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Molnlycke Absorbent Products Supply AB.

28 Molnlycke Absorbent Products Supply AB

S-435 81 Molnlycke Sweden (46)31 37 83 00; Fax (46)31 88 58 12

Worldwide Nonwovens Sales $50-55 million Key Personnel: Jan Lemmon, material administration (Holland); Fred Graf, vice president-purchasing Plants: Hoogezand, Holland; Molnlycke, Sweden Processes: Dry Laid, Thermal Bonded, Print Bonded, Coextruded Polyethylene Film Major Markets: Disposable Personal Hygiene Coverstock, Medical Drapes, Gowns, Sheets, Bibs, Wipes Notes: The internalization of the formerly pan-European nonwovens business of Molnlycke is now basically complete, with 100% of its nonwoven and film production now consumed by the gigantic appetite of its Molnlycke parent company's consumer disposables operations.

A reorganization that took affect Jan. 1 followed the obvious route of this turning inward by placing the nonwovens roll goods operations as part of the Absorbent Products Supply unit, consisting of 16 factories scattered around Europe; the unit is actually the consolidation of the former Molnlycke Consumer, Ancilla, Peaudouce and Molnlycke Health Care businesses.

In a prelude to this year's organizational moves, in 1990 Molnlycke began consolidating all of its nonwovens production into its Hoogezand, Holland facility. Now all thermal bonded coverstock operations are centered in Holland, having moved from Molnlycke Sweden in the past year. All thermal bonded nonwoven output is for internal use. The company's resin bonded capacity remained in Sweden under the control of the Clinical Products Group.

Fred Graf, vice president-purchasing, told NONWOVENS INDUSTRY that this process has been complete for some time and the group is really starting to experience the benefits of it, primarily in the form of 10-15% increased capacity through process improvements. "The move to Holland was a positive," he said. "Today we are producing a bit more than we did earlier." Molnlycke Consumer Products continues to buy substantial amounts of nonwoven coverstock on the open market, but all indications are it will continue to control a portion of its own production. The reasons for that, according to Mr. Graf, are many.

"In order to have production of your own, you have to have the best quality and the cost of producing it must not be higher than what you can go out and buy it for," Mr. Graf said. The absorbent products supply side of Molnlycke has thus far been able to do just that.

Much like its American counterpart Kimberly-Clark, the success of the nonwovens business at an internal supplier such as Molnlycke is tied very closely to the performance of the parent's consumer operations. In a volatile European market, that can be risky business for a captive supplier. But, so far, it has not affected the nonwovens operations.

"Sure, we can see overcapacity in Europe," Mr. Graf said, pointing out that because of it there are no capacity expansions planned at Molnlycke for the foreseeable future. But Molnlycke reported a sales increase of 16-17% in the first four months of 1991 from 1990 figures and it has taken back its disposable diaper market leadership position in Sweden, as well as maintaining its market lead in incontinence and strong position in feminine hygiene, so the situation for nonwovens supply has remained stable.

Molnlycke also produces its own polyethylene film in Hoogezand, as well as at the Peaudouce operations in St. Ouen, France. Together they produce approximately 15,000 tons a year for in-house consumption, again, only a portion of the demand from Molnlycke but enough to give the parent a modicum of control over its supply situation.

"Even though our nonwovens unit is only a minor part of the total product, it does allow us to organize a very stable situation for our consumer production," he said. "Production is very much integrated into the total (Molnlycke) factory in Hoogezand. But the nonwovens business is very much integrated into the material supply units. It used to be a profit center of its own, but now we are able to just concentrate on supplying the Molnlycke core fluff business."

The far reaching Molnlycke empire is an international concern with focus in the hygiene sector. Fiber-based products such as baby diapers, incontinence products and tissue paper accounted for about 75% of its corporate turnover of 11.8 billion Swedish kronor last year. Sales at the corporate level rose 9% in 1990.

The group's strategy in recent years has focused on growth within the fluff products sector of baby diapers, adult incontinence products and feminine hygiene; it holds the distinction of being the largest producer of these products in Europe. During the past decade sales rose by an annual average of 20%. Much of the growth is attributed to expansions, such as the acquisition of the Ancilla incontinence products company in The Netherlands in 1987, Peaudouce in France and the U.K. in 1988 and Sancella, a Canadian producer of incontinence products, in 1989.

Molnlycke's operations have gradually become more international and, in 1990, about 20% of sales were to the Swedish market, 20% to the other Nordic countries and the remaining 60% to other European markets.
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Title Annotation:nonwoven fabrics business
Publication:Nonwovens Industry
Article Type:company profile
Date:Sep 1, 1991
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