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The top companies in the worldwide nonwovens industry.

Our seventh annual survey profiles 31 major producers of nonwoven roll goods; this year producers are looking internally for sales and capacity growth, while flexibility and management reorganization are major themes in a tough economy

So say the executives in the nonwovens industry for the year 1991. While most reported a difficult year, the overwhelming majority felt their businesses were not unduly impacted by the recession. Yes, times were tough and the economy certainly did not yield sales growth to the degree companies have achieved in the past, but as a whole the nonwovens industry fared well in a weak economy.

For nonwovens, 1991 emerged as a year for rebuilding and fine tuning. Influenced in part by the economy and in part by the mayhem of the late 1980's where mergers and acquisitions were the order of the day, joint ventures and capacity expansions continued at breakneck speed and globalization was the ultimate buzzword, the early 1990's have settled down somewhat as companies reassess what they have and where it can take them.

In conjunction with that, restructuring of management was also the order of the day in the last year. Company reorganizations and management shuffling took place in at least one third of the companies another indication of the need to streamline the organization in a poor economy

Globalization did continue to be a key word, although most companies are already positioned in key European and Far East markets. Eastern Europe is emerging as an area to monitor, but short term, no major producers are doing work there. Likewise, Latin America - Mexico in particular - is also a growing market, but the infrastructure needs work before real growth can continue.

The 1991 Issues: Flexibility

And Positioning

Two words - flexibility and positioning - emerged as the main concentrations of the nonwoven roll goods industry heading into the 1990's. As the industry transcends the "globalization" era, more internal areas become the focus.

The flexibility factor takes many forms within an organization. As the world market becomes a true global marketplace and companies in Chelmsford, MA compete with local manufacturing in Malaysia, flexibility to respond on a timely basis to customer needs is crucial. The "positioning" of a company, in terms of product availability, customer service and just-in-time delivery, is playing a major role in plans for the future. Companies are restructuring management to eliminate layers, bringing important decision-making lower in the organization and shortening response time.

Restructuring is also occurring at the product or market level, with many companies moving towards strategic business unit formats where each specific product area has its own unit comprised of marketing, R&D and manufacturing personnel. This organizational streamlining should lead to a smoother flow of product and a more efficient, leaner operation.

Along those same lines, streamlining of production capability has also been a focus. Optimizing current capacity and modernizing technologies - rather than major capacity expansions - was a theme for 1991. Automation and statistical process control systems continue to abound and quality improvement systems have been instituted at just about every nonwovens company throughout the world. As ISO certification rapidly becomes the standard in the industry, almost all the companies included in our survey have been certified or are in the process of becoming certified.

Flexibility also applies to market involvement, where the diversity of the top roll goods producers allowed them to concentrate on a myriad of markets, a fact that helped pull them through the recession with a minimum of adverse affect. The flexibility to be able to production from a recession-plagued product to another higher value-added material has certainly helped the nonwovens industry in the past year.

On a more positive note, an almost unanimous majority of companies reported stronger sales for 1992 and also said that the recovery - although occurring at a slow and steady pace - was definitely on the way.

Positioning also refers to the geographical as well as marketing map. While most companies are where they have to be for the upcoming EC common market and many have concentrated for years on developing Far Eastern markets, the fall of the Berlin Wall and the Iron Curtain and the development of Latin America have made these market areas new possibilities for growth in the next few years.

Eastern Europe, especially the former East German is an area being closely monitored b roll goods producers, but the general feeling is that the market will take some time to rebuild before nonwoven "convenience" products will be accepted. Areas such as geotextiles and construction fabrics definitely have more potential, as much of the current infrastructure must be rebuilt.

Likewise, Latin America, in particular Mexico, is another growth area for nonwovens. As the North American Free Trade Agreement becomes reality and the Mexican government concentrates on improving standards, the potential for this area continues to grow. As with Eastern Europe, however, there is much work to be done before nonwovens are widely accepted.

The 1991 Companies: The Numbers

In terms of numbers (and "positioning" within the Top 30), Europe gains the most in this year's survey, as the total number of European companies in the Top Companies jumps from 10 to 12 with the addition of Austrian needlepuncher Polyfelt and industrial nonwovens producer Fibertex, Aalborg, Denmark. Europe also maintains its hold - with Freudenberg, Fiberweb and Hoechst - on three spots in the Top Ten.

The U.S. companies, while still maintaining their dominant role and holding six of the top ten places in the survey, number only 14 companies in the overall survey, as recession-plagued needlepunchers National Felt and Troy Mills drop from the bottom of the list.

The Japanese nonwovens industry holds steady with five companies in the Top 30 and one, Japan Vilene, in the Top 10. Japanese manufacturer Asahi also makes the biggest leap in the survey, from number 15 to number 12 on the strength of more than 15% sales growth.

The worldwide nonwoven fabrics industry, according to consultant John R. Starr, Inc., Osterville, MA, was between $6-7 billion in 1991 with production in excess of 3.5 billion pounds. The top 30 (31 actually, as the last two companies tie for the 30th position) companies make up more than 90% of this figure and continue as the driving forces in the industry.

Within the Top 30 companies, the Top 10 made up 67% of that figure, or between 55-60% of the worldwide total. The 14 U.S. companies accounted for $2.77 billion in 1991 sales, or 50% of the total Top 30 sales figure. The European companies accounted for 39% at $2.15 billion and the Japanese companies maintained 11% of total Top Companies sales at $605.5 million.

Once again, sales figures are for 1991 and were either provided by the companies themselves or - in the case of several companies such as Kimberly - Clark, Johnson & Johnson Advanced Materials Company, Phillips Fibers and Molnlycke - are estimates based on industry information and the aid of consultants.

International sales figures, where given in local currency, have been translated into U.S. dollars at the average 1991 exchange rate as reported by the Federal Reserve. As is the case each year, currency fluctuations may make company sales appear to have increased or decreased to a greater degree than is actually the case; however, this is necessary because this is an international ranking and analyzing current exchange rate and dollar value information may present a clearer picture.

Also, it has become our policy to update the rankings and information as more accurate information becomes available, which may lead to changes in company sales figures and information.

Finally, the figures are the best representation of "roll goods only" figures from the companies; however, in some cases a small amount of converted goods may also be included.
 (millions of dollars, 1991 sales)
Du Pont $665
Kimberly-Clark $357
Veratec $330
Dexter $255
J&J AMC $242
Reemay $185
Scott $130
Phillips $120
Lydall $100
Dominion Textile $92
 (millions of dollars, 1991 sales)
Freudenberg (Germany) $1.054
Fiberweb (Switzerland) $220
Hoechst (Germany) $170
Akzo Industrial (Holland) $125
Lantor Group (Holland) $120
Polyfelt (Austria) $110
Sandler (Germany) $79.5
Corovin (Germany) 60
J.W. Suominen (Finland) $59
Molnlycke (Sweden) $55
 (millions of dollars, 1991 sales)
Japan Vilene $212
Asahi $128.5
Toyobo $119
Unitika $74
Kuraray $72
COPYRIGHT 1992 Rodman Publications, Inc.
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
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Author:Noonan, Ellen
Publication:Nonwovens Industry
Article Type:Industry Overview
Date:Sep 1, 1992
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