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Review & forecast of the nonwovens industry.

Turbulence and chaos. Optimism tinged with caution. Criticism of government and "the system." Environmental actions and reactions. Favorable forecasts in recessionary times.

These are just a few of the issues and descriptions that characterized the comments of the top nonwovens industry executives in our annual "Review and Forecast" article this year. The economy was by far the focus of the majority of comments from the nonwovens leaders and the opinions were diverse. While industry executives spoke of an impending recovery and generally offered an optimistic forecast, many also said that 1992 had not rebounded to the level expected and that 1993 was likely to continue as an average year, with low growth percentages and mediocre sales.

Companies also discussed their individual achievements, however, and these reflected much more optimistic opinions. While the economy in general proved less than rosy, nonwovens manufacturers are doing better than average by relying on the diversity of their businesses to keep them afloat in the turbulent economic waves. Nonwovens manufacturers and suppliers are also relying on research and development and cost competitiveness to bring them through the economic recovery and help them retain--or regain--profitability.

The impact of the environment and the changing government and world situation were also issues that were addressed, as companies remained focused on the future and how it will be affected by changes in the present. Overall, opinions were varied and manufacturers in different nonwovens segments were obviously affected differently.

Without further ado, here's what the nonwovens industry executives had to say about yesterday, today and tomorrow:

Lee Sullivan, president and CEO, Freudenberg Spunweb, Durham, NC

Mr. Sullivan saw last year as the year the recovery began. "We have seen a general increase in economic activity, but not yet the robust growth that would signify a true recovery," he said. "We expect 1993 to be the true recovery year."

In describing the environmental and waste concerns facing the industry, Mr. Sullivan noted that there has been an increased emphasis on recycling and source reduction in both the areas of process waste and eventually in the reclaiming of durable goods at the end of their life cycle. Mr. Sullivan also offered a double edged forecast for the automotive industry. "There is now, and will remain in the future, immense pressure for cost savings. We see a continued reduction of the automotive supplier base and reduced operating margins for the survivors. However, the survivors will enjoy greater total volume."

Jeffrey Templar, president, Freudenberg Nonwovens, Chelmsford, MA

According to Mr. Templar, "1992 was another year of continuing and accelerating improvement for the nonwovens industry, as it was for many other sectors of American manufacturing. More efficiency, just-in-time, better yields, lower overheads, less inventory, ISO 9000, employee training and team management are just a few of the mantras that were invoked to make ourselves competitive with producers from any part of the world," he commented. "For many of us, the impact of these changes is tangible and exciting."

Looking ahead, however, Mr. Templar was less enthusiastic. "One has to wonder if we are all swimming against a tide of government inaction and mismanagement," he said. "No matter how hard the private sector works toward quality and productivity, can we succeed within a political and economic context of crushing political debt and unavailability of capital for either infrastructure or productive capacity?" questioned Mr. Templar. "Can we train our employees well enough to overcome the deficit of the American educational system? I hope so," he answered. "I know we'll all try."

Taiji Mukaiyama, general manager-Spunbond division, Asahi Chemical, Osaka, Japan

Mr. Mukaiyama commented that 1992 was a tough year despite steady business in the hygiene products and household goods market. "This was due primarily to the recession in the automotive, construction and housing markets," said Mr. Mukaiyama. "For 1993, we are not optimistic, but owing to our R&D effort for new products and new applications, we estimate better results."

Stephen Foss, president, Foss Manufacturing, Hampton, NH

In forecasting for 1993, Mr. Foss predicted that the slow economic action will continue. "We believe that 1993 will continue to be a relatively flat year for existing products and that success will be gained from the marketing of new products and penetration into new markets. Price pressure will be stronger than ever, but sophisticated customers will be working with their suppliers on a value engineered approach. We will be continually looking at products to improve their value while reducing their cost."

Summarizing his comments, Mr. Foss outlined the company's plans to become even more competitive. "We will continue our firm commitment to continuous improvement in order to drive down our cost and be a stronger competitor in the marketplace."

Len Jaskol, chairman and CEO, Lydall, Inc., Manchester, CT

Mr. Jaskol began his comments by addressing the economy as a whole.

"The recent elections will not bring about any substantial change in the economy. The economic cycle will right itself in its own time," he said. "I think we'll see some improvement next year, but it will be slow--probably at the same pace we saw at the beginning of 1992." In reviewing the past year, Mr. Jaskol commented on the unsteady nature of the economy. "It seemed we were coming out of the recession earlier this year; then in July, things just seemed to slow and move backward a bit."

Commenting more specifically on business at Lydall, Inc. and the company's performance, Mr. Jaskol continued, "Lydall has done very well in this difficult economy. We've increased sales and earnings and strengthened our balance sheet. We've managed our costs and gained marketshare through our quality programs, new products and aggressive marketing."

In conclusion, Mr. Jaskol highlighted his optimistic outlook for Lydall, and for all other nonwovens companies, in the next several years. "I'm certainly not pessimistic. I just think we are back into this economic rut and nonwovens companies, like all businesses, will need to help themselves and not rely on the economy to improve their performance."

Ted Kelly, vice president-marketing, Phillips Fibers, Greenville, SC

Mr. Kelly offered encouraging reviews for most of the different business areas at Phillips Fibers. "1992 has been a good year for the needlepunch nonwovens business at Phillips Fibers, primarily because we are involved in diverse markets with a variety of products." There is also a continuing strong emphasis on quality for both fibers and fabrics at the company. "Being awarded the Ford Q-1 quality supplier status for the company's nonwovens plant is evidence of the company meeting these challenges."

One area that was hit by the recession, said Mr. Kelly, was the specialty fiber business. "Primarily oriented towards bag-house filtration, our specialty fiber business was impacted by the world recession and low natural gas pricing in 1992, but we anticipate a rebound next year."

Looking to next year, Mr. Kelly offered an optimistic view. "1993 will present opportunities to grow our business despite the ever increasing competitive scenario in these markets (needlepunching, spunbonded, etc.)."

Roger Fehrman, president, Fiberweb North America, Simpsonville, SC

Mr. Fehrman saw a year of rapid expansion for his company, despite continued flatness in certain key durables markets. "Fiberweb was able to solidify and grow the base business while funding substantial new projects, including major new capacity in spunbondeds, investment in a new composite barrier fabric line and the acquisition of a unique, patented technology for superabsorbent fibers."

Fiberweb also launched two new products in 1992: "Securon" composite fabric for barrier applications and "Spectralon," which is the industry's only line of colored nylon fabrics, positioned to compete with woven nylon in select markets.

Mr. Fehrman forecasts a positive outlook for the nonwovens industry for 1993 and the years ahead. "The nonwovens industry should ultimately realize a dual benefit from the economic recovery: a resurgence in the durables markets that have historically been strong for nonwovens and an incremental conversion from woven and other high cost materials for profit recovery in the aftermath of the recession."

Frank Andrusco, vice president & general manager, Amaco Fabrics and Fibers, Atlanta, GA

A major emphasis at Amoco in the past year has been in developing several new nonwoven roll good products for new and existing applications, explained Mr. Andrusco, referring specifically to the company's "RFX" and "CLAF" fabrics. "The versatility of these nonwovens permits us to custom design the product to meet customer needs," he said. "We expect both of these fabrics to have large growth potential."

Peter Kociemba, managing director, Corovin, Peine, Germany

"People say that the Chinese have the same sign for crises and chances," said Mr. Kociemba. "If I look back, we have to consider the past year also under these two aspects. The first half-year of 1992 tended to be a crisis due to the problems in start-up of our new line, which incorporates our own multidenier technology. The second half-year was much better and now we are very happy with our new plant."

Mr. Kociemba predicted an increase in sales despite these problems. "We could manage to increase our turnover by roughly 30%," he said; "this reflects the growing demand for spunbondeds in Europe in 1992. We at Corovin are very optimistic that nonwovens will continue playing a dominant role in the industry. However," he cautioned, "the trend of requirements is changing from |simple' nonwovens to composite structures. This will lead to a further increase in investment activities; especially at the very end, the concentration process among the nonwoven producers will continue."

Siegfried Wittauer, vice president and general manager, Du Pont Nonwovens, Wilmington, DE

The thrust towards globalization was the focus at Du Pont in 1992, according to Mr. Wittauer. "Our business grew better than 10% through strong progress in both |Tyvek' and |Sontara' in Europe and in the Asia-Pacific region," he said. "The most traumatic event was the temporary collapse of the European currency snake, which reinforced our convictions and will increase our efforts around currency-sheltered global positioning. Careful analysis of the situation in Eastern Europe suggests getting ready but still holding off with investments in plants and equipment," Mr. Wittauer continued.

"The introduction of our |Criticlean' Sontara based wipe program, a breakthrough with Tyvek in the U.S. promotional apparel market and the introduction of our post consumer waste recycle product line in high strength envelopes and packaging," he concluded, "were our product introduction highlights."

Shozo Iwakuma, president, Japan Vilene, Tokyo, Japan

Mr. Iwakuma described 1992 as a difficult year for the business. "Many of the companies are now compelled to review their business strategy and structure, and even their corporate philosophy, to cope with the big social and economic changes," he said.

He continued on an optimistic note, however. "We take these difficulties as a chance to improve the total productivity of our company," he said. "As a nonwovens manufacturer we have strengthened our confidence in the potential of nonwovens as a product capable of offering advantages and new opportunities to our customers who are endeavoring to improve their productivity and who are trying to offer higher functioned products." He concluded, "Nonwovens can be designed and tailored to match any requirements!"

Perk Foster, president, Foster Needle, Manitowoc, WI

"At the date of writing this the presidential election is still one week away," commented Mr. Foster. "Yet despite all the rhetoric and gloom being offered by the Clinton campaign, we will be enjoying a much improved economy in 1993 no matter who is elected on November 3rd. Inflation is extremely low, interest rates are at low levels that we have not seen since the 1950's and our balance of trade has improved by about $100 billion during the first term of Mr. Bush. The stage is set and 1993 will give us an improved U.S. economy no matter who fills the Oval Office."

Mr. Foster added that his forecast can be seen in the needlepunching sector of the nonwovens industry as the automotive industry gears up for an improvement that is already beginning and new housing starts continue their recent upward trend. "The other large application of needlepunched nonwovens, geotextiles, never really slowed at all in 1992," said Mr. Foster, "and looks even better in the future if all the infrastructure spending becomes a reality."

John Green, director-specialty markets, Oliver Products, Grand Rapids, MI

An extremely interesting year was how Mr. Green characterized 1992 at Oliver Products. "We attended the TAPPI nonwovens conference, the INDA-TEC conference and the IDEA show, we developed many new products and customers and located some excellent industry contacts and we've added several people to our organization," said Mr. Green. "We continue to uncover opportunities worldwide for our technical capabilities."

Concentrating on expansion, Oliver has added resources in the Far East, said Mr. Green, as well as expanding its European business. "We are also looking at the Mexican and South American markets for expansion as the free trade agreement takes effect. We will have completed our new 60" wide coating line by year end, which will give us increased coating capacity as well as new capabilities in laminating structures. Finally," added Mr. Green, "our Medical and Specialty businesses continue to grow at a fast pace and our challenge will be to locate good people to manage these growth businesses in 1993 and beyond."

Gleen Morton, director-product and process research, Cotton, Inc., Raleigh, NC

"The consumer driven textile business continues to use increased amounts of cotton," said Mr. Morton, "and recent consumer studies show that a similar trend exists for cotton in nonwoven personal care products. This trend is most pronounced in Japan, where considerable increases in spunlaced cotton production are being realized." He continued, "Advanced technology in bleached fiber processing, recently introduced by Cotton, Inc., should make cotton more attractive for roll goods manufacturers in meeting this current need. Cotton production reached a record high in 1991-92," he added, "and forecasts are again strong for the current crop year."

Frank Wiesner, president, Webex, Neenah, WI

Mr. Wiesner reports that 1992 was an unpredictable year for his company. "It was turbulent and chaotic--much like the world situation," said Mr. Wiesner. "In total, business has been fairly good, up from last year, but demand for precision rollers and custom machinery has been impossible to forecast."

In reviewing the roller coaster year, Mr. Wiesner described the 1992 business environment as having been the most difficult in history. In predicting for the future, he believes that the difficulties will continue, moderated by a general upturn. "The wild swings in demand will continue to test our flexibility and responsiveness," he concluded. "JIT capital expenditures is a concept that is changing the face of our industry."

Randy Schaaf, president, UltraCare Products, Marion, Oh

The past year was another exciting one for the diaper industry, both domestically and in international markets, said Mr. Schaaf. "In the U.S., the |all other' category including regional brands, control brands and private label, increased its sales significantly," he said. "This resulted from a narrowing of the product feature difference between the national brands and the |all other' category. In line with this trend, sales of |Cozies' diapers and baby wipes experienced significant growth. Internationally, P&G continues to move very aggressively with its effort to make |Pampers' the number one diaper brand worldwide.

"The new year brings with it the advent of yet another diaper development--superthin diapers," continued Mr. Schaaf. "The level of acceptance and performance of these new products will be closely watched by diaper producers worldwide." (Editor's Note: For additional information on UltraCare, see Top of the News, page 8.)

Robert Bayer, president, American Threshold Industries, Enka, NC

"American Threshold Industries experienced record growth in 1992, particularly in the healthcare segment of our business," commented Mr. Bayer. "We again concentrated on developing innovative products for niche markets," he said, adding, "We have concentrated on the further development of fully automated converting equipment to manufacture our "Made in USA" products on a competitive basis, rather than creating off-shore operations." For the future, Mr. Bayer said, "We will look toward further growth in 1993, with globalization as a key factor."

G. Graham Allen, professor, University of Washington, Seattle, WA

"During 1992 increasing attention was paid to microscopy as a design property for nonwovens, particularly by Japanese companies who continued to promote new microporous fibers," commented Mr. Allan. "International recognition of the microporosity of never-dried wood pulp fibers as a micropackaging system for nonwovens was also achieved. In 1993," he continued, "the introduction into nonwovens of environmentally degradable plastics based on carbon monoxide-olefin copolymers will probably begin."

The Consultants Comment..

Predictions On The Nonwovens Industry From The Consultant's Perspective

Mr. Rewald painted an optimistic view of a Brazilian nonwovens industry that has grown despite outside influences. "In spite of the recession and economic and political factors during 1992, the Brazilian nonwovens industry has grown internally through new investments in spunbonding, carded thermal bonding and needlepunching lines that increase productivity and quality," he said. "In the Brazilian diaper battle, imports have increased their marketshare, reaching almost 30%."

Looking ahead, Mr. Rewald predicted hope for significant improvement in partnerships among nonwovens manufacturers, raw materials suppliers and converters to reduce material costs and improve sales growth. Also, "another focus in 1993 will be the appearance of new industries entering the nonwovens business as well as the appearance of new technologies not yet in Brazil," said Mr. Rewald. In conclusion, said Mr. Rewald, "1992 has not been so bad after all and 1993 will be better."

Gunnar Nordgren, president, Gunnar Nordgren Consulting,

Mr. Nordgren discussed the impact of increased economic interdependence between nations, which he believed was clearly shown in the last year. "The monetary instability may continue for some time, causing us extra problems," he said. "Looking at the |real' economy, the sustained success of our industry will rest on continuous innovation, which involves continual small improvements in both products and processes, rather than a few major technological advances."

He continued, "This in turn will require that R&D and manufacturing work in closer cooperation. To achieve this, we must play down hierarchy and internal politicking. The emphasis should be on getting things done rather than following the system."

Wells Shoemaker, president, Filterex, Shippensburg, PA

The evolution of filtration was the topic of Mr. Shoemaker's comments. "Filtration applications for nonwovens have progressed through the many stages of life," he began. "Originally they were orphans--if you couldn't find any other use for the nonwoven then try it out for filtering. Or if you had excess capacity, just go out and sell what you have to somebody who can't tell the difference."

He continued, "Gradually the perfection of novel techniques such as spunbonding and melt blowing emerged into adolescence and producers discovered that they could design new nonwovens just for the filtration market--and make money. But after a while," said Mr. Shoemaker, "all the competitors could do the same, only cheaper. Maturity came upon the industry as the glamour disappeared, excitement waned and price warfare became the norm--just like all the other applications.

"Now in middle age, filtration in nonwovens has become a commodity item for many purposes and 1993 is not apt to see any major breakthroughs in product improvement," he said. "The people who buy nonwovens for their cartridges and bags feel that they have seen them all. For the truly novel makers, however, there is always the hope that some new technique will arise ... something unique, something valuable, something needed. That anticipation will be enough to keep the trade from slipping too far into middle age," he concluded.

Colin White, chief executive, MCW Technologies, Brampton, U.K.

Mr. White paints an optimistic picture for the European nonwovens sector, despite the recession. "Although the general world economy has been in varying degrees of recession for the best part of two years, the European sector of the global nonwovens business has held up well with increased volume growth throughout the period," said Mr. White. His optimism is not, however, without reservations. "Whether this increased volume has produced increased profit growth is not so easy to determine and there is a danger that the industry will produce more and more meters of nonwoven fabric but less and less money," Mr. White said.

For 1993, Mr. White outlined two major factors that could impact the European nonwovens industry--the European Commission legislation to control waste and environmental pollution and the continuing effects of the recession and the resulting moves towards larger business groups. "New ownerships and new associations of companies could be a sign of rationalization, but it could also restrict the entrepreneurial growth seen in earlier days," he commented. "Whether these actions are good in the mid to longer term for the nonwovens industry is less clear." Mr. White also noted that at present, the European market still has more than 25% of its output concentrated in the coverstock sector and that events in 1992 have shown this concentration of product is vulnerable to consumer shifts in demand.
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Title Annotation:nonwoven fabrics industry officials review 1992 and predict industry future for 1993; includes related article with consultant comments
Publication:Nonwovens Industry
Date:Dec 1, 1992
Words:3476
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