Fibertex Nonwovens expanding production capacity in fast-growing Brazilian market

The major Danish nonwovens manufacturer expanding production capacity in Brazil by 20% in order to accommodate growing demand for special-purpose products for the automotive and other industries.

In February 2018, Fibertex Nonwovens, which is owned by Danish industrial conglomerate Schouw & Co., paid about DKK 100 million to acquire Brazilian nonwovens manufacturer Duci. Now, only six months later, sales to a number of South American customers have risen to a level that has made Fibertex Nonwovens expand its production capacity:

“The process of taking over the factory in Brazil has far exceeded our expectations. Our South American customers have given us a really warm welcome, and we’re already facing an urgent lack of capacity,” said Fibertex Nonwovens CEO Jørgen Bech Madsen, and he continued: “We've been planning to expand capacity since acquiring Duci, but the need has arisen faster than we anticipated, and we will begin to upgrade the existing production line immediately. We know from previous experience in expanding our other factory sites that an upgrade can increase our output capacity by 20%. In addition, we will accelerate planning for other expansion projects.”

Estimated at close to DKK 15 million, the investment is expected to be fully implemented by the summer of 2019. Mr. Bech Madsen explains that Fibertex Nonwovens has already sold the extra capacity to the growing Brazilian market, which at almost 125,000 tonnes per year is the world’s sixth-largest and accounts for more than half of the entire South American market.

Fibertex Nonwovens – the special-purpose product experts
Fibertex Nonwovens applies the spunlace technology at its facilities in Brazil and is one of only two companies in South America capable of manufacturing this type of product. A relatively new production method, spunlace uses high-pressure jets of water to needlepunch nonwoven textiles. Fibertex Nonwovens already has several years of experience in using this technology, and this is one of the reasons the company is able to base a major upgrade on its own prior experience:

“We’ve accumulated our nonwovens experience over quite a number of years, but there is a big difference between the simple high-volume products, such as geotextiles, and the special-purpose products used for filtration, acoustic solutions, interior and exterior applications in cars and other purposes, special wipes or products for the shoe-making industry. We are a global leader in special-purpose products, and obviously, work is well under way to apply our knowledge and production methods at our new facility in Brazil. They give us some unique market advantages,” Mr. Bech Madsen continued.

In fact, demand for special-purpose products is growing faster than any other part of the industry, and not just in the Brazilian market. Several other South American markets, including Argentina, are reporting strong growth in industrial production, so Fibertex Nonwovens’ investment in Brazil has proven to be very well timed:

“Historically, the nonwovens market has grown at three times the rate of our GDP, and there is still a huge potential. The average Brazilian consumer spends only about one third of what an American or European consumer does, and this is where nonwovens play an important role,” explains Carlos Benatto, the CEO of Fibertex Nonwovens’ Brazilian subsidiary and its 130 employees.

That growth rate applies not least to Brazil’s large automotive industry in which virtually all American, European and Japanese carmakers play an active part. Fibertex Nonwovens is a market leader when it comes to supplying nonwovens to the auto industry. The average European car contains about 30 m2 of special-purpose nonwovens, including everything from headliners, seats and parcel trays to exterior applications used in wheel housings, motor insulation or underbody parts, and the investment in Brazil gives Fibertex Nonwovens a unique platform from which to serve existing and new automotive customers.

“At Schouw & Co., our revenue climbed to DKK 17 billion in 2017, with Fibertex Nonwovens contributing just over DKK 1.4 billion. In 2018, we expect to grow the company’s revenue to about DKK 1.6 billion in 2018, and we’re targeting DKK 1.9 billion by 2020. In other words, we have set very ambitious growth targets for Fibertex Nonwovens, and this is where Brazil and the rest of the South American market will play a crucial role. We are absolutely confident that the potential is there, especially considering the unique know-how and production capabilities we possess in terms of special-purpose products,” explains Schouw & Co. CEO Jens Bjerg Sørensen.

Facts about Fibertex Nonwovens
Fibertex Nonwovens is the leading global partner in technical and innovative performance-based materials and nonwovens solutions. Fibertex Nonwovens offer more than high-performance materials to customers in more than 70 countries. They also offer strong partnerships that include access to in-depth industry knowledge and a best-in-class technological platform.
Nonwovens, i.e. nonwoven textiles, are used in a number of different areas, including the automotive, filtration, furniture and construction industries, for geotextiles and in niche industries such as the med-tech industry and wipes, which are products for hygienic, high-performance cleaning.

Fibertex Nonwovens A/S is wholly-owned by Schouw & Co. and is headquartered in Aalborg where the business was founded in 1968. The company generates annual revenue of DKK 1.4 billion (2017) and has production facilities in Denmark, France, the Czech Republic, Turkey, the USA, South Africa and Brazil as well as sales offices in France, Portugal, Spain, India and China.

For more information, please contact:
• Jørgen Bech Madsen, CEO, Fibertex Nonwovens, tel. +45 96 35 35 35
• Jens Bjerg Sørensen, President and CEO, Schouw & Co., tel. +45 86 11 22 22

September, 2018