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February 2001 - Volume 16 I Number 1 Producer Reassesses Its Global Strategy Deutsche Bank’s purchase of Trevira cleared by regulators By Geoff Fisher, European Correspondent
DB Investor, the industrial and private equity holding arm of Deutsche Bank, Germany’s largest bank, has a 90% stake in Trevira GmbH & Co. KG, with the remaining shares assigned to the management of the Frankfurt-based company. With an annual turnover of around $370 million, Trevira makes high-value fibers and has leading positions in the automotive, home textiles, sportswear and healthcare sectors. DB Investor acquired control of the fiber producer from European Fiber Industries (EFI) BV, the Amsterdam-based holding company for Indonesia’s Multikarsa group, which purchased the business in 1998 from Hoechst, the giant German chemicals group then in the process of restructuring. The bank acquired both EFI’s majority stake in Trevira and the portion owned by Hoechst successor Aventis. The total value of the acquisition was not disclosed. It is understood that Multikarsa sold Trevira because of financial difficulties the Indonesian company was having at home and the need to raise cash. New CEO With the sale finalized last October, Bernd Sassenrath was appointed chief executive officer of Trevira, taking over from Ulrich Huwe, who has left the company. Dr. Hartmut Last is in charge of the staple fibers business unit and is also responsible for production and technology at Trevira. Gerd Hochapfel combines responsibility for the filaments business unit and all Trevira’s sales and marketing activities. A supervisory board has also been established, under the chairmanship of Dr. Karl-Gerhard Seifert, a former member of the Hoechst AG board. DB Investor holds stock in a number of public companies, most notably DaimlerChrysler. The equity holding in Trevira is believed to be one of the first in the private sector. The investment group’s strategy is to boost Trevira’s profits and earn a nice return on the company’s sale in the near future. DB Investor Chairman Axel Pfeil said: “We see Trevira as a high-value company that has proven its profit-making capability in the economic cycle by its focus on specialty products. In collaboration with the management, DB Investor will, as finance investor, continue to push forward the strategy of Trevira and substantially increase company profitability in the coming three to five years.” In recent years, Trevira has shifted from the production of commodity products towards a greater degree of specialization – a process that has intensified in the last half of the 1990s. The strategy has paid off for the company, especially in 1999, “a difficult year in which Trevira was probably the only European fiber producer to be profitable” and where “we performed significantly better than any of our competitors,” Mr. Sassenrath said. “In addition to our specialty focus, which gives us the possibility of attracting premium prices for our products, the other big asset is the Trevira brand name. It is a reputable brand with which the industry continues to associate high quality and innovation,” he added. European Heavyweight Trevira was founded in 1956 as a business unit of Farbwerke Hoechst AG, one of the world’s largest chemical groups. The brand, one of the first major trademarks in the manmade fibers industry, was created in the Bavarian town of Bobingen, where Trevira’s Textile Technology Center still stands. After more than four decades of research and development, Trevira has been transformed into a highly specialized manufacturer of textile polyester products. With 2,700 employees, the company has five production centers in Europe for the largely integrated manufacture of polymer through to textured yarn. These plants are located in Guben (Germany), Bobingen (near Augsburg, Germany), Trevira Neckelmann in Silkeborg (Jutland, Denmark), Trevira Fibras in Portalegre (Portugal) and Trevira Belgium in Quevaucamps (Belgium). Trevira’s total production amounts to 180,000 tons a year — 150,000 tons of staple fiber and filament yarn, and 30,000 tons of polyester chips. Apparel remains the leading business by application, accounting for 29% of turnover, followed by polyester chips (26%), home textiles (19%), automotive (17%) and the hygiene/semi-technical sectors (9%).
Automotive Insider “Trevira took the right decision to move toward specialties,” said Mr. Sassenrath. “We are also European market leaders for supplying fiber for automotive textiles. More than 50% of all European cars have Trevira inside. And we are also developing fine denier fibers, such as Trevira Finesse and Micro for apparel and functional wear.” While no great capacity expansion is planned, Trevira intends to shift, enlarge and modernize its production facilities, and will continue to invest in growth areas and markets that show promise. Although the trademark has survived for more than 40 years, “the Trevira brand was showing signs of age,” Mr. Sassenrath admitted. “It has now been rejuvenated and repositioned with nine sub-brands.” The current marques are: Trevira Perform, specially modified functional fibers for low-pill apparel materials; Trevira Xpand, a PBT yarn for stretch fabrics; Trevira Finesse, used mainly in the manufacture of lightweight sports clothing; Trevira CS inherently flame retardant fibers; Trevira Home, for easy care, light-fast home textiles; Trevira Micro, microfilaments for high performance sportswear; Trevira Polair, for knitted fleeces, underwear and sports clothing; and Trevira Classixx, the traditional polyester fiber for outerwear. Trevira has also given itself a new, modern image. “We are not just producing fibers for apparel and other end-uses, but offering products that perform distinct functions,” Mr. Sassenrath said.
Going Global? Although Trevira says it is a global player in fiber and filament production, its customer emphasis and indeed most of its sales have been in Europe. However, Mr. Sassenrath said Trevira is currently reassessing its global position. In 1999, the company started a joint venture in Brazil — Trevira Neckelmann South America, based in Nova Odessa, São Paulo. With just about 35 employees, this enterprise produces air-textured, dyed and undyed polyester yarns for Brazilian automakers as well as the local home furnishings market. Trevira is also assessing possibilities in the USA, “but we are not sure yet,” said Mr. Sassenrath frankly. “It is feasible that we could become involved in product-dyed, air-textured yarn for the automotive industry, although it is too early to speculate. We will make a decision early in 2001.” He said a US move, if it takes place at all, will be driven by Trevira’s customers who are supplying the US automotive market. European car makers with US operations have noted the increasing trend for North American car interiors to become “a little bit more European,”— no doubt due to the growing influence of European car designers and stylists now working in the USA.
Sophisticated market “There remains a sophisticated textile sector in Europe, particularly in the highly demanding markets for automotive and home textiles as well as apparel products,” Mr. Sassenrath said. “This sophisticated market requires specialty products — that is why we have moved away from standard polyester products to focus on functional aspects. “We will have to work hard to continue as Europe’s leading specialty polyester producer, but we have to assess opportunities to expand beyond Europe. We are only a small company in terms of global fiber producers, so we must look for new developments to reduce production costs. Our strategy is not to be based in low-cost countries.” Mr. Sassenrath agreed there are still too many fiber companies and too much capacity in Europe. “More restructuring has to take place,” he said. Will Trevira be part of that restructuring? “I don’t know,” he said. “Many things have changed over the past 10 years since I was last directly involved in the fibers business. But the basics have come back very quickly. A decade ago the set up was very different. Trevira has changed from being an internal division of a large chemicals group to a relatively small, independent company with demanding financial investors. “It is quite a challenge and I am looking forward to increasing the value of the company over the next 3-5 years.”  |
