens when it comes onstream in late 2007. The new line is intended to be fully dedicated to the hygiene market, providing high-quality fine denier topsheet material and other substrates for use in diapers. The addition of this line gives the company's DNS operation the ability to produce material that will satisfy the highest hygiene standards in the industry. The expanded capacity will also be used with DNS's coating capabilities to provide even more value-added products, such as cloth-like backsheet. This investment follows similar growth strategies across PGI's Latin American business. News lines have come onstream in Cali, Colombia in early 2005, which doubled capacity at the site, and in San Luis Potosi, Mexico in 2004. In Cali, the new Reifenhauser line is fully dedicated to the hygiene market, providing high quality, fine denier top-sheet material for diapers, while in Mexico, a new three-beam spunbond line produces lightweight materials for hygiene markets throughout the Americas. "Latin America is a very important piece of our total business," Mr. Schaeffer said. "It is consistent with our mission of having the right products at the right price anywhere in the world. Our customer base continues to grow at a very good rate throughout Latin America, and we have a really good manufacturing footprint. We are continuing to expand that." And, while spunmelt technology been the focus of much investment for PGI of late, the company maintains its commitment to be a total solution provider to the nonwovens industry. "A lot of people think we only do spunmelt in these areas, but we have a carded operation in Cali and chemical bond products in China," Mr. Schaeffer said. "Our drive is to be a full service provider of nonwovens and engineered products." Also contributing to PGI's full range of services is its patented Apex spunlace technology, which has allowed the company to target a number of interesting markets. With more than 40,000 tons of the material earmarked for wipes, certainly this has become an interesting market for PGI but the company has shied away from commodity areas and instead has focused on areas where Apex's imaging technology is valued. "There is a real array of different materials in the wipes market," Mr. Schaeffer said. "We are seeing a number of different shapes and feels." One good example is the development of cotton-containing baby wipes by PGI and wipes converter NicePak for retail giant Costco, which have not only proven successful at retail but has opened a new category in the baby wipes market. "Just as we anticipated, we are leading the way with some new applications and new products with Apex," Mr. Schaeffer continued. Beyond wipes, Apex has allowed PGI entry into markets including automotives, carpet backing and filtration. In filtration, PGI's Durapex line of media now contains oleophobic aramid and conductive variations, thanks to a strategic relationship with Donaldson Co. These new products are suited for dust removal in humid conditions, high temperatures and manufacturing environments where dust may be explosive. "One of the things about Apex is that we are really incorporating it into a number of different applications," said Dennis Norman, vice president, strategic planning and communication. "There are a number of different ways we have been able to leverage Apex to create a real value-added, differentiating product. And, while hygiene and medical and wipes continue to be an important part of PGI's growth strategy, so do industrial areas like flame retardant fabrics for mattress applications and automotive products, filtration and construction." PGI's growth in these areas has helped offset market maturity in certain regions of the hygiene market. "Hygiene in emerging regions is growing very quickly but hygiene in general in the U.S. is not growing as fast as industrial. By playing in industrial, we have great diversity," Mr. Norman said. "The great potential for industrial is in organic growth," he added. "We are growing just by entering new markets because we are starting at zero." With plants throughout the world, PGI's expansion strategy has largely centered around new lines but major investment in Europe has clearly been missing as PGI's capital expansion has taken place in the Americas and Asia. PGI executives would not specify their plans for Europe, but alluded to future growth plans to be implemented at the right time and stressed that the European leg of its business continues to be important to its position as a global supplier of nonwovens. "I think you will see with PGI a consistent theme for growth yet it will be growing strong, growing smart," Mr. Schaeffer said. "We are not just going to grow for the sake of growing. This industry offers great growth potential. We believe we have the capability to be the industry leader instead of an industry leader." 6 Ashlstrom Helsinki, Finland www.ahlstrom.com $928 million Personnel Jukka Moisio, president and CEO; Randal Davis, senior vice president and general manager, filtration; Claudio Ermondi, senior vice president and general manager, nonwovens; Tommi Bjormann, senior vice president and general manager, glass nonwovens; Marco Aimo, global sales and marketing manager, Europe filtration; Jerome Barrillon, director of marketing, U.S. filtration; Valmir Piton, general manager Brazil filtration; Howard Jin, vice president and general manager, Korea filtration; Karen Renton, marketing and communications manager, Europe nonwovens; Ellen Miles, marketing and communications manager, North America and South America nonwovens; Jimmy Loh, general manager, Shanghai nonwovens; Juha Bohm, director of sales and marketing Europe glass nonwovens Processses Airlaid, carded drylaid, fine fiber, glass nonwovens, needlepunch, spunbond, spunlace, spunlace composites, Hydraspun, wetlaid, Trinitex and process enhancements such as embossing, extrusion coating, lamination, and textilization. ACQUISITION AND CAPITAL investment has continued for Ahlstrom's Nonwovens business area, which reported sales and earnings growth in 2005. The company has attributed much of this success to new acquisitions and new equipment but credits its success to a sharp focus on core markets including wipes, medical, industrial, food packaging and filtration. "We are not interested in being involved in a number of niche areas," explained Claudio Ermondi. "We aren't making acquisitions just for the sake of it." Sales growth in 2005 came from increased activity on Ahlstrom's spunlace composite line in Windsor Locks, CT, the fruits of its acquisition of Green Bay Nonwovens in late 2004 as well as improvements to lines in Turin, Italy and Hyun Poong, Korea, intended to support the local growing markets for nonwovens. One major coup for Ahlstrom has been the wipes market, which is served through its spunlace composite lines in Windsor Locks and Chirnside, Scotland, as well as the Green Bay Nonwovens facility (renamed Ahlstrom Green Bay), where Ahlstrom is already adding a second spunlace line to respond to increased wipes demand in North America. This new line is expected to come onstream in January 2007. Despite these coups, Ahlstrom faced several challenges in 2005. Growth in European markets remained unsatisfactory; prices for raw materials, energy and logistics increased in 2005. Ahlstrom offset these challenges by improved sourcing of raw materials, centralized purchasing and the use of less expensive raw materials where possible. These strategies allowed Ahlstrom to nearly double its earnings with operating profit growing to 117.2 million [euro]. "Our strategy is pretty simple," Mr. Ermondi explained. "We invest in capacity of new lines that will allow us to maintain our growth." The acquisition and subsequent expansion to Ahlstrom Green Bay reflects the growth of the consumer wipes market, an area where Ahlstrom is a key supplier. "We needed more capacity for the North American wipes market," Mr. Ermondi explained. The challenge in wipes lies in meeting the diverse needs of converters such as natural-based wipes or water solubility, he continued. "They are continuously asking for new things and it is a good opportunity for you if you can meet these needs." Most recently, Ahlstrom added the ability to run cotton fibers through its Green Bay spunlace line to respond to the wipes market's increased interest in incorporating cotton into the substrate. Much of Ahlstrom's efforts in wipes have centered on North America but other areas are on the radar. The big wipes opportunity remains in the U.S. so far," Mr. Ermondi said. "It is the 'driving' market. Europe is growing but slower, South America is small but growing. We don't see big growth in Asia yet." In Europe, Ahlstrom currently operates only one spunlace line in Chirnside. Because this market is facing an overcapacity situation, building a new line there is probably not in Ahlstrom's future but Mr. Ermondi would not rule out an acquisition in the region. Another area receiving significant investment by Ahlstrom is filtration, where the company has played a role since the 1970s when it began producing media in Italy, mainly for the automotive market. More recently, however, the company has worked hard to broaden the scope of this business by adding new technologies, most often through acquisitions. "It has been easier to buy some companies rather than starting from scratch," Mr. Ermondi explained. These efforts began in 2004 with the purchase of Hollinee LLC's filtration in the U.S., which has given Ahlstrom instant access to the $500 million HVAC market, and have more recently included a number of acquisitions across the filtration spectrum. In December, Ahlstrom acquired the filtration business of Lantor, Inc. to reinforce its position in the air filtration and automotive filtration markets by adding additional needlepunch production capacity and expanding its product portfolio with high temperature dust filtration and other specialty filtration products. The Lantor acquisition will add approximately $20 million in sales to Ahlstrom's filtration business and includes a Bellingham, MA facility as well as a new facility in Wuxi, China, which started production in May 2005. The new entity in the U.S. is operating under the name Ahlstrom Lantor LLC. Mr. Ermondi said the Chinese arm of the business shows particular potential for growth. "China with increasing power generation needs and growing industrial manufacturing has a high demand for air filtration products. The fact that Lantor has built a successful filtration business in the U.S. and that they have transferred this knowledge to China will allow Ahlstrom to accelerate its presence in this geography." Also in December, Ahlstrom acquired FiberMark's North American absorbent materials business and integrated this operation into its existing product offering supplied from its Mt. Holly Spring, PA site. "This transaction strengthens Ahlstrom's position and increases its product offering in the specialty filtration market. We know the market and have the structure to service it, we have the right production capabilities and we are now well positioned to be a major supplier to this market." Then, in January, Ahlstrom reached a deal to acquire HRS Textiles, a South Carolina supplier of specialty nonwovens to the North American air and liquid filtration markets. This transaction will add $20 million to Ahlstrom's filtration business and strengthen its position in air and liquid filtration. "Ahlstrom has been in filtration for more than 35 years already. We grew in transportation filtration being one of the biggest players of the segment. We also accumulated an important experience and knowledge in filter media design and production. Then we started to approach different filtration markets, using our competencies and enhancing them with selected acquisitions (companies that support market know-how and have complementary-to-Ahlstrom technologies)," Mr. Ermondi said. Also expected to add to Ahlstrom's filtration business is a new fine fiber line in Turin, Italy, which came onstream in June 2005. Based on custom melt-spinning technology, this line can use multiple polymers and create multilayer and calendered products to serve multiple applications, particularly filtration. Where traditional meltblown technology produces most fibers above one micron, Ahlstrom's Fine Fiber technology produces a much higher proportion of fibers in the sub-micron range. This greater amount of finer fibers opens up many possibilities to increase filtration efficiencies while maintaining performance. In addition, the compositing capabilities of the line combined with its ability to produce multiple density materials will allow it to create novel structures, opening up new avenues for filtration product development. Also receiving attention is Ahlstrom's medical and consumer business, which continues to benefit from a large-scale composite spunbond line added in Windsor Locks in November 2001. While demand for medical nonwovens has been softer in early 2006 than it was in 2005, Ahlstrom continues to focus on offering higher protection and increased comfort to its customers. In November, Ahlstrom formed an alliance with SAAF, a Saudi Arabian nonwovens producer, to sell its Medalon range of spunmelt medical drape and gown fabrics alongside Ahlstrom's existing product range. The cooperation enables both companies to benefit from SAAF's manufacturing expertise and innovative product range, allied to Ahlstrom's global presence, strong relationships and wide product offering. Whether through capital investment, acquisition of joint ventures, Ahlstrom clearly is willing to do anything it takes to grow its nonwovens business and these efforts will continue, said Mr. Ermondi. "Ahlstrom aims to continue to expand and further improve its operations mainly through the following ways: investments in new capacity, new technologies and productivity improvements in existing capacity; investments and expansion in Asia, Russia/Eastern Europe and the Americas to grow with its global customer base and possible acquisitions to expand its geographic presence and enhance its product offering." And, Ahlstrom won't be haphazard. "We want to be sure that if we invest it will benefit the company and that's not always easy," Mr. Ermondi said. 7 Johns Manville Denver, CO www.jm.com $530 million Key Personnel Dion Persson, senior vice president, engineered products group; Fred Stephan, vice president for high performance nonwovens; Zain Mahmood, vice president for construction materials and systems Plants Waterville, OH; Defiance, OH; Richland, MS, Spartanburg, SC, Etowah, TN; Bobingen, Berlin, Wertheim, Karlstein and Steinach, Germany; Shanghai, China; Trnava, Slovakia ISO Status Spartanburg, SC and Defiance, OH ISO 9002 certified; Bobingen and Berlin, Germany ISO 9001 certified; Waterville, OH ISO 9002 certified; Etowah, TN ISO 9002 certified Processes Airlaid (glass and synthetic), wetlaid, calendered, melt blown, spunbonded, needlepunched, thermal bonded Brand Names Microlith, DuraGlass, Delta-Aire, DynaWick, DynaWeb, DynaTech, Micro-Aire, MicroLith, Ecomat, Duraglass, and Combimat, DuraBase and Gorilla Wrap Major Markets Roofing substrates, air and liquid filtration, sorbents, battery separators, geotextiles, flooring substrates and facers for building products BUILDING AND ENGINEERED MATERIALS expert Johns Manville, Denver, CO, has been able to continue its trend of growing nonwovens sales across all of its markets. The Berkshire Hathaway-owned company's sales grew to be in excess of $525 million in 2005. While raw material prices have posed significant challenges globally, JM has been successful in passing along increases throughout the world, according to vice president and general manager, construction materials, Zain Mahmood. "Our biggest challenge has been the significant, worldwide increase of costs in raw materials and energy," he said. "JM has maintained its leadership role by increasing prices in all of its nonwovens markets to reflect these changes." Johns Manville operates through two groups--engineered products and building materials. JM's nonwovens operations are contained within the engineered products group and are divided into three global segments--reinforcement fibers, construction materials and systems and high performance nonwovens, a combination of glass and synthetic mats and filtration media. The construction materials segment is set to receive a boost from a new glass mat line in Etowah, TN, which will come onstream during the second half of 2007. The expansion will make the facility an extremely cost-efficient operation with two large furnaces and 70% of its customers nearby, according to Mr. Mahmood. "This new glass mat line has some significant new capabilities to reduce the total cost of ownership of our key customers and partners," Mr. Mahmood said. "The market is looking for these new capabilities and JM is pleased to respond to these customer/market needs. These new capabilities will allow our partners to continue to win in their spaces for the long term." JM operates two similar lines in Ohio and has a significant presence in Europe. Beyond roofing systems, glass mat nonwovens have been boosted by the material's replacement of paper in wallboards, which is a response to concerns about mold from customers. Meanwhile, in Europe, a new low area weight polyester spunbond line targeting the roofing market is currently in start-up phase in Bobingen, Germany. This line will also help JM expand its product capabilities while making the facility more cost efficient. JM's Bobingen facility as well as its operation in Berlin, Germany serves customers throughout Europe, including Eastern and Central Europe where construction and roofing markets have been growing significantly. While no nonwovens operation is in place, for now, JM, which currently produces fiberglass in Slovakia, has indicated an interest in expanding its nonwovens operation into this area. "We have multiple nonwovens capability enhancements on our investment drawing boards and will continue to pursue the right market timing to bring them onstream," Mr. Mahmood said. "JM is a leader in the CEE market and will continue to serve our customers with adequate investments." Moving towards Asia, especially China, JM has expanded its Chinese operations, based in Shanghai through the acquisition of a new spunbond line in the Henan state, which will double the company's footprint in that country/region. "The new line will serve some of our key customers in China in core JM markets. We are also bolstering our technology capabilities in China, allowing us to focus on one of the fastest growing markets in the world." JM currently operates a line in Quingpu, near Shanghai. In addition to regional expansion, new product development has been an important growth strategy for JM. Earlier this year, JM introduced two significant new products in time for the National Association of home Builders 2006 International Builders' Show. The first, Gorilla Wrap, is a non-perforated, nonwoven polymeric housewrap material that decreases air infiltration, resulting in increased energy efficiency and maximum moisture control. Gorilla Wrap's superior strength, with a tear resistance that is 300% higher than the leading housewrap, reduces builder concern during installation and makes it one of the most durable housewrap products on the market, according to the company. Unlike most housewraps on the market, Gorilla Wrap is non-perforated, reducing the potential for bulk water penetration and allowing trapped moisture to escape, thus reducing concerns about mold and mildew growth. In addition, the non-perforated material keeps wood sheathing drier, reducing the potential for rot and degradation within the wall cavity. The unique composition of JM's other new product, DuraBase roofing underlayment, employs, the proven technology of asphalt with a new high-performance nonwoven polyester reinforcement. Its durability enables DuraBase to hold nails better and provides greater tear strength and puncture resistance than synthetics or felt. It also offers greater waterproofing performance and better protection as it also seals around nails. DuraBase's enhanced ultraviolet resistance allows longer exposure to the sun (up to six months) without performance deterioration. "This product is focused on creating a spunbond underlayment that is completely different from traditional felt and synthetics," Mr. Mahmood explained. This unique, patented technology, developed by JM, allows customers to reduce installation costs and get more superior value than existing felt products that absorb water (and thereby do not provide adequate waterproofing) and do not lie flat." Durabase also differs from synthetics in that it allows for the use of staples for installation, decreasing installation costs. Durabase's exposure in the roofing market has been enhanced through JM's partnership with Tarco, Little Rock, AK, a leading supplier of roofing underlayments for use under roof shingles, ceramic tiles and steel roofing. Together, the two companies created a new asphalt synthetic underlayment called EasyLay, a new Leakbarrier product using DuraBase. DuraBase technology allows the EasyLay product to unroll flat in warm and cold weather. Additionally, EasyLay offers greater waterproofing performance and better protection, as it employs DuraBase technology, which provides sealing around nails. "Tarco is the largest underlayment producer in North America," said Mr. Mahmood. "With its significant logistics and distribution channels, it is ideally suited to help JM convert the traditional felt-based underlayment market. We are partnering with Tarco to help us get this product to market in the fastest possible way. This is a combined effort between JM's newly formed building products group, engineered products and Tarco. Since this is a steep slope application, we are working with Tarco and large shingle manufacturing partners to use this as a part of their overall system." Mr. Mahmood added that JM's efforts in product development mainly center on helping its customers reduce their total cost of nonwovens while providing them the means to enter new areas. "We are optimistic about the increased need for enhanced durable nonwoven capabilities in every market we play. JM is investing heavily in this segment to ensure that we meet our customers needs, both for today and tomorrow." To help achieve this, JM recently formed a global nonwoven technical center with a presence in North American, Europe and Asia. Product specialists working in this center are working on the next generation of technologies to help benefit JM's customers. "We will continue to extend our technology edge in durable nonwovens," Mr. Mahmood concluded. "With multiple product/technology capabilities and a global presence, our customers expect us to lead the way in durable nonwovens and we look forward to meeting their expectations." 8 Buckeye Memphis, TN www.bkitech.com $241 million Key Personnel Marko Rajamaa, vice president, Nonwovens; Chip Aiken, senior vice president, nanufacturing; Mike Brown, Nonwovens Sales Manager--Americas and Far East; Norbert Busch, nonwovens sales manager--Europe and the Middle East; Laurence Li, nonwovens division technology manager Plants Delta, British Columbia, Canada; Steinfurt, Germany; Gaston, NO Processes Latex bonded, thermal bonded and multibonded airlaid Vicell, Vizorb, Unicore, Brand Names Vicell, Vizorb, Unicore, Duocore, Walkisoft, Airspun Major Markets Feminine hygiene, baby diapers, adult incontinence, pre-moistened wipes, moist tissue, medical, tabletop, wipers, filtration, food packaging, household cleaning products. Sales have continued to grow for Buckeye Technologies as it continues to expand its airlaid nonwovens into new markets and grow its role in existing markets. In 2005, the Memphis, TN-based company reported sales of $240.8 million compared to $226.4 million the year before. "Sales are strong and we have been able to increase prices to help with increasing manufacturing costs, but these prices have not kept up," said sales manager Michael Brown. In terms of end use markets, a large portion of Buckeye's airlaid output continues to serve the specialty wipes market. "Even though a lot of spunlace capacity has come osntream, the impact of this on our business has really been minimal," Mr. Brown said. "Our wipes business has never been stronger". Last year, Buckeye began supplying specialty wipes into Europe, where spunlace has traditionally been the preferred susbstrate, and while this market has not resulted in explosive growth for Buckeye, which operates an airlaid line in Steinfurt, Germany, it has become a nice market for Buckeye. Meanwhile, Buckeye's other core business, feminine hygiene, continues to be strong. Beyond that, new markets for airlaid is a major initiative. "New applications are a major focus for us and we are investigating a number of interesting opportunities" Mr. Brown said. "We have to look into other new areas to increase our business and hopefully our margins'. In fact, new product development is so important to Buckeye that in February it established a new marketing organization within the company to bring new products to market on an accelerated schedule. The division is being led by Jeff Cook, with the support of Susan Crenshaw and Hank Hall, who formerly served as nonwovens sales manager for the Americas and Far East. For more on Buckeye's 2006 earnings results, see our earnings report on page 103. 9 Companhia Providencia Parana, Brazil www.providencia.com.br $220 million Plant Location Sao Jose Pinhais-Parana, Brazil Key Personnel Milan Starostik, chairman, Ana Seles, Starostik, commercial director; William Starostik, marketing director, Romeo Bregant, industrial director; Vicente Batista de Lima, financial and administrative director, Cleber dos Santos, export director; Wagner Carvalho, sales manager Processes Spunbonded, SMS, meltblown, laminated nonwovens Brand Names Kami Major Markets Hospital, agriculture, bedding, towel and coverlet, table mat, hygiene, baby diapers AS IT FINALIZES PLANS FOR a ninth production line, Companhia Providencia continues to focus on the hygiene market. With all eight of its existing production lines centered on spunmelt technology, the Parana, Brazil-based company--Brazil's largest nonwovens producer--continues to add value to its operation through printing and laminating capabilities. "We are not a commodity supplier of nonwovens," said Cleber dos Santos, export director. "We add a lot of a value to our goods and make specialties for the hygiene market." This added value has allowed Providencia to achieve higher returns on its spunmelt nonwovens. In 2005, the company's sales reached $220 million, up from $200 million the year before. Continuing this momentum could prove difficult, according to Mr. dos Santos, as the hygiene market continues to increase its competitiveness and adds pressure to pricing levels. Between 50-70% of Providencia's output targets hygiene applications, mainly in the Americas. "The Latin American hygiene market is still growing," Mr. dos Santos continued. "We are seeing good initiatives in terms of better products in South America, compared to major markets like the U.S. Companies are converting to cloth-like backsheet and other improvements." Additionally, Providencia is responding to demands for more innovative features such as alternative colors and printing applications and better hand, improved softness and elastomeric products. Last year, Providencia upped its printing capabilities with the addition of a new multicolor line giving it the ability to print nonwovens for hygiene products. Providencia's ninth line will add 15-20,000 metric tons to its operation, making its total capacity 70,000 tons when it comes onstream during the second quarter of 2007. This line, like its eighth line--which came onstream during the second quarter of 2005--will be based on Reicofil 4 technology. It will add to the company's hygiene business but also expand its efforts in the medical market, according to Mr. dos Santos. Beyond hygiene, Providencia targets industrial markets such as agriculture and bedding with output from its older lines, which make heavier weight products. "Compared to hygiene, the growth in these areas is much more conservative. Basically, we have good years and bad years and the situation varies from one year to the next," Mr. dos Santos said. Geographically speaking, Providencia's are more or less split in half between exports and imports but its entire business is served from its one plant in Parana. Diversifying its manufacturing base, however, could be the next step in Providencia's growth strategy but Mr. dos Santos refused to elaborate on attractive locations for his company's potential expansion. 10 Owens-Corning Aiken, SC www.owenscorning.com $202 million Key Personnel North & South America: Boudewijn Morelissen--General Manager, Europe & Asia-Pacific: Steven Vermeulen--General Manager Plants Aiken, SC; Ft. Smith, AR; Danville, IL (JV); Apeldoorn, Netherlands; Livers-edge, U.K. Processes Wetlaid, drylaid Major Markets Ceiling systems, roofing systems, flooring systems, battery separators, insulation facers, gypsum facers, wall coverings, electrical laminates, automotive applications, paving mats, fire-resistant fabrics for mattresses and upholstered furniture WITH NONWOVENS SALES estimated at $200 million, Owens-Corning's glass nonwovens operation continues to target ceiling tiles, flooring systems, wall coverings, insulation facings, roofing systems, paving systems and automotive applications, among others. And, while the multinational conglomerate and maker of PINK insulation, roofing materials and vinyl siding has been beleaguered by asbestos-related litigation, which were partially blamed on the company's filing for bankruptcy protection late last year, nonwovens remains on of the company's best growth prospects. Owens-Corning has been making drylaid glass nonwovens since the 1950s and led the roofing industry's conversion to glass mat-based asphalt shingles in the late 1970s. In the 1980s, Owens-Corning acquired two European operations, one from Pilkington in the U.K. and another in the Netherlands. The company currently operates five nonwovens production facilities in Apeldoorn, The Netherlands, Liversedge, U.K., Alken, SC, Ft. Smith, AR and Danville, IL. While the bulk of its output is made using a wetlaid process, the company also manufactures drylaid nonwovens. Also, as the nonwovens business continues to expand, the company is diversifying beyond glass veils and mats into input fibers such as polypropylene, PVC and polyester, among others. The company has also proven its commitment to its nonwovens operation with the announcement of a $25 million investment at its Alken, SC site. The expansion will increase output of a glass mat facer for gypsum wallboard, more specifically, Georgia-Pacific's next generation of DensArmor, which features a glass mat facing that finishes like paper-faced wallboard, resulting in the first completely paperless interior wallboard that offers mold and moisture resistance and finishes easily. On the new product front is Owens-Corning's Fire Resistant (FR) Filler Cloth, which boosts the mattress industry's ability to comply with open flame fire resistance legislation, set to come up next year. Comprised of fire-resistant and self-extinguishing fibers, Owens-Corning's (FR) Filler Cloth is seamlessly bonded to standard non-FR filler cloth, which then looks, feels and installs just like traditional materials that are applied to the bottom of no-flip mattresses. On the corporate front, in June Owens-Corning announced it would merge its Reinforcements Business with with St. Gobain's Reinforcements business (formerly known as Vetrotex). The anticipated transaction would be structured as a joint venture, with Owens-Corning owning a 60% equity interest and Saint-Gobain owning the remaining 40%. After a minimum of four years, the joint venture provisions would give an option to Saint-Gobain to sell its 40% stake to Owens-Corning, and Owens-Corning to buy the same. The new company would have approximately $1.8 billion in annual revenues. The Owens-Corning-Saint-Gobain joint venture would present significant opportunities for synergies. These are expected to come primarily from scale benefits in purchasing and procurement; operational and technological plant improvements; improved distribution costs; reduced administrative costs and asset management optimization. 11 Japan Vilene Tokyo, Japan www.Vilene.co.jp $200 million) ([yen] billion) Key Personnel Yutaka Tanaka, president; Minoru Tanaka, managing director; Yoshiaki Mizutani, director; Mitsuo Kanno, managing director Plants Shiga and Tokyo, Japan Processes Resin bonded, needlepunched, thermal bonded, wetlaid, spunlaced, meltblown, tackspun Major Markers Apparel interlinings, apparel insulations, air filters, plaster bases, automotive mats, automotive headliners, battery electrode separators WITH A PLAN TO BOOST SALES to [yen] 61 billion by 2008, Japan's largest roll goods producer Japan Vilene has had a busy year. Consolidated sales in fiscal 2005 (April 2005-March 2006) totaled just under [yen] 22 billion, a solid 5% increase over the previous year. As usual, sales generated within Japan Vilene's application segments varied, with apparel materials bringing in [yen] 5.1 billion (a 14.5% decrease compared to the year before). Meanwhile, the company's automotive business saw a dramatic increase of 18.6%, totaling [yen] 19.1 billion; air filtration materials earned [yen] 8.6 billion (a 3% decrease); sales for industrial materials were [yen] 5.4 billion (a 3.5% drop); electrical materials increased slightly (1.9%) to [yen] 5.4 billion; medical and consumer materials earned [yen] 7 billion (up 8.8%) and sales for the rest of Japan Vilene's businesses amounted to [yen] 1.3 billion, a 13.4% increase. Domestic and overseas sales represented [yen] 51.9 billion of the company's consolidated sales in 2005. Sales within Japan increased 2.5% to [yen] 37.5 billion while sales outside of Japan increased 12.3% to [yen] 14.4 billion. While domestic sales decreased and exports increased in 2004, both domestic and overseas sales increased in 2005. Last year exports represented 27.6% of total sales, a jump over 2004's ratio of 25.9%. Japan Vilene achieved solid sales in both North America and Asia last year. At [yen] 8.5 billion, sales in North America increased 27% over 2004 while sales in Asia remained at [yen] 5.5 billion. Sales in the rest of the world amounted to [yen] 0.4 billion. According to the company, the increased revenue from sales of automotive materials in North America contributed greatly to its overall sales growth in 2005. Speaking of growth, Japan Vilene has installed an electro-spinning pilot plant for nanofiber nonwovens, which is capable of producing materials as wide as one meter. The average fiber diameter can be adjusted within the 0.1-1.0 um range while the average pore size of the nonwovens is in the 0.4-2.0 um range. Average density is within the 5-25 gpsm range. Currently acrylic fiber is predominantly being used for these applications; however, the electrospinning method can employ various polymers as raw materials. Nanofiber nonwovens target applications such as air filtration, battery electrotrode separators and medical materials. 11 Propex Fabrics Ringgold, GA www.propexfabrics.com $200 million Key Personnel Joe Dana, president and CEO; W. Michael Coffin, executive vice president and COO; Phil Barnes, vice president, CFO and treasurer; Lee McCarter, executive vice president and CFO; Hugh McClain, vice president of U.S. sales; John Stover vice president and general counsel Nonwovens Plants Ringgold GA, Hazlehurst GA, Seneca SC ISO Status ISO 9002 Certified ISO 14001 Certified Process Needlepunch Brand Names Geotex, Petromat, Proguard, Petrotac, Duon, Synfab Actionbac, Polybac, Earthscape, Matrix, RFX, Xtinguish Major Nonwovens Markets Geosynthetics, flooring, furniture and bedding, automotive, agriculture, laminates, vinyl substrates, sorbents FOLLOWING ITS ACQUISITION in January 2006 of SI Corporation, Propex Fabrics changed its name to Propex Inc. In the face of strong competition and varying dynamics in all of its end use markets, nonwovens sales volumes at the combined SI and Propex in 2005 were relatively flat compared to the prior year at over 500 million square yards. With nonwovens representing approximately 20% of Propex's overall business, the combined entity is a leading producer of polypropylene-based fabrics and fibers for geosynthetics, furniture and bedding, automotive, concrete reinforcement, carpet backing and a variety of other industrial end uses. SI Concrete Systems, SI Performance Technology and SI Geosolutions are now combined with the previous Propex Fabrics divisions, forming four Propex business reporting segments--Geosynthetics, Furnishings, Industrial Products and Concrete Systems. "The acquisition creates a streamlined organization that is stronger and better equipped to drive success and secure a stable, profitable future for customers, employees, shareholders and suppliers," offered Bob Tlumak, director of marketing. "The combined entity is market-driven and dedicated to innovation, service excellence and proactive market development." Other benefits expected to result from the acquisition are increased diversification and a broader range of products and services. "As a leading supplier of needlepunched nonwovens in North America, the company has unparalleled capabilities for product development with an array of commercial technologies and conversion capabilities." Dr. Tlumak added that he also expects the business to benefit from the consolidation of the combined product offerings and cost structure. In terms of manufacturing capabilities, Propex currently operates three needlepunch nonwoven plants, with lines at Hazlehurst GA, Seneca SC and Ringgold GA, but plans are underway to shut down the Seneca site and transfer its manufacturing assets to Ringgold. The transfer will make the Ringgold site the largest needlepunch operation in North America, according to the company. "We have been investing capital in our nonwovens business to continue to improve our cost structure, upgrade operations to maintain leading quality and support the commercial production of new products," remarked Dr. Tlumak. Turning to the subject of the economy and its impact on Propex's core markets, Dr. Tlumak pointed to the upholstered furniture sector, where manufacturing continues to migrate to the Far East, attracted by low labor costs and capital availability. "We see this trend continuing, a trend that is reducing the demand for our products in North America." He added that automotive manufacturing in the U.S. is down slightly from last year. On the positive side, Dr. Tlumak indicated that the geosynthetics market is enjoying growth from continued investment in civil construction for both site development and transportation markets. When it comes to product differentiation, a key strategy for Propex has been making the most of its varied capabilities, which span from weaving, embossing and fiber spinning to film coating and laminating. These processes can be combined with needlepunched fabrics to offer an innovative range of products including Matrix carpet backing, a proprietary differentiated system designed for artificial turf requiring high tuft bind and made from a woven/nonwoven composite structure. "Propex looks to set ourselves apart from the competition by creating advantages for our customers by offering consistent and reliable high quality products and services with proven performance," said Dr. Tlumak. "We are committed to growing the markets we participate in and bringing business to our customers with focused marketing efforts. We also offer consultation and expertise in our markets with technically trained sales personnel and support staff as well as collaboration with our customers to bring innovative solutions to the market that enhance their offerings and improve their profitability. In this way we are focused on driving sustainable, profitable growth for both our customers and ourselves by delivering value to the marketplace." 13 Fibertex Aalborg, Denmark www.fibertex.dk $190 million Key Personnel Knud Waede Hansen, managing director; Mikael Staal Axelsen, general manager, Personal Care Division; Jorgen Bech Madsen, general manager, Technical Division; Etienne Ficht, business development Director, Kenneth Mynster Dolmer, purchasing director, Ole Houmann, Finance Director Plants Two in Aalborg; one in Malaysia, two in the Czech Republic ISO Status DS/EN ISO 9001 Quality management 1991:2000; DS/ISO 14001 Environmental management 2001; DS 2403 Energy management Processes Drylaid, carded, needlepunched, thermalbonded, spunbond/ meltblown Brand Names Fibertex, Flexback, Formtex, Compoflex, Multigeo, Superflor, Weedseal, Fiberforce, Fibergreen, Fibertex patio, Fibertex universal, Fiberacoustic, Two-in-One, Comfortback, Matchback, Woodback, Q-match, Making the perfect match Major Markets Industrial textiles-primary and secondary carpet backings, automotive, furniture and bedding, filtration; technical textiles-building and construction, composites, do-it-yourself, horticulture; hygiene; protective clothing; packaging SALES INCREASED FOR DANISH nonwovens producer Fibertex thanks to the increased ramp up of its second Malaysian spunmelt line as well as continued integration of its acquired Czech Republic business. The company's sales reached $190 million in 2005 compared to $160 million in 2004. Despite this remarkable growth, Fibertex, like many nonwovens producers, has been challenged by the increased price of polypropylene, the core raw material of its spunmelt operation. "We have tried to optimize our operations but our price increases were so dramatic, we had to raise prices," said managing director Knud Waede Hansen. "This is always a challenge for nonwovens producers. We are a smaller player stuck between two larger players--the raw material producers we are buying from and the hygiene companies we are selling to." Fibertex's growth in the hygiene segment has been impressive since the company entered this realm in 1998 Last year alone, sales in the personal care division rose 23% to DKK669 million and this growth is expected to continue. Currently, Fibertex runs two spunmelt lines at its headquarters in Aalborg, Denmark as well as two lines in its Malaysian facility. And, a third line--a Reicofil 4--is currently under construction in Aalborg. Set to come onstream this fall, this line, like its four sister lines, will mainly produce lightweight products for the hygiene market. "There is still demand for spunmelt nonwovens in Europe," Mr. Hansen explained. "You have to have the latest technology and to be competitive we had to add another line." Meanwhile, Fibertex's technical division sales increased 17% to DKK491 million, thanks to the establishment of a state-of-the-art facility in the Czech Republic, which Fibertex acquired from Vigona in 2004 and where it has since added a large-scale NSC needleloom measuring six meters in width. This operation, which also produces thermal bonded nonwovens, is allowing Fibertex to target important industrial markets, most notably the automotives segment, which has seen significant activity in Central Europe. "Automotives was traditionally the biggest market for Vigona because many of the tier one and two automotive suppliers are located in that region," Mr. Hansen explained. "Because they are located there, it is better to serve them from that area." According to Mr. Hansen, investment in this area will continue. Upon purchasing the site, Fibertex officials indicated investment in the region could reach as high as DKK200 million. Beyond automotives, Fibertex's technical business includes construction and geotextiles, furniture, carpeting and filtration. In fall 2005, Fibertex developed a new geotextile product program with improved properties and all of the necessary market and quality certifications. Other new product initiatives include a line of lightweight nonwovens for automotives, new products for the filtration market and laminated and multilayer products for various industrial and technical markets. "Technical nonwovens are very different from hygiene," Mr. Hansen said. "But, both sides are doing very well. It is good to have two legs to stand on." After several years of aggressive investment--two lines and a new facility in Malaysia, the acquisition of and improvements to a Czech Republic site and most recently a new line in Denmark--Fibertex is now at a crossroads as to where to focus next. "We are considering what our next move should be," Mr. Hansen said. "It could be a new line but there are other options." For instance, Fibertex has no operation in America or in China, large markets for all of its businesses. "We want to be global but we cannot enter a market just for the sake of entering it," he continued. "There has to be a plan. For instance, China should not be ignored but the question is how do you attack it?" 14 Hollingsworth & Vose Walpole, MA www.hollingsworth-vose.com $187 million Key Personnel Val Hollingsworth, president and CEO; David von Loesecke, vice president and general manager, engine and industrial filtration and high efficiency and specialty filtration; Tom White, vice president and general manager battery products; Randall Rogers, vice president and general manager, industrial specialties and engineered composite materials; Juergen Binzer, vice president and general manager, European engine and industrial filtration products; Justin Harkiewicz, vice president and general manager, Asia-Pacific; Jeff Sherer, vice president and CFO; John Fitzgerald, vice president, technology; Mike Paddock, vice president, human resources Plants Apizaco, Mexico; Corvallis, OR; East Walpole, MA; Easton, NY; Floyd, VA; Greenwich, NY; Hatzfeld, Germany; Hawkinsville, GA; Kentmere, UK; Suzhou, China (under construction); West Groton, MA; Winchombe, U.K. ISO Status Apizaco, Mexico, QS-9000; Corvallis, OR, ISO 9001:2000; East Walpole, MA, ISO 9001:2000; Easton, NY, ISO 9001:2000; Floyd, VA, ISO 9001:2000; Greenwich, NY, ISO 9001:2000; Hatzfeld, Germany, ISO 9001:2000; Hawkinsville, GA, ISO 9001:2000 and AS 9100; Kentmere, UK, ISO 9001:2000; West Groton, MA, QS-9000; Winchcombe, UK, ISO 9001:2000 and QS 9000 Processes Wetlaid, meltblown, carded thermal bonded (point and flat calendared), latex bonded, thru-air bonded, needlepunched, thermal and chemical lamination, aqueous and solvent-based saturation, nanofiber coating, composites Brand Names AFM, AFN, AlphaPerm, AquaSure, BGO, Duo-Phase, DynaSeal, EnergyGuard, Fastock, HELP, HiPerm, HollTek, HovoFuse, Hovoglas, Hovoliner, Hovolon, Hovomat, Hovopulse, Hovosorb, Hovotex, Hovotherm, Hovotrim, Hovowipe, Magnaseal, NanoMelt, Nanoweb, PurePerm, Saf 'N' Shielded, Soft 'N Stable, Stitchbackers, Technostat, The Cat, Tufguard, Unisorb, ValPac, WallTek Market Sectors Engine and industrial filtration: air-heavy duty, passenger car and cabin air; fuel-heavy duty, passenger car, common rail, in-tank; oil-heavy duty, passenger car; industrial-gas turbine, dust collection, hydraulic. High efficiency and specialty filtration: analytical/medical/biotech equipment coalescers; drinking water; electronic equipment; HEPA, ULPA and cleanroom; HVAC; pool and spa; room air cleaner; respiratory protection/surgical face masks; specialty liquid filtration and separation; vacuum cleaner. Battery products; battery chemistries for industrial and automotive markets: alkaline manganese, nickel cadmium, nickel metal hydride, valve regulated lead acid; specialty-lithium thionyl chloride, zinc air, paste fiber-PA10-6. Industrial specialties; apparel; embroidery backing; label stock; waistband canvas; engineered composite materials; automotive and industrial sealing materials; thermal/acoustical barriers; electrical insulators; specialty roll form composites; friction substrates; UL-rated materials; floppy disk liners; home furnishings; drapery buckram; wallcovering substrates; window covering; advanced fiber nonwovens; composite roll materials; composite tank and pipe materials; EMI shielding, ESD and ground planes; fuel cell GDL materials; radar absorbing veils; low observables; sporting goods; surfacing veils THE WORLDS 13TH LARGEST roll goods producer Hollingsworth & Vose, East Walpole, MA, was able to achieve successful results in 2005 despite industry-wide energy and energy-related raw material pricing hurdles. Most business units reported good results despite these challenges, and H&V's total nonwoven rolls goods sales in 2005 were $187 million, up a solid 7% from 2004 revenues of $175 million. "Continued high raw material prices for fibers, binders and chemicals, and the ongoing high cost of energy, have resulted in earnings pressure and necessitated further price increases to our customers during 2005," commented Angelika Mayman, director, new markets for H&V. "A portion of these cost increases are still absorbed by the roll goods manufacturer, resulting in margin reductions and increased pressure to improve manufacturing efficiencies," she added. In H&V's high efficiency and specialty filtration business, growth continued, stemming from the strength of its base business, despite a modest downturn in the cleanroom market in 2005 relative to 2004. "Our respiratory business had favorable results, due in part to H&V's high quality media and our ability to meet many international standards," reported Ms. Mayman. New products in this segment include H&V's patented low boron PurePerm, which has been well received by the cleanroom market. PurePerm is comprised of unique glass fibers that contain negligible trace levels of boron oxide, which ensure that the filter medium does not contribute to boron contamination in the cleanroom. H&V's NanoMelt meltblown media, pleatable synthetic composites and pool and spa line continue to do well. During 2005, H&V continued the development of its NanoMelt media, adapting the product for expected U.S. standards. According to H&V, NanoMelt media provides a higher mechanical filter efficiency than other meltblown media due to its fine fiber structure. NanoMelt was originally developed in 2004 to meet new filtration standards going into effect in Europe. Pleatable synthetic composites are now a commercial product for mini-pleat ASHRAE applications, offering ease of pleating, high efficiency and low resistance. The pool and spa product line, which includes both silver and copper versions (AquaSure Ag and AquaSure Cu, respectively), has fared well in the market due to its high water flow rates, minimal resistance, superior filtration efficiency and dirt holding capacity. H&V describes AquaSure Ag as the first pool and spa media to integrate antimicrobial protection into the fiber (rather than a surface coating) for longer lasting effectiveness over the life of the filter. In its industrial specialties segment, markets were stable between 2004 and 2005 for H&V. A continued focus on home furnishings, including window treatments and wall-covering materials, embroidery, waistband and friction markets, offset declines in certain other markets such as diskette. In the wall coverings sector, HollTek and WallTek continue to penetrate the wallcoverings market due primarily to specific characteristics (easy strippability and permeability) that H&V's products offer as well as the continued penetration of nonwovens into this traditional woven market. The engineered composite materials product line, part of the industrial specialties business, has been successful with its introduction of new friction materials and adsorptive products, additions to the traditional gasket business. H&V's saturated friction material is used in the automotive aftermarket for use in automatic transmissions and offers quality and durability. In H&V's AFN segment, the focus continues to be on conductive nonwovens as well as composite roll covers and lightning strike protection. H&V's conductive nonwovens are isotropic, extremely uniform and conductive. Composite roll cover media is used for paper machines and printing sleeves where H&V's nonwovens offer surface smoothness, durability, stiffness and uniform wear. The company's media for lightning strike protection is a component of a composite structure employed to protect aircraft and wind turbines. "H&V's high quality gas diffusion layer (GDL) substrate for use in PEM fuel cells continues to be an important development for the company. We offer both coated and uncoated versions, and have brought certain critical process functions in house to ensure the highest quality product," offered Ms. Mayman. Although many applications for fuel cells are still in the market development phase, H&V is taking steps to ensure that it is well-positioned to provide the market with the media for this complex product. H&V is leveraging its expertise with electrochemical devices to participate in the broader alternative energy market, which includes both fuel cells and NiMH batteries for hybrid electric vehicles. As for H&V's battery products segment, the business continues to expand. "Our battery business is exhibiting good, steady growth and continues to benefit from an improved telecommunications market," she said. The company's engine and industrial filtration group performed well in 2005, benefiting from H&V's ability to provide high quality cellulose and synthetic products to the engine and general industrial market. "Our innovations in synthetic composites, begun several years ago, combine durability and efficiency to provide the best cost per unit performance. As the market has increasingly turned to synthetic media for certain applications, H&V's broad product offering has successfully met customer needs," Ms. Mayman said adding that H&V has the flexibility to provide these substrates as free sheets or composites, including meltblown/cellulose composites, fine fiber meltblown, adsorptive filter media (AFM), Technostat, H&V's triboelectret media, and Nanoweb, its proprietary nanofiber coating. On the European front, the new meltblown line in Hatzfeld, Germany was started up successfully during 2005. The original plan was to focus on significantly extending H&V's capability and capacity in meltblown production for high efficiency filtration market segments and provide local supply for its European customers. Market demand for technically advanced filtration media in high efficiency air and liquid filtration has been strong, and the line has been running successfully throughout 2005, the company reports. In Asia, the company's immediate strategy is to complete the construction of its manufacturing facility in Suzhou, China to serve the broader Asia-Pacific region. H&V also plans to maintain and expand its presence in the Americas and Europe to support key businesses. In Mexico, H&V purchased its joint venture subsidiary in Apizaco in January 2005. "This was an initial step in a process of continued investment in the mill to support regional and global engine and industrial filtration customers," explained Ms. Mayman. Wrapping up, she pointed to organic growth through product innovation, key customer relationships and market focus as key strategies for short- and long-term growth. "Geographic expansion and acquisitions will be evaluated selectively to complement or extend our business base and manufacturing assets," Ms. Mayman concluded. 15 Colbond Arnhem, The Netherlands www.colbond.com $184 million Key Personnel Jan van Boldrik, CEO; Axel Poscher, vice president; Bart Austin, president Colbond Inc.; Randy Cook, director sales and marketing flooring; Harry Verbakel, director sales and marketing automotive; Rob Noppen, director sales and marketing construction industry; Blair Rawes, director sales and marketing civil engineering; Joe Luna, director sales and marketing building and industrial applications Plants Emmen and Arnhem, The Netherlands; Obernburg, Germany; Asheville, NC ISO Status All European plants ISO 9001:2000 certified; U.S. plant QS 9000 certified; ISO 9001 by end of 2006 under preparation Processes Chemical bonded, thermal bonded and specialties Brand Names Colback, Colfors, Enkamat, Enkadrain, Colbonddrain, Enkagrid, Enka-Spacer, Enka-Vent Major Markets Flooring, automotive, construction industry, civil engineering, building and various industrial applications 2005 HELD MIXED BLESSINGS for Colbond, Arnhem, The Netherlands. While the company achieved a double-digit growth rate in nonwovens, raw material costs continued to impact the company's results. Although Colbond partially compensated for these price hikes through efficiency increases, higher sales prices were necessary, the most recent of which occurred early this year. Amidst these increases, the company continues to focus on efficiency and is working on a number of solutions aimed at mitigating the impact of rising raw material costs to customers. "We haven't seen any change so far in this situation other than that raw material price levels are increasingly influenced by a range of short-term factors, several of which are not directly related to our nonwovens business," commented Jan van Boldrik, Colbond CEO. He predicted that this growing uncertainty of raw material price developments would further increase the volatility of market dynamics. Outside of raw material price woes, another key piece of recent news for Colbond is its sale to London, U.K.-based specialty materials group Low & Bonar. Low & Bonar considers the acquisition a major step forward in its strategy of driving organic and acquisitive growth in its core markets. The firm, which also has operations in China, France and Germany, expects the acquisition to be earnings-enhancing by November 2007. The new owner will offer increased market access for Colbond products through the Chinese sales infrastructure of Low & Bonar while Colbond's U.S. infrastructure will offer access to new market opportunities. Low & Bonar operates two divisions--yarns and fabrics and floors with Colbond operating within the yarns and fabrics division. "We are very pleased with this acquisition," stated Mr. van Boldrik. "The strategy of Colbond and the approach of the yarns and fabrics operation of Low & Bonar complement one another to a great extent. Both companies supply specialty products for niche applications and have a clear focus on their core competencies. We expect our current and future customers to benefit from the integration of Colbond in the enlarged group. Most obvious, of course, is the continued focus on high quality products and services and the drive for process development in line with customer demands. But also the now-increased worldwide presence of Colbond as a member of Low & Bonar will represent a major advantage for our customers and partners in our markets." From a market perspective, Colbond describes growth in high-quality durable nonwovens as positive but somewhat limited during the past several years, but it foresees this trend changing in the medium-term. "Thanks to the unique bicomponent composition of Colback nonwovens and the flexibility of our process, we are able to serve market segments with challenging demands for backing materials and reinforcements," Mr. van Boldrik said. "We differentiate ourselves from other nonwovens manufacturers by means of high-grade specialty products." In terms of manufacturing output, plans are in the works to increase capacity for bicomponent filaments and corresponding nonwovens production. This expansion is in line with Colbond's strategy to further reinforce its position in the worldwide flooring, automotive and construction markets. A new bicomponent nonwovens technology is expected to play a major role in this capacity increase, which will allow Colbond to further improve the value-added features of its products and services. Additionally, Colbond is planning to increase its capacity for 3-D mats and composites, both in the U.S. and Europe through continuous debottlenecking and upgrades to existing production equipment. Colbond's Asheville, NC site alone will increase its nonwovens capacity by more than 10% in the third quarter of 2006 as a result of these efforts. For Colbond, capital investments are essential to retaining long-term growth and anticipating new market demands in terms of technologies, lead times and volume. The company's strategy requires that growth be facilitated by capacity increases be backed up by continual customer orientation, a clear focus on the further development of added-value solutions and a company-wide drive for continuous product and process innovation. "To maintain these qualities, Colbond safeguards its dedication to supplying high-grade specialty products," explained Mr. van Boldrik. "Our in-house technology and extensive manufacturing expertise in the spinning, fleecing and extrusion of various synthetic materials enables us to tailor products in line with specific customer demands and forms the basis for sustained growth." When it comes to new products, Colbond has had a busy year, rolling out several key innovations across its five core markets--flooring, automotive, construction, civil engineering and building and industrial applications. In the flooring area, Colbond has unveiled a 70 gpsm primary backing, a secondary backing for tiles and post-consumer recycled content nonwovens as well as new composite backing materials. In the automotive market, Colbond is building marketshare for Colback Pro in Europe and Easy Tuft in NAFTA and Asia. In the construction sector, the company has successfully introduced its Colfors product range, which is positioned as a mainstream product that complements its premium Colback brand. In the civil engineering segment, this year Colbond plans to launch a new soil consolidation product, which will replace Colbonddrain, its current prefabricated vertical drain. The composite is based on an innovative extrusion and shaping technology, which allows the use of various types of polymers and nonwoven filters. Consisting of a plastic core fully bonded to a nonwoven filter, the new Colbonddrain product is designed to provide extremely high discharge capacities and result in short settlement times. In the U.S., new types of rain screen drains for use with housewrap products are currently being developed. The unique 3-D monofilament matrix (Enkamat) provides a continuous space for drying, channels for drainage, a thermal break and pressure equalization, allowing moisture to escape quickly before it damages the sidewall materials. Launched last year, Colback Pro (a thermally bonded spunlaid nonwoven made from PET/PP bicomponent filaments) is performing well in the automotive industry as a backing material for various molded carpet platforms at leading European car manufacturers. "The recently launched SMR product line made with post-consumer recycled materials put us at the forefront in the sustainability race, a position that we intend to keep," offered Mr. van Boldrik. "Colbond has a powerful portfolio of activities at its disposal. The strategic goals of our company cannot be achieved without the high quality, efforts and teamwork of our individual employees. As sound human resources management assures an appropriate workforce and development of our human capital, it is a major key to the success of our company. I am proud to meet the challenges we will face in the coming years together with this highly motivated workforce," he concluded. 16 Asahi Kasei Osaka, Japan www.asahi-kasei.co.jp $176 million ([yen] 19.4 billion) Key Personnel Yoshikazu Ban, general manager, nonwoven fabrics division; Ryujiro Yoshino, general manager, spunbonded fabric sales; Akira Naganami, general manager, Bemliese sales Plants Moriyama and Nobeoka, Japan Processes Spunbonded, meltblown Major Markets Coverstock, wipes, gauze, packings, white blood corpuscle removing filters DESPITE AN INCREASE in nonwovens sales, steep hikes in raw material and fuel prices have impacted profits at Osaka, Japan-based Asahi Kasei. Following unsuccessful efforts to pass along increased costs to customers, the company is now concentrating instead on tightening production efficiencies, reviewing raw material procurement routes and remodeling equipment. In the spunbonding area, the equipment used to produce nylon spunbonded material has been expanded to also produce polyester nonwovens. The newly compatible line came onstream in May. In the SMMS segment, Asahi Kasei has used equipment improvements to increase its annual production capacity from 13,000 to 15,000 tons per year. Additionally, the company has been experimenting with the production and sale of a new type of highly uniform, thin polyester spunbond material for filter applications. When it comes to technology segments, Asahi Kasei's production capacity breakdown has remained steady at 12,000 tons of polypropylene spunbonded, 6000 tons of polyester spunbonded, 4000 tons of nylon spunbonded, 4500 tons of cupra spunbonded and 200 tons of meltblown materials. As previously mentioned, the company's SMMS production capacity is now at the 15,000 ton-per-year mark. Another important expansion for Asahi Kasei this year is in the area of cupra spunbond nonwovens, which are sold under the Bemliese brand. Production of these materials has been augmented by 1000 tons per year to reach an annual capacity of 4500 tons per year in 2005. However, despite these efforts, profits decreased for Bemliese products due to raw material price hikes as well as further depreciation costs of the extension of the facility. Therefore, in the industrial wipes segment--which is the main application for its cupra spunbond fabrics--the company plans to introduce a new application that will play a key role along with industrial wipes. Asahi Kasei also plans to develop new cupra spunbond-based products for consumer, medical, gardening and agricultural markets as well as strengthen its sales in the European sector for these materials. Moving forward, the company plans to expand its spunbond nonwovens business in the long-term by realizing a return on its investments. Improvements to profitability are expected with the introduction of its newly upgraded SMMS facility. In terms of its previously outlined plans to add a spunbond nonwovens production line outside of Japan, Asahi Kasei has decided against committing to this project, at least for the time being. 17 British Vita Manchester, U.K. www.britishvita.com $170 million Key Personnel Howard Harris, group CEO Plants Belgium, France, Sweden, U.K., U.S. ISO Status ISO 9001:2000 Processes Drylaid, chemical bonded, drylaid thermally bonded, needlefelt, impregnation A MAJOR CHANGE THIS YEAR for British Vita is its new ownership by Fort Worth, TX-based Texas Pacific Group (TPG). The purchase made British Vita a privately owned company that was subsequently de-listed from the London Stock Exchange in June 2005. A private equity firm that invests in franchises across a range of industries, TPG has acquired the controlling interest in British Vita. The arrangement makes TPG a shareholder of the company but not its operator. At the helm of the newly acquired company is Howard Harris, group CEO. "The change in ownership brought a new strategy for the company," explained Alison Vesey, corporate PR manager. "The vision is to become the most efficient producer and preferred supplier in our chosen markets, one of which is specialty nonwoven products. We will achieve and sustain this through investing and sustaining best practice in SHE (safety, health & environment), efficiency measures and listening to our customers to develop growth opportunities, leveraging scale and scope of each division and of the group." Looking back over 2005, British Vita described a stable business environment with growth achieved in the area of technical applications. In the furniture and bedding sector, the market for fiberfill has continued its evolution with some relocation of customers to lower wage regions and a competitive environment. This has led to some restructuring in the U.K., including the closure at the end of 2005 of its Vitaluxan site. As for the company's Libeltex business--which has operations in France and Belgium--the executive board of British Vita decided in March to retain Libeltex as part of the group because it added greater value than being sold as a separate entity. As part of this retention strategy, a program of investing in the people and production capabilities of the company is being formulated to ensure Libeltex maintains its position at the forefront of European nonwovens technology. "The business will continue to attain the standards of product and service quality that our customers have grown to expect, while continuing to focus on operating in a safe and healthy environment," commented Ms. Vesey. On the North American front, U.S.-based Vita Nonwovens has undertaken a market re-focus combined with an efficiency improvement exercise. This is expected to give the company a sound footing for growth in the future. The company said it is pleased with progress to date. In the U.K., British Vita has reduced capacity while European production levels are gradually increasing with improvements in manufacturing operations. Moving forward, British Vita sees hygiene, automotive, filtration and other technical industrial applications as the clear focus for growth. The company is also carefully considering the development of new products and services to meet the future needs of its customers, which may include looking at new market sectors and new geographies. "Since the acquisition of British Vita, there has been a review of our nonwovens business. This has included an extensive strategy study to identify potential growth areas and the best way for us to compete in these," said Ms. Vesey. 18 Avgol Tel-Aviv, Israel www.avgol.com $160 million Key Personnel Shuki Goldwasser, chairman; Nir Peleg, CEO; Achai Bonneh, vice president of technology Plants Tel Aviv, Israel; Mocksville, NC, China, Eastern Europe ISO Status ISO 9002 Certified Processes Spunbonded, meltblown Brand name Zebra Major Markets Hygiene, medical, filtration, construction, agriculture, furniture, upholstery SALES REACHED $160 MILLION last year for Tel Aviv, Israel-based Avgol Nonwoven Industries and this figure is expected to reach $220 million in 2006 as the company achieves full utilization of a new Reicofil spunmelt line started up in October 2005 at its Mocksville, NC facility. The new line is the second added to the site, which already contained a spunmelt line when Avgol acquired it from Unifi in 2002. Additionally, Avgol operates five spunmelt lines in Israel as well as another at a joint venture operation (with Hubei Goldkinglong Investment Stock Co. Ltd.) 300 miles southwest of Shanghai, China. According to Avgol CEO Nir Peleg, the Chinese joint venture is the result of a strategic decision to target markets prime for future growth. Next on Avgol's global growth plan is Eastern Europe. In June, the company confirmed plans to build a new factory at an undisclosed Eastern European locations designed to serve emerging markets in Eastern Europe, Russia, the Ukraine and "Stan" countries. The factory is expected to begin operation by the fourth quarter of next year. In addition to capital investment, Avgol is set to benefit from its recent collaboration with Israel Petrochemical Enterprises (IPE). In June, the conglomerate, which already owned a 50% stake in Carmel Olefins, an Israeli producer of polypropylene and polyethylene resin, purchased 20% of Avgol's outstanding shares. Mr. Peleg said that this partnership would further enable Avgol to globalize its brand name and establish synergies in Avgol's raw material usage. Currently, 100% of Avgors output, of which 65% is produced outside Israel, consists of polypropylene-based spunmelt nonwovens, which largely targets the hygiene markets globally, With a reported 75% of its business conducted in North America, Avgol has been able to continue to this portion of its business successfully, as evidenced by the addition of a third line in North Carolina, while expanding globally, "Although we are a relatively small company, we are doing our best to emulate the multinational companies' philosophy of thinking globally and acting globally," said Mr. Peleg. "We continue to leverage our competitive advantage of efficiently employing young Reicofil spunmelt assets with innovation, execution and hands-on management across strategic geographies for consumer and industrial product applications. By combining our technical and production know-how with targeted marketing and servicing of our bundle of quality spunmelt products, our organization has become a very reliable material supplier for our global and regional customers." 19 Western Nonwovens Carson, CA www.westernnonwovens.com $150 million Key Personnel Ken Hardin, president and CEO; Mike Wood, CFO; Dan Dobbins, vice president and general manager-industrial nonwovens business division; Matt Schrantz, vice president and general manager-performance insulation business division; Jim Walker, vice president and general manager-Cerex Advanced Fabrics business division Plants Carson, CA; Los Angeles, CA; City of Commerce, CA; St. Louis, MO; Oakland, CA; Sauget, IL; Orlando, FL; Pensacola, FL; Clearfield, UT; Clinton, TN ISO Status Cerex Pensacola site Processes Carded, drylaid, airlaid, thermal bonded, needlepunched, chemical bonded, foam bonded, densification, calendered, spunbond, continuous filament batting Brand Names Bouncebackability; Cerex; PBN-II; Orion; Vibratex; Spectralon; Esyntial Safe; ClimaShield; SandMat; SpectraMax Major Markets Furniture, consumer insulation, bedding, filtration, medical, craft, aerospace, automotive, rug components, carpet cushion, home furnishings, mattress barriers, turf products, printing press media WEST COAST-BASED Western Nonwovens (WNI) continues to concentrate on the North American market, with more than 90% of total revenues targeting U.S. customers. This focus is expected to continue for the foreseeable future, although the company is planning new initiatives for its branded products in the Asian market. With sales reaching $150 million in 2005, WNI is continuing to enjoy steady sales growth despite rising raw material prices and manufacturing costs associated with energy-related areas such as freight and utilities. "In addition, medical benefits and worker's compensation costs continue to increase," explained Ken Hardin, WNI's president and CEO. The company has been successful in offsetting these costs but has been required to pass through some of these increases to the marketplace. So far in 2006, WNI reports that sales revenues are being led by its Industrial Nonwovens Division (INW), particularly from demand for its Esyntial Safe flame retardant (FR) barrier products--offering 50 different solutions for the mattress industry--as well as other value-added product areas. FR barriers are leading the company's growth due to the size of the industry segment and WNI's success in commercializing its barrier solutions. "We see the U.S. nonwovens market as very robust with strong demand across most market segments being led by FR barriers and densified products for foam replacement," said Mr. Hardin. WNI has kept busy this year executing the final stages of its three-year capital investment plan, which involves expansions in all three divisions--industrial nonwovens, performance insulation and Cerex Advanced Fabrics. The company's newest site expansion targets its insulation business in Clinton, TN. And, Cerex Advanced Fabrics' new state-of-the-art nylon spunbond line is on-stream and selling commercial products. According to James Walker, vice president, Cerex, the expansion demonstrates Cerex's commitment to exceed customer expectations for higher quality nylon fabrics and support significant growth through a pipeline of new products. Housed in the company's Pensacola, FL facility, the new line produces high quality, nylon-based spunbond materials. The new fabrics will be sold under the SpectraMax brand name to the automotive trim, specialty wipe, shoe component, medical fabric, home furnishing, protective apparel and aerospace media markets. SpectraMax is a low denier, extremely uniform nylon 6,6 fabric with benefits of superior strength, filtration efficiency, opacity, softness and drapeability. It will be available in weights ranging from 0.3 to 4 ospy and widths up to 122 inches. The new Spectramax products offer even greater spunbond uniformity combined with the high strength and thermal resistance of nylon "Capital investment is one of the major strategic initiatives for WNI to support its overall top line growth," said Mr. Hardin. "The INW division is rapidly occupying its new capacity across the country and will expand again in 2007, targeting the northeast region of the U.S." Other new products include Climashield, the company's new continuous filament consumer insulation brand. The Climashield brand represents the newest technology for extreme outdoor thermal insulation with superior value in thermal efficiency, compressibility and durability. Now available is a lighter and mixed denier continuous filament structure for extreme thermal applications beyond sleeping bags, such as outerwear, apparel, gloves and boots. As these new products continue to gain ground, WNI's long-term strategy is to continue its top line growth primarily in the durable nonwovens industry segment with a strict focus on value-added products. For the short term, the company is focused on managing its capacity needs across the country, according to Mr. Hardin. 20 Pegas A/S Znojmo, Czech Republic www.pegasas.cz $150 million Key Personnel: Milos Bogdan, managing director, Frantisek Klaska, technical director; Frantisek Rezac, commercial director Plants Znojmo, Bucovice, Czech Republic ISO Status ISO-9001: 2000, ISO-14001:1996 Nonwovens Processes Spunbond, meltblown, SMS, BiCo Major Markers: Hygiene, agriculture, healthcare, ecology, furniture, building, protective apparel SALES REACHED 110 [euro] MILLION for Pegas A/S, Central Europe's largest nonwovens producer. Commercial director Frantisek Rezac attributed increases--sales clocked in at 75 million [euro] in 2004--to new capacity. Last year, the company brought its seventh spunbond production line, capable of producing approx. 15,000 tons of material annually, onstream. Like lines, output from this Reifenhauser Reicofil line is mainly targeting hygiene markets in Western and Central Europe, including Russia. And, Pegas has already announced its intent to build an eighth line, based on Reicofil 4 technology. Representing a reported 40 million [euro] investment, this new line will target hygiene applications as well as technical markets when it comes onstream next year, according to Mr. Rezac. "I think that we are looking for a balance between hygiene and nonhygiene markets," he explained. "In the past we have dedicated a huge portion of our capacity to hygiene and now we are ready to focus also on other applications." Also in the headlines in 2005 was Pegas' purchase by a U.K.-based private equity fund, Pamplona Capital Partners, in December. Pegas' current nonwovens output is 55,000 tons per year, and it will rise to 70,000 tons upon the completion of the new line. Currently, the bulk of Pegas' sales are conducted in Europe, with an increasing share in Eastern Europe and the Russian market, but a significant part of capacity, mainly specialty products, is exported beyond Europe. "Pegas has the advantage of having some very modern technology and I think this can bring us some new territory in the future," Mr. Rezac said. While pricing levels in its key raw material component have presented challenges, there continues to be opportunity for spunmelt nonwovens in Europe, despite planned investments by some of Pegas' competitors. "You have to keep investing if you want to be competitive," Mr. Rezac said. "If you wait for a time when no one else is investing, you would never do it." 21 Georgia-Pacific Atlanta, GA www.gp.com $145 million Key Personnel Mike Burandt, president, Consumer Business, North America; Bill Shultz, president, European Consumer Business; Kathy Walters, president, Commercial Business; Remi Perin, sales manager, French Operation; Massimo Conforti, sales manager, Italian Operation; Mike Sprangers, sales manager, North America; Tom Kalupa, Senior sales representative; John Rank, sales representative Plants Green Bay, WI (two facilities); Glen, France; Avigliano, Italy ISO Status: Both U.S. plants ISO 9002 certified; Italy plant ISO 9002 certified; France plant ISO 9002 certified Processes Airlaid, carded Brand Names Airtex, Dritex Major Markets Baby wipes, industrial and food service wipes, feminine hygiene, absorbent core, tabletop, medical, moist toilet tissue, meat packaging UNDER NEW OWNERSHIP THIS year is Georgia-Pacific. In November, the company was purchased by Koch Industries, a multinational conglomerate that had already owned G-P's cellulose business as well as fiber producer Invista, among other things. "It's a new owner but they've maintained G-P as a total separate subsidiary," said vice president and general manager of nonwovens, Paul Farren. "It's almost like a holding company. G-P has its own board of directors, president, CEO, etc." Meanwhile, G-P's nonwovens business, which centers on airlaid technology, has continued to perform well by focusing on improving its production and reducing costs. "Like everyone else, we are managing as well as possible with the raw material price increases by aligning ourselves with the right partners," Mr. Farren said. Benefiting G-P were existing contracts, put in place before raw material prices escalated, which kept their impact to G-P under check. Additionally, G-P has been successful in unearthing new market segments for its airlaid technology that had been using other materials. "These markets were using technology that was more expensive than airlaid and found that pulp worked as well or better for their applications at a lower cost," Mr. Farren said. "With converters under pressure they are using all different types of substrates and raw materials to satisfy their needs at lower costs. When business is challenged, people are more willing to run trials and revamp businesses. As they have been looking for other things, they have opened up some nice market segments." Meanwhile, wipes and other traditional markets for G-P's airlaid business, continue to hold good positions even though they aren't growing as dramatically as they once had. "What has helped us is that we have some good customers that still use airlaid in their wipes, allowing us to maintain that leg of the business while growing in businesses that have not historically been there before," Mr. Farren said. Additionally, G-P's role as a user of a portion of its airlaid materials continues to benefit its business. Currently, about 30% of its output targets its own consumer products, including away-from-home products and tabletop applications. G-P currently manufactures about 40,000 tons of airlaid nonwovens at its Green Bay, WI manufacturing plant. In recent years, the company has not been aggressive about new capacity investment, choosing to debottleneck and improve its existing lines rather than build new ones. However, with its new ownership in check and new markets for airlaid opening up, Mr. Farren hinted that it could be time for new capacity. "Koch has been very willing to invest in the (G-P Cellulose) Brunswick operation and it's clear that they are interested in growing the businesses they acquired," he said. "Nonwovens has a lot of opportunities to expand on the synergies between all of these businesses. But, at this point, I can't say that everyone has sat down and thought through all of this." 22 Sandler Schwarzenbach/Saale, Germany www.sandler.com $145 million (113 million [euro]) Key Personnel Dipl. Kfm. Christian Heinrich Sandler, Dr. Christian Heinrich Sandler, Dieter Magiera, members of the management board Plant Schwarzenbach/Saale, Germany ISO Status ISO 9001:2000, ISO 14001 certified, Okotex Standard 100, OHRIS Processes Carded, waddings and drylaid nonwovens, resin bonded, thermal bonded, mechanically bonded, meltblown, thermofused, needlepunched, air through bonded, spunlaced, hot melt lamination and coating Brand Names sawafill, sawabond, sawaloom, sawavlies, sawaloft, sawaflor, sawatex, sawascreen, sawagrow, sandler sports, sawacomp, sawaflock, sawaform, sawalux, sawaflex, sawasoft, sawasorb, sandler-fibercomfort, sandler-fiberskin, sandler-unico, sawadur, sawadry Major Markets Fashion, home furnishing, technical nonwovens (civil engineering, automotive, filtration, horticulture), hygiene, medical, wipes (baby, cosmetic, technical, oil) SALES DECREASED TO 113 [euro] MILLION (compared to 131 million [euro] in 2004) for Sandler, the Schwarzenbach/Saale, Germany-based company, due largely to declining prices, brought on by steep competition in its coverstock nonwovens business. This competition, in fact, has encouraged Sandler, a leading producer of carded nonwovens, to develop more innovative, tailor-made products within all of its current markets. "Despite extremely high government incentive to relocate (e.g. to Eastern Europe, which would significantly decrease expenses) we have made the decision to remain in Schwarzenbach, rather than expand outside of Germany," explained C.H. Sandler, member of the management board, whose company operates solely out of Germany. "In the Czech Republic, for example, you get incentives of nearly 50% from the government that allow companies investing there to have considerable savings. It was a conscious decision to take this more difficult course in Upper Franconia in order to use the competencies and resources existing here for the development of new high-grade products. However, this is an important precondition for safeguarding qualified jobs and providing new ones. Recent positive business developments with special products are proving this decision to be right," Dr. Sandler added. Despite reports that the European spunlace market has been challenged by overcapacity and pricing pressures, Dr. Sandler described the segment as "interesting and innovative." Consequently Sandler continuously offers new spunlaced products with a large variety of different blends and/or multiple layers. Following the market's development toward individuality and visible diversification, Sandler is offering printing, hydro embossing, thermal embossing and structured spunlaced materials to target personal care and baby wipe applications. The material's good dust and dirt absorption rates and fast drying make it ideal for a number of household cleaning markets as well. While wipes in general are consuming the bulk of Sandler's spunlaced market, a number of technical applications are also opening up, according to Dr. Sandler. In fact, technical nonwovens are an important growth area across Sandler's nonwovens business. Sandler's most recent effort in this area is a new carded-based needle-punching nonwovens line, which is currently ramping up and will target technical applications, namely filtration and automotive products. The 10 million [euro] investment is part of a larger 25 million [euro] investment centering on special technologies for the development of new products and markets for the future. Among these new technologies will be one centering on ultrafine nonwoven material which is an important building block in developing nanofiber technology, an area Sandler feels will be important to the nonwovens industry in the future. "Technical nonwovens is a very interesting business and it's a very good business for the structure of our company because we are focused on innovation," he said. "We can use our technical skills." Automotives and filtration are two technical areas where Sandler has flourished. Nonwovens made by the company are already used in more than 30 different car models and are increasingly being accepted in vacuum cleaner filter bags. Other key growth areas include furniture and mattresses as upholstery nonwovens. Nowhere is Sandler's focus on new product development more clear than in the fact that more than 50% of its turnover is made with products that are younger than five-years-old. Sandler is able to achieve this through a systematic development of new products and production methods based increasingly on cooperation with universities and textile research centers. Mr. Sandler said that this strategy is not only important to his company but to the nonwovens industry in general. 22 Toyobo Osaka, Japan www.toyobo.co.jp $145 million ([yen] 16 billion) Key Personnel Kazumasa Kayama, general manager, spunbond division of Toyobo; Yukio Kawasaki, president of Kureha Plants Tsuruga, Iwakuni and Shiga Processes Spunbond, needlepunch, resin bonded, spunlaced, thermal bonded, stitchbonded Brand Names Volans, Ecule, Bonden, Kurelock, Kurehalock, Dynac Major Markets Geotextiles, roofing sheets, carpet backings, automotive interiors, automotive filters, needlepunched carpets, hot melt bonding sheets, plaster bases AMONG THE NONWOVENS PRODUCERS in the Toyobo Group are Kureha and Yuho. Kureha produces resin bonded, needlepunched, thermal bonded and spunbonded nonwovens, while Yuho produces needlepunched, spunlaced and stitchbonded nonwovens. Toyobo itself produces polyester spunbonded nonwovens. In terms of production capacities, Toyobo is in the lead with 14,000 tons of polyester spunbond nonwovens while Kureha manufactures 7000 tons annually and Yuho s capacity is 3000 tons per year. While in the past, the three main applications for Toyobo's polyester spunbonded nonwovens were geotextiles, roofing sheets and carpet backings, steady sales growth has placed automotive materials on this list as well. Spunbonded nonwovens based on new polymers such as PBT and polyester elastomers are being used for novel applications in this field while polyester spunbonds are finding application in automotive headliners because of their softness and flexibility for molding. According to Toyobo, polyester elastomer-based nonwovens offer excellent stretch and are expected to reach full scale sales levels in 2006-2007. 24 Mitsui Chemicals Tokyo, Japan www.mitsui.com $132 million ([yen] 14.6 billion) Key Personnel Yasushi Nawa, general manager, functional fabricated products division Plants Yokkaichi and Iwakuni Processes Spunbonded, needlepunched, meltblown, thermal bonded Brand Names Tafnel, Syntex Major Markets Coverstock, geotextiles, oil absorbing materials, air filters, wipes, agricultural materials, household materials WITH HEADQUARTERS IN TOKYO, Japan, Mitsui Chemicals produces a total of 48,000 tons per year of spunbonded, needlepunched, meltblown and thermal bonded nonwovens. This includes 25,000 tons of polypropylene-based spunbonded materials; 9000 tons of SMS, all made in Japan; and 14,000 tons of SMMS made in Thailand through the company's MHM division. MHM, a wholly owned subsidiary of Mitsui Chemicals, has been producing SMMS in Thailand since 2003 to meet increasing demand for diaper material. MHM is fully operational with 16,000 tons of planned annual capacity expected to come onstream in January 2008. The expansion will bring Mitsui's total production capacity in Thailand to 30,000 tons per year while its capacity in Japan will reach 64,000 tons annually. To support this additional capacity, the company plans to introduce new production equipment for its MHM business in 2009-2010. The nonwovens produced in Thailand will be general-purpose materials for diapers and other end uses while the fabrics manufactured in Japan will consist of value-added substrates for higher-end applications. Up until now, Mitsui has produced polypropylene spunbonded nonwovens for diapers on a third machine with a production capacity of 12,600 tons per year as well as on a fourth, 8000-ton-per-year line. Reflecting an overall trend in the diaper market toward composites such as SMS and SMMS, Mitsui reports that demand for single-layer polypropylene spunbond is on the decline. In response, the company plans to remodel its existing third and fourth lines so that they can produce added-value nonwovens for uses other than diapers. Meanwhile, the company expects to be able to meet demand from the Japanese diaper market by importing materials from its facility in Thailand. 25 Lydall Manchester, CT www.lydall.com $113 million Key Personnel W. Leslie Duffy, chairman of the board, David Freeman, president and CEO; Thomas Smith, vice president, chief financial officer, and treasurer; Mona Estey, vice president human resources; Mary Tremblay, vice president, general counsel, and secretary Plants Rochester, NH; Saint Rivalain, France; Winston-Salem, NC; Hamptonville, NC; St. Johnsbury, VT; Green Island, NY; Ossipee, NH; Meinerzhagen, Germany; Saint-Nazaire, France Major Markers Thermal and acoustical shields and insulation, high-efficiency air and liquid filtration media, bioprocessing and specialty blood and cell therapy products Major Brand Names Lytherm, Manniglas, Manniweb, Affinity, ZeroClearance, dBLyte, Lydair, Actipure, AcuPore, AMS, CRS Wrap, Cytherm, BCor, LyPore, BioPak STRONG GROWTH WAS THE KEY TO success in 2005 for Lydall Inc., Manchester, CT. The company's nonwovens sales reached $113 million, which represents an increase of 12% from 2004. During 2005, Lydall instituted major operating improvements, strengthened its operating and marketing management and integrated the production of a sizeable amount of new automotive business. "Lydall's progress in 2005 was primarily attributable to our automotive businesses, particularly in Europe," commented David Freeman, Lydall president and CEO. "Our filtration and vital fluids businesses, however, had a difficult year. During the first quarter of 2006, our air filtration business continued to face a price-competitive market as well as higher manufacturing costs. The vital fluids business showed some improvement." Lydall's largest business segment continues to be thermal/acoustical applications, which represents approximately 69% of total sales. This segment includes automotive, passive thermal and active thermal businesses. Making up approximately 21% of total sales, the filtration/separation segment includes air and liquid filtration and vital fluids businesses. Other products and services, which is primarily comprised of its transport business, represents about 10% of total sales. In describing current filtration/separation market conditions, Mr. Freeman said that the market, particularly for air filtration products, has become increasingly price competitive, especially in light of rising raw material and energy costs. "In response, Lydall is focusing on value-added product development to meet unique industry needs." Lydall's recent efforts to consolidate domestic automotive operations and expand its position in Europe were successful, according to Mr. Freeman. "We completed the consolidation, increased sales and strengthened management of our North American operations. These operations are well-positioned for future growth and further improvements," he said. The company's Lean programs, particularly Lean Manufacturing, are a key factor as is a strengthening collaboration between its European and North American operations. During 2005, European automotive sales increased and operating income grew significantly, according to Lydall. The company made substantial gains in operating efficiencies in Germany and benefited from a successful first year of operation at its St. Nazaire, France facility. Both North American and European operations are continuing to improve operating efficiencies and growing sales in 2006. In terms of capacity upgrades, no major expansion plans for this year are being reported. "Significant capital has been invested in the past two years, both here and in Europe, related to our automotive businesses. We are anticipating lower capital spending in 2006 compared with 2005," offered Mr. Freeman. "We believe that we are well positioned for growth as a result of the capital invested during the past couple of years. This investment has been key to the growth of our automotive business. We're not expecting any out-of-the-ordinary capital requirements by any of our facilities this year." In its passive thermal business sector, Lydall is building on its initial successes in the appliance market, an area about which the company is very enthusiastic. This business is also exploring certain cross-marketing opportunities with other Lydall operations. In its active thermal operation, which manufactures and markets Affinity temperature-control units, Lydall is stepping up development efforts of next-generation products for the semiconductor market. "We are also exploring the viability of outsourcing basic manufacturing of these products so we can concentrate on our strengths in this area, which are exceptional service and customization." The company has also strengthened its marketing force, which focuses on air and liquid filtration. "We expect this to be an area of growth. Both air and liquid filtration businesses are working closely with customers to meet their needs and to provide innovative products and value-added offerings," Mr. Freeman remarked. In the vital fluids business, Lydall has changed its approach to the market for its bioprocessing product lines and brought all selling activities in-house. "We are beginning to see progress as a result. All Lydall businesses are concentrating on operational excellence to counter erosion of gross margins and guarantee the highest level of quality," said Mr. Freeman. He added that the company remains committed to its Lean Six Sigma program as a powerful tool to accomplish these objectives. As for its globalization strategy, Lydall sells its filtration/separation and passive and active thermal products worldwide. The company currently sells to the North American and European automotive markets. "We are making progress gaining Asian transplant business." Wrapping things up, Mr. Freeman pointed to manufacturing excellence as Lydall's major focus and said that its Lean Six Sigma programs are expected to significantly improve its bottom line. "Our priorities for 2006 are to increase accountability and to continue focusing on management development. We expect to improve gross margins, and we are concentrating on how we allocate and manage our capital resources. Most importantly, we are driving value-added product development throughout our businesses." 26 Concert Industries Gatineau, Quebec www.concert.ca $110 million Key Personnel Tony Molluso, CEO Plants Gatineau & Thurso, Quebec, Canada; Falkenhagen, Germany Processes Airlaid Major Markets Wipes, feminine hygiene, homecare ITS BEEN A GOOD A YEAR FOR CONCERT Industries. Less than two years since the once-strapped airlaid producer was purchased by Brookfield Asset Management's (formerly Brascan) Tricap Fund, Concert has been able to return its Gatineau operation, which contains two side-by-side airlaid lines, to profitability. According to CEO Tony Molluso, Concert achieved its goal, several months ahead of schedule, by drastically changing the way it does business. For one, it started running its machines only when customer demands warranted it; for another, it exited businesses that were not profitable. These changes meant a workforce reduction of 30% but executives hope to hire back workers as Concert continues to grow its business. "We had to really rationalize our business," Mr. Molluso said. "We took out several millions of dollars worth of product that didn't make us any money so now we are making less product but what we are making we are making money on." Under its prior ownership, Concert used to run its line 24/7 but was left with excess product, which was either stored indefinitely in a warehouse or, even worse, wasted. Now, the company works closely with its customers to forecast their needs and runs its machines on an as-needed basis. Another major initiative was a reduction in its consumer wipes business, an area where Concert's technology cannot fetch the price it deserves. While, Concert still targets wipes, the percentage of its business targeting this market has dropped from 20% to 5%. "Our machines were made for fern care and home care products so that's what we are making. We still have some wipes business but it's sporadic, not something that we do on a regular basis," Mr. Molluso said. "Wipes are generic products that sell cheaply and don't make any money. What is the sense of committing machine time to this area when we can commit it to profitable businesses?" Restoring profitability also meant idling a smaller airlaid line in Thurso, Quebec, an action that could be reversed if Concert's business continues to grow. In fact, expansion is a definite plan for Concert's future as the company's European operation in Falkenhagen, Germany is completely sold out. "We are able to serve our North American needs from Gatineau so we didn't need to keep running Thurso," Mr. Molluso said. "But, we have to definitely add capacity to Falkenhagen because you cannot achieve topline growth when you are operating at a sold-out status." Concert executives are currently examining strategies for this growth, which come in the form of an acquisition, a plant expansion or even a greenfield location in a completely new area. "Returning to profitability was one year ahead of schedule," Mr. Molhiso said. "This gives us a little more time and resources to decide our next move. We are not just looking for ways to fill up our lines, we are looking at specific products that highlight our technology." 27 Foxx Manufacturing Hampton, NH www.fossmfg.com $100 million Key Personnel A.J. Nassar, CEO Plants Hampton, NH ISO Status All businesses are both QS 9000 and ISO 9001 certified and are close to ISO 14,000 (environmental registration based on efforts to reduce emissions, solid waste and waste water) Processes Polyester, polypropylene and specialty fiber spinning; needlepunch, extrusion; post finishing, die cutting, embossing Brand blames Foss; Fosshield Antimicrobial Technologies; SoleMates: Enviromat; Geomat; FossFibre; FossFelt, Stratos; Whispertex; Masterwear; FossForm; Kunin Felt; Rainbow Felt; Confetti Felt: Kreative Kanvas; Fosscloth; Softherm; Fossdust; Fossflow; Ozite; Elevations: Showtime; Safari Felt; Wonderflex; Glitterfelt; Fluorescent Felt; Fosshape; Fisipe Acrylic Fibers; TopGuard; RAY-sist (endurance fibers); Lane House Collection; Signature Major Markets Specialty synthetic fiber (solution died PET, bicomponent fibers, antimicrobial fibers, fire-retardant fibers, acrylic fiber); automotives (headliners, package trays, floor carpets, trim fabrics); decorative (wall coverings, marine, RV, speaker coverings), retail (craft, auto-aftermarket); technical (vinyl substrate, filtration, healthcare, car wash, home and garden). ITS A BEEN A TROUBLING YEAR for Foss Manufacturing. The Hampton, NH-based needlepunch nonwovens manufacturer entered Chapter 11 bankruptcy in October 2005 after accusations of fraud forced the resignation of longtime CEO Stephen Foss. In the ensuing months, stories surfaced accusing Mr. Foss of using corporate funds to fund personal expenses and hiding the company's financial troubles from creditors. Amidst these allegations, the troubled company was purchased by Alinian Capital Group, a Florida-based investment banking advisory group for $39 million, allowing Foss to pay off some of its debt, in May. Since then, Foss has been able to return to profitability. Alinian named A.J. Nassar Foss' new CEO who has addressed three major priorities: intense review of costs and controls; focus on employee initiatives and morale and repair of customer, and former customer, relationships "Foss Manufacturing had not been performing to its potential and we took steps to be more productive and profitable. Those steps have resulted in the retention of almost 400 jobs and 200 new position offerings here at Foss. In addition there has been a huge collateral effect with direct and indirect suppliers in Hampton and throughout the Northeast," said Mr. Nassar. Among the allegations against Mr. Foss are that he and other executives illegally distributed $900,000 worth of illegal dividends, spent $562,000 to pay off personal charges on credit cards and used $300,000 of company living expenses on his personal residence and other family members' homes. Additionally, Mr. Foss reportedly manipulated computer data to hide his company's financial problems from creditors. With its needlepunch technology, Foss serves a number of markets including automotives, retail crafts, auto aftermarket, filtration, car wash and home and garden. Additionally, the company has been a pioneer in performance fibers with its Fossshield technology which includes a wide range of antimicrobial fibers and fabrics produced with all natural silver, one of the oldest antimicrobial agents proven effective against more than 650 strains of bacteria. Foss' most advanced antimicrobial technology Fosshield CS used a combination of copper, silver and zinc as the active ingredients and has proven to be extremely powerful against a broad spectrum of bacterial, mold, fungus and mildew. Beyond Fosshield, Foss' PCT fiber, based on modified polyester, has proven to be exceptionally effective for filtration at high temperatures. It is also resistant to hydrolysis degradation, which significantly increases the lifecycle of a filter media. This technology is allowing Foss to provide filtration solutions for drinking water, the healthcare industry, food processing and aviation fuel. 28 Orlandi SpA Gallarate Italy $100 million Key Personnel Cav. Vittoria Orlandi, CEO; Massimiliano Orlandi, marketing director, Maria Saldarini, commercial director Plants Gallarate, Bolgare, Cressa, Cassano Magnago ISO Status ISO 9002 Certified Processes Needlepunched and hydroentangled Brand Names Akena, Tex Sil 2, Teporland More, Temporland Compact, Dacron II2SB, Flortex, Clax, flormop, Solex, Alltex, Leitex, Dustex, Suntex, Suntex Plus, Robel-Tevar, Talura Telco, Axxys, Spring, Nortec, Dacron II, Dacron 808, Elastic 808 Major Markets Medical, hygiene, apparel, home furnishings, interlinings, industrial/household wipes and synthetic leather. THE COMBINATION OF RISING raw material prices and pricing pressures from its customers in the wipes market has presented great challenges to Orlandi. The Gallarate, Italy-based company is looking to escape this trap by offering differentiated products. To achieve this, Orlandi is currently reconfiguring its fourth spunlace line in Cressa, Italy to produce a three-layer material containing two sheets of spunbonded polypropylene and carded PET with fluff pulp in between. "This material features better characteristics for personal care wipes such as bulkiness, softness and increased resistance," said Maria Saldarini, commercial director. "This is a way for our customers to escape the day-to-day competition. It's something really new. This is how we are trying to help our customers." In the meantime, Orlandi initiated a price increase in July in response to rising costs of viscose, a key ingredient in spunlaced nonwovens. And, Mr. Saldarini said another price increase could be forthcoming as European viscose producers have already announced plans to up their prices again this fall. "The market is very, very tough for spunlace, particularly for wipes and skin care products. "We have had to increase our prices and are now waiting to see the market reaction. On the other hand, our customers are getting retailer pressures so they don't want to accept any price increases." In addition to its reconfigured line, Orlandi operates three other lines--two in Cressa and one in Gallarate--offering traditional viscose-based spunlaced nonwovens, and while a portion of the output on these lines, about 20%, targets medical and other applications, wipe products comprise the bulk of Orlandi's spunlace business. "Despite the challenges, wipes offer opportunities for high volumes and that is why we are focusing on this market," Mr. Orlandi said. Meanwhile, Orlandi's plans to enter the North American market, which were shelved last year when several other European spunlace makers announced expansion there, seem to be back on track. Mr. Orlandi would not elaborate on these plans but hinted that the initiative would be with a partner and would produce a differentiated product. "We don't want to enter this market with a commodity product," he said. "The new line will feature something different, something new." Beyond spunlace, which represents about three-quarters of Orlandi's business, the company produces 4000 tons of needlepunch nonwovens on two lines, and this business remains important to the company. Key markets include dry wipes and artificial leather. 29 Toray Saehan Seoul, Korea www.toraysaehan.com $99 million Plant Locations Gumi, Kyungsang-Bukdo, South Korea ISO Status ISO-9001: 1999; ISO-14001 (environmental certification): 1999; ISO-18001 (operational certification): 1993 Key Personnel Y.K. Lee, president and CEO; Y.K. Kim, senior vice president; Shigeto Fukuda, senior vice president; W.C. Hwang, director Processes Spunbond PP (SS, SMS, SMMS), PET Brand Homes Jesbon (PP), Techbon (PET), Airbon (protective apparel) Major Markets Hygiene, medical and protective markets, industrial specialties, agricultural, upholstery, filtration, PP/PE bicomponents, geotextiles TORAY SAEHAN INC. IS a joint venture company between Japan's Toray Industries and Korea's Saehan. With company-wide sales hitting the $653 million mark in 2005, TSI's nonwoven sales totaled $99 million or 15% of the company's total turnover last year, representing 24% growth. Despite this dramatic increase in sales in 2005, TSI's earnings did not meet company expectations due to the sharp rise in polypropylene resin prices. "Our newly installed polypropylene spunbond production line, which came online at the end of 2003, contributed to much of the increase in sales turnover in 2005," offered company spokesperson H.B. Lee. "Rising oil prices are continuing to negatively impact producers of polypropylene-based nonwovens this year." TSI's geographic sales regions span the globe, with 47% of business generated in Korea, 21% coming from Japan and other markets representing 32%. Export markets continue to make up just more than half (53%) of TSI's total sales volume. Major export regions include Japan, China, Taiwan and Asean countries. In Japan, TSI now holds a 15-20% marketshare in the hygiene market, where it supplies quality-oriented services. "Our fast growth in Asia comes from constant quality control, flexible R&D and aggressive marketing forces," said Mr. Lee. Outside of Korea, TSI's parent company Toray Industries Inc. operates one spunbond polyester line in Japan with an annual capacity of 4000 tons. The line primarily targets geotextile and industrial sectors. (Toray Japan's sales are broken out of TSI's annual nonwovens sales results and are therefore not included in its Top Company sales figure.) In its Korean domestic market, TSI holds a 40% marketshare in the hygiene sector and supplies the major market players. TSI has also attained about two-thirds of the marketshare in Korea for agricultural products and serves approximately 40% of the Korean industrial composites market. TSI operates five polypropylene spunbond lines and one polyester spunbond line. According to the company, TSI boasts the largest single plant capacity in Asia with an annual production rate of 54,000 tons on one location. Through state-ofthe-art SSMMS and bicomponent technology, TSI fabricates top quality spunbond products including lighter weight multi-layered nonwovens featuring SMS, SSMMS and bicomponent layers. All of TSI's spunbond facilities house Reifenhauser machines with S, SS, SMS and SSMMS capabilities. Additionally, TSI has been successfully producing PP/PE bicomponent products on a PP-5 machine since 2003. In response to (current and projected) rapid growth in the Chinese hygiene market, TSI has completed a feasibility study for investing in a new production facility in China. "As living standards improve, the marketshare of nonwovens is increasing in areas such as hygiene, medical, household, clothing and shoes. Since China has substantial potential growth in disposable markets, we are going to begin production in Nantong, Jiangsu Province, China in late 2007," explained Mr. Lee. "We currently provide quality goods to most of the major hygiene producers in China. As we cross the threshold into the Chinese market, we will play a leading role in the growth of the Chinese nonwovens industry." Outside of hygiene, another key end use market is medical. "We are developing and widening categories step by step for medical markets," offered Mr. Lee. "Because Asia's consumption of disposable nonwoven fabrics is low in comparison with developed countries, we can grow faster than other areas." In agricultural applications, spunbond uses are becoming more diverse as farming technologies evolve. "As a supplier of quality agricultural materials, TSI helps farmers increase crop yields and boost productivity. We provide fabrics for curtains, thermal covers, rice seedbed and red pepper mulching, tunnel mulching and alpine vegetable mulching," said Mr. Lee. TSI's spunbond fabrics have also recently found varied uses in commodity-type applications. Toray Saehan's major polypropylene spunbond products include meltblown spunbond, SMS, SMMS, SSMMS as well as polyester spunbond including embossed and needlepunched spunbond. 30 Polyfelt Linz, Austria www.polyfelt.at $91 million (73 million [euro]) Key Personnel Andreas Matje, CEO; Michel Haudrechy, VP marketing and sales; Manfred Winkler, VP product supply; Nick Blasl, VP finance and IT services, Frank ten Oever, VP human resources Plants Linz, Austria; Bezons, France; Almelo, Netherlands; Kuala Lumpar, Malaysia ISO Status ISO 9001:2000 Processes Spunbond, needlepunch and hydroentanglement Brand Names Polyfelt, Bidim (geotextiles and geoeomposites), Polyline, Polymat, Megadrain, Envirofelt, Enviromat, Polyfelt AR, Polyfelt Hydrocomp, Polyfelt Rock PEC, Polyfelt Rock GX Major Markets Geosynthetics AN IMPORTANT HIGHLIGHT THIS YEAR For Austrian geotextile specialist Polyfelt was its e70 million acquisition in October 2005 by technical textiles powerhouse Royal Ten Cate (RTC), headquartered in The Netherlands. With nonwovens sales reaching 73 million [euro] last year, Polyfelt continues to hold tight to its leading position in the European civil engineering and construction markets. According to Guenter Froschauer, commercial director, the company's 2005 performance was impacted by two main influences. "On one side, market development was slowed by the high Euro exchange rate compared to the U.S. dollar. Additionally, internal restrictions, mainly caused by the installation of a new production line, limited our ability to grow sales." Mr. Froschauer added that there was a significant increase in competition, especially in Europe, as well as constant increases in raw material prices that made 2005 a very tough year. With intense competition permeating European markets, Polyfelt reported that customers are currently tending to prioritize cost reduction efforts over new product developments. Although several internal product developments--such as Geodetect (a geosynthetic composite combining reinforcement with monitoring of soil movements) and Polyfelt HM, a high modulus grid for special reinforcement applications--have been successfully introduced, sales volumes were not impressive, especially in 2005, according to the company. "This could be explained by the weak and mainly cost-orientated crisis that had to be overcome by the construction industry, especially in the German market," explained Mr. Froschauer. Commenting on the European nonwovens industry, he pointed to a consolidation trend exemplified by several take-overs in Europe. "The acquisition of Polyfelt by Royal Ten Cate is a typical example. This trend is partly driven by the stronger competition caused by decreasing margins due to increasing raw material and transportation costs, as well as stymied sales price increases in the main mass markets." He added that there is also a trend where producers that formerly supplied exclusively nonwovens are now offering competitive, varied product ranges. In terms of export markets, the company is continuing to focus on the EU, including the new EU candidates. Other neighboring countries, such as CIS (the Commonwealth of Independent States or the former USSR Republics), the near and Middle East and other Eastern European countries, are gaining more importance for Polyfelt. When it comes to production technology, Polyfelt's capacity in Europe exceeds 30,000 tons, which is 100% spunbond. The company uses a hydroentaglement process only on its newest production line in Linz. "Developed in-house, this hydroentanglement technology--in combination with the use of new and improved raw materials---enables us to improve the technical properties and therefore the performance of our geotextile products." Mr. Froschauer added that the new line could help Polyfelt examine new applications. Polyfelt is now in a phase of consolidation within the existing plants and has no plans to increase capacity in the short term. Going forward, Mr. Froschauer said that profitable growth--achieved largely through export activities--continues to be a strategic goal for Polyfelt. Key benefits for customers are expected to include not only high quality products and solutions but also a well developed distribution chain and outstanding technical support. Polyfelt predicts that synergies with Royal Ten Cate's other activities will leverage those possibilities further and result in a powerful global position. "In the beginning of 2006 we successfully implemented in Europe a new organization out of formerly independent companies but maintained their regional distinctions. This sort of 'think global, act local' policy will be intensified in the future so we can provide customers a perfect one-stop solution." 31 Jacob Holm Aaischwill, Switzerland www.jacob-holm.com $87 million Key personnel Poul Mikkelsen, chairman; Peter Opperman, CEO; Jack Richardson, COO; Ingo Johannsen, CFO; Michael Norboge, vice president of Personal & Home Care; Claudia De Buman, vice president of Special & Technical Applications Plants Asheville, NC, USA; Soultz, France; Mildenau, Germany Processes Hydroentangling, needlepunch Brand names Lidro, Norafin, Rn'S Major markets Wipes, Hygiene, Medical, Filtration, Packaging, Protective apparel and Automotive CONTINUED GROWTH CAN BE expected for the coming years for Jacob Holm Industries. Sales of $87 million were relatively unchanged in 2005 as the company commissioned and started production on its new spunlace line in new facilities in Asheville, NC and looked toward boosting its Special and Technical Applications (STA) unit. However, sales are expected to jump this year as the new North American spunlace line is fully commercial, according to Jacob Holm Group CEO Peter Oppermann. "The line's real potential will be visible during the course of 2006, the qualification process of our non-standard products has just taken more time than expected in 2005; however, the sold-out position was reached at the end of the second quarter. The advantages of a very versatile, yet highly productive line being able to produce two times textile width fabrics (4.6 m line width) supported the business as expected," Mr. Oppermann explained. Jacob Holm invested more than $50 million in this U.S. facility to accomplish two phases of business expansion in the U.S. The new line can produce 15,000 tons of spunlace material per year and will serve the wipes market, a core segment for Jacob Holm's spunlace business in Europe and North America, as well as a range of technical markets, namely filtration and protective apparel. In fact, Jacob Holm's focus on these technical areas resulted in the spin off of its technical activities under the name Jacob Holm & Sons STA, into which LD Equity invested. Jacob Holm & Sons STA announced the acquisition of Tytex in July 2006. Jacob Holm & Sons STA will employ 500 and achieve sales of $94 million. Tytex is a producer of knitted technology for global healthcare companies. Among Tytex's key markets are adult incontinence items, hip protection, nursing mothers, bandages for wound and skin care and orthopedic solutions. "We are not combining the two companies in order to produce the standard tough-action cost synergies. We intend to exploit the fact that the two companies both develop and manufacture advanced textiles based on a high knowledge content and close partnership with customers. Also, both operate in markets driven by innovation. That is why the two companies can learn from each others' experience and together build a global platform and a broader range of solutions to offer our customers. By combining the two technologies, we will also be able to design entirely new products to spur growth," said Christian Moller, partner with LD Equity, and Poul Martin Mikkelsen, chairman of the board of Jacob Holm & Sonner A/S in a joint statement. Tytex Group will operate a subsidiary under its own name and with its own brands. Poul Martin Mikkelsen, owner of parent company Jacob Holm & Sonner A/S, will be appointed chairman of the board of directors of Jacob Holm & Sons STA while Christian Moller, Stig Lokke Pedersen, executive vice president of H. Lundbeck A/S, and Martin Mikkelsen, attorney, will also serve on the board. Peter Aggersbjerg, who was the CEO of Tytex from 2001 to April 2006, will become CEO of Jacob Holm & Sons STA. He orchestrated the company's successful transition from a contract manufacturer to an innovative, market-driven healthcare company. Per Gernow will stay on as CEO of Tytex. Jacob Holm's activities in the production of nonwovens for applications within personal hygiene, cosmetics and cleaning will continue without change. According to Eveline Geser, marketing director, this business arm has been challenged by pricing concerns and retailer pressures. However, Jacob Holm has been making strides in developing specialty wipes as well as continuing to improve its productivity. "Supported by one of the most versatile and complete spunlace nonwovens production assets and an in-depth understanding of market requirements Jacob Holm has in close cooperation with its clients developed solutions providing an opportunity to differentiate in a highly competitive market. The utilization of specialty fibers, composite structures as well as customized patterning helped that initiative," Ms. Geser added. 31 TExtilgruppe Hof Hof/Saale, Germany www.textilgruppe.com $87 million Key Personnel Manfred Knieling, managing director; Harald Stini, managing director; Rudolf Scholtter, managing director; Detlev Kappel, managing director-Techtex and global sales director eswegee, technical nonwovens; Lothar Hackler, president-Hof Textiles, Inc. Plants Hof/Saale, Germany; Mittweida, Germany; Lincolnton, NC Processes Drylaid, thermal bonded, needlepunched, saturate bonded, stitchbonded Brand Names Variopoint, Unipoint, Unisoft, Zetafelt, Zetastitch, Zetafil, Zetawatt, Florbond, Zetabond, Zetatherm, Zetamold, Maliwatt, Malivlies, Kunit, Multiknit eswegee 2000 series, Bassopoint WITH CONSOLIDATED 2005 WORLDWIDE nonwovens sales topping $87 million, eswegee Vliesstoffgroup, Hof/Saale, Germany, saw a slight decrease in sales compared to last year. The main reason for this was a drop in sales in the Interlining division related to continued increases in imports from Asia. For industrial nonwovens, eswegee was once again able to increase sales by approximately 5% in comparison to 2004. The company's domestic/export sales ratio shifted slightly this year, with sales within Germany reaching 62% and exports making up 38% of the company's overall business. Industrial markets remain the company's core focus and represent more than 60% of its business. In terms of the company's current market strategy, Textilgruppe Hof is following what it sees as a trend in the global nonwovens industry and is focusing on industrial applications for the future in order to offset decreases in other segments (such as interlinings). Additionally, the company is paying much attention to investments for the future. "Despite these plans," explained Manfred Knieling, managing director, "the interlining business is still an important part of our strategic planning. We are working hard not only to stabilize revenues in 2006 but also to expand our marketshare." He added that plans are still underway to add production in Asia for interlinings and industrial nonwovens in the near future. "More details will be unveiled soon aider the deal is done," Mr. Knieling predicted, "and our sales network will also be expanded in that region." In anticipation of its future plans, eswegee has strengthened its top-tier management capacity. As part of this move, Dr. Harald Stini joined eswegee's board in September 2005, while at Hof Textiles Inc., Dr. Lothar Hackler joined the team. Their extensive backgrounds in the nonwovens industry are expected to enable the company to grow into new market segments as well. In the interlinings sector, eswegee has increased production capacity and customized its product variety to better focus on customers' future needs. "Our new, wide thermal bonding line in combination with the double dot lines are running at capacity," reported Mr. Knieling. Industrial business for eswegee remains strong with sales and production output exceeding expectations. "Raw material pricing is still the major hurdle to overcome" commented Techtex managing director Detlev Kappel. "We must also struggle to remain profitable despite continuous demand for lower prices from our automotive customers." He added that the company has been able to achieve improvements in terms of productivity to partially balance soaring fiber and chemical prices. "The OEMs should sometimes scrutinize their procurement strategy so that they do not end up some day in the hand of just a few Tier1/2/3s who will then bounce back in terms of pricing power. On top of that, the level of quality should also be reviewed as they even want to increase quality by lowering the price simultaneously," Mr. Kappel warned. Other market segments such as filtration and non-automotive-related industrial applications also report further growth compared to last year's sales. Further expansions of new product groups and additional sales support are underway, At Mittweida, the company's new, wide Kunit/Multiknit production line is running satisfactorily to supply foam replacement products for car seats used by various OEMs. A new six-meter stitchbonding line is running to full capacity due to a new project the company acquired for secondary carpet backing. "We expect further growth in the future for these product groups as we are able to offer our customers higher performance for reasonable pricing compared to other products," stated Mr. Kappel. Capacity expansion is also planned for decorative stitchbonded nonwovens for use in headliner facing and package tray/luggage cover/trunk applications. "We are also considering expanding our capability for mechanical and thermal product finishing to enhance quality and add value," Mr. Knieling added. At its U.S.-based subsidiary HofTextiles, another year of growth has been achieved in terms of sales for the industrial nonwovens division due to the completion of its investment program. Further projects with Tier1/OEMs are slated for 2006. The interlinings business at Hof Textiles remains a challenge and the company plans to develop new sales and marketing strategies to supply its remaining North American customers. "In a nutshell," concluded Mr. Knieling, "Hof will further concentrate on developing and customizing its products to tailor-make the best package for our customers. We will definitely not go for more volume but concentrate on intelligent products with added value. Hof has some more new market information up our sleeves for 2006 with another possible nonwoven technology we might add," said Mr Knieling. 33 Suominen Nonwovens Nakkila, Finland www.suominen.fi $85 million Key Personnel Suominen Corporation: Heikki Bergholm, president and CEO, Esa Palttala, executive vice president, Wipes and Nonwovens; Juha Henttonen, vice president, Flexible Packaging; Pekka Rautala, vice president, Wet Wipes Business Unit, Arto Kiiskinen, vice president, CFO. Suominen Nonwovens: Sakari Santa-Paavola, commercial director, Teppo Lainio, production director, Margareta Hulden, product and process development director Plant Nakkila, Finland ISO Status ISO 9001, 14001 environmental certification Processes Hydroentangled, thermal bonded Brand Names Fibrella, Novelin FOR SUOMINEN NONWOVENS. net sales dropped 9% to $85 million in 2005 compared to $93.5 million in 2004 as sales volumes were affected by challenges to branded wet wipes manufacturers in Europe. "Both the trend in sales prices and continued strong rises in the prices of oil-based raw materials and energy eroded financial performance," said Sakari Santa-Paavola, vice president and general manager. By technology, thermal bonded nonwovens lost ground to alternative materials in hygiene products resulting in a clear sales decline while volumes in spunlaced nonwovens were slightly better than the previous year. Despite saturation of spunlace in the European market, Mr. Santa-Paavola said wipes is still an important and viable business for Suominen, whose spunlace operation accounts for roughly 80% of its sales. "On the horizon of the spunlace business there is still new light in sight, mainly due to growth of its current product range and geographical expansion," he said While Europe remains Suominen's primary market, the upswing in the usage of spunlaced nonwovens in the U.S. wipes market has meant good news for Suominen, particularly as the U.S. spunlace market is not as saturated at Europe's. "The U.S. is an important export market for us, Europe being Suominen's main market area. Growing demand of spunlace in the U.S. has been positive news for the whole nonwovens industry. With the help of Suominen's logistics solutions we have been able to act as a local supplier in the U.S." Suominen recently completed a debottlenecking project of its spunlace operation, increasing its capacity by 20% and allowing the company to efficiently process lighter nonwovens. Also to this company's advantage is its ability to offer its customers individual products by having a large variety of PP, PET, PLA, viscose, cellulose pulp and cotton blends as well as a number of finishing techniques. "Suominen's wet wipes business is successfully rounded but there is still room for improvement. Integration is evolving according to previous plans," Mr. Santa-Paavola added. Three years ago, Suominen forward-integrated into wet wipes production with the acquisition of Codi International, a Dutch wipes converter. In 2005, this unit produced about 100 million packs of wipes and net sales decreased by one-fifth. Challenges here included structural changes in retail business as well as generally slower growth in the marketplace. In summer 2005, Suominen complete the final stages in the construction of a new product facility for wipes and since then all production lines have been operating at full capacity. In 2006, having finished rationalization measures, Suominen's wet wipes business has begun to restore profitability. The target is to retain the marketshare lost during 2004-2005 and achieve growth particularly in personal care wipes but also in baby and household cleaning wipes, according to Mr. Santa-Paavola. Much of this recovery has been achieved through research and development. "Suominen is constantly investing in product and process development to be able to offer its customers more innovative products and solutions. Pilot lines for each production technology (PP fiber, thermal bonding, hydroentanglement, converting and multi-layer film) makes it possible to run all development stages in house. "By making good use of our competitive R&D, and raw material and process variations, we are able to offer our customers individual products. Close and continuous cooperation with customers and suppliers ensures that new and innovative ideas are brought to the market quickly." 34 Unitika Osaka, Japan www.unitaka.co.jp $82 million ([yen] 9 billion) Key Personnel Masaru Tsugawa, general manager, spunbonded fabrics division; Hiroshi Kawasaki, general manager, spunbonded fabric sales Plants Okazaki and Tarui, Japan Processes Spunbond, spunlaced Brand Names Matrix, Eleves, Nyace, Wiwi, Alcima, Terramac, Cottoace Major Markets Agriculture materials, carpet backings, geotextiles, cable wraps, wipes, storage bags, coverstock, roofing sheets BASED IN OSAKA, JAPAN, roll goods producer Unitika boasts an annual production capacity of 22,000 tons of spunbond nonwovens and 5000 tons of spunlaced materials per year. Additionally, the company can manufacture another 4000 tons of polyester-based spunbonded nonwovens through its TUSCO joint venture with Teijin Films in Thailand. Although TUSCO achieved full capacity levels in 2005, neither of the company's Japan-based plants reached this mark. Consequently, the company's sales saw a decrease last year. In the automotive sector, Unitika has made recent efforts to expand exports into China. According to the company, production of both automotive the carpets and floor mats has been increasing in China and consequently demand for polyester spunbonded nonwovens used for carpet backings has been on the rise. As its TUSCO plant is operating at full capacity, Unitika has been exporting carpet backings into China from its Japanese plant. The company reports that it competes in China against Taiwan-based Freudenberg Far Eastern Spunweb (FFES), which dominates the carpet backing market there. In an effort to strengthen its position, Unitika plans to increase its exports into the Chinese market. In the spunlaced sector, Unitika's production of cotton-based nonwovens has not yet reached full capacity levels. The company is currently making efforts to boost sales of Lyocell-based spunlaced nonwovens. Unitika describes nonwovens made of Lyocell as suitable for industrial wipes because of their strength, moisture retention and low linting properties. The company is also promoting five-layer composites featuring spunlaced and thermal bonded nonwovens for a variety of applications. 35 Union Industries Masserano, Italy $81 million (65 million [euro]) Key personnel Matteo Moltrasio, vice president; Luigi Cassano, managing director; Alessandro Taramasso, commercial director Plant Masserano, Biella, Italy ISO Status ISO 9001:2000 since 1997 renewed in 2006 Process Spunbonded, spunbonded-meltblown, carded thermal bonded Trade name: Spundouce Market Hygiene, wipes, medical, agriculture, industrial SALES WERE ON THE RISE for Italian roll goods producer Union Industries. And, with a new line--the company's fifth--set to come onstream within the fourth quarter of this year, this trend is only set to continue. In 2005, sales clocked in at 65 million [euro] due largely to the full utilization of a new Reicofil 4 SSS line, which began production in the fourth quarter of 2004, according to vice president Matteo Moltrasio. The new line, which like the rest of Union Industries' business mainly targets hygiene applications, joined four other production lines, a carded line built in 2000 and three other Reifenhauser lines, an SMS line installed in 1994 and upgraded in 2005 and two SSS lines, which Union Industries added in 2001 and 2004. We are quite specialized in lightweight materials so our core business is hygienic," Mr. Moltrasio said. "This does not mean we won't sell to other markets. Even today, we are involved in other markets, not quite as important as hygiene--agriculture market, medical, industrial applications and a little bit of filtration as well." Currently, about 90% of Union Industries 45,000-ton capacity is exported beyond Italy with main markets lying within Europe but other areas of interest including the Middle East and the Far East. Because the bulk of its output is based on polypropylene and focused on the hygiene market, Union Industries, like many nonwovens producers in its position, has been challenged by pricing pressures and eroding markets. "For sure, raw material prices have made earnings much more difficult than in the past," said Mr. Moltrasio. "Also a lot of new capacity is coming on the market. The raw material prices are getting higher and higher and obviously our margins are very much reduced if we compare the margins we have today to the past." Also of interest to Union Industries is the wipes market, which it targets with material made on its carded thermal bonded line, established in 2000. This line can make materials with blends of polypropylene and other fibers such as cotton and viscose, making them ideal for wipes. Union Industries has achieved success by concentrating on understanding the market needs and trying to serve them with the latest technologies available. "We try to innovate with some new technology and we are always focusing to keep a very high standard in terms of quality and in terms of service. Most importantly, we are able to grant the same high standard constantly. 36 Albis Roasio, Italy www.albisnw.com $79 million (63 million [euro]) Key Contacts Gianni Boscolo, president; Carlo Soave, CEO; Pietro Landone, commercial director Plants Roasio, Italy; Aschersleben, Germany, Cincinnati, OH Processes Carded thermal bonded, spunmelt, carded resinbonded, carded ATB Major Markets Hygiene ESTABLISHED IN 1995 AS A maker of thermal bonded nonwovens for hygiene applications, Albis, based in Roasio, Italy, has grown quickly during the past decade with total group sales reaching 63 million [euro] in 2005, according to commercial director Pietro Landone. With its roots in carded thermal bonded production, Albis has followed changes in the hygiene industry in recent years, converting a portion of its operation to meet its needs. After its establishment in 1995 with a 4-meter-wide carded thermal bonded line in Roasio, Albis' growth was so rapid it constructed a second thermal bond line at its German facility, called Ascania, in 1998 and added a second line there in 1999. In 2000, Albis set up a five-meter carded line in Italy, a then, new-to-the-world technology called CMC (carded-meltblown-carded), bringing its total number of lines to four. In 2001, the company diversified into polypropylene fiber production with the establishment of Arborea in Germany. Fibers made through this subsidiary fueled the German plant's needs. By 2003, Albis was the largest worldwide producer of carded thermal bonded nonwovens with an estimated 30,000 tons of available capacity but at the same time the global hygiene business was lessening its reliance on thermal bonded nonwovens and becoming more reliant on the use of spunbond. It was this conversion that encouraged Albis, in 2004, to reconfigure one of its Italian lines to make air through bonded resin bonded material and add Ason Neumag AST bicomponent spunbond technology to the other line to make spunbond nonwovens. "The second carded line in Italy was already five meters wide so it was structured well for the new spunbond technology," Mr. Landone said. "It was already a carded/meltblown/carded line, so we kept the existing meltblown beam on it." With about 95% of its business centered on the hygiene market, Albis has worked hard to diversify itself in a market known for its commodities. "The fact that we have invested in Ason Neumag technology shows that we want to stand out in the hygiene market," said Mr. Landone. "We did not invest in the same machinery everyone else is and we are not selling the same material as everyone else. This technology allows us to offer customers something different. In a world where standardization of technology is becoming increasingly prevalent, it was important for Albis to differentiate and allow our technical skills to express themselves." Despite the challenges being posed in hygiene such as competition and pricing pressures, Mr. Landone said its size alone makes hygiene an attractive market to be in. "Hygiene is challenging but it's the largest market for nonwovens and it's a market where technology and quality are very important," he said. "When you think of its size, just 1% growth can mean a big return." Albis targets hygiene markets throughout Europe, North America and the Middle East and continues to expand its operations and product range. It has recently acquired, for example, an elastic yarn business for the hygiene market. Its latest venture, this time in the U.S., is a joint partnership called Amantea Nonwovens and based in Cincinnati. As for Albis' wholly-owned business, Mr. Landone said that additional investment is not far off but refused to elaborate. "Our next site will be mostly dedicated to hygiene but it might allow for opportunities outside of hygiene," he said. "This will be our vision in the next three to five years. Hygiene will continue to be the most important business for us. "The strategy we have is pretty clear," he continued. "We need to base our future on technological innovation, offering our customers and their customers--wherever they may be--the best value for their money." 37 Precision Custom Coatings Totowa, NJ www.pcc-usa.com $75 million Key Personnel Peter Longo, chairman and COO, Scott Tesser, president and CEO; Rich Noble, CFO and treasurer; Dan Kamat, vice president, Industrial Textile Division; Shaile Dusaj, director industrial marketing and sales; Keith Martin, industrial business manager; Gunther Hoffman, marketing director automotive division. Plant Location Totowa, NJ Processes Needlepunch, thermal bonded, chemical bonded, heat acti vated adhesive coatings, specialty finishes ISO 9001:2000 (March 2001) Major Markets Apparel interlinings, automotive fabrics, medical, fabric softener substrates, furniture and bedding, filtration, vinyl substrates, home furnishings, wipes, hygiene, footwear INDUSTRIAL APPLICATION GROWTH continues to bode well for Precision Custom Coatings, Totowa, NJ. In 2005, the division represented 30% of the company's $75 million sales compared to 17% last year, thanks largely to growth in bedding, filtration and automotive products. Helping to boost its industrial business is the acquisition of needlepunch manufacturer Globetec Incorporated, North East, MD, in December 2006. In March, PCC announced it would add a second needlepunch line to this facility, more than doubling the site's production capacity. The new line is able to make needlepunched material in widths up to 180 inches and in weights ranging from two to 50 ounces per square yard. The line can produce dual-layered fiber blends and can incorporate structural scrims on the exterior or even between the layered fabric. Applications include air and liquid filtration media, wipes and pipe liners. Meanwhile, in PCC's NJ headquarters, a composite line combining the benefits of thermal bending, highloft and chemical bond capabilities, is producing a heavy weight, uniform fabric suitable for a number of industrial markets. "Composite materials are what have been creating new markets for years," said PCC COO Peter Longo. "When you are able to do many things with one fabric, you can really go into a lot of new businesses." One key area is furniture and bedding where flame retardancy has become a major concern due mainly to recent national legislation regulating the flammability of mattress materials. To target this area, PCC has developed fiber-inherent systems that perform well at price points that are appealing to the market. While this market is a new one for PCC, executives expect sales here to reach $10 million by next year. Also targeting this market is a new line of mattress protection fabrics that add properties such has waterproofing and fluid proofing to the mattress and are sold separately from the mattress at retail. "Commodities are not a business area we pursue because it would be hard for us to chase some of the bigger companies," Mr. Longo said. "Mostly we look for areas where we can add value and where customers can benefit from our ability to create products, start to finish, under one roof." Meanwhile, PCC's apparel interlining business, which continues to represent the bulk of its business has been challenged by this market's transgression into Asia. And, while the company has been able to maintain a strong foothold on this business in the U.S., it recently took up a Chinese partner to strengthen its business in the region. In June, PCC formed a joint venture agreement with Ningbo Yigua Textile Factory, an Asian textile manufacturer, which will expand its apparel interlining production capabilities, enhance its product line and augment its ability to offer localized relationships with apparel manufacturers throughout Asia. Operations for the new joint venture are being conducted from a PCC Ningbo Textile Co., Ltd.-dedicated facility in Ningbo, China. "We were already able to beef up our apparel business in China," said president and CEO Scott Tesser. "But as our industrial unit grows, we have less capacity here for apparel. We thought this would be a good way to control our own manufacturing in China." PCC has already operated a joint venture agreement in Jiangshu for coating applications. 38 Kuraray Osaka, Japan www.kuraray.co.jp $72 million ([yen] 9 billion) Key Personnel Nobuaki Sumita, president, Kuraray Kuraflex Plants Okayama, Saijo and Ibaragi Processes Resin bonded, thermal bonded, spunlaced, meltblown steam jet Brand homes Kuraflex, Microflex Major markets Coverstock, wipes, medical and household materials KURARAY CONSISTS OF THREE nonwovens companies--Kuraray Kuraflex, Kuraray Saijo and Kuraray Ibaragi. With an annual capacity of 10,500 tons, Kuraray Kuraflex is the core of the group and produces thermal bonded, spunlaced and resin bonded nonwovens. Meanwhile, Kuraray Saijo manufactures 1800 tons of melt-blown nonwovens per year and Kuraray Ibaragi makes 3500 tons of spunlaced materials annually. A recent technology development for the company is the steam jet method, a process it will use to create new products that are being unveiled in the market next month. New steam jet equipment with a 1000 ton-per-year capacity has been added. Originally developed by Mitsubishi Rayon Engineering, the system bonds fibers through the use of high-pressure nozzles. According to Kuraray, it is the first company in the world to industrialize this method. Kuraray expects to reach a [yen] 1 billion sales target with the new materials, which will be priced at [yen] 200-[yen] 2000 per square meter. The new nonwovens will be promoted as value-added, next generation substrates. Kuraray faces challenging conditions in its existing markets, where it continues to focus on producing nonwovens for diaper coverstock and wipes applications. In the wipes area, Kuraray competes against low cost products from China while competition in the coverstock segment reportedly has also been growing. In response, Kuraray Kuraflex is attempting to procure raw materials from sources outside of Japan and also plans to increase the productivity of its nonwovens facilities. The company will also expand the end use possibilities for certain specialized materials to include industrial applications such as commercial filters or automotive materials. Overall, Kuraray is looking to shift its focus to product areas with high added value. 39 KNH Taipei, Taiwan www.knh.com.tw $71 million Key Personnel J.C. Tai, president and owner; Dr. Kirk Hwang, president; George Wong, hygiene business director; Herman Tai, industrial specialties business director; Alvin Hu, technical vice president Plants Taipei, Taiwan; Shanghai, China Processes Air through bonding, thermal bonding, meltblown, airlaid, needlepunching Brand Name Carnation brand used for hygiene; Co-Fiber for industrial specialty products Major Markets: Hygiene, industrial, agriculture, geotextiles SALES GREW 10% FOR Taiwanese roll goods producer KNH Enterprises thanks largely to increases in the wipes business. Despite this growth, KNH's earnings were impacted by higher raw material costs, a situation the company has been battling with cost controls throughout its operation. Additionally, lower weight materials are being developed to combat raw material costs. "Surface area enlargement and surface characteristics modification for value-added applications are the growing technology," explained company president Kirk Hwang. "KNH has been challenging itself to leverage new innovation for other fields to reposition its nonwovens business." From a regional standpoint, the Asian nonwovens market continues to grow, led largely by Chinas large volume growth as well as Japan's increased focus on high value, highly technical applications. According to the company, efforts to integrate and modernize the Asian nonwovens industry, which has traditionally been very fragmented, are paying off, allowing the region to experience growth in a number of segments ranging from high volume commodity to lower volume, high technology areas. "The major growth lies in the auto industry and technical textiles for high performance products," said company president Kirk Hwang. "Nonwoven has served as a unique substrate for nano, antibacterial, solar cell, and biological reaction beds. KNH is exploring various applications in biological reactions and slow release for skin care." One area of increasing interest to the company is wastewater treatment, which is becoming more important to Asian countries as they look toward modernization and try to clean up heavily polluted areas. KNH has been supplying a meltblown/needlepunch/spunbond composite membrane for these applications. The material forms the filtration media in products that use bacteria to convert debris in wastewater to carbon dioxide and water. Meanwhile, growth in the wipes market has led KNH to add a new spnnlace line to support its hygiene wipes converting operation in Shanghai. Executives hope this move will allow the company to position itself in the heart of the Chinese home and personal care wipes markets, which are growing at the same pace as the country's economy. In other expansion news, KNH has added a second meltblown line in Taiwan--and is planning on installing a third--to meet demand for the material in face mask and room air cleaning filtration media markets as well as in the water treatment industry, which is being targeted with a meltblown composite product. Other highlights of KNH's converting operation include a second airlaid line as well as a new film/nonwovens line, which came onstream in 2004, to produce polyethylene/nonwoven laminates for hygiene applications. From a technological standpoint, KNH has been lowering weights, and subsequently costs, of its carded nonwovens. The company has developed its materials to provide the same absorbency at 25 gpsm as it did at 30 gpsm. In airlaid, the company has been fine-tuning its two-in-one airlaid product, sold in the feminine hygiene market, to increase performance and decrease basis weights. 40 Lantor Veenendaal, The Netherlands www.lantor.nl $55 million Key Personnel Nico Boot, managing director; Albert Feyts, finance director, Paul Verwoerd, sales and marketing director, Jan Sikkenga, production director Processes Drylaid web forming, chemical and thermal bonding, lamination, coating, impregnation, calendaring, slitting, spooling Brand Names Condenstop, Coremat, Finishmat, Soric, ResonStop Major Markets Cable, fiber reinforced plastics/composites, construction/building, packaging, automotive, label systems LANTOR BV HAS CONTINUED to achieve greater volumes, higher sales and healthy earnings thanks to ambitious marketing strategies, including investments in new products and staff "We are very pleased to see growth across all the markets that we concentrate on," said Paul Verwoerd, sales and marketing director. Key markets for Lantor include cable, fiber reinforced plastics/composites, construction/building, packaging, automotive and label systems. Lantor Cable Products continued to increase volumes and sales of cable tapes in both the energy and telecommunication segments. "We expect market conditions will further improve, since demand for energy and telecommunications is growing, especially in developing regions and countries. These greater volumes enable us to compensate for increased raw material costs", he added. In response to this growth and to assure short delivery times to its customers, Lantor installed additional slitting capacity to this operation. Lantor Composites offers a comprehensive range of nonwoven products to the composites industry, including its Coremat, Finishmat and Soric brands. In this segment, Lantor especially benefited from the Soric product range. Lantor Construction's main product CondenStop could reap the fruits of extensive efforts in increasing the use of condensation control solutions by means of nonwovens, rather than coatings. "Based on our experience and expertise, we offer a concept rather than a product, which gives customers the confidence to make the shifL," Mr. Verwoerd said. "Our European customer base has grown significantly over the last few years and for future growth we are also looking at overseas markets." Lantor GmbH, based in Haibach, Germany, houses Lantor Labels Systems and Lantor Automotive. The labels systems business continued to steadily grow sales in the garment/bedding industries in Europe. "Although the (bulk) garment/bedding industry continues to shift to low wage countries, there is still room for growth in niche applications by providing tailored solutions," Mr. Verwoerd said. Lantor Automotive continued to face difficult market conditions including increased price competition. However, in 2005 Lantor started to benefit from new automotive models using its products. "Our product development capability and flexible logistics have been and will be the key to success in a highly demanding and competitive environment," Mr. Verwoerd explained. Lantor BV focuses on the development, manufacturing and global marketing of high added value nonwovens for industrial markets. The company's direction and strategy are driven by "leadership through innovation," Mr. Verwoerd concluded. 2006 TOP NONWOVENS MANUFACTURERS REPORT Company 2005 Global Nonwovens Sales 1. Freudenberg $1.4 billion 2. DuPont $1.35 billion 3. Kimberly-Clark $1.2 million 4. BBA Fiberweb $1.1 billion 5. PGI $948 million 6. Ahlstrom $928 million 7. JM $530 million 8. Buckeye $241 million 9. Companhia Providencia $220 million 10. Owens-Corning $202 million 11. Propex $200 million 11. Japan Vilene $200 million 13. Fibertex $190 million 14. Hollingsworth & Vose $187 million 15. Colbond $184 million 16. Asahi Kasei $176 million 17. British Vita $170 million 18. Avgol $160 million 19. Western Nonwovens $150 million 19. Pegas $150 million 21. Georgia-Pacific $145 million 21. Sandler $145 million 21. Toyobo $145 million 24. Mitsui Chemical $132 million 25. Lydall Inc. $113 million 26. Concert Industries $110 million 27. Foss Manufacturing $100 million 27. Orlandi $100 million 29. Toray Saehan $99 million 30. Polyfelt $91 million 31. Jacob Holm $87 million 31. Textilgruppe Hof $87 million 33. Suominen $85 million 34. Unitika $82 million 35. Union Industries $81 million 36. Albis $79 million 37. Precision Custom Coatings $75 million 38. Kuraray $72 million 39. KNH Enterprises $71 million 40. Lantor $55 million |
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