Recently, the world’s largest nonwovens producer, Magnera, announced a plan to reduce its global nonwovens output by 5% through a new Project Capacity Optimization and Resource Efficiency (CORE) program. This effort, which will save the company a reported $20 million, will help Magnera optimize its global capacity while reducing costs and positioning it to deliver improved financial performance.

Formed through the merger of Berry Global and Glatfelter late last year, Magnera operates 46 sites globally and imakes spunmelt/spunbond materials for hygiene and medical applications as well as airlaid nonwovens for wipes and hygiene applications—among other things. In recent years, many of its key markets, particularly hygiene applications, have been heavily challenged by oversupply thanks to aggressive investment during the Covid pandemic and slower growth rates in areas like baby diapers.

According to a recent report from Price Hanna Consultants, demand for polypropylene spunbond/spunmelt nonwovens—which are largely used in hygiene and medical applications—stands at about 868,000 kilotons per year, which is below actual installed capacity. This means that the current market is oversupplied. While much of this can be attributed to overproduction in China, which is responsible for about 40% of global capacity and has an export rate near 50%, other factors like more efficient lines and large-scale investment can also be blamed.

By idling or reducing capacity on some of its older assets, Magnera, the world’s largst maker of SMS nonwovens, is acting responsibly not just for itself but for the entire nonwovens industry. Oversupply is creating pricing issues in many world regions and has slowed investment in new lines by nearly half creating challenges throughout the supply chain.

Calling the action a moment of evolution and opportunity, Magnera CEO Curt Begle says the Project CORE initiative will allow it to build a stronger, more agile organization—ready to lead with purpose and deliver new possibilities for its customers and communities.

So far, Magnera has announced just one specific action within this program—the winding down of its manufacturing site in Pilar, Argentina, which produces polypropylene spunmelt nonwovens largely serving the South American markets. Magnera entered the Argentina market in 1997 through a joint venture with Dominion Nonwovens, which it bought outright in 2009. Its last known investment there was a spunmelt line in 2007 which largely makes fine denier topsheet materials for hygiene applications.

While it is unknown where else reduction is necessary—Magnera’s manufacturing footprint spans Asia, Europe, North America and South America—and encompasses a range of manufacturing technologies, the company says it will provide additional details on which of its 46 global sites are being impacted by this global program during its next quarterly earnings call. Surely, the industry will be listening.

Karen McIntyre
Editor
kmcintyre@rodmanmedia.com