Spunmelt production capacity to increase in the Americas

Adrian Wilson
Fri Nov 26 2010, 12:29 PM

Two leading spunmelt producers – FitesaFiberweb and Brazil’s Companhia Providência – have announced near-identical plans to add capacity in both North and South America this month.

FitesaFiberweb announced it will install two new spunmelt lines over the next three years, one at a new site in Lima, Peru and the other in the US.

In Peru, construction associated with the projects is expected to begin in the first quarter of 2011 and material is expected to be commercially available in early 2012. Additionally, the company plans to expand its North American capacity by adding another spunmelt line, expected to be commercially available in early 2013.

“Following the recent completion of the largest and most modern spunmelt line in the US at FitesaFiberweb’s Simpsonville, site in South Carolina, these investments build on our current strong performance and will enable enhanced logistics and customer service in the region,” says FitesaFiberweb CEO Silverio Baranzano.

The lines will add close to 35,000 tons of capacity to the company’s current spunmelt production – to reach 140,000 tons per year.

FitesaFiberweb is a joint venture which was only formed in August 2009 by Fiberweb and Brazil’s Petropar, achieving sales of US$200 million in the first-half of 2010.  It has been benefiting from sustained rapid market growth in South and Central America and from the cost and operational benefits through the combination of Petropar’s Fitesa business in Brazil with Fiberweb’s hygiene spunbond facilities in the USA and Mexico.

The JV’s new production plant at Fiberweb’s Simpsonville site has now been completed, with commissioning to start imminently and commercial production expected in the first quarter of 2011.

Companhia Providência, meanwhile, plans to install two new Reicofil lines in Brazil and North America in equipment and other asset investments totalling US$120 million.

The production lines are scheduled to go into operation in the first half of 2012 and will result in an increase of 40% in the company’s installed capacity. which will then amount to a total of 140,000 tons per year.

The plant currently being built in Statesville, North Carolina, USA – the company’s first overseas operation – is scheduled to be inaugurated at the end of January 2011.

“We are expanding our production capacity and consolidating our position among the largest producers of nonwovens in the world, in line with our strategic plan which provides for growth and internationalisation,” said Hermínio de Freitas, Companhia Providência’s CEO. “In addition, we are confirming our vocation for investments in state-of-the-art technology, the continued financial strength of our company and the commitment to our shareholders.”

In addition to increasing the production capacity of the plants in line with growth in the domestic and international markets, a reduction in logistical costs and greater proximity to major consuming centres for nonwovens will result. The new lines will produce both nonwovens for the manufacture of hygienic disposable items – diapers and sanitary pads – and disposable gowns, drapes and other protective surgical apparel.

Companhia Providência ended the third quarter 2010 reporting a net income of R$ 14.2 million, a 98.3% increase over reported earnings for the second quarter 2010. Adjusted EBITDA amounted to R$ 30.1 million, 21.1% higher than 2Q10 and 15.6% greater when compared with the same period in 2009. Sales volume amounted to 19.7 thousand tons, a growth of 3.2% compared with 3Q09 and net operating revenue reached R$116.6 million.

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