Corovin GmbH.

Corovin GmbH

Woltorferstrasse 124, P.O. Box 1107 D-3150 Peine, Germany (0 51 71)408-0; Fax [phone]

Worldwide Nonwovens Sales: $55 million (90 million DM) Key Personnel: Peter Kociemba, managing director; Walter Bruckner, managing director-technical; Andreas Kirsch, marketing director; Rudolf Leberle, sales director; Heinz-H. Boich, research and development director Plant: Peine, Germany Processes: Spunbonded (polypropylene), Melt Blown, Multidenier Brand Names: Corovin (hygiene, medical, protective clothing, home furnishings, construction, filtration, automotive), Corosoft (hygiene), Covertan (agricultural), Corogard Notes: Can it be that the noisiest kid on the block is determined to become one of the quietest? It's true. Just as every young child eventually grows into an adult, Corovin, which for the past couple of years has been among the most vocal participants in the worldwide nonwovens industry as it attempted to carve its position in the business, has reached a level of maturity where it no longer has to tell everyone just how good it is.

That is basically because the German nonwovens producer has already proved its worth through a rapid ascension into the elite of the European nonwovens producers. Another healthy year last year resulted in a turnover of $55 million, capping growth from $42 million in sales in 1988 and only $22.7 million as recently as five years ago. And in the first half of 1991 the company continued its fine performance with a reported 10% sales increase from a similar period in 1990.

Much of this has taken place since the time a year and a half ago when Corovin's former owner publicly announced its nonwovens unit was for sale to the highest bidder. Twelve months and untold bids later, Corovin was sold to a surprise entry, Stohr GmbH, a German textile firm, and the Westdeutsche Landesbank Girozentrale, the financial backer of the deal. Company officials expect another $30-35 million (50-60 million DM) increase in sales next year as an on-going expansion takes effect.

At this time last year the big question was exactly who will benefit from the tremendous strides Corovin had made in the late 1980s. The answer came in early January when it was announced that Stohr had finally reached an agreement with former Corovin parent BPB Industries, U.K. The public auction had drawn much of the industry's attention for much of 1990.

The Stohr Connection

The story of the sale can be summarized by saying that Stohr came as a surprise winner but was exactly the fit current management was seeking for the company it had built almost from scratch from the mid-1980s. "We have enough freedom in our strategic policy and all of our people will stay," said Peter Kociemba, managing director, in an interview in early June. "We are a flexible group with enough financial strength."

Much of that money comes from Corovin's new association with the wealthy Westdeutsche Landesbank, which holds 30% of the business. Again, it was the capital backing that sold Corovin on the new owners. "Banks look for good investments," Mr. Kociemba added. "They believe the nonwovens industry is a strong, growing market and that we are just in the beginning of developing new areas and of our life cycle."

The purchase of the German producer of spunbonded, melt blown and composite nonwovens is the first foray into nonwovens by Stohr, whose current businesses center in the spinning of worsted woolen yarn and industrial textiles. Stohr, with 1989 turnover of $185 million (276 million DM) was attracted to Corovin because its traditional market segments have become very low growth, highly competitive areas in the European textiles segment. And, according to an official announcement, the high investments needed in the past to compete in the spinning and technical textile segments will most likely decrease in the next few years, freeing up investment capital for new areas such as nonwovens with higher growth and profit potential. Stohr also indicated a desire to remain in businesses related to its core markets, another plus for the diverse product and technology portfolio offered by Corovin.

Much of that investment is underway already with a fourth production line that features a 3.4 meter, four bank unit capable of spunbonded, melt blown, microfiber and multi denier nonwovens production. It is scheduled for on-time start-up in the last quarter of 1991.

Another fruit of the investment harvest is the impressive research and development center the company has installed at its Peine location. At the time it was commissioned two years ago the center demanded an investment that reached more than the company's annual turnover. In 1989, Mr. Kociemba admitted the center, which now houses the capabilities to produce test runs of spunbonded, melt blown or multi denier nonwovens as well as polymer testing and related work, was oversized for a $40 million company. Now, it fits right in.

"You have to be willing to take a risk, because without risks you can't be successful," Mr. Kociemba said. Corovin has opened avenues of research by inviting its customers into its plant for testing and development work. "We can only be successful if we put all of our heads together," is his personal philosophy espoused in the Corovin actions.

Despite its expansions, Corovin remains oversold to the European market currently. But there will be no more immediate capacity expansions as the company concentrates on absorbing, digesting and fine tuning its current fare. "We knew from the start that we had to offer more than just spunbondeds, that composites were the future of the industry. We knew we had to offer more than a simple nonwoven," Mr. Kociemba said.

Corovin is expanding geographically, although it currently maintains only its one plant in Peine. It is well known that the company is considering options through a joint venture in the Far East, but it was unwilling to discuss details until a decision is finalized. Near term plans, however, call for Asian representation and then Asian production within one year or so. The company would not comment at all on its plans in the U.S., where it currently sells no product at all.

The real future of nonwovens companies lies in cooperative arrangements with customers and suppliers, according to the Corovin policy. As a result, the next news from the formerly vocal, now unusually quiet company can be expected to focus on that area. "We are exploring the possibilities of strategic alliances," Mr. Kociemba revealed. "You can either buy or sell a company or you can cooperate. We have to find new ways to look at what we have done and make the most of it."

What that means for the rest of the nonwovens industry is that Corovin can be expected to maintain a low profile for the next year or so, to maintain a stable European expansion in the distant future, continue to explore a Japanese joint venture under consideration and to further U.S. moves not yet made public. It seems Corovin will now be a little more defensive with its information policy.

Only time will tell, but we surely have enjoyed all Corovin has had to say in the past few years and will miss their source of news. However, perhaps they won't end up being very quiet after all.