Innovation is driving growth in the durables segment
Investkonsult Sweden AB are consultants in the nonwoven and absorbent hygiene industries supporting both established companies and start-ups. They assist large and small firms with objective valuations, line and set-up guidance, and brokering and sales. Proprietor Johan Berlin speaks about the trends and challenges in the nonwoven and absorbent hygiene industries.
Depends very much how it is calculated, but the global nonwoven market is worth around $35 billion and the global absorbent hygiene market about $100 billion. But again, the figures depend on how this is calculated. The global average growth is around 6-7 percent per year with variations among regions.
Geographically, the growth for AHP (absorbent hygiene product) will be in Asia and the Indian subcontinent. The growing industries are the hygiene segment as well as some industrial markets. Actually, all markets within the industrial segment are doing well, but it's a cyclical market like others. Hygiene awareness is driving growth in AHP, and innovation is driving growth in the durables market.
For nonwovens, the major market is without a doubt the hygiene market, as roughly 50 per cent of all nonwovens produced globally gets converted into a hygiene product of some sort. The rest of the nonwovens go into the durable segment where it's split between automotive and building/construction including geotextiles, filtration and furniture (home textiles of some sort). For the hygiene market, the baby diaper market still carries the highest value, followed by fem-care and then adult-inco.
Our major clients are already existing nonwoven manufacturers who have a desire to increase capacity by purchasing second-hand machines that are immediately available and in good condition.
It differs a lot from region to region, and from customer to customer. If customers are existing nonwoven or absorbent hygiene manufacturers, they tend to only purchase a machine/line and handle the full installation by themselves, as they already have in-house expertise. On the other hand, if a customer is a newcomer, as is often the case in India or certain African countries, then the demand for a full turnkey operation is required. In our business of second-hand equipment, the requirement changes by the day and no customer is like another one. Price is of course also an important factor-maybe more so in Asia and the Indian subcontinent where the price of used machine/line always tend to be compared to the price of new Chinese equipment. On the other hand, existing nonwoven and absorbent hygiene producers in Europe, US and South America tend to focus more on delivery time, because normally, they will purchase a line to increase capacity, and in most cases, the capacity increase is needed urgently; thus, they do not have time to wait for delivery of brand new equipment.
Trends in AHP are of course that the pull-up diaper (both for baby and adult) are gaining a lot of market share versus the traditional open type diaper. In the durable nonwoven, the drivers are many, but one has been the increased use of nonwoven material in the automotive market.
Overcapacity in certain areas, but that is cyclical; so that usually evens out. Also, of course, the price of raw material for certain materials is volatile. Then, even if you are a big multinational company and enormous as a nonwoven producer, you are still a small company when put between your raw material supplier (big chemical companies like Exxon) and your customers (huge FMCG companies like P&G and Essity). Further, one of the challenges is that of polluted oceans, as this spills over on the nonwoven industry. Same goes for India where the ban on plastics may spill over on to spunbond manufacturers.
No, we don't.
Not really. We are content with being a fairly small and tight company working on a global scale. There are very few companies in the world with our expertise; so we have enough work to do as it is. (HO)
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of technicaltextile.net.