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Transcript of The North American Nonwoven Filtration Market · 1 Endless Possibilities and Growth for Nonwovens...
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Endless Possibilities and Growth for Nonwovens
The North American Nonwoven Filtration Market
Brad Kalil Director of Market Research and Statistics
April 4, 2017
2 2
Today’s Discussion
The North America Nonwovens Market
North American Nonwovens Filtration Market
What’s At the Forefront
3 3
Nonwovens Definition
An Engineered Fabric
“An engineered fibrous assembly which has been given a designed level of structural integrity by physical and/or chemical means, with the exclusion of paper, woven, or knitted material .”
A successful, growing, continuously evolving, dynamic and diverse industry
4 4
Today’s Discussion
The North America Nonwovens Market
─ Supply Side Growth – Capacity – Investments – Mergers & Acquisitions
─ Demand Side Growth
5 5
Robust Global Production Production Growth in Tonnes, Historical and Forecast Average Annual Growth Rates
Source: Worldwide Nonwovens Industry Outlook, INDA/EDANA, 2015
6 6
North America Investments Exceed GDP North America Capacity by Process in Tonnes
Source: INDA North American Nonwovens Supply Report, 2017
26 years Nonwovens 5.4% U.S. GDP 2.4%
915
3,596
1990 1995 2000 2005 2010 2016
Airlaid Pulp
Wetlaid
Spunlaid
Drylaid
8 8
Incumbent & New to Nonwovens, Region North America Capacity Additions, 2015 (8 new lines)
– 1 airlaid hydroentangle line: wipes
– 2 drylaid hydroentangle line: wipes (1 New to Industry)
– 1 drylaid needlepunch line: filtration
– 1 drylaid needlepunch line: home & office furnishings
– 1 meltblown line: wipes, filtration
– 1 meltblown line: filtration
– 1 wetlaid glass line: construction
Source: INDA
6
9 9
Significant Uptick in Number of Lines North America Capacity Additions, 2016 (17 new lines)
– 1 airform thermal bond line: home & office furnishings
– 1 airform thermal bond line: automotive, home & office furnishings, bldg. construction
– 1 carded hydroentangle line: filtration
– 1 carded line: wipes, hygiene, filtration, automotive
– 7 carded needlepunch lines: filtration (4), automotive and other durable products
– 1 carded thermal bond line: absorbent hygiene
– 1 spunmelt needlepunch line: high-temperature durable products
– 3 spunmelt lines: hygiene
– 1 wetlaid glass lines: battery separator, filtration
Source: INDA
10
10 10
Growth Continues North America Capacity Additions, 2017 (14 new lines… so far)
– 1 airformed needlepunch line – industrial products
– 1 carded hydroentangle line – wipes, medical, hygiene
– 1 carded hydroentangle line – filtration
– 3 carded needlepunch lines – automotive, home&office furnishings
– 1 carded stitchbond line – automotive
– 2 spunlaid lines – hygiene, medical
– 1 spunlaid line – construction
– 1 wetlaid thermal bond line – filtration
– 1 wetlaid hydroentangle line – wipes
– 1 wetlaid glass line – filtration, building construction
– 1 wetlaid line – wipes
Source: INDA
8
11 11
Variety of Production Investments
• Companies with a North American Footprint expanding – Numerous
• Companies adding a North American footprint – Sandler, Germany – Mogul, Turkey – Norafin, Germany – Uniquetex, China
• Companies entering into the nonwovens industry – Carver Nonwoven Technologies – U.S. Cotton
12 12
Healthy M&A Activity
• Nonwovens companies acquiring other nonwoven companies – Lydall acquired Texel – TWE acquired Vita Nonwovens – Foss Manufacturing acquiring Beaulieu America
• Adjacent companies acquiring nonwoven related companies – Clacor acquiring FibeRio Technology – Parker Hannifin acquiring Clarcor – Drylock acquiring Presto Absorbent Products
• CPGs companies acquiring nonwoven related companies – S.C. Johnson acquired Babyganics – Unilever acquired Seventh Generation
13 13
Healthy M&A Activity
• Paper companies investing in and acquiring nonwoven companies – Neenah (conversion and acquiring Crane Technical Markets)
– Schweitzer-Mauduit International (SWM) (DelStar, Conwed)
– Glatfelter – Domtar
• Adjacent companies acquiring nonwoven companies – Berry Plastics acquired Avintiv – AstenJohnson acquired Eagle Nonwovens
• Nonwoven companies acquiring nonwoven related companies – 3M acquired Polypore International’s ultrafiltration business
14 14
Today’s Discussion
The North America Nonwovens Market
─ Supply Side Growth
─ Demand Side Growth – Existing Markets Expanding
– Economic Drivers – Demographic Drivers – Product Innovation
– Taking Share from Other Materials – Entirely New Uses (Markets)
15 15
Absorbent Hygiene
Wipes
Filtration
Medical/ Surgical
PPE
Other Disposables
Building Construction
Geosynthetics
Home and Office Furnishings
Transportation
Apparel
Other Durable Applications
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
0% 2% 4% 6% 8% 10% 12%
Historical 2008‒2013
CAGR
Forecast 2013‒2018
CAGR
Recovery of the Durables North America End Use Categories – Size and Growth in Tonnes
Source: INDA North American Industry Outlook Report, 2015
Average 1.4% 2008-2013 5.1% 2013-2018
16 16
2.2%
3.0% 3.2%
2.8% 2.7%
2010 2011 2012 2013 2014f 2015f 2016f 2017f 2018f
Forecast Based on GDP Forecast… Annual Growth of Real GDP in the United States, Percent Change from Preceding
Source: INDA North American Industry Outlook Report, 2015
2.4% 2.6%
1.6%
2.2% 2.4%
17 17
Today’s Discussion
North American Nonwovens Filtration Market
─ Taxonomy
─ Demand Drivers
─ Size
─ Outlook
18 18
Harmonize Industry Taxonomies
Air Filtration Transportation (8)
• Induction/Air Intake, Cabin Air
Commercial HVAC (4) • HEPA/ULPA, MERV 9-15, MERV 1-8
Residential HVAC/Furnace (3) • Low End, High End, HEPA/ULPA
Personal Protection/Face Masks (4) • Molded/Pleated, Respirator
Industrial (4) • Dust Removal/Baghouse, Air Intake
Vacuum Cleaner Bags (3) • Standard, Standard w/MB, HEPA w/MB
Liquid Filtration Water (3)
• Water Treatment, Wastewater, Pool/Spa
Transportation • Oil, Lubrication, Fuel, Transmission
Manufacturing (4) • Hydraulics, Manufacturing, High-Tech
Food Processing (6) • Tea Bags, Coffee Filters, Cooking Oil
Healthcare (3) • Blood, Pharma, Bio
19 19
Demand Drivers
• Main Drivers – The Economy
– Construction, Transportation
– Consumers Awareness and Sensitivity – Air and Water Quality Concerns
– Legislation and Regulatory Control – Clean Air Act – Environmental Protection and Pollution Control
20 20
Demand Drivers
• Secondary Drivers – Increasing Share of Filter Media
– Filter Efficiency Improvements
– Use of Nanofibers
– Sustainability
22 22 Source: INDA North American Industry Outlook Report, 2015
Transportation Commercial HVAC
Residential HVAC
Personal Protection
Industrial Filtration
Vacuum Cleaner Bags
Value ($MM) Tonnes (M)
Square Meters (MM)
Tonnes Material Value ($MM) Square Meters (MM)
Different Ways to Measure “Size” Air Filtration Nonwoven Material Consumption, 2013
23 23
-12%
-8%
-4%
0%
4%
8%
12%
16%
20%
0% 2% 4% 6% 8% 10% 12%
Historical 2010‒2015
AAGR
Forecast 2015‒2020
AAGR
Forecast from the 2015 Report Historical CAGR, Forecast CAGR and Size in Tonnes of Production by End-Use, 2014
Source: INDA North American Industry Outlook Report, 2015
8%
North American Average 1.4%, 5.1%
Filtration 2.4% Historical 3.5% Forecast
24 24
Air 1.8%, 3.2%
Liquid 4.1%, 4.4%
-2%
0%
2%
4%
6%
8%
10%
0% 2% 4% 6% 8% 10%
Historical 2010‒2015
AAGR
Forecast 2015‒2020
AAGR
Forecast from the 2015 Report Historical CAGR, Forecast CAGR and Size in Tonnes of Production by End-Use, 2014
Source: INDA North American Industry Outlook Report, 2015
Filtration Average 2.4%, 3.5%
Air Filtration Categories Transportation + Commercial HVAC + Residential HVAC Personal Protection Industrial + Vacuum Cleaner Bags
2013–2018 3.7%
25 25
-12%
-8%
-4%
0%
4%
8%
12%
16%
20%
0% 2% 4% 6% 8% 10% 12%
Historical 2010‒2015
AAGR
Forecast 2015‒2020
AAGR
Updated Forecast to the 2015 Report Filtration Demand Size and Growth
Source: INDA North American Industry Outlook Report, 2015
Filtration 2.4% Historical 3.5% Forecast
26 26
-12%
-8%
-4%
0%
4%
8%
12%
16%
20%
0% 2% 4% 6% 8% 10% 12%
Historical 2010‒2015
AAGR
Forecast 2015‒2020
AAGR
Updated Forecast to the 2015 Report Filtration Demand Growth Update
Source: INDA North American Industry Outlook Report, 2015
Filtration 2.4% Historical 3.5% Forecast
3.9% Updated
27 27
Today’s Discussion
What’s At the Forefront
─ Material Development
─ Product Innovation
─ Machinery Development
─ Market Developments
28 28
Material Development
• Functionalizing Nonwoven Fabrics
– Main Processes… Just Faster, Better
– Nanotechnology / Meltblown / Fine Fibers
– Proprietary Developments
– Nonwovens Approaching Membrane Efficiency
– Composites
31 31
Machinery Development
• Machinery – Reifenhäuser Reicofil High Loft Spunbond
– Resurgence of Wetlaid
32 32
Product Innovation
• Transportation Air Induction Filters
• Transportation Cabin Air Filtration
• Air Treatment in Healthcare
• Personal Protective Equipment
33 33
Nonwoven Producer Developments 170 Producers in North America with nearly 700 lines, Top 10 Account for Only 46%
• Berry Plastics
• Kimberly-Clark
• Hollingsworth & Vose
• Johns Manville
• DuPont
• Ahlstrom
• 3M
• Lydall
• Freudenberg
• Neenah
34 34
Filter System Manufacturer Developments
• Mann + Hummel
• Cummins Filtration
• Pall Corporation
• Parker-Hannifin / Clarcor
• Donaldson
• 3M
• Pentair
• The Filtration Group
• Camfil
35 35
Market Developments
• Very Fragmented Industry – Supply Chain
– Numerous End-Uses
– Media, Fibers and Polymers Used
• Growing Market – Numerous Drivers
– Steady Revenue
– Continuous Innovation
36 36
Market Developments
• Attracts Attention – Within the Industry
– Companies Outside the Industry
– Financial Sector
Resulting in… – Strategic Alliances and Mergers
37 37
Market Developments
• Types of Mergers and Acquisitions – Consolidators
– Expanders – Nonwoven Producers
– Filter System Manufacturers
– Joiners
Invites… – Private Equity
38 38
In Conclusion
• The Market – Growing Markets with Steady Revenue
– Highly-Fragmented
– Continuous Innovation
• Attracts Attention – Within the Industry
– Companies Outside the Industry
– Financial Sector
• Will Continue