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Foss Manufacturing.

Foss Manufacturing

380 Lafayette Road, P.O. Box 1030 Hampton, NH 03842 (603)929-2111; Fax (603)929-0061

Worldwide Nonwovens Sales: $85 million U.S. Nonwovens Sales: $70 million Key Personnel: Stephen Foss, president; Gordon Goodwin, vice president-sales Plants: Haverhill, MA; Hampton, NH; Australia; warehousing in Bangkok and Korea; distribution in California and Indiana, U.K., France Processes: Needlepunched, Polyester Fiber Spinning, Post-finishing Brand Names: Geomat, Fossfibre, Fossfelt, Fossplit, Stratos, Stytherm, Whispertex, Styplast, Masterwear, Fossform, Foss Flex, Ssoflite, Styplast, Kunin Felt, Rainbow Felt Major Markets: Automotive, Footwear, Wall Coverings, Marine, Health Care, Decorative and Consumer, Carpet Cushions, Crafts Notes: While the expected buying binge of 1991 never did materialize for Foss Manufacturing, the largest privately-owned member of the Nonwovens Industry Top Companies has taken other expansion steps during the past few months to increase its reach into the needlepunching business. Most of the activity at Foss has centered on establishing an improved worldwide distribution system for its large range of needled products.

Foss did start off the year with a bang with the acquisition of Kunin Felt, a supplier of felt fabrics to the home sewing and craft markets. Kunin, Worcester, MA, had been a manufacturing partner of Foss since 1975. Stephen Foss, president, pointed out at the time of the merger that "the Kunin family has had a long commitment to serving the home sewing, home decor and craft markets. That strong family tradition merges perfectly with our own tradition and with our business philosophy." Established in 1920, Kunin Felt has been a family-owned and operated business through three generations.

That move to start off the year, following so closely on the heels of its purchase of Waterbury Nonwovens in 1990, fueled speculation that Foss would continue to feed its appetite for acquiring smaller competitors and, in the case of Kunin, customers, for much of the next 12 months. That has not happened, but the year is not yet over.

A Move To Europe

Instead, Foss went overseas. Less than two months after its January purchase of Kunin Felt, Foss again made news with its March announcement that it had established a wholly-owned European marketing subsidiary. Foss has opened offices, warehousing and distribution facilities in Carros, France, approximately 10 kilometers north of Nice. The new subsidiary, which is headed by Charles de Erney, formerly president of USM France and vice president-Europe of USM Machinery Group, will be involved in the distribution of all Foss products into the European market. Foss has had a U.K. distribution center outside of Manchester, England for the past decade and has Far East distribution in Bangkok and Korea to go along with its converting and distribution facility in Australia.

The new distribution site was put in the south of France to primarily service the European footwear industry, which is centered in Italy, Spain, Portugal and France. If Foss wanted to broaden its coverage of this market, Mr. Foss said, there was no alternative to this regional distribution.

Even more recently Foss established a West Coast distribution warehouse just south of Los Angeles, CA; it complements its existing warehouse facility in Elkhart, IN. There are also plans in the next year or two to add a distribution site in the southern part of the U.S. to complete its nationwide coverage.

Mr. Foss explained the reasoning behind the distribution expansions: "So much of the business is smaller competitors that are, by their nature, very close to their customers. The farther away you get from your manufacturing point, the more you want to look transparent to your customers. We have to act very responsively and make them think you are actually right next door to them.

"Manufacturing doesn't necessarily have to be right there," he continued. "I am not convinced that that is the only way to do it. You are better off maintaining a strong, efficient single location. It boils down to getting the product to the customer at the best possible price and this is the way we have chosen to do that."

Mr. Foss believes that distribution is becoming the company's strong point, a necessity in the current business climate. "The business has shifted from five years ago," he said. "You see there are more and more small competitors out there, so you have to act as a small producer yourself."

Foss has gotten larger in the past year, though, and has completely assimilated the former Waterbury Nonwovens needlepunching operation into the Foss facilities in Hampton, NH and Haverhill, MA. "Waterbury is still there in name, but basically we bought the business and the equipment," Mr. Foss said. The move to totally absorb the company began as soon as it was purchased in 1990 and was basically completed last spring.

But no matter how large it gets, Foss will continue to "think small." Because of the unique nature of the privately-owned company, it has been able to continue its oft stated policy of participating only in markets where it can be the number one or number two player. It has followed this policy closely in lessening its involvement in such commodity markets as geotextiles and increasing it in more profitable, specialty niches such as marine fabrics. Automotives remains its largest single market. Foss will participate a bit in commodity markets for the exposure and market knowledge, but they will never be the cornerstone of its business.

"Sometimes it is a little tougher than others, but, yes, we have held to the policy of staying number one or two in our markets," Mr. Foss said. He added that there are some merits in just sitting back and copying what other people do. "You don't have to work as hard, for one," he said jokingly. "But we haven't found a good reason for doing that yet."

Even More Vertical Integration

The future of Foss will almost certainly see more acquisitions, primarily to continue its quest for complete vertical integration, a desire that did take a major leap with the Kunin acquisition this year. With its polyester fiber spinning capabilities providing much of its fiber needs, Foss is one of the few nonwovens companies involved in virtually every aspect of fabric production and sales.

"The complete vertical integration of Foss has long been our goal and with Kunin we now sell into the retail market," Mr. Foss concluded. "It has been our goal to achieve that because there are a lot of great opportunities for nonwovens on the retail side." He did not foresee any imminent acquisitions in the retail sector, however, preferring instead to rely on the Kunin expertise and channels in that area.

One interesting way Foss will go retail on its own is the opening of a planned factory outlet store adjacent to its Hampton headquarters within the next year or two, believed to be a first in the nonwovens industry. It will only be a small place, Mr. Foss pointed out, but it will provide an opportunity for the company to be even closer to the market. "The idea has some great merit, because we always end up with 50 yards of something that needs a home. You would be surprised at how many of the products we make have retail applications." He mentioned the craft business and incontinence products as two of them.

Foss Manufacturing, for years a trendsetter in the needlepunching industry--first through product innovations and then by setting the pace for acquisitions and now expansions--is doing it again with this retail outlet move. Because of its unique situation and New England location, it will be able to pull off something as novel as the factory outlet idea. Now, to varying degrees Foss is involved in nonwovens from making the fiber through needling and post finishing to retail outlets through Kunin and, with this newest idea, by having a Foss store employee hand the product right to a customer who has come in off the street.

That is unique in the nonwovens industry, but not surprising about Foss Manufacturing.
COPYRIGHT 1991 Rodman Publications, Inc.
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Publication:Nonwovens Industry
Article Type:company profile
Date:Sep 1, 1991
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