From the Sector

Lower volumes due to geopolitical developments and the sharp rise in inflation impacted the result in the first half of 2022. In a slightly declining market, Autoneum increased revenue in local currencies by 0.5%. At CHF 888.7 million, revenue in Swiss francs reached the previous year's level. Despite the challenging environment, Autoneum achieved a positive operating result of CHF 6.4 million (EBIT margin: 0.7%). The net result decreased to CHF –12.8 million. On the other hand, Autoneum was able to generate a solid free cash flow of CHF 45.2 million. A high demand for sustainable products for electric vehicles confirms that Autoneum is well positioned for this growing market of the future.

Current geopolitical developments substantially affected business performance in the first half of 2022. They are accompanied by accelerating inflation and significant price increases in the commodities markets, which the war in Ukraine has further exacerbated. These developments are also delaying market recovery in the automotive industry. Autoneum does everything it can to minimize the impact on the Group. Despite the present challenges, we will continue to implement our strategy, focusing on innovative and sustainable technologies for growing markets of the future.

• Revenue development influenced by the war in Ukraine and supply chain bottlenecks*
• Low production volumes and high inflation impact profitability*
• Solid free cash flow enables further reduction in net debt*
• Business Groups*
• Well positioned for e-mobility and sustainability*
• Expanding the product portfolio for electric vehicles*
• Autoneum joins the Science Based Targets initiative*

Outlook
According to global market forecasts¹, automobile production will pick up again in the second half of the year with growth of 8.8% compared with the first half-year 2022. For full-year 2022, global automobile production is projected to reach 80.8 million vehicles, which is equivalent to a 4.7% increase on 2021. Based on the market forecasts, Autoneum expects to improve the operating result for the second half of the year. This will be supported by ongoing customer negotiations with a view to fair sharing of costs, the accompanying contribution of vehicle manufacturers to shouldering the sharp increases in material, energy and transport costs and the foreseeable normalization of production after the easing of lockdown measures in China. On this basis, Autoneum expects substantially enhanced results for full-year 2022, as well as an improvement in the EBIT margin to 2.0% to 3.0%. Free cash flow is expected to be in the mid to high double-digit million range for the full year 2022.

*For more information see attached document

¹Source: IHS “Light Vehicle Production Forecasts” – July 15, 2022

Indorama Ventures Public Company Limited (IVL) announced that construction of an integrated PTA-PET plant in Corpus Christi, Texas, will resume in August this year. Corpus Christi Polymers LLC (CCP), a partnership between three companies, is expected to begin production in 2025 and ensure continued cost-competitive production to support the growth of IVL’s global PET operations into the next decade.

CCP was formed in 2018 as a joint venture between Indorama Ventures Corpus Christi Holdings LLC, a subsidiary of Indorama Ventures; DAK Americas LLC, a subsidiary of Alpek S.A.B. de C.V.; and APG Polytech USA Holdings, Inc, a subsidiary of Far Eastern New Century, following the purchase of a partially constructed facility of M&G Resins in Corpus Christi. Each partner will procure its own raw materials and receive one third of the PTA and PET produced at the facility to sell and distribute independently.

Construction of the plant is resuming following a period of pandemic-related disruptions. Through the pandemic, the partners firmly resolved to continue planning amid continued robust demand for PET packaging and the need for shorter supply chains. As the impact of the pandemic eased in 2022, the management team was strengthened in preparation for the resumption in activities.

CCP is expected to be the largest vertically integrated PTA-PET production plant in the Americas, and IVL’s biggest greenfields project in the U.S. since the development of the AlphaPet production facility at Decatur, Alabama in 2009. The new Texas facility is a significant addition to IVL’s leading global footprint, and will expand its coverage to customers across the U.S. The plant’s vertical integration optimizes PTA-PET production and, together with the availability of raw materials Paraxylene and Mono Ethylene Glycol in the U.S., ensures long-term competitive-cost supply for IVL’s locally integrated polyester value chain.

The facility will have nominal annual capacities of 1.1 million metric tons of PET and 1.3 million metric tons of PTA, shared between the partners. It will employ three state-of-the-art technologies: PTA: IntegRex®, PET melt: Invista, and PET solid state: Easy Up (HCIRR – Horizontal Continuous slightly Inclined Rotary Reactor).

CCP is adding to its leadership team to prepare for the new growth opportunities. Mr Russell Wilson will leave his role with IVL as Head of Manufacturing Americas, Combined PET, to take up a new role as Chief Executive Officer of CCP from 18 July. He brings 30 years of Aromatics and PET leadership experience including prior roles with Amoco and BP before joining IVL. Mr Todd Hogue, IVL’s Global Head of EH&S, replaces Mr Wilson as IVL’s representative on CCP’s Board. Mr Michael Day joined CCP as Project Director in June and brings 34 years of construction leadership experience including senior roles with Bilfinger, KBR, and CB&I.  Mr Jeff Shea will assume the role of Chief Operating Officer on 18 July.  Mr Shea has been in the PET industry for the last 22 years and has managed PET sites for the last 17. 

The electrolyser producer Enapter has set itself the goal of developing its entire production process to run without negative impacts on the environment. As an important step on this journey, it is building the Enapter Campus production facility, which will be powered entirely from renewable energy produced on-site and in the neighbouring Bioenergiepark. The site in in Saerbeck, North Rhine-Westphalia combines electrolyser production, an R&D building, administration and office space, as well as a cantine over 82,000 square metres. Now the company wants to investigate what other measures can be implemented to achieve its “Life Cycle Impact Zero” aspirations – together with researchers from Fraunhofer UMSICHT, the Wuppertal Institute and the Institute of Sustainable Nutrition (iSuN) of FH Münster.

With the Life Cycle Impact Zero project, started on April 15, 2022, the parties want to develop and apply an especially comprehensive and holistic approach to environmental assessment. This includes chemical manufacturing and electrolyser production, as well as matters like the use of energy and water resources, the generation of waste or the human factor in general. This is intended to cover all interactions between business and people. That includes, in particular, Enapter’s employees, but also people in upstream and downstream value chains, users of the technology or residents close to the production site. A concept for sustainable employee catering is also being developed.

The basis for all environmental assessment that will be carried out is ISO 14040. The recognised international standard divides the research into four phases: Aim and scope of the study, inventory analaysis, impact assessment, as well as interpretation. Sensitivity analyses and scenario techniques are also used as further methods.

On the basis of these analyses, the 18-month project should derive concrete measures to avoid negative environmental impacts completely, if possible, for example in production, employee mobility or in energy supply. Furthermore, it will examine whether these measures are transferable to Enapter’s other locations – such as in Italy. Following on from the project, the steps defined should be implemented by Enapter in the next phase. In the subsequent Phase 3, a renewed analysis is planned. This will determine if the technological innovations achieved by then in the production and use of Enapter’s electrolysers can enable additional ecological improvements.

The Life Cycle Impact Zero project is supported by the State of NRW.

Indorama Ventures Public Company Limited (IVL) completed the acquisition of the wool spinning businesses in Italy and Poland of Tollegno 1900 S.p.A. (Tollegno 1900), a leading Italian manufacturer of fabrics and yarns.

Tollegno 1900 has a family-based heritage with more than 120 years of experience and is one of the leading European textile groups with a total spinning capacity of around 3,500 tons of yarn per year with a specific focus on flat knitting and hand knitting yarns. With this acquisition, IVL secured two assets, including a spinning and top-dyeing operation in Poland and a yarn dyeing operation in Italy.

The acquisition is a strategic fit for IVL’s integrated business platform and will make a significant contribution to the sustainable growth of its Wool business, which is part of the company’s Fibers segment. It will also strengthen IVL’s footprint for worsted yarns in Europe and help extend IVL’s wool products globally with trading subsidiaries in America and Asia.

The operations, which will be renamed Filatura Tollegno 1900, will add more sustainable products to IVL’s portfolio, including a full traceability project of the fibers used for yarns and fabrics, as well as provide synergies with existing assets.

Giovanni Germanetti, the CEO of Tollegno, will continue in the same role with Filatura Tollegno 1900, facilitating continuity and exploring new growth as part of IVL. Lincoln Germanetti, the President and co-CEO of Tollegno, will remain with Filatura Tollegno 1900 as COO.

Indorama Ventures Public Company Limited (IVL), a global sustainable chemical company, has signed a license agreement with Shandong Binhua New Material Co., Ltd. (Binhua), a subsidiary of Befar Group, a leading petroleum and chemical enterprise in China, to build, own and operate a propylene oxide (PO), t-Butanol (TBA) and t-Butyl methyl ether (MTBE) co-production unit.

Featuring the world’s only MTBE ‘single-step’ reaction technology, IVL’s proprietary innovation, the project is part of the ‘C3 and C4’ comprehensive utilization project in Shandong, China. It is one of the largest in the province, covering an area of over one million square meters.

Under the contract, IVL will provide a design package, technology, operational know-how and training to enable the construction and operation of a PO co-production with MTBE and TBA units for Binhua. The plant is part of a larger complex comprising propane dehydrogenation to propylene, butane isomerization, synthetic ammonia, and other installations.

• New yarns for the contract furnishing world, for industrial sewing threads and the challenge of biodegradable polyester

At the product level, big impulse has been given to the range of industrial sewing threads for various uses, with new references both in the polyester + polyester compositions as well as in cotton + polyester. The industrial threads, marketed as raw material, allow the company to consolidate its position on some strategic markets, such as in Germany.

As a result of the partnership with Trevira® for the spinning of the flame-retardant Trevira^®CS fibre, Filidea Technical Yarns reinforces its offer of non-dyed performant yarns aimed at the world of contract furnishings. The sector of hospitality, of furnishings for public and work spaces, fairs and areas for social-cultural gatherings will find a comprehensive answer to its demands in the Trevira^®CS-based yarns: with regard to fireproof standards, versatility, resistance to wear and tear, excellent colour rendering, and last but not least, the component of fibre sustainability, an essential value for the design of spaces for collective use.

Continuing in the development of sustainable production across the sector, the company has undertaken two important initiatives with other actors in the textile supply chain. Filidea participates in Trick, the European blockchain project – part of the European Horizon 2020 programme – involving 29 partners from six different nations to reinforce the circular economy thanks to the development of a digital platform which is complete, traceable and available to operators in the textile sector.

MagnoLab, the network of enterprises in the textile supply chain, and of which Filidea is one of the founding members, gives the impulse to constant R&D activities. MagnoLab was established in 2022 in order to develop tangible solutions for the sector, to create values and to collaborate with regard to current and future demands.

MagnoLab brings together textile companies which are active at various stages of and with complementary roles in the supply chain, and which work in synergy and share objectives, resourcefulness and long-sightedness, with the aim of developing innovation in a structured way. MagnoLab is also open to welcome new partners.

C&S strengthens its position in the luxury segment with the acquisition of Texo S.R.L., a company based in Cagli (Pesaro and Urbino) with 10 years of experience in the production of fashion apparel for Texo and for third parties.

C&S enriches the offer of its Style Services Luxe division, the research and production solution for any kind of style needs, together with Style Services Denim and along with C&S Experience projects, initiatives in direct contact with retail such as the haikure brand and the license agreements for Europe for Jeckerson and Purple. C&S’s history begins over 40 years ago in Trestina, in the Perugia province, and is rooted in denim culture and in the limitless potential that comes with this fabric. The company has begun to establish itself as a partner for the creation of jackets, shirts, outerwear, and denim. Its know-how expresses the combination of the production souls that characterize its territory of origin, between Umbria and Marche: all the typical tradition of premium denim mixed with the culture of luxury apparel, intimately dedicated to beauty, quality, and attention to detail.

“We are proud to have achieved this new milestone” states Federico Corneli, C&S’s main shareholder. “We firmly believe that the added value that Texo S.R.L.’s specialization brings to the table will allow us to grow further and to be able to accelerate the strategic path that will lead us to establish ourselves as special partner for the most important luxury brands”.

• Joining Science Based Targets initiative

ith its Advance Sustainability Strategy 2025 launched in 2018, Autoneum defined ambitious goals in the areas of environment, society and governance. In the past year, significant quantitative and qualitative improvements were achieved, as shown in the Corporate Responsibility Report 2021 published today. For example, CO2 emissions were reduced in 2021 and the proportion of reused production scrap (recycling) was significantly increased.

Following Autoneum’s decision last year to extend its environmental targets with quantifiable targets for all direct and indirect greenhouse gas emissions and a time horizon to 2027, the Company has recently signed the declaration to join the Science Based Targets initiative (SBTi). Autoneum acknowledges the urgent need for action and will submit its ambitious, science-based targets to the SBTi to reduce CO2 emissions in the near term. In addition, Autoneum is reporting its Scope 3 emissions in full for the first time. In line with the strategic goal of continuously reducing electricity purchases from fossil fuels and replacing them with renewable energies, ten plants worldwide were converted to renewable energies in 2021.

In the past year, Autoneum again implemented a large number of projects in the areas of “Sustainable Products and Production Processes”, “Fair and Attractive Workplace”, “Good Corporate Citizenship” and “Responsible Supply Chain Management”: 29 eco-efficiency projects with a focus on materials efficiency and recycling contributed to more environmentally friendly production and correspondingly more sustainable components worldwide. The result was a significant reduction in waste and a further optimization of processes for a range of products. Moreover, new eco-efficient products were successfully launched on the market.

A complete overview of all targets and activities during the past year can be found in the Corporate Responsibility Report 2021.

Suominen strengthens its capabilities in sustainable products by enhancing and upgrading one of its production lines in Nakkila, Finland. The investment is made in line with Suominen’s strategy and supports company’s vision to be a frontrunner in sustainability.

“As we foresaw in our strategy the market demand in Europe has changed remarkably towards more sustainable products. With this investment we respond to the increased demand for environmentally friendly products and also enhance our operational performance in terms of safety, quality and productivity,” says Petri Helsky, President and CEO of Suominen.

The total value of the investment is approximately EUR 6 million and the investment project will be completed in the second half of 2023.

The Reifenhäuser Group will be represented with four booths at the world's leading trade fair for plastics processing, K 2022, from October 19 to 26. Under this year's Reifenhäuser motto "The Time is Now", the extrusion specialists will show producers of films and nonwovens solutions for the three major topics of the industry: sustainability, digitalization and productivity.

The main booth showcases the Reifenhäuser Blown Film, Cast Sheet Coating and Reicofil business units. With the help of machine exhibits, visual presentations and concrete solutions for end products, visitors will learn, among other things, how they can manufacture fully recyclable products economically, process recyclates safely, increase their output and network the entire production without becoming dependent on systems, specialists or manufacturers. To ensure smooth production even after purchase, Reifenhäuser Service shows how customers can get the best out of their Reifenhäuser products and increase their productivity with rework solutions, modifications, training programs and digital services.

The component specialists of the Reifenhäuser Extrusion Systems business unit will additionally present their portfolio at two other exhibition booths. Here, everything revolves around screws, barrels and extruders - and why, especially for processing recycled material, high-performance wear protection is essential for reliability and high economic efficiency. Reifenhäuser Extrusion Systems will also showcase its innovations for flat dies and coextrusion blocks and their coordinated interaction for maximum productivity.

In addition to its own booths, Reifenhäuser will also be present as a partner of the R-Cycle initiative as part of a joint pavilion on the open-air site in the so-called Circular Economy Forum. R-Cycle is a cooperation project of various technology companies and organizations along the entire life cycle of plastic packaging.

Aanother highlight for visitors to the Reifenhäuser trade fair booths is the opportunity to additionally participate in the in-house exhibition on October 20, 21 and 24 at the Reifenhäuser Technology Center.