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Nonwovens/​Converting

Mixed year for Fibertex nonwoven companies

Construction and automotive applications bounced back, as the Asian market for absorbent hygiene got tough.

20th March 2024

Innovation in Textiles
 |  Denmark

Medical/Hygiene, Industrial

Fibertex Nonwovens and Fibertex Personal Care, both members of the Danish conglomerate Schouw & Co., reported mixed results for 2023, reflecting the differing fortunes in specific markets for nonwoven fabrics last year.

Reporting a strong performance, Fibertex Nonwovens has just started up the first of two planned new spunlace production lines at its plant in Greenville, South Carolina, with a second line to be installed in Europe at a later date.

The company’s sales for 2023 were DKK 2.158 million, a 5% improvement from DKK 2.060 million in 2022 and EBITDA was DKK 169 million, up from DKK 111 million.

Sales were driven by increased deliveries to the European construction industry combined with enhanced sales of wipes and similar products in the USA. The automotive industry also regained some of its growth momentum late in 2023, the company reports.

 The revenue improvement was also the result of an increase in volumes sold, which more than offset the effects of reduced selling prices as a result of the lower prices of raw materials.

Fibertex Nonwovens believes it has the right technology and a promising pipeline and is therefore well positioned. Its short-term goal for 2024 is to build volume while securing sustainable earnings power, to be in a position to implement plans for the coming years and capitalise on the full potential of the capacity-expansion investments made.

The company expects to generate full-year 2024 sales of DKK 2.3-2.5 billion and EBITDA in the range of DKK 200-240 million.

AHPs decline

Fibertex Personal Care, the Danish headquartered manufacturer of nonwovens for absorbent hygiene products (AHPs), meanwhile experienced an anticipated 2023 fall in revenues due to lower volume sales and a very competitive market environment in Asia.

The company managed, however, to keep its earnings before tax in line with 2022 levels due to lower production costs, stronger print operations and lower energy prices. Business activity is expected to further soften in 2024 and the company has reduced its sales and earnings forecast for this year.

Full-year 2023 revenue was DKK 1,891 million, down 23% from DKK 2,454 million with EBITDA of DKK 262 million, compared to DKK 269 million in 2022.

Tough market

The company reports that the Asian market for nonwovens is still affected by excess capacity as manufacturers have invested heavily in recent years to ramp up their production capacities to support the continuing growth in the personal care market, as well as responmding to the special requirements that arose in connection with the Covid-19 pandemic. Demand relative to the pandemic is no longer present, creating a noticeable imbalance between supply and demand and a resulting pressure on selling prices.

This imbalance is now being exacerbated by a lower birth rate in China which is directly impacting the sale of diapers.

Fibertex Personal Care is investing to secure its market position in the region but a new production line in Malaysia has yet to commence operations. It is also strengthening the reliability of supply to customers by establishing local warehouse facilities. The first of these, located in Vietnam, has already been established and more are expected to follow.

The excess production capacity in Asia will remain a challenge for some time, the company believes, but the market is still expected to see underlying growth which will absorb the idle capacity over time.

The European market is more consolidated and while sales of diapers are stagnant, diaper pants are gaining a growing share of the market, and require proportionately more nonwoven material, leading to rising consumption.

Print developments

Fibertex Personal Care has launched a new bonding patterning process for nonwovens it believes has great potential, with a soft feel that does not compromise the strength of the material. As an added feature, the patterns and figures printed appear sharper and more uniform compared to standard nonwoven materials.

The company has also expanded its print operations to include printing on laminated materials and on both breathable and non-breathables. Print operations have grown into an increasingly important part of overall business in recent years, thanks mainly to the capacity investments made in the North American market.

New small digital printers installed in both Germany and the USA, will enable new value-creating services for customers, including small volume production for testing and digital approval of print designs. These are now part of the service package offered under the company’s Innowo Print brand.

During 2023, the company also announced a nonwoven material weighing just 5gsm, with the lightest nonwoven materials in diapers today typically weighing 8-10gsm. The lower weight product promises to significantly reduce raw material consumption, transport volumes and CO2 emissions in the value chain.

Outlook

Fibertex Personal Care will have additional output capacity available in Malaysia during 2024, but the challenging competitive market in Asia is expected to limit the effect.

However, the company believes that its investments in new technology will bolster its competitive position and enable it to retain market position.

Due to tough price competition in Asia and reduced volume sales the company expects to generate full-year 2024 revenue in the  region of DKK 1.6-1.8 billion.

www.fibertex.com

www.fibertexpersonalcare.com

www.schouw.dk

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