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February 2001 - Volume 16 I Number 1 First-Year Objectives By Derek Ward, European Editor
A rnhem, The Netherlands - Progress made at Acordis during its first year of independent operation, set against the background of contemporary industrial textiles climate, was discussed at a recent meeting in the company’s headquarters here. Peter Rogers, deputy chief executive officer, said the company’s main objectives had been to rationalize capacity, and to further develop business in the industrial and specialty fiber sectors. Industrial and specialty fibers now constitute 70% of the company’s total output. Major products in the portfolio include airbag yarns, polyester tire cord and industrial yarns, nonwovens, viscose tow and diape membrane items. Commenting on the difficult conditions in the global fibers industry, Mr. Rogers said, “We all know it’s a hard business, but at Acordis we understand the challenges of life in a fibers culture.” He described how in a drive to reap the benefits of independence, firm action had been taken to create a more focused company structure. “It’s no longer possible to survive in the fiber business by product development alone.” Future success, Mr. Rogers believes, will be built on production efficiency, quality, reliability and cost, coupled with reliability and innovation on a global basis. Getting to the Core Early last year Acordis decided to close the former Enka viscose filament operation at Kelsterbach, Germany, due to weakening product demand. Last September the Acordis acrylic staple and tow operation in Barcelona, Spain, was sold to Fisipe Sarl, a Portuguese acrylic fiber producer. Mr. Rogers said this later move would enable Acordis to focus on further developing its acrylic specialty products in the UK and Germany. Several peripheral operations have also been divested. These include the UK-based CEL International process engineering contracting business, which was the subject of a management buyout last March, and the sale in September of Enka tecnica, the spinneret and high precision component manufacturer, to Heberlein Fiber Technology, Switzerland. Acordis is also selling its Sympatex business to Ploucquet, Germany. Although this latter business has no concrete property assets, Sympatex currently holds a 60% of the German market for windproof, waterproof and breathable membranes used in outdoor apparel and associated products, plus prominent status in similar sectors of several other West European markets. Commenting on negotiations for the sale of Twaron Products BV to Teijin Ltd., Japan, Mr. Rogers said the aramid operation is a solid business, and one that Teijin is committed to expanding globally. He refused to be drawn into financial details of the proposed sale, but he said he expects the deal to go through once regulatory approval has been received. These divestments, plus other minor ones concerned with service and maintenance operations, are said to have provided funds for considerable future investment in selected industrial markets. Acquisitions will be considered, Mr. Rogers said, although he said no suitable opportunities have arisen to date. “The actions we have taken have been justified by results,” he said, noting that in the first six months of the year, sales reached 1.3 billion Euro (or more than $1.1 billion), a nearly 13% increase over the same period a year ago. Return on sales rose from 4% to 5%.
Global Changes Leo Janse, general manager of Acordis Industrial Fibers, spoke about changes currently taking place within the industrial fibers arena worldwide. For Western producers, the impact of rising raw material prices has been exacerbated by currency fluctuations, such as those between the US dollar and German mark against the Euro. The high tenacity polyester yarn sector, in particular, faced its own set of problems, with increases in global production capacity causing concern. Mr. Janse noted, for example, that as much as 75% of Korean output of polyester tirecord yarns was aimed at export markets. Major changes in the competitive environment seemed imminent. Mr. Janse cited statistics from CIRFS, the Brussels-based organization representing European manmade fiber producers, showing deliveries of high-tenacity polyamide and high-tenacity polyester yarns to Western Europe jumped significantly in the January-to-August period of 1999 compared with those of the previous year. The performance of high-tenacity viscose yarns was “disappointing.” (See Table 2.) Nevertheless, he suggested, high-tenacity viscose performance had more to do with cyclic patterns than long-term decline.
Measures have been taken to re-establish the reliability of supplies, and rayon’s share of the dipped tirecord fabric sector is increasing. Converting operations have been modernized, and a decision concerning the adoption of a newly developed spinning technology is scheduled for early 2001. The polyamide situation was undergoing changes resulting from the reshaping of the competitive environment. In Turkey, Sabanci Group had taken control of the DUSA operation originally formed jointly with DuPont, and was increasing capacity. In China, Shenma was showing strong growth in a market big enough to absorb any capacity increase and still attracting imports. Rhodia was developing as a more focused supplier and had recently acquired three production facilities in Eastern Europe. Turning to the reactions of Acordis to current conditions in industrial markets, he said strong growth was being experienced in the polyamide airbag yarns sector. The picture brightens even more with the development and introduction of side protection products, and Mr. Janse was confident Acordis would win a high share of the market. He noted the agreement between Acordis and Toyobo by which both companies can supply identical types of airbag yarn to meet the specifications of car manufacturers with global operations. Modernization of Yarn Plants The company’s polyester yarn facilities throughout the world are being modernized, and some European converting operations are being relocated in order to cut costs. An annual 3,000 tons yarn-dipping contract had been negotiated with Rhodia in Brazil. Research and development projects are bearing fruit in terms of new lower-cost technology combined with higher output. Although in Europe low-cost imports are giving rise to fears about dumping, arriving shipments from Asia-Pacific are being reduced. Acordis is determined to remain a global player in polyester tirecord and industrial yarns, supplying global customers with locally produced ranges. Its Chinese joint venture with Wuxi Taiji Co Ltd. illustrates this strategy. Annual output capacity of what will become Acordis Taiji Industrial Fibers will be increased from 8,000 tons to 25,000 tons to meet fast-growing domestic demand. The project will include 10,000 tons annual capacity facilities for twisting, weaving and dipping tirecord and conveyor belt fabrics. Acordis, with a 60% share in the project, will provide advanced spinning technology for producing the latest types of tirecord and other industrial yarns, plus production, application research, marketing and management expertise. Acordis estimates Chinese demand for polyester industrial yarns will more than double from slightly more than 50,000 tons in 2000 to nearly 105,000 tons by 2010.  |
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