From the Sector

As reported on August 17, 2020, the Supervisory Board of SGL Carbon SE had appointed Thomas Dippold to CFO and member of the Board of Management of SGL Carbon SE effective December 1, 2020. Fortunately, Mr. Dippold is able to assume office of his mandate as member of the Board of Management of SGL Carbon SE earlier, so that the Supervisory Board of the company has brought forward the appointment to October 15, 2020, also to prepare for the planned assumption of the CFO position.

As previously reported, and effective December 1, 2020, Mr. Dippold is succeeding the long-standing CFO Dr. Michael Majerus, who is resigning from his office effective November 30, 2020 by mutual amicable consent.

As planned, Dr. Stephan Bühler resigned from his office as member of the Board of Management effective October 15, 2020.

The textile machinery industry is eagerly awaiting the start of the virtual trade show "Innovate Textile & Apparel". What and how will the more than 160 exhibitors present themselves virtually? How will the approximately 10,000 registered visitors accept the digital offer? WTIN is breaking new ground as organizer with this platform. But one thing is already certain: From 15 to 30 October 2020, they will bring the textile machinery industry a little closer together again in the Corona Pandemic. Oerlikon invites all visitors to take a look into the future of manmade fibers production and get to know the comprehensive range of products and services.

"Reconnecting innovation in the textile & apparel value chain" is the motto of WTIN's virtual trade show. And Oerlikon intends to more than live up to this motto. With more than 50 active experts from sales, customer service and technology as well as partners from its international network of representatives, the Manmade Fibers segment of the Swiss Oerlikon Group will try to be represented around the clock. "It is an interesting experiment for all of us and we would like to see it succeed," explains André Wissenberg, Head of Marketing, Corporate Communications and Public Affairs. "Our aim is to meet our existing customers again, make new contacts and see 'old friends' from the industry. We have prepared an attractive digital offer for them all. Those of you who missed our roller coaster ride in Barcelona last year can now enjoy the journey through time in peace and quiet from your home office on your digital tour of the fair. And, there are no more waiting times either," promises Wissenberg.

Factory know-how from a single source
From Melt to Yarn, Fibers and Nonwovens. From the polycondensation and the processing of PTA and MEG as well as the extrusion of, for example, recycled polyester chips all the way through to hundreds of thousands of packaged and stored or directly-delivered textured bobbins for a market within the textile industry worth billions. From the planning and construction of highly complex production plants to the engineering of large-scale plant projects and competent customer services. This business model runs like a red thread through the self-conception of the Manmade Fibers segment of the Swiss Oerlikon Group. The right partner, especially – but not exclusively – for newcomers to the textile industry. "With us they get everything they need for a successful business: Factory know-how from a single source. And that's what we would like to show our visitors at our virtual trade fair booth," says Wissenberg.

• World Cotton Day on 7 October Highlights the Importance of Cotton for Development Policy

Bremen - Stemming from a 2019 initiative of the African Cotton-4 countries Benin, Burkina Faso, Chad and Mali, World Cotton Day will take place this year on 7 October. The event is organised by the Geneva-based World Trade Organisation (WTO) and is supported by the Food and Agriculture Organisation of the United Nations (FAO), the United Nations Conference on Trade and Development (UNCTAD), the International Trade Centre (ITC) and the International Cotton Secretariat (ICAC). The Bremen Cotton Exchange is also involved.

“Cotton is often underestimated because it is so natural. Behind it are millions of people, for example many farmers, field workers, employees in ginning factories, logistics providers and traders. We want to honour their achievements,” said the President of the Bremen Cotton Exchange, Stephanie Silber.

According to the WTO, the aim of World Cotton Day is to highlight the global economic importance of cotton and to raise awareness of the raw material by recognising the work of everyone involved in its cultivation, processing and trade. At the same time, within the framework of international cooperation, it is hoped that supporters and investors can be found to aid with technological and economic progress within the cotton value chain.

This time, the entire world cotton community will be involved in World Cotton Day on Wednesday, 7 October 2020. A wide variety of campaigns and events are taking place everywhere to draw attention to the importance of cotton and its possible uses.

Cotton is one of the most relevant agricultural raw materials in the world. Around 26 million tonnes of it are harvested annually. Approximately 150 million people in almost 80 countries around the world live from the cultivation of the natural fibre. A large number of these live in developing countries, where cotton cultivation is of particular importance as a cash crop.

Cotton is known as an agricultural product that is turned into a textile. The raw material is indispensable in fashion and clothing – and has been for thousands of years. But the use of cotton now goes far beyond textiles. For example, cosmetic products such as hand creams and hair shampoo are made from the oil of cotton seeds. The raw material is also used in the manufacture of banknotes, furniture and technical textiles, as well as in medical technology.

Against the background of the current discussion on sustainability and sustainable consumption, the role of natural fibres is becoming even more important. Cotton is biodegradable and a renewable resource. It can be grown again and again in agriculture through cultivation in crop rotation. This secures incomes and enables efficient value creation within the global production and processing chain.

The Bremen Cotton Exchange will actively support World Cotton Day with cross-media coverage. In addition, in time for World Cotton Day, three thematically different, emotionally appealing short films about cotton will be launched. They are aimed at consumers as customers of the textile and clothing trade and provide information about the benefits and properties of cotton and answer questions about its sustainability. In keeping with the times, they will be published via virtual media.

Sustainability and environmental responsibility are important developments for the current design of productions and products. In order to obtain a comprehensive evaluation of the potential of bio-based composites, the AZL, together with an industry consortium, is investigating the market potential, future applications and relevant technologies for bio-based composite materials. The 5-month market and technology study will start on October 22nd, 2020 and is open to interested companies. Companies such as REHAU, an Automotive Tier 1, Asahi Kasei, Johns Manville, Mahr Metering Systems and several material manufacturers are participating in the study.

Bio-plastics are well established in industry, especially in packaging applications. The market for biopolymers is expected to grow from USD 10.5 billion in 2020 to USD 27.9 billion in 2025. At the same time, bio-based raw materials, such as natural fibers, are available on the market in a cost-effective manner. Composites with wood or natural fiber content are also increasingly used in products.

Dr. Michael Emonts, Managing Partner of AZL: "Together with our partner companies we want to identify hidden business potential for composites with bio-based materials. To do so, we will reapply our established approach for market and technology studies: Based on a detailed market analysis, we will dive deep into the technological evaluation of technologies, applications and business cases.”

Based on a detailed market segmentation, AZL's technology experts analyze the various market segments in terms of their size, growth potential, relevant players and existing and future applications. For the identified applications, the participants in the study will receive detailed insight into the respective technical and legal requirements as well as an overview of value chains, processes and materials. In the following, the strengths and challenges of bio-composites compared to conventional materials are elaborated. The consortium will select the components with the highest potential, for which suitable production scenarios will be developed and analyzed in terms of costs in a business case analysis.

"We are participating in the AZL study to identify and evaluate new product areas with bio-materials. The technological analyses of the AZL studies have already helped us in the past to initiate new developments," says Dr. Steven Schmidt, Director Technology Platforms Materials at REHAU, explaining the motivation for working with the AZL and the industry consortium. "As one of the 50 Sustainability & Climate Leaders, we at REHAU are incorporating environmentally friendly materials into more and more products. Wherever the company is active - from the furniture and construction industries to the automotive industry - REHAU is already developing and manufacturing high-quality products from recycled raw materials. By 2025, REHAU plans to increase its recycling rate across the Group to significantly more than 15 percent and at the same time reduce CO2 emissions by at least 30 percent," adds Dr. Steven Schmidt.

Bio-composites will also be the topic of the upcoming Lightweight TechTalk by AZL on September 29, 2020. Experts from industry and academia will give technology and market insights on sustainability and recycling of composites in 6 presentations. Registration is free of charge at: https://azl-aachen-gmbh.de/termine/recycling-of-composites/.

The kick-off of the project will take place on October 22nd, 2020 in the form of a video conference. Further background information on the project can be found under the following link: https://azl-aachen-gmbh.de/wp-content/uploads/2020/09/2020-251_OP_Bio-Bases_Composites.pdf

• Diana, Giusy, Simona and Marina. The call to action of the fashion world was born from four women engaged in the field of sustainability. On the occasion of Fashion Revolution Week, we tell you their story and the results achieved

A task force of Italian textile companies active in our area supported the first call to action launched at the fashion world by four women who have always been involved in the field of sustainability. The appeal launched on March 19th by the green journalist Diana de Marsanich, Giusy Bettoni, founder and CEO of C.L.A.S.S. (Creativity Lifestyle and Sustainable Synergy)the eco multi-platform hub specialized in integrating a new generation of eco values into fashion, products and companies, Simona Roveda, Editorial Director and Director of Institutional Communication of LifeGate and Marina Spadafora, Italian Country Coordinator of Fashion Revolution and currently collaborating with Luxury Fashion Brands to implement responsible strategies in their companies have luaunched a call-to-action project which has brought together textile companies to manufacture PPE garments for the medical staff working in San Gerardo Hospital in Monza, near Milan.

The companies that answered the call-to-action are: Filo d’Oro, Mantero, ROICA™ by Asahi Kasei, C.L.A.S.S. (Creativity Lifestyle and Sustainable Synergy) e Zerobarracento, Iluna Group, Lg Electronics, Jimmy Lion, Personal Genomics, Isamar Holyday Village, Marcolin Eyewear, Maglificio Ripa.

During the last weeks the 4 women collected about 1,800 non-drip cotton and non-woven TNT gowns for sanitary use, about 400 protective masks for multipurpose washable, bacteriostatic, breathable and water-repellent prevention, 1,000 washable cotton surgical caps, 150 complete protective googles eye masks, two microwave ovens for hospital departments to offer support to medical and healthcare personnel by helping them in the few breaks during the grueling shifts of this period, a supply of samples of cotton socks, 300 cotton masks + polyester outer layer, water-repellent and antibacterial, and free weekly stays made available to doctors, nurses, civil protection personnel and families with related children involved in the Covid-19 pandemic.

Forging Ahead with Circular Bioeconomy

Sateri, the world ’ s largest producer of viscose, has successfully produced on commercial scale viscose fiber regenerated from textile waste. The high-quality new fiber uses a mix of dissolving pulp made from recycled post-consumer textile waste by Swedish company Södra, and other PEFC - certified wood pulp.

Trialed at Sateri ’ s Linz Nanjng yarn spinning mill using two advanced technologies, Siro compact and Vortex, the new fiber has proven compatibility with existing spinning technologies, ensuring stable yarn production without the need to adjust existing processes or parameters. The fiber also has excellent spinning efficiency and delivers yarn evenness and tenacity.

Sateri ’ s breakthrough comes on the back of RGE’s announcement in October last year of a USD200 million investment towards next-generation cellulosic fiber innovation. Sateri is working with several dissolving pulp producers using various innovative technologies to aid the push towards a circular bio-economy. Sateri will be partnering yarn customers, garment manufacturer s and fashion brands to market and officially launch this new recycled viscose fiber product in the coming months, with the eventual goal of making recycled fiber available to the mass market.

Within the framework of the preparations for the Group annual financial statements and based on preliminary results, SGL Carbon confirms its guidance for 2019 as revised in October 2019. Accordingly, the Company continues to expect Group sales between €1.05 and €1.1 billion and Group EBIT before extraordinary items between €45 and 50 million. In addition, net financial debt as of December 31, 2019 has also developed as expected, increasing by a mid double digit million € amount and thus remaining below the €300 million mark.

SGL Carbon also confirms the initial outlook for 2020 as presented in October 2019. Group sales is anticipated slightly below the 2019 level and Group EBIT before extraordinary items 10-15% below the 2019 level. To reflect the lower earnings expectations and within the context of a conservative free cash flow management, the Company will restrict capital expenditures to €70-80 million in 2020 (previous guidance: approximately €100 million) and thus approximately on the level of depreciation.

As usual, SGL Carbon will communicate further details on the guidance for 2020, particularly relating to the guidance on the level of the reporting segments, with the publication of the annual report 2019 on March 12, 2020.

The Company will also publish statements on the new mid-term plan on this date.

Archroma announced its transition plan for the function of Chief Executive Officer. The Board of Directors of Archroma has appointed Heike van de Kerkhof to succeed current CEO Alexander Wessels effective January 6, 2020. Mr. Wessels has held the CEO position at Archroma since the Company was established in October 2013 and will be appointed as Vice Chairman of the Company’s Board of Directors. He will also take on a Senior Advisory role within SK Capital working across its portfolio of investments, which includes Archroma.

Alexander Wessels commented, “I feel privileged to have been given the opportunity to work with SK Capital and the Archroma team over the past six and a half years, which has really been an incredible journey. We are coming off another record year in terms of profitability and the business is uniquely positioned to capitalize on its significant momentum moving forward. For me personally, this is the ideal moment to take on my next challenge and in Heike we have found the ideal person to pass the baton to. We look forward to a seamless transition and I am excited to continue to support the Company as a member of the Board of Directors.”

“I have a true passion for innovation and sustainability, and I am thrilled to join Archroma as its next CEO,” Heike van de Kerkhof commented. “The Company has established itself as a leader in sustainable chemistry based on its strong technology-driven product portfolio with a solid foundation to further build upon. I believe Archroma is uniquely positioned to support its customers’ manufacturing processes in a cost effective and sustainable manner. The investments made into research and technology during the first stage of SK Capital’s ownership have positioned Archroma to reach new levels of growth and success.”

• Group sales increases by approximately 6 percent compared to the prior year period to 832 million euros due to organic growth in the market segments Digitization, Energy and Chemicals
• Group recurring EBIT at around 54 million euros; adjusted for a positive one-time effect in the prior year approximately on the comparable level of the prior year
• Business unit Composites – Fibers & Materials (CFM) deteriorated substantially in the third quarter 2019 due to the weak development in the market segments Textile Fibers, Wind Energy and Industrial Applications; Graphite Materials & Systems (GMS) developed better than expected on the very good level of the prior quarter reaching overall a record high level in 9M/2019
• Free cash flow from continuing operations improved significantly in the first nine months
• Impairment testing triggers a non-cash impairment charge of approximately 75 million euros in CFM in the third quarter
• Revised guidance of October 25, 2019: Recurring EBIT at CFM in a negative mid-to-high single digit million euros amount and on Group level at 45 to 50 million euros
• Countermeasures initiated to improve earnings of CFM
• Dr. Michael Majerus, Spokesman of the Board of Management of SGL Carbon: ”The structural growth drivers remain intact in our strategically relevant markets. The countermeasures to improve earnings of CFM will be implemented consistently.”

In the third quarter 2019, the business units of SGL Carbon developed very differently. While Graphite Materials & Systems (GMS) showed better than expected results, Composites – Fibers & Materials (CFM) deteriorated compared to the two previous quarters. This is attributable to the weaker development in the market segments Textile Fibers and Industrial Applications. In total, sales revenue in the first nine months 2019 grew by approximately 6 percent to reach 832 million euros. Recurring Group EBIT after nine months reached approximately 54 million euros. Adjusted for a positive one-time effect in the prior year, this was comparable to the prior year level.

In its ad-hoc notification of October 25, 2019, the company revised its guidance for recurring EBIT of CFM downwards to a negative mid to high single digit million euro amount. On the Group level the company now expects a recurring EBIT at 45 to 50 million euros. Due to the lower starting point in 2019 as well as the ongoing weakness in the market segments Textile Fibers and Industrial Applications in the business unit CFM a non-cash impairment charge in the amount of approximately 75 million euros was recorded in the third quarter 2019. In recent years acquired assets of the former joint ventures with BMW and Benteler were not affected by this impairment. In addition, the impairment charge of CFM led to a valuation allowance on deferred tax assets in the amount of 7.4 million euros. Against this background, SGL Carbon now expects a net result of approximately minus 100 million euros for fiscal year 2019.

As of October 1st, 2019, the Netherlands-based global market leading manufacturer of advanced automation equipment and solutions for composites, Airborne, strengthens its activities particularly in German speaking countries, the so-called D-A-CH region, comprising Germany, Austria and Switzerland with Dr. Michael Effing from AMAC. The Dutch company is looking for specialised partnerships to develop and deepen its international business opportunities in the aerospace and automotive markets.

Airborne’s focus is on high-end composite components, at high production rates at radically low conversion costs. Airborne is building up a suite of automated solutions for the manufacturing of composites with the aim to radically reduce costs and touch labour, minimize the footprint and use of material, and improve the time to market for their clients. The company offers i.a. solutions in automated honeycomb potting, automated kitting and automated lamination of thermosets and thermoplastics. In order to develop new business opportunities in the D-A-CH region for the end-markets aerospace and automotive, Airborne is cooperating with AMAC to accelerate the process of locating suitable partnerships.

Dr. Effing, CEO of AMAC GmbH confirms: "As a first step for the establishment of Airborne on the German market, we just signed their membership at AZL in Aachen which will help to connect with over 80 companies and latest research developments. In the framework of theirstrategy to strengthen the supply to the aircraft sector, Airborne will also exhibit at the Aircraft Interiors Expo in Hamburg from March 31st to April 2nd 2020.”