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317 George Street New Brunswick, NJ 08903 (201)524-0400

Worldwide Nonwovens Sales: $220 million U.S. Nonwovens Sales: $170 million Key Personnel: Alfred Mays, president; David Lehman, vice president-marketing, Specialty Products Div.; Robert Munoz, vice president, Affiliate Div. Plants: Benson, NC (spunlaced); North Little Rock, AR (dry laid, wet laid); Gainsville, GA; Cuijk, The Netherlands (Chicopee Europe); research and development is in Dayton, NJ. Processes: Spunlaced, Wet Laid, Dry Laid, Thermal Bonded, Composites Trade Names: Keybak, Masslinn, Chix, Fresh Guy, Stretch 'n Dust, Bonnlinn, Durawipe, Duralace, Kiara Major Markets: Personal Care (diapers, feminine hygiene), Wipes, Filtration, Industrial Notes: A major question around the industry is what will be the impact of Johnson & Johnson's recent divestiture of its Chicopee private label diaper business on its Chicopee nonwovens roll goods business.

The answer, after speaking with Chicopee executives, is that there should be very little impact at all on the nonwovens unit, which was already in the midst of a refocusing in a variety of markets.

The sale of the diaper unit this summer, along with the sale of its Lumite Div. earlier, is the most visible sign of a strategic planning initiative taking shape at Chicopee for the 1990s. David Lehman, vice president-marketing for the Specialty Products Div., explained that a new management team--Chicopee has a new president, new vice president-operations and new vice president of R&D in the past one and a half years--has created a new outlook for a company traditionally viewed as solely an in-house supplier to J&J.

"Our primary mission is to support J&J operations and that continues," he said. "But we are now focusing more on utilizing our technologies to the best of our abilities on non-internal markets, as well as growing our spunlaced technology."

This new outlook virtually demanded a new philosophy towards the nonwovens business, Mr. Lehman explained. "The private label diaper sale (it was sold in an LBO to current management mid-year) was a result of our deciding that instead of diluting our efforts all over the place, let's structure these efforts towards directions where we could manage more effectively simply by trying to be less diverse."

The divesting of the diaper business--"a good business decision" is how Mr. Lehman described it--allows the implementation of a strategic plan that will focus "on areas where we have a strong competitive advantage." Among these areas: spunlacing, composites and research efforts.

Implementing this grand scheme will be a host of new people in key positions. J&J has supported Chicopee by approving added staff for just this purpose. "The newness at the company is new people taking a fresh look at the business," said Mr. Lehman, himself in the position for less than two years; he succeeded Robert Bramson in late 1989. "These people have to have the dedication to select a strategy and then resource that strategy and move forward with it."

With the new people has come a more aggressive and open attitude towards the nonwovens industry. It is most visible in the form of increased trade advertising, a continued very high association profile and the formation of a new business development team to seek out and identify market opportunities. "Chicopee had a history of not being aggressive in the nonwovens market," said Mr. Lehman, citing its comfortable niche as a supplier to J&J as the primary reason. But the fact is that Chicopee continues to sell half of its nonwovens roll goods on the merchant market and, in today's business climate, it had to focus more on developing new markets.

"We are putting some significant new effort into it now," he said, referring to the two year old New Business Development Group headed by Robert Munoz as the first step. "That group is totally dedicated to developing new markets."

Apparently one of the key areas that will benefit from Chicopee refocusing will be its spunlaced technology. Chicopee has long been a leader in hydroentanglement and currently has four lines worldwide producing more than 15,000 tons annually of its spunlaced nonwoven; plants are located in North Little Rock, AR and Benson, SC and at its European site in Cuijk, The Netherlands.

One of the first new products to result from the new outlook at Chicopee is a blended spunlaced cotton food service towel. It was launched under the "Chix" brand name on Aug. 12 at the Western Restaurant Association trade show and will initially only be available in the western part of the country. The absorption, bulk, durability and, of course, the natural fiber, are its primary selling points.

Mr. Lehman would not elaborate on the other new markets identified by the nonwovens producer other than by saying the process has begun bearing fruit and will become more visible over time. "In January, 1991 we started putting together marketing implementation of strategy developed in 1990," he said. "Obviously there will be some existing markets we are going after, but we are not ready to let on what they are. His only hint: "We want to look at more specific markets, where a value added product can be appreciated. Some of them will be very dramatic for the nonwovens industry, we feel very strongly about that."

With acquisitions not a Chicopee priority, new technology coming out of its Dayton, NJ research and development efforts will fuel these dramatic moves. This R&D emphasis, Mr. Lehman said, is imperative. "If you accept the status quo, you are going to get run over. You have to invest in technology to invest in the future and J&J is certainly not bashful about investing in the future."

So the industry can expect to see a more focused, certainly more visible Chicopee in the mid-1990s. First and foremost, its charter remains to provide "a sustainable competitive advantage for J&J companies." While it accomplishes that it will move towards becoming a bigger force on the merchant market.

"If we were 80/20 or 75/25 in J&J versus open market sales, I would feel differently," Mr. Lehman said. "But we know the half of our business on the outside markets has to be profitable. They go hand in hand."

The next year or so will see Chicopee "concentrating on clearly defined markets to expand our sales and to have more customers be aware of Chicopee than they were previously," he concluded.

"People are starting to call us for specifications. They didn't always used to do that because there was no reason to think in our direction. Now, when someone needs a nonwoven we want them to think of Chicopee."

The Private Label Buy Out

The limited buy out of the private label diaper business from Chicopee was finalized on June 14. Parent company Johnson & Johnson had made the decision to divest its diaper operations to allow the other Chicopee operations to concentrate on their core missions of developing and supplying materials for use in health care products. Rather than sell the diaper business to an outside suitor, the opportunity arose for five top executives to assume control from Chicopee and begin anew as Arquest, located in Cranbury, NJ.

Together, the five key executives have more than 100 years experience with J&J and in the retail diaper category. In addition to John Rinaldi, president and chief executive officer, the other executives involved were Jim Daly, vice president-marketing; Charles Hart, vice president-operations; Robert Baker, vice president-sales; and Lawrence Mraz, chief financial officer.

"It's a win/win situation," promised Mr. Rinaldi. "Chicopee will set their sights on different horizons while we at Arquest will flourish with a variety of new entrepreneurial opportunities."
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Title Annotation:nonwoven fabrics business
Publication:Nonwovens Industry
Article Type:company profile
Date:Sep 1, 1991
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