From the Sector

INDA, the Association of the Nonwoven Fabrics Industry, announced the election of five new members to serve on its 2024 Board of Directors. The Board of Directors play a key role in advancing INDA’s strategic objectives, actively supporting both the industry and the membership. Their primary responsibility lies in ensuring that INDA remains responsive to the evolving needs of its members and the broader nonwovens industry, guiding the formulation of policies and programs.

The five new Board members include:

• Jaren J. Edwards, President, Stein Fibers
• Edward McNally, Sales Director Nonwoven, Oerlikon Nonwoven
• Thomas Olsen, Senior Vice President, Americas Business Area, Suominen
• Patricia A Sargeant, Vice President, Glatfelter Corporation
• Paul Wood, President, Ontex North America

The Board is comprised of elected Board Officers. One-third of the entire Board is elected each year for a three-year term by INDA’s general membership. INDA’s Executive Committee, empowered to act on behalf of the Board between meetings, consists of the Board Officers plus appointees.
The Executive Committee includes:

• Chair: Mark Thornton, Vice President, The Procter & Gamble Company
• Vice Chair: Barbara Lawless, VP of Sales and Marketing – Medical Products, Precision Fabrics Group, Inc.
• Past Chair: Bryan Haynes, Senior Technical Director for Global Nonwovens, Kimberly-Clark Corporation
• Appointee: Mike Clark, President, Filtration Solutions, Hollingsworth & Vose Company
• Appointee: Jodi Russell, Vice President R&D, Cleaning Innovation, Packaging & Sustainability, The Clorox Company
• Appointee: Jeff Stafford, Vice President of Nonwovens, Milliken & Company
• Appointee: Robert Weilminster, EVP & General Manager, US & Canada – Health, Hygiene and Specialties Division, Berry Global
• Appointee: Tom Zaiser, CEO, Indorama Ventures

Perlon® – The Filament Company, a manufacturer of synthetic filaments headquartered in Munderkingen, Germany, celebrated the opening of its new plant in Goa, India. The event marked a significant milestone in Perlon®‘s global expansion strategy and underlines the company’s commitment to growth and innovation.

The plant in Goa was made possible by the recent acquisition of Shaun Filaments, a renowned Indian manufacturer of filaments. The integration of the Shaun Filaments production facility into the Perlon® Group not only offers the opportunity to strengthen market presence, but also to expand capacities and improve production processes.

The Perlon® plant in Goa will play a key role in the production of synthetic filaments for various industries, including paper, technical textiles, brushes, cosmetics and dental care. The acquisition of Shaun Filaments brings not only experienced professionals but also established production lines and technologies to the company.

Florian Kisling, CEO of Perlon®, expressed his enthusiasm about the successful purchase: “The opening of this plant in Goa is a crucial step in our global growth strategy. We are proud to strengthen our presence in Asia while delivering the quality and innovation that Perlon® is known for worldwide.”

Tampon for Men by Finnish hygiene product brand Vuokkoset aims to alleviate the distress transgender men feel related to menstruation. The creative partner behind the idea is TBWA\Helsinki. The product was launched during the international Transgender Awareness Week and sparked a discussion in Scandinavia of the inclusivity of the health and wellness industry.

Research has shown that 93% of transgender men have experienced gender dysphoria related to menstruation. With a tampon designed for men, Vuokkoset sparked a vivid conversation in Finland during the International transgender awareness week (Nov 13 to 19, 2023) with an aim to change perceptions of menstruation and reduce the distress it causes to transgender men.

“Marketing has a huge role in shaping the world around us. As Finland’s leading creative agency and the leading global agency collective, we have an immense responsibility in actively making the world more inclusive. Vuokkoset is a brand that shares this value base and was brave enough to put the campaign together with us in just four short weeks” says Heidi Taina, creative director from TBWA\Helsinki.

Trans men and non-binary individuals may still have menstrual cycles, regardless of hormone therapy choices. This highlights the diversity in experiences related to menstruation among different gender identities.

"When I was young, menstruation felt not only strange but somehow wrong. Our culture does not really acknowledge the diversity of menstruating individuals" says DEI consultant and face of the campaign Dakota Robin, who has been through the gender affirming process himself.

The Tampon for Men will be available as a limited edition in Finland and wider distribution will begin in early 2024. Total sales proceeds are donated to Trasek ry, an organization focused on gender diversity and sexual health. A fully gender-neutral tampon product by Vuokkoset is also being considered.

"Menstrual products - from visuality, advertising to store location - are strongly feminine. It’s time to acknowledge the diversity of menstruating individuals" says Sanna Karhu, CEO of Delipap Oy, the company that manufactures Vuokkoset products.

"This is definitely a step in the right direction. By changing attitudes and broadening perspectives, we can also remove discrimination against gender minorities," concludes Dakota Robin.

Klaus Steger (64), CEO of ERWO Holding AG (“ERWO Holding”) and Hoftex Group AG (“Hoftex Group”), will step down from the Management Board of both companies at the beginning of 2024 in accordance with internal policies of the family and the company regarding the retirement age. Already on June 30, 2023, ERWO Holding Management Board member Hans-Georg von Schuh will retire as planned. ERWO Holding Management Board member Manfred Heinrich will also leave the Board as planned at this time and will continue to hold his mandate as one of the managing directors in the Südwolle Group together with Stéphane Thouvay and Johannes Rauch.

Steger’s designated successor as CEO of both companies is Manuela Spörl (50), currently CFO of ERWO Holding and also CFO of Hoftex Group. Hoftex Group is a group of medium-sized companies in the textile industry, in which ERWO Holding holds a significant stake. In addition, ERWO Holding acts as the parent company of the Südwolle Group, in which the Group’s worsted yarn activities are bundled.

Spörl has a degree in business administration and has been working for Hoftex Group since 2000. Her professional career began in the Corporate Controlling department, and in 2012 she was appointed as an advisor to the Board of Management. She was granted power of attorney in 2015, followed by appointments as CFO of the Hoftex Group in 2020 and CFO of the ERWO Group in 2022. A search for a successor for Spörl in the position of CFO of the Hoftex Group and, subsequently, of ERWO Holding is currently underway. Until the new CFO takes office, the two members of the Management Board, together with the Supervisory Board, will ensure an orderly transition.

The announced change in the Management Board of ERWO Holding, which acts as the parent company of the Südwolle Group, also ensures continuity at the leading manufacturer of worsted yarns for weaving, circular and flat knitting products in pure wool and wool blends. In the future, the management of Südwolle Group will continue to consist of the longstanding members Manfred Heinrich (Technology, Production & Planning), Johannes Rauch (Finance & Controlling) and Stéphane Thouvay (Sales & Marketing and Product Management & Innovation). Together with the designated board member of the parent company ERWO Holding, they will continue the successful development of the Südwolle Group from a mere supplier to a strategic partner of its customers as well as the growth trend of recent years.

The founding family Steger remains involved in the various supervisory bodies of the group of companies and will continue to work closely with them as the sole shareholder of ERWO Holding.

On the sidelines of the Intertextile Shanghai fair, the Swedish textile-to-textile recycling innovator Renewcell and the leading Chinese viscose manufacturer Tangshan Sanyou announced the next step in their partnership to make fashion circular that stretches back to 2018.

The two companies’ new shared ambition is to offer manufacturers and brands Circulose® viscose fibers made from 100% recycled textiles in commercial quantities starting in 2024. The collaboration has been facilitated by Ekman Group, Renewcell’s exclusive global trading partner.

“I am very happy to announce this acceleration of our long-standing partnership with Tangshan Sanyou. They were the first commercial producer of Circulose®-based fibers in the world, and the first to commit to sourcing significant volumes from us. Now, they aim to also be the first to commercialize 100% Circulose® content fibers” said Patrik Lundström, CEO of Renewcell, adding "I applaud Tangshan Sanyou’s vision and support to scaling next gen raw materials like Circulose®.”

The announcement, which follows the recent start of deliveries of 100% recycled textile Circulose® pulp from Renewcell’s newly opened Renewcell 1 recycling plant, is the result of successful validation of Circulose®’s quality in production at Tangshan Sanyou’s commercial-scale manufacturing lines. Tangshan Sanyou would strive to finish the mission of producing commercial volumes of 50% Circulose® content fibers during 2023 and work towards achieving the delivery of 100% Circulose® content branded viscose fibers to selected fashion brands and manufacturers starting in 2024. The two companies will cooperate to market the fibers globally using Renewcell’s Circulose® ingredient brand name.

Mr. Zhang Dongbin, Executive Vice General Manager of Tangshan Sanyou Chemical Fiber, says, "Through the collaboration with Renewcell, we have achieved to use Circulose® made from recycled cotton in the production of our viscose fibers, which is great beneficial to improving resource utilization efficiency and lowering carbon footprint of the industry. It has brought a huge impact in the sustainable fashion industry. We will continue putting efforts in forming good interaction between consumers, brands and enterprises, convey the concept of circular sustainable fashion, promote the greening of textile industry, and ensure a more sustainable way to ensure the sustainable development of the textile industry. Protecting the global ecological environment by applying sustainable solutions is our common goal."

• Sales increase of 12.8% to €1,135.9 million
• EBITDApre improves by 23.4% to €172.8 million
• Net financial debt reduced from €206.3 million to €170.8 million
• Fiscal 2023 expected to be investment and stabilization year

SGL Carbon was again able to improve sales and earnings in fiscal year 2022 following 2021. All four business units contributed to this success.
Sales in fiscal 2022 increased by 12.8% year-on-year to €1,135.9 million (previous year: €1,007.0 million). The rise in sales was mainly due to both volume effects and the successful implementation of pricing initiatives to compensate higher raw material, energy and transport prices. At 23.4%, adjusted EBITDA (EBITDApre) improved at a higher rate than sales and amounted to €172.8 million in fiscal 2022 (previous year: €140.0 million). Increased sales and the associated higher capacity utilization also contributed to the improvement in earnings, as well as focusing on market segments with higher margin potential.
 
Earnings development of SGL Carbon
The increase in EBITDApre by €32.8 million to €172.8 million was mainly driven by the Graphite Solutions business unit (+€30.6 million). The Composite Solutions (+€7.9 million) and Process Technology (+€5.2 million) business units also contributed to the improvement in profitability. Although the Carbon Fibers business unit was able to offset the loss of a lucrative supply contract with an automotive customer in terms of sales with new orders from the wind energy sector, but these sales showed a significantly lower margin level. Accordingly, EBITDApre of this business unit decreased by €11.2 million to €43.2 million (previous year: €54.5 million).

Taking into account net one-off effects and non-recurring items of €8.9 million (previous year: €30.7 million) and depreciation and amortization of €60.8 million (previous year: €60.3 million), reported EBIT amounted to €120.9 million (2021: €110.4 million). This corresponds to an increase of 9.5%.
As a result of the pleasing business performance, the successes of the transformation and non-operating one-off effects and non-recurring items (€8.9 million), a positive Group’s net profit of €126.9 million (previous year: €75.4 million) was achieved in 2022. It should be noted that consolidated net income includes tax income of €31.3 million (previous year: minus €6.2 million). This development is mainly due to valuation adjustments on deferred tax assets amounting to €41.8 million, based on the good business development combined with positive earnings prospects in the USA. Current tax expenses amounted to €11.4 million in 2022 (previous year: €11.9 million).
 
Net financial debt and equity
In fiscal 2022, net financial debt was reduced significantly by 17.2% to €170.8 million compared with the end of 2021 (€206.3 million). The main reason for the decrease is the repayment of financial liabilities in the amount of €29.0 million. Free cash flow decreased from €111.5 million to €67.8 million in 2022. In this context, it should be taken into account that in the previous year, free cash flow included cash inflows of €30.6 million from the sale of land not required for operations.
After 2021, the equity ratio increased again to 38.5% at the end of 2022 (previous year: 27.0% I 2020: 17.5%). Due to the significantly improved earnings situation, the return on capital employed (ROCE) also rose from 8.0% in the previous year to 11.3% in 2022.
 
Development of the business units
As the largest business unit with a share of Group sales of around 45%, Graphite Solutions contributed €512.2 million to Group sales in 2022 (previous year: €443.6 million). The 15.5% increase in sales is based in particular on the positive development of the important market segments Semiconductor & LED and Industrial Applications. Compared to the previous year, sales to customers in the semiconductor & LED industry increased by 49.6%, driven in particular by increasing demand of materials and components for the production of silicon carbide-based high-performance semiconductors. Combined with the increase in sales, GS EBITDApre improved by 34.8% to €118.5 million (previous year: €87.9 million). Accordingly, the EBITDApre margin increased from 19.8% to 23.1%. Volume effects due to higher sales as well as margin effects from the product and customer mix had a positive impact.  Especially the higher sales with customers from the semiconductor industry should be taken into account.

In fiscal 2022, the Process Technology (PT) business unit benefited from the good order situation in recent months and increased its sales by 21.9% to €106.3 million. The main clients of the PT business unit are customers from the chemical industry. The positive development of PT is also reflected in EBITDApre which rose from €4.7 million in the same period of the previous year to €9.9 million. Higher capacity utilization and the successful passing on of increased raw material costs led to an improvement in the EBITDApre margin from 5.4%  to 9.3% in 2022. Energy costs play only a minor role at PT.

In the reporting year, sales of the Carbon Fibers (CF) business unit increased by 3.0% to €347.2 million (previous year: €337.2 million). It should be noted that CF had to absorb the scheduled expiry of a supply contract with an automotive customer at the end of June 2022. These sales were offset by orders from the wind industry and Industrial Applications. However, EBITDApre in the CF division decreased by 20.7% year-on-year to €43.2 million (previous year: €54.5 million). This earnings development is mainly attributable to the expiry of the high-margin automotive contract. In addition, a special effect from energy derivatives in the amount of minus €9.2 million impacted CF earnings in the 1st quarter of 2022. However, the implemented energy price hedges enabled the business unit to maintain its production capability throughout the entire fiscal year, that the weakening of earnings was mitigated.
The Composite Solutions (CS) business unit confirmed its upward trend in fiscal 2022 with a 25.0% increase in sales to €153.1 million (previous year: €122.5 million). The most important market segment for the CS business unit is the automotive industry. In line with the highly positive business performance, EBITDApre of CS increased by 65.3% to €20.0 million (previous year: €12.1 million). This figure also includes non-recurring positive effects of €3.7 million from compensation payments received from automotive customers for premature project terminations.

The non-operating Corporate segment contributed €17.1 million to Group sales (previous year: €16.5 million). In line with continued strict cost management as part of the transformation, EBITDApre improved slightly to minus €18.8 million (previous year: minus €19.2 million).

Outlook
"If we summarize our expectations for the 2023 financial year, it can be summed up under the guiding principle: -invest and stabilize," CFO Thomas Dippold comments on the forecast for 2023.
For the fiscal year 2023 we continue to expect solid demand for our materials and products. In particular, we expect that the demand for special graphite products for high-temperature processes, e.g. in the semiconductor, solar and LED industries, will continue to increase. On the other hand, the first-time full-year effect from the expiry of a supply contract with an automotive customer in the carbon fiber segment and the sale of our business in Gardena (USA) will burden sales development.

"The increasing demand for high-performance semiconductors for electromobility or renewable forms of energy will also boost the demand of components made of graphite for the production of these semiconductors. To benefit from the related opportunities, we will expand our production capacities in this segment and invest a double-digit million amount in 2023 . Based on existing supply relationships, we will implement this investments partly together with our customers," explains CEO Dr. Torsten Derr.
On the cost side, we expect energy and raw material prices to remain at a high level in 2023, along with significant wage increases. Our forecast implies that higher factor costs can be partially passed on to customers through price initiatives.
Based on the assumptions described, we expect Group sales to be at prior-year level and EBITDApre to be between €160 million and €180 million in the financial year 2023.
In the medium term (until 2027), we anticipate a further improvement in our EBITDApre margin between 18% and 19%.

UK advanced materials and technology firm Hypetex, a manufacturer of coloured carbon fibre, has appointed Michael Dowse as a Non-Executive Director and Board Member.

Dowse brings experiences across sport and retail, following leadership roles at some of the biggest sports organisations and companies in the world. He was a Global Director for Nike before becoming President and General Manager Outdoor Americas for Amer Sports, managing brands such as Salomon, Arc’Teryx and Suunto.

As President of Wilson Sporting Goods (2013-2019), Dowse led 1,500+ colleagues in delivering the company’s global strategy, corporate operations, and manufacturing across more than 160 countries. He then took up the position of Chief Executive Officer and Executive Director of the United States Tennis Association (2020-2022).

Dowse will join a group of advisors at Hypetex, which includes Board Chairman Neil MacDougall and former Diageo Chief Financial Officer Nick Rose. They will support CEO Marc Cohen and Chief Technology Officer Nigel Dunlea as they continue to expand the company’s presence in sport and other sectors worldwide.

NatureWorks, the manufacturer of low-carbon polylactic acid (PLA) biopolymers made from renewable resources, hosted a cornerstone laying ceremony to celebrate construction of their new Ingeo™️ PLA manufacturing complex in Thailand. The ceremony which took place on February 1st, 2023 commemorated the progress made to date on the new fully integrated biopolymer facility. The day also featured a ceremonial groundbreaking that mirrored the ceremony held in Blair, Nebraska, USA in 2000 when NatureWorks began construction on the world’s first commercial scale PLA manufacturing facility.

The new manufacturing facility located on the Nakhon Sawan Biocomplex (NBC) in Nakhon Sawan Province, Thailand is designed to be fully integrated including production sites for lactic acid, lactide, and polymer. With completion expected in the second half of 2024, the manufacturing site will have an annual capacity of 75,000 tons and will produce the full portfolio of Ingeo biopolymer grades.

The expanded global production of Ingeo biopolymer will support growth in markets including 3D printing and hygiene as well as compostable coffee capsules, tea bags, flexible packaging, and food serviceware that demand sustainable, low-carbon biomaterials and require the high-performance attributes that Ingeo is uniquely suited to deliver.

“This ceremony is a meaningful milestone for the entire NatureWorks team,” said Rich Altice, president and CEO of NatureWorks. “For the last three decades, we have not only been building a company and manufacturing facilities, but also a whole new industry and market for low-carbon, renewable biomaterials that are revolutionizing the sustainability and safety of packaging and product materials used in our everyday lives.”

The viscose fibre manufacturer Kelheim Fibres - exclusively using FSC® or PEFCTM certified pulps exclusively from sustainably managed sources - welcomes the preliminary political agreement reached between the European Parliament and the Council on an EU regulation on deforestation-free supply chains. The new rules, adopted at the end of 2022, are intended to prevent goods that cause forest degradation or deforestation from being placed on the EU market.

As one of the largest economies worldwide, the EU is a major consumer of wood-based raw materials. Therefore, the new law can significantly contribute to reducing global deforestation and forest degradation as well as protecting threatened forest areas.

“Wood is an incredibly versatile and valuable renewable resource and the basis for countless products. Our viscose fibres are just one example – they offer an environmentally friendly alternative to synthetic materials in various applications and are thus a promising material for the future. Of course, this only applies if the production of our raw materials does not take place at the expense of our earth's natural forest resources. These forests are a bastion of biodiversity and climate protection for our entire planet and must be protected at all costs. No one can escape this responsibility," says Craig Barker, CEO at Kelheim Fibres.

The Lenzing Group, a leading supplier of sustainably produced specialty fibers, and Renewcell, the Swedish textile-to-textile recycling pioneer, have signed a multi-year supply agreement to accelerate the transition of the textile industry from a linear to a circular business model. The agreement contains the sale of 80,000 to 100,000 tonnes of Renewcell’s 100 per cent recycled textile Circulose® dissolving pulp to Lenzing over a five-year period, for use in the production of cellulosic fibers for fashion and other textile applications.

“The textile industry must change. By signing the agreement with Swedish textile-to-textile recycling company Renewcell, Lenzing is able to further integrate recycling and accelerate the transition of the textile industry from linear to circular. As champions of sustainability, we know that moving towards a circular economy is vital to address the enormous textile waste challenges of the industry”, says Christian Skilich, Chief Pulp Officer of the Lenzing Group.

“Lenzing is a major player in our industry, with an inspiring track record of path-breaking technical excellence and sustainability leadership. Our new partnership fits perfectly into Renewcell’s strategy to accelerate the scale-up of circular materials by collaborating with fashion’s most important players. We are more than pleased to join forces with Lenzing with the shared goal of making fashion circular.” said Patrik Lundström, CEO of Renewcell, in a comment on the agreement.

Canopy, a not-for-profit environmental organization dedicated to protecting forests, species, and climate, welcomes the agreement between Lenzing and Renewcell.
“Accelerating the transition to low-impact, circular production is the challenge of the decade for the fashion industry. That is why this partnership between Renewcell and Lenzing is so refreshing – it will bring low-carbon Next Gen solutions to market at scale,” exclaimed Nicole Rycroft, Executive Director of Canopy. “With the climate and biodiversity clocks ticking, the race to circularity is one we need all companies to win.”
 
It is an essential part of Lenzing’s corporate strategy and ambitious sustainability targets to become a true champion of circularity and to offer TENCEL™ and LENZING™ ECOVERO™ branded specialty textile fibers with up to 50 percent post-consumer recycled content on a commercial scale by 2025. To reach this goal Lenzing partners with recycling pioneers like Renewcell.
Circulose® originates 100 per cent from textile waste, like old jeans and production scraps, and turns into dissolving pulp. It transforms textile waste and production scrap into new high-quality textile products.