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Lydall: high tech applications and acquisitions.

With an international division that is running smoothly and a newly defined emphasis on acquisitions, the 18th largest roll manufacturer, Lydall, Inc., Manchester, CT, poised for the future and in position to ride out the recovering economy. With sales of $113 million, an increase of 13%, the recession did not really affect this manufacturer of high quality filtration and thermal barrier materials, since many of its markets are recession-resistant in nature. Despite this, chief executive officer Leonard Jaskol painted a less than optimistic view for the economic future. "We're doing well but we're getting little help from the economy in general," he said candidly. "Certain segments are doing well, but for reasons other than the economy," he explained. "We seem to operate on different cycles."

The recovery in general has been very modest and, said Mr. Jaskol, very fragile. "It can be derailed very easily," he said, "you have to use a magnifying glass to even find the recovery. Whatever is gained can be short circuited pretty quickly."

Overseas as well, business has been only "decent," said Mr. Jaskol. "Is it better than last year, yes; is it better than it had been in the past, no." In particular, he said the European automotive market was down, which is noticed through Lydall's battery separator business in France. This is counterbalanced by a rebounding automotive market in the U.S., to which the company supplies a variety of thermal barrier products.

Generally, Lydall continues to draw approximately 24% of total sales from outside the U.S. This includes products manufactured at its U.S. divisions--Manning Nonwovens, Technical Papers and Westex--and at its newest subsidiary, Lydall Axohm Division in Melrand, France.

The Axohm Division, which was purchased in 1991, began to produce some ASHRAE grades of air filtration media and has added SLA battery separators to its battery separator product line. The division is also developing material for a gel battery that is helping its market position.

Mr. Jaskol reported being very happy with Axohm's progress. "We bought them because we needed a European supply source and because their processes and equipment complemented those of our U.S. businesses. Customers are now tending to view us as a European company," he said.

Now that the Axohm purchase has been merged into the existing business, Lydall is again turning its eyes to the acquisition market. "Historically, a reasonable segment of our growth has come from acquisitions," said Mr. Jaskol, referring to Axohm and to the acquisition of the Manning Division in 1986. "Financially, we're in the best shape we've ever been and we can look at a number of modest size acquisitions or one large one. Ideally we're looking for another company in Europe first, then Asia, then the U.S.," he said, adding laughingly that it would never happen in that order. "Obviously it depends on what's available."

Charged with the task of examining what is available is Alan Gnann, who, effective July 1, was named vice president-corporate development. Mr. Gnann, who had been president of Manning Nonwovens, will be responsible for investigating potential acquisitions and other development opportunities, bringing this goal to the forefront. Mr. Gnann commented on his new position. "While we've had a successful track record with product line and stand alone company acquisitions," he said, "our stated goal of growing the business through acquisitions dictated the need to dedicate resources full time to that plan."

Both men said that the acquisitions would stay within core Lydall businesses. "We also won't buy a |turnaround' company, one that is performing poorly," said Mr. Jaskol. "Ultimately that doesn't work. We are willing to pay a premium a company that is doing well." Patience is the key, he said. "We looked for two years before we found Axohm. We have an active program, but nothing imminent," is how he described the current acquisition outlook.

In addition to acquisitions, new products have helped carry Lydall through the past economic difficulties. "New products are really key to our current as well as our future growth," said Mr. Jaskol. "We really haven't been disrupted during the recession and we've been able to continue to invest in R&D. We continue to increase spending in those areas, which should help in subsequent years."

Overall, "despite the fact that we had double digit growth last year, those businesses directly affected by the economy did not do well; the global economy as a whole is experiencing sluggish growth," said Mr. Jaskol. For the future, he predicted, "I don't want to be pessimistic but I don't see the economy greatly improving. If companies in the nonwovens industry are going to be successful, they are going to have to help themselves." This means working more efficiently, developing new products and figuring out less expensive ways to do things, said Mr. Jaskol.

Manning Nonwovens Division

New at Manning Nonwovens, Troy, NY, is James Carolan, who joined the division on July 1 as division president. Mr. Carolan was most recently president of Lydall International and had been located in France.

New in the product area at Manning is a bicomponent fabric that came onstream earlier this year. "It was just recently introduced because the necessary thru-drying equipment was not available until the first quarter of this year," explained Mr. Jaskol. "We've seen a lot of enthusiasm about this product, which is just getting off the ground," he said.

Customers are currently evaluating the material, which is expected to take a few months. Manning's bicomponent fabric combines the best attributes of wet laid and spunbonded nonwovens, bringing together highly uniform fiber deposition with high strength. It targets filtration applications and medical uses, specialty packaging and composites. The product is 100% binder-free and composed primarily of synthetic fibers. According to the company, the product can also be manufactured efficiently with little waste and it is very pure. It has the added characteristic of being heat or ultrasonically sealable.

Another development at Manning Nonwovens is the formation of a new strategic business unit (SBU). The Advanced Structural and Composite Materials unit was formed primarily because of the success of Manning's "Formoweb" thermoformable material. The primary target of Formoweb is the automotive industry, where it has gained wide acceptance, according to Mr. Carolan. It has been used most notably in headliner end uses and was instrumental in aiding Manning Nonwovens in achieving its Ford Q1 rating earlier this year. From its work with Formoweb in headliners, Manning has developed several new applications for other automotive areas.

Technical Paper Division (TPD)

The Technical Papers Division of Lydall, Rochester, NH, has maintained its strength in the thermal barrier and filtration markets. This year it continued its cooperation with the Axohm Division. "We have reached a point where we are beginning to get commercial sales of our ASHRAE products," said Elliott Whitely, Technical Papers Division president. "We have been manufacturing certain of our air filtration products at Axohm for about a year and commercial success is becoming a reality." Mr. Whitely added that the next step with Axohm is to make some HEPA papers at the French facility.

In other areas, growth in the air bag market continues to benefit TPD. "Now that it is being mandated by government, we're seeing automobile companies embracing the idea of air bags," said Mr. Whitely.

Composites are another growth area at Lydall, where the company combines its materials with other Lydall materials as well as with materials from other companies. This is particularly prevalent in air and liquid filtration.

In the thermal barrier area, "Lytherm LDF" is being sold on a commercial basis. "We think this could be a big area for us," said Mr. Whitely, "and we continue to do further process development work to increase the family of products and temperature ranges of the product."

"We've been having a pretty good year," said Mr. Whitely. "We've had a good first half and we're expecting an even better second half," he said.

Westex Division

The Westex Division of Lydall, Hamptonville, NC, also continued very strongly in 1992, with sales increasing almost 20%. The company fared well on the strength of its thermal barrier and medical filter nonwovens.

In the medical area, Lydall Westex continued to concentrate on its leukocyte filter, developed last year. The filter, which incorporates technology and marketing from Westex with the process expertise of TPD, helps filter white blood cells from blood in transfusion applications. The company received a patent for the filter material in March, although Lydall Westex president Christopher Skomorowski reported that product approvals were moving slowly. "We have been working with device manufacturers both in the U.S. and Europe," said Mr. Skomorowski, "but we are still awaiting regulatory (FDA) approval."

Mr. Skomorowski commented, "The European market for leukocyte filtration is larger right now than the U.S. market and we can sell material while we are awaiting approval." He said that Westex has been supplying one European device manufacturer since February; the customer is selling into the Italian market and awaiting market approval in other areas.

In the thermal barrier area, Lydall Westex last year launched its insulated battery cover material; it has been selling the product to Ford Motor Company since last December. The car manufacturer a few months ago began recalling 1991 models of the Ford Explorer to retrofit it with the cover, adding significantly to Lydall Westex's business. "We have doubled capacity," said Mr. Skomorowski, "anticipating that the battery cover will be standard equipment on a number of new vehicles beginning with the 1995 models." The Westex Division also expects to receive Ford's Q1 supplier award this month.

The division made the decision not to add any needle-punching equipment, which it considered at one point, simply because it has optimized its current line and can now run the machinery more efficiently. It did however, order recycling equipment, which is expected to be delivered next month and on-line by November. "We will be able to recycle virtually all our edge trim, waste rolls and die cut waste from our fabricating division and put right back into the product," said Mr. Skomorowski about the new equipment.

In other news, Lydall Westex has expanded its R&D facility, adding 5000 sq. feet and three brand new laboratories. R&D makes up approximately 5% of total sales, although Mr. Skomorowski did say that most of this work is directed at specific customers and projects.

One area under consideration at Lydall Westex is air filtration, which it is just beginning to investigate. "We have a lot in the test stages," said Mr. Skomorowski, "although nothing is commercial at this time. We're hoping for something early next year, perhaps in conjunction with Manning [Nonwovens]."

Lydall, Inc. One Colonial Road, P.O. Box 151, Manchester, CT 06045-0151 203-646-1233; Fax: 203-646-4917

Worldwide Nonwovens Sales: $113 million

U.S. Nonwovens Sales: $86 million

Key Personnel: Leonard Jaskol, chairman and chief executive officer; John Hanley, vice president-finance, Alan Gnann, vice president-corporate development; Carole Butenas, vice president-communications, Mary Adamowicz, counsel and secretary

Manning Nonwovens Div. P.O. Box 328, Troy NY 12181 518-273-6320; Fax: 518-273-6361

Key Personnel: James Carolan, president; David Butler, director of manufacturing; Bryan Thomas, technical director; Arthur Kazanjian, comptroller; Ray Dugan, vice president-sales

Plant: Green Island, NY

Process: Wet laid

Brand Names: Cryotherm cryogenic insulation; Manniweb synthetic fiber nonwovens; Manniglas glass fiber nonwovens; Mannitherm thermally upgraded insulation; Ultradur high strength nonwoven substrates; Acupore battery separator materials; Voltex high temperature electrical insulation; Formoweb thermoformable nonwoven

Major Markets: Filtration, Flame and Thermal Barriers, Electrical Insulation, Structural and Composite Materials

Technical Papers Div. P.O. Box 1960, Chestnut Hill Rd., Rochester NH 03867 603-332-4600; Fax: 603-332-9602

Key Personnel: Ellioptt Whitely, president; Kevin Lynch, vice president-marketing; Norman Labrecque, comptroller; Lester Wilson, manufacturing manager

Plant: Rochester, NH

Process: Wet Laid

Brand Names: Lydair high efficiency air filtering media; Lypore industrial liquid filtering media; Lytherm high temperature insulation media; Actipure activated carbon purifying and filtering media; Technimat carbon fiber-based mats

Major Markets: Air and Liquid Filtration, High Temperature Insulation;, Advanced Composites

Westex Div. Brooks Crossroads, P.O. Box 109, Hamptonville, NC 27020 919-468-8522; Fax: 919-468-8555

Key Personnel: Chris Skomorowski, president, Ray Grupinski, manufacturing manager; Lisa Krallis-Nixon, medical marketing and manufacturing manger; Frank Burroughs, automotive marketing manager; Donna Gordin, comptroller; John Hiers, technical director

Plant: Hamptonville, NC

Process: Needlepunched

Brand Names: Lytherm thermal barrier materials; Lypore medical depth filtering media; Lyclad laminated nonwovens; Filtra gas and liquid filtration media

Major Markets: Thermal Barriers (intermediate range), Filtration--air, gas and liquid

Axohm Div. Saint Rivalain en Melrand, 56310 Melrand, France 33 97 28 5300; Fax: 33 97 39 5890

Key Personnel: Herve Nicolle, president and general manager; Bertrand Ploquin, comptroller; Steve Gerts, director-sales and marketing

Plant: Saint Rivalain en Melraznd, France

Process: Wet Laid

Major Market: Battery Separators
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Title Annotation:International Top 30
Publication:Nonwovens Industry
Date:Sep 1, 1993
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