‘No gain without pain’ is certainly a maxim that applies to leading nonwovens manufacturer Fiberweb, which has just posted a terrific set of results for its 2009 financial year.

Following three years of considerable restructuring, the UK-headquartered company achieved profits of UK£23.1 million for the year, compared to £18.8 million in 2008, on 2009 turnover of £454.2 million.
Given the financial climate throughout last year, the result is little short of miraculous.
“The success of the restructuring actions of the past three years is apparent in these strong 2009 results and the board believes that this marks the end of the turnaround phase for the company,” said chairman Malcolm Coster. “Fiberweb is very well positioned to make further progress in today’s challenging markets, and through innovation and investment, to capitalise on the eventual upturn in construction and industrial markets.”
“We delivered strategic and operational progress in both the industrial and hygiene divisions in 2009, enabling further steady margin progression during the year,” added CEO Daniel Dayan. “Our Hygiene business demonstrated its defensive characteristics, benefiting from recent investment and a strong first five month’s trading from the FitesaFiberweb JV, with especially good volumes in Brazil and Mexico. The Industrial business suffered from weak volumes, as expected, but saw margin expansion from innovation and improved efficiencies.
“The economic outlook remains uncertain, but we have taken significant measures over the past three years to build a robust business that can deliver growth and increased profitability.”
During 2009, Fiberweb’s portfolio changed markedly with the creation in July of the FitesaFiberweb 50/50 joint venture with Petropar of Brazil. This venture accomplished several strategic goals. Firstly, Fiberweb is now active in the growing markets of South America from a very competitive site in Southern Brazil. Secondly, Fitesa’s independent plan to invest in the USA will now be implemented together with iberweb on a Fiberweb site, reducing risk and cost.
The JV also enjoys very strong relationships with both major global branded customers as well as regional branded and private-label customers. In addition, Fiberweb acquired the outstanding 50% of the successful Coronor JV from Nordenia, focused on producing medical laminates at a Fiberweb site in Germany.
The relative stability of the Hygiene business, comprising airlaid and consumer fabrics, provided the group with a degree of resilience during a period of almost unprecedented volatility. Volumes of these products – which are consumed overwhelmingly in the production of consumer staples such as baby diapers and sanitary towels – remained stable overall, with a fall of around 10% in the first half countered by a similar recovery in the second half as destocking by producers and retailers was reversed. Fiberweb’s production lines continued to be well-utilised overall.
Despite fairly stable demand, over-capacity in Europe for consumer fabrics emerged as a number of new investments came on-line and many fabrics were further lightened, creating some price pressure. Thanks to recent investments by the group, management was able to react firmly with the announcement in January 2009 of detailed plans to remove uncompetitive lines at Fiberweb sites in Sweden, Germany and France, coordinated with the commissioning of the new Italian spunbond line in mid-2009. These initiatives were all completed as planned during the year, with the desired effect on margins and competitiveness.

The Industrial business was impacted to a much greater extent than Hygiene by the turmoil in many markets during the year, especially those serving the construction industry. The decline in house-building in the USA continued and similar issues were experienced in Western European markets. In these challenging circumstances the performance of the company’s Typar housewrap products in both US and Canadian markets demonstrated strong resilience, with market share held in both countries even while volumes fell dramatically. In Europe, roofing products produced strong margins thanks to new product innovation and cost reduction.
Filtration products had a strong year, demonstrating the resilience of a business largely based on replacement sales and benefiting from strong sales of specialist meltblown fabrics for face-mask applications in response to the swine flu epidemic during the year.
New products for air filtration applications were developed for both European and North American markets. In the UK, Terram continued the recovery apparent since 2007, with record output from its remaining production line in South Wales and progress in developing sales in the Middle East and Russia in particular.
Investments were made in new technologies and production assets to improve product performance and to reduce waste and energy consumption, and programmes were launched to improve the information systems infrastructure of the company.