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Fiberweb: a focus on change.

Change has been the order of the day throughout the last year (and has continued right up until press time, see Top of the News, p. 8) at the Fiberweb Group, the eighth manufacturer of nonwoven roll goods in the world. The company, which had 1992 sales of $236 million (SFr. 332 million), underwent major organizational restructuring and changes in management throughout the year. The changes began with the departure of president and chief executive officer Guido Patroncini last October. Mr. Patroncini, who left due to "differences regarding the management of the division and in particular of Sodoca," was replaced by Pedro Reiser, who is chief executive officer of Holvis Holzstoff. Reporting directly to Mr. Reiser, who now also holds the title of president of the Fiberweb Group, are Aldo Ghira, head of Fiberweb Europe and Roger Fehrman, head of Fiberweb North America.

Rounding out the management structure and reporting to Mr. Ghira is Gianluigi Fornoni, managing director of Fiberweb Neuberger, Rene Beer, interim managing director of Fiberweb Sodoca, Dag Hermelin, managing director of Fiberweb Sweden and Hans-Ulrich Mueller, vice president, marketing-Europe.

Speaking of Neuberger and Sodoca, name changes were also part of the past year's organizational changes. The two companies are now officially known as Fiberweb Neuberger and Fiberweb Sodoca, in order to "better reflect the integration of the entire group of companies." Overall, Fiberweb reports a satisfactory year despite the recession that swept through much of the world. Sales increased 2.7% while operating profits increased 2.3% for the year.

In the European market, the group still has three individual companies with one marketing organization, explained Aldo Ghira, president. "On the marketing side, we have focused on specific market segments and we are still going through the process of harmonization of the company." "In the future we will adopt the concept of strategic business units throughout Europe. We need to better focus on market needs." He summed up by saying, "Organizational changes will have to happen."

On the R&D side, however, the cooperation is already global. Research and development is headed by Lloyd Trimble, vice president-R&D, who is based in Europe; however, there are R&D centers in the U.S. and Europe and there are ongoing formal technology exchanges. "At the technological level there is a lot of cross fertilization," said Mr. Ghira.

Fiberweb Sodoca has the dubious distinction of gaining the most headlines during the last year at Fiberweb due to its less than satisfactory results. Indeed, the Group made the decision last November to cut the workforce at Fiberweb Sodoca in order to streamline the organization. "Last year Sodoca was stressed by the economy," explained Mr. Ghira. "It was more serious than expected. Now," he continued, "we have new management in place and there has been a major restructuring in addition to the workforce reduction. We believe it was the right thing to do to bring Sodoca back into a competitive environment."

Fiberweb Sodoca, which manufactures thermal bonded and spunbonded nonwovens as well as running a semi-commercial melt blown line, recently added new spunbonding technology in the form of its "S-tex" process. The line was officially onstream at the end of last year and targets medical, filtration and protective apparel applications as well as some minor industrial end uses.

At Fiberweb Sweden, "The performance continues to be excellent," said Mr. Ghira. "There has been an ongoing process to optimize current lines and we have had good success with this program." Fiberweb Sweden has three spunbonded lines and serves the hygienic and industrial markets; it did make the decision in the last year to withdraw from spunbonded polyester production and now manufactures only lightweight polypropylene products. However, the potential to provide polyester remains, should the market warrant it, said Mr. Ghira.

Fiberweb Neuberger also operates three spunbonded lines and targets a wide range of end use products. The company is hard at work on a new spunbonded concept that should be finalized this year. According to Mr. Ghira, the new technology emphasizes flexibility and low investment per unit. The first target will be the hygiene field, although the concept will allow entry into other markets.

Fiberweb Deutschland continues as the company's German sales subsidiary, with no plans to place any manufacturing there. Mr. Ghira described Fiberweb Deutschland as a link to long term opportunities in Eastern Europe.

Taking advantage of other long term opportunities, Fiberweb continues its negotiations with Mitsui Petrochemical for its joint venture in Japan. The companies have been test marketing Fiberweb's S-tex product and are still in the phase of clearly defining the market for the material. Once the market definition has been completed, the companies will move forward with plans for a joint manufacturing facility.

In terms of markets across the board for Fiberweb, the medical sector is a major area of growth, with mid-range plans for this sector to become the company's second largest target market. As of now, hygiene holds approximately 70% of Fiberweb's business, with agriculture and industrial applications vying for second in the 10% range. Other smaller end uses make up the rest of the company's sales.

On the subject of quality, the Fiberweb Group is at different levels in its ISO certification process. "We are working on achieving a total quality culture at the company," commented Mr. Ghira. "ISO certification is only one tool for the implementation of a total quality management model." He added that while each of the individual companies are developing their own quality process, the European companies are being advised by a consultant who is assisting with the coordination.

Fiberweb Group president Pedro Reiser commented on the future. "That we see is growth slowing and competition increasing," he said. "There is excess capacity in some areas and times are harder. In terms of technology, markets and strategy," he continued, "we must be more specialized and address customer needs. We cannot be all things to all people and we must develop more targeted global businesses."

Mr. Ghira concurred. "In Europe, for eight years we had double digit growth. Now we are experiencing about 6%; this is quite a major change. On the other hand, capacity is growing much more quickly than previously. We must focus on selected markets, building strength and competence. You cannot build around a technology concept, you must build around market needs," he concluded.

North American Operations

At Fiberweb North America, Simpsonville, SC, the "sunrise" has now been "eclipsed." The company, having last year completed its "Sunrise" spunbonded expansion project, this this year continues with "Eclipse," an expansion currently underway that will target the medical nonwovens market.

The Eclipse project will manufacture "Securon" barrier fabrics for medical and other protective apparel end use markets as well as other composite products. The line, located in Simpsonville, is expected to be up and running by mid-1994. "We are making use of some of the best technology in spinning and melt blowing as well as having the flexibility to add other types of composite structures," said vice president, general manager-industrial and medical James Posa. "It will dramatically upgrade our flexibility and our capacity to provide unique nonwoven products to the medical and industrial markets. The key," said Mr. Posa, "is that we can produce so many different types of products and weights. The product mix will vary according to customer needs."

Securon, which was introduced at last year's IDEA |92 show, will be one of the major product lines manufactured with the new capacity, although it will also "include some of the best capabilities in the industry to offer high value in quality, cost and capacity," according to Mr. Posa. Securon has far exceeded expectations at the company, with end user acceptance very high. "The product was targeted to fill an unmet need," said Mr. Posa. "This is what led to the development of the Securon fabric and it is gaining acceptance rapidly by meeting this need."

Meanwhile, the Sunrise line added last year officially came onstream October 1, 1992. The start-up phase has gone well on the line, reported president Roger Fehrman and additional capacity plans have already been discussed. "The operation is doing very well," said Mr. Fehrman. "This represents to us our next step in improving product performance for diaper coverstock applications. We expected to see the next level of product necessary for the future from this line; it is meeting these expectations." Specifically, Mr. Fehrman said the new products from the Sunrise line have improved uniformity, lower basis weight and can operate at higher speeds. The line is currently sold out in the start-up phase.

The other North American technology under the Fiberweb Group umbrella is Absorbent Products Inc. API, which was formed last year when Fiberweb purchased absorbent product technology from Weyerhaeuser, is being looked at as a long term project, explained Mr. Fehrman. "We continue to believe in the technology, which is unique in the absorbent product area," he said. "But we have no plans yet for a commercial line."

Fiberweb currently has a semi-works line at its Simpsonville site and is working on developing various applications. While it continues to manufacture a food service wipe initially produced by Weyerhaeuser, "this is not where the future lies," said Mr. Fehrman. "We are currently working with partners for future product lines. We see a lot of potential in several areas; where the technology ultimately ends up will depend on the success of these customer tests. Conceptually," continued Mr. Fehrman, "we are selling a product that goes into other people's products. If we can eventually manufacture a material that combines an absorbent core with a coverstock fabric, we are bringing added value at a lower cost to the party."

Hygiene remains Fiberweb North America's largest market, with more than 60% of total sales, which were half of the Fiberweb Group's sales in 1992. Medical and industrial continue to compete for second, although because of the success of new products in these areas, the growth curve is definitely steeper.

In the Industrial business unit, "Spectralon" is a nylon spunbonded product introduced earlier this year. The product adds color and patterning capabilities to Fiberweb's line in Pensacola, FL, enhancing the company's offerings for markets including banners and flags, safety products and automotive applications.

In terms of other technologies at Fiberweb North America, spunlacing still remains a pilot plant, with no plans to bring that technology to the commercial level at this time. "There are too many other companies involved in that technology," explained Mr. Fehrman. "There is simply no reasonable competitive advantage at this time."

The competitive situation and investment priorities also explain Fiberweb's decision to sell its monolithic melt blown process, which was purchased by melt blown manufacturer Web Dynamics last December. "Essentially, as we looked at the monolithic melt blown business in terms of making significant headway based on our current businesses, we felt the opportunities were limited," said Mr. Posa. "We have been investing a great deal of our efforts in composites, medical and hygiene markets and we did not see the payback in melt blowns holding the same potential." He added that to continue as a key player in the business, Fiberweb would have had to expand capacity and purchase additional equipment. "We did not feel that it would have been a worthwhile investment of our resources," concluded Mr. Posa. Fiberweb had been a major supplier in the sorbent products market, but had exited that business in 1990. Before the sale to Web Dynamics, the company had only had a small face mask business.

ISO certification has been a major effort at Fiberweb North America, although Mr. Fehrman qualified this as the umbrella under which all of the company's quality programs exist. "Our quality programs are unique according to business unit," he said. "The Industrial Division is looking at different standards in the automotive industry, while the Medical Unit needs to meet GMP standards. We are specifically designing our programs to meet the needs of the individual businesses," he said. This requires a substantial effort and a major investment in terms of time and money, said Mr. Fehrman. "We are doing it right," he said. "We intend to get value out of this for our customers and ourselves."

Fiberweb North America reports a positive but slow recovery in the economy, quite in line with the company's predictions, and it expects a major jump in sales in 1993 as new capacity comes onstream. However, said Mr. Fehrman, there have also been major shifts in our markets, particularly dramatic in the hygiene area. "So on one hand you have a rebounding economy, while on the other you have shifts in customer preference and continuing need for better value."

Mr. Posa pointed out that despite these changes, business has been good. "You can call it luck or superb planning," he said, "but because of decisions made a year or two ago, we are having a good year." These decisions include the Sunrise project, the medical expansion and the new industrial products. "We have experienced growth across the board," he said. "Without these decisions, this might not have been the case. We're now well positioned to take advantage of the business climate as we see it."

Looking ahead, Mr. Fehrman said, "Next year you'll see the results of decisions taken currently in a major effort to globalize the nature of the business. We are structuring now to meet this need," he said.

In conclusion, Mr. Fehrman said, "You need to have the best value package regardless of the economy. Your strategy should drive your business."
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:International Top 30
Publication:Nonwovens Industry
Date:Sep 1, 1993
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