Elevated demand for disinfectant wipes during the Covid-19 pandemic in 2020 and 2021 led to unprecedented investment for spunlace nonwovens—one of the wipes market’s most preferred substrate materials. This drove global consumption for spunlaced nonwovens to 1.6 million tons, or $7.8 billion, in 2021. While demand has remained elevated, it has retreated, particularly in markets like face wipes.
As demand normalizes and capacity continues to ramp up, manufacturers of spunlaced nonwovens have reported challenging conditions, which have been further exacerbated by macroeconomic conditions like global inflation, rising raw material prices, supply chain issues and regulations limiting the use of single-use plastics in some markets.
In its most recent earnings call, Glatfelter Corporation, a nonwovens producer which diversified into spunlace manufacturing through the acquisition of Jacob Holm Industries in 2021, reported that both sales and earnings in the segment were lower than expected.
“Overall, the work ahead of us in spunlace is more than was originally anticipated,” Thomas Fahnemann, CEO, says. “The segment’s performance to date, along with the impairment charge we have taken on this asset is a clear indication that this acquisition is not what the company first thought it could be.”
Fahnemann, who assumed the top role at Glatfelter, the world’s largest airlaid producer, after the Jacob Holm purchase in 2022, told investors that spunlace continues to be considered a good fit for the company as the acquisition not only gave the company access to a strong brand name in Sontara, it provided it with new manufacturing platforms that complement airlaid and composite fibers. Returning spunlace to profitability was earmarked as one of the company’s six key areas of focus in its turnaround program.
“I believe the team has a good understanding of what is needed to stabilize the spunlace business to return to profitability,” Fahnemann adds. “We will address the cost base and optimize output so we can meet customer demand.”
Post time: Aug-08-2024