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Nonwovens as construction fabrics in upholstered furniture and bedding: an update.

The domestic market for nonwoven fabrics used for internal construction applications in upholstered furniture and bedding is a large, mature business with unit volume growth forecast at 4-5% for 1993. This forecast presents a significant increase over the essentially net zero growth years of 1990-1992. In spite of declining discretionary consumer income, industry experts are expecting significant growth in the 1990's because the baby boomer generation is reaching the historically prime age for the purchase of furniture and home furnishings. Assuming these prognosticators are correct, the total volume of nonwovens consumed in the domestic market for these applications in 1998 is estimated to be 250 million and 350 million sq. yards a year for furniture and bedding respectively.

Nonwovens are primarily used as internal construction fabrics in the arms/backs, as spring insulators, dust covers, pull strips, cushion/pillow tickings and skirt liners/inserts of upholstered furniture. Wovens and knits dominate the outer ticking and decking applications. In bedding, nonwovens are used as spring insulators, spring wrap, flanging, dust covers and quilt backings. Stitchbonded, needlepunched and spunbonded nonwovens are also used in a limited way as the outer tickings for low-end mattresses and foundations.

The large number of customers (2500) and their requirements for timely delivery of a variety of widths, configurations and put-ups in relatively small quantities requires selling through converters/distributors who have strategically located warehouses in areas of manufacturing concentration.

Hanes Converting Company and VWR Textiles & Supplies Division of Momentum Distribution Company continue to be the primary distributors because of their strong national warehousing and sales covering (Editor's Note: At press time Hanes Converting had entered into an agreement to purchase VWR Textiles, although the sale has not yet been finalized). Foothills Division of Hickory Springs Manufacturing Company also covers most of the market areas while Yarborough, Inc. is basically a regional distributor (i.e., Pacific Upholstery Supply Company, Olympic Products, etc.) that services specific areas.

These converter/distributors usually have contractual arrangements with the major nonwovens manufacturers who supply their market. Reemay, Kimberly-Clark, Fiberweb North America, Amoco, Phillips and Spartan are primary suppliers, with Poly-Bond, American Nonwovens, Freudenberg Spunweb, Atlas and numerous others as secondary suppliers.

Historically, much of the market for internal construction fabrics was converted from wovens to nonwovens using off-quality spunbonded and needlepunched fabrics, primarily produced by DuPont ("Reemay" & "Typar"), Kimberly-Clark ("Evolution" and "Accord"), Crown-Zellerbach "Celestra") and Phillips ("Duon"). Because of the large quantities of off-grade nonwovens sold to the converter/distributors by most of the producers, much of its value was passed on to the furniture and bedding manufacturers.

In recent years, however, quality programs and improved inventory control procedures of the nonwoven produces have reduced the quantity of off-quality goods sold to 20-25% of the total vs. 70-75% in the early 1980's.

Consequently, both new and existing nonwovens producers frequently sell incrementally priced goods at contribution margins below full costs. In spite of these extremely thin margins the nonwoven producers view the market strategically important as a "ballast" for excess capacity created by capital investment and/or shifting markets.

This "dumping" mentality by both domestic producers and imports, and the need to sell volume, continues to pressure the margins of the converters/distributors who report their selling process of commodity items (i.e., 1.25 ounces/sq. yard spunbonded polypropylene) have eroded by 15-20% over the past several years; this is expected to continue. The scenario has forced the major converter/distributors to direct their resources to developing businesses outside their core furniture and bedding construction fabric markets.

Hanes Converting and VWR reportedly have achieved considerable success in obtaining ancillary business over the past several years. Astute nonwoven producers have recognized this situation as an opportunity to expand their penetration into other fragmented markets using the strong national coverage developed by these distributors. In addition to the major challenge of achieving acceptable margins in a large, low technology business, several other industry issues are being followed closely.

Adoption of NAFTA within the next several years may result in domestic furniture manufacturers moving labor intensive operations to Mexico along the U.S. border with reasonable proximity to large consumer markets (i.e., southern California and Texas). This could provide an incentive for the converter/distributors to expand their sales/warehousing coverage to service both these and Mexican manufacturers.

Also, the use of "fire blocking" materials (i.e., woven fiberglass, FR knits, etc.) for contract furniture sold into California, Minnesota and Boston continues to expand slowly. Many industry experts believe that additional states will adopt the Cal 133 or similar flammability requirements for contract furniture over the next five years. This trend offers nonwoven producers an opportunity to develop construction fabrics with sufficient FR characteristics to meet these standards.

Finally, some nonwoven manufacturers continue to modify and develop fabrics with sufficient performance, aesthetic and cost characteristics to replace woven decking and outer tickings in low-end furniture and bedding products. Substitution has been extremely slow because of style orientation and the overcoming of traditional perceptions by the furniture manufacturers that consumers will demand a woven appearance.

In summary, the static market characteristics of this large volume, low-margin market are unlikely to change in any significant manner over the next several years, which will adversely impact nonwoven producers. Both producers and converter/distributors need to extract the demonstrated performance value of nonwovens by adopting value pricing where possible on existing and, most certainly, new product offerings.
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Author:Banks, Charles
Publication:Nonwovens Industry
Date:Aug 1, 1993
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