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Two divisions driving success at Hoechst.

A strong U.S. subsidiary as well as a German operation that did well in a tough economy has kept Hoechst AG competitive at the ninth position among our Top Companies. Hoechst, which had 1992 sales of $203 million, consists of Hoechst AG in Frankfurt, Germany and Hoechst Celanese, Spartanburg, SC. Both operations are run completely separately, although worldwide research and development remains based in Germany.

At the German company, roofing remains its primary market, with more than 70% of sales at the company. This market has remained strong, primarily because of activity in the former East Germany, said Reinhard Groger, marketing director, spunbond. "Roofing presents a very diversified picture throughout Europe," he said. "While there is a demand for high quality roofing--there are a lot of leaky roofs--in countries such as Poland, Hungary and the former Yugoslavia, the money is not there. Other European countries, such as France, Italy, the Netherlands, Spain and Portugal, are experiencing a decrease in demand." Mr. Groger remained optimistic, however, saying he thought there would be another increase in demand in the next year, especially in the higher end arena where Hoechst's "Trevira" materials are targeted.

Hoechst has developed a new Trevira bicomponent product for the roofing industry. A binder-free roofing carrier, the material is a heterofil thermal bonded product. Production is at the company's Bobingen, Germany plant on a reconstructed line; other applications such as floorcovering and molded automotive carpets are also being considered for the product.

A second new product for the roofing market is a composite that incorporates a glass scrim in a polyester material. The product, which was commercialized late last year, provides greater dimensional stability, allowing for faster production as well as better waterproofing.

In general, R&D is continuing at Hoechst, with several new products in the works. "We are working on a new composite material for roofing," said Karl-Christian Zerfass, R&D director, spunbond, "although at this point it is too early to talk about." Hoechst is also intensifying its focus on lightweight spunbonds, said Mr. Zerfass.

In addition to the company's Bobingen plant, Hoechst also has a facility in Berlin, Germany, where two lines added in the past few years are running at or very close to capacity. The Berlin facility received ISO 9001 certification in January, 1993, while the Bobingen facility has been certified for two years.

Geotextiles represent the second largest market at Hoechst, with more than 10% of spunbonded sales. "Polyester is still an interesting raw material for this field," said Mr. Groger, "although competition from polypropylene is getting tougher." The geotextile market is growing at about 5-8% a year, said Mr. Groger.

In Bobingen, now that geotextile production was moved to Berlin last year, concentration has moved to specialty niche markets. These include floorcoverings, needlefelts, substrates for PVC coatings and laminated roofing. "There are all kinds of applications where the customer is looking for a unique product and uniformity of materials," said Mr. Groger. "We have reduced our number of applications and are concentrating on the most profitable ones to offer unique products," he said.

A concentration at Hoechst has been optimization and rationalization of existing capacity rather than the addition of more lines in Europe, said Mr. Groger. However, that does not rule out expansion in other areas of the world. "We have an ongoing project in discussion in the Far East," he said. "Here is a market where we must have local production if we want to be present in the market." Location of production has not yet been determined, but Mr. Groger said they are looking at all possibilities.

"These countries have leaky roofs, too," said Mr. Groger. "The countries are quickly industrializing and as buildings are constructed, roofs will have to be made to conform to international standards."

The German company had sales of $40 million in Europe. "Quantities are increasing but prices are dropping so turnover remains basically unchanged," said Mr. Groger, adding that, "We are fighting problems because of German exchange rate revaluation. Profitability has suffered strongly."

Ending on a more optimistic note, however, nonwovens are still a very interesting part of Hoechst Fibers' activities, said Mr. Zerfass. "We are optimistic about the future, there is room for growth at a moderate rate."

New Line, New Management At H-C

New at the U.S. division of Hoechst AG, Hoechst Celanese, Spartanburg, SC, is a new line coming onstream this fall and a new business director, who joined the Spunbond Unit in June. Beginning with the latter, Marvin Mitchell has taken over as head of the Spunbond Business Unit, replacing Paul Fischer who retired. The management change was effective June 1.

Mr. Mitchell has been with Hoechst Celanese in the fibers area and was previously the business unit manager of the company's Monofilament Business Unit, a title he still maintains. Mr. Mitchell talked about the direction of the Spunbond business. "The team is currently reevaluating our strategic initiatives," he said. "At the top of our list will be solidifying our position in the roofing reinforcement and geotextile segments, but other business areas are of interest." He did say that the company planned to remain in durable, rather than disposable, end use markets. The answer to this strategic evaluation will be determined in the next few months.

Perhaps part of the strategy for the future rides on the success of the company's new spunbonded line, which was expected to be up and running last month. "In a sense the strategic direction has to do with the new line," said Mr. Mitchell, "as it will give us much greater capabilities. The line," he said, "is state-of-the-art and gives us a great deal of flexibility. Although the line will concentrate on Hoechst Celanese's core markets of roofing reinforcement and geotextiles, "it will also help to position us in other industrial segments," said Mr. Mitchell. Hopefully by year end, according to Mr. Mitchell, the company will begin development work on new products.

Composites are one area of concentration when the subject of new products arises. "Composites will be supported by the line and we have some definite ideas of what we want to try," said John Underwood, market development manager. "We have not had the capability to manufacture these products with current capacity and we're cager to look at new markets and products once the line is onstream."

Roofing remains the company's largest market segment, making up 65% of total sales. Geotextiles makes up the majority of the rest of sales, although the company is also involved in other niche markets as well. Roofing has continued strong for Hoechst, marketing manager, roofing Dean Norman told NONWOVENS INDUSTRY. "We've introduced several new products and our particular market segment focus--modified bitumen roofing--has been the fastest growing area. Re-roofing has brought in the bulk of our business recently," he continued, "so even if new construction is low, our business has remained strong."

In geotextiles, the biggest growth has been in the waste management market, where geotextiles are becoming a key part of the construction. Mr. Mitchell reported that the market is expanding at a rapid rate.

Two other areas of development at Hoechst Celanese have been in pipe and tank lining material and in the transportation industry. In pipe linings, the company is working on a fabric for lining pipes or vessels carrying corrosive liquids. "We have had technical successes in this area," said Mr. Underwood.

In the transportation area, Hoechst Celanese is hard at work designing materials that can be recycled such as vehicle seats. "There's been a lot of pressure to do this," said Mr. Mitchell. "The emphasis is on recycling across all markets and people have started thinking along those lines. We are trying to consider this with any new or existing products, either in terms of recycling the end product or using recycled raw materials."

Across the board, lighter weight fabrics are also becoming an issue, as the environment again plays a role in influencing customer requirements. "More performance per weight is what is needed," explained Mr. Norman. "Customers are following a trend toward lighter weight but they still need the strength of the material." Here, he said, continuous filament products have a distinct advantage over staple fiber products.

Hoechst Celanese takes advantage of the fact that it belongs to a global company and Mr. Mitchell said that technology exchange is constant between the U.S. and Germany. While Hoechst Celanese concentrates on the Western hemisphere as its market--except in the composites segment where it is involved worldwide--it enjoys the benefits of research going on at Hoechst AG in Germ any. "Actually, most of the product development work for our new line was done in Germany," said Mr. Mitchell. "Although each division is responsible for its regional strategies and the day to day operations, we have worldwide strategic coordination with Hoechst AG," he said.

Hoechst Celanese is in the process of pursuing ISO certification and expects to achieve it in 1994, forecasting that its preliminary audit will be mid-year. "Getting certified is a byproduct of improving our process," said Mr. Underwood. "We see it as a way to better our business. It will be asked for at some point in the future; it helps in building confidence in our product and it will be worth it in the long run." Hoechst Celanese is also using a computer

integrated format for its certification process, which will greatly reduce product cycle time once the process is implemented.

Reflecting on the future of the business, Mr. Mitchell said, "It's surprising to see the growth still taking place in nonwovens. When we look at the future for nonwovens, we believe that growth will continue to be there." He referred to the environmental arena as an example. "When you work on integrating recycling into product development, there are so many areas that offer technology and market benefit. We will continue to see that with nonwovens in every aspect of the business," he said.
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Title Annotation:International Top 30
Publication:Nonwovens Industry
Date:Sep 1, 1993
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